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HB 2032

Authorizing the state corporation commission to increase or decrease an electric public utility's return on equity based on whether such utility's all-in average retail rate has increased or decreased.

2025-2026 Regular Session

Allows KCC to adjust a regulated electric utility’s ROE by up to ±0.5% for 12 months based on changes in the all‑in average retail rate.

Died in Committee
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Bill Summary · HB 2032

Summary — HB 2032 (Kansas)

Authorizes the Kansas Corporation Commission (KCC) to adjust an electric public utility’s return on equity (ROE) up or down based on changes in the utility’s “all‑in average retail rate.”

Main purpose

Allow the KCC to make short‑term (up to 12 months) ROE adjustments — up to ±0.5 percentage points — for regulated electric utilities when a utility’s all‑in average retail rate changes meaningfully (threshold: 1%) over the preceding calendar year. The changes are intended to link allowed investor returns to observable changes in the total retail cost customers pay per kWh.

Key provisions

  • Trigger thresholds:
    • If, and only if, an electric utility shows at a public hearing that its all‑in average retail rate did not increase by more than 1% in the prior calendar year, the KCC may order an ROE increase of up to 0.5% above the ROE authorized in the utility’s most recent general rate case. (Order valid for 12 months.)
    • If, in a complaint or on the KCC’s own motion, the KCC finds a utility’s all‑in average retail rate has increased by more than 1% in the prior calendar year, the KCC may order an ROE decrease of up to 0.5% below the ROE from the most recent general rate case. (Order valid for 12 months.)
  • The KCC is required to amend the utility’s retail rates to reflect any ROE adjustment ordered under this section.
  • Definition: “All‑in average retail rate” = total cost per kilowatt‑hour a retail customer pays, including all charges, fees, taxes, surcharges, and customer charges.

Who is affected

  • Regulated electric public utilities before the KCC (their authorized ROE and interim revenues).
  • Retail electric customers (through retail rate amendments tied to ROE changes).
  • KCC (administration and hearings) and intervenors such as the Citizens’ Utility Ratepayer Board (CURB).
  • Potential indirect effects on municipal utilities, counties, and other stakeholders depending on jurisdictional boundaries.

Fiscal and procedural impacts

  • Fiscal note (Kansas Division of the Budget): CURB estimates increased expenditures of approximately $8,000 in FY2025 and $10,000 in FY2026 from agency fee funds due to increased workload and potential additional litigation; actual costs depend on frequency/complexity of reviews. KCC reports the fiscal impact would be minimal and absorbable within existing resources. Kansas Association of Counties indicates no direct fiscal effect to counties.
  • Procedural: Increase requests require a public hearing and a showing by the utility; decreases may arise from complaints or commission‑initiated proceedings. Any ROE change is temporary (12 months) and measured relative to the ROE from the last general rate proceeding.

Timeline / status (as provided)

  • Introduced: January 23, 2025
  • Hearing (House Committee on Energy, Utilities and Telecommunications): February 4, 2025, 9:00 AM, Room 582‑N
  • Fiscal note dated February 3, 2025 (Kansas Division of the Budget)

Considerations / potential effects

  • Provides a limited mechanism to adjust investor returns between general rate cases based on a single, aggregate retail cost metric.
  • Could create incentives for utilities to manage costs and for parties to litigate how the “all‑in average retail rate” is measured and attributed.
  • May increase the number of interim filings and hearings; impacts on utilities’ revenue stability and on customers depend on how frequently the threshold is met and on the magnitude of adjustments.

Compiled from official sources — confirm details with the bill’s official record.

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