Gridlock delays utility rate study contract
- July 10, 2019
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Top Republican and Democratic members of the Kansas Legislature failed Tuesday to reach consensus on hiring of a consulting firm to perform a detailed study of commercial and residential electric utility rates viewed as excessive by many lawmakers.
The 2019 Legislature authorized the rate study in a bill that included a rare provision mandating the selection of a consultant had to be done with approval from at least one Democrat on the GOP-dominated Legislative Coordinating Council. When the LCC considered proposals from three bidders, the
five Republicans and two Democrats on the panel couldn’t make a deal.
The Republican-backed approach failed to get a vote from Democrats, and a pair of alternatives suggested by Democrats didn’t attract Republican votes.
Senate President Susan Wagle, R-Wichita, said it might not be possible for the LCC to meet again this year and that a new rate study bill would need to be considered during the 2020 legislative session starting in January. Republicans on the council pointed a finger at Democrats, suggesting gridlock on the three-phase study was a result of the minority party’s unwillingness to consider the majority’s perspective.
The overall bids stacked up this way: London Economics International, of Boston, $309,000 for phase one and two only; Energy and Environmental Economics, of San Francisco, $260,000 for all three phases; and Energy Ventures Analysis, of Arlington, Va., $1.15 million for all three phases. Selection of London Economics would have required rebidding the final phase of the study.
“I think we’re at an impasse,” Wagle said. “It’s very unfortunate for the ratepayers of Kansas this has been blocked.”
Senate Minority Leader Anthony Hensley, D-Topeka, said minority party members on the council didn’t deserve condemnation simply for declining the accept the GOP view on the contact.
“I don’t think we’ve been unreasonable at all. We offered two alternatives,” he said.
Senate Majority Leader Jim Denning, an Overland Park Republican, recommended London Economics be hired for the first and second phase of the project under an arrangement that would leave the final phase to be rebid. He said the Boston company was “certainly the better qualified” to perform the analysis. His plan was supported by all five Republicans on the LCC but neither of the Democrats.
“Is there an alternative way to thread this needle?” said Wagle, who warned against being seduced by low bidders on state contracts. “We need to get to the bottom of the issue, which is why we are paying higher rates than surrounding states.”
Hensley proposed awarding the electricity study contact to Energy and Environmental Economics, but his motion was rejected on a 2-5 vote.
Denning said that company had a business relationship with one of the state’s largest utility companies, Westar Energy, and the firm would have a conflict of interest in evaluating the energy landscape.
“Something doesn’t smell right,” Denning said. “It’s a clear conflict.”
House Minority Leader Tom Sawyer, D-Wichita, offered a $409,000 compromise. It would allow London Economics to perform the first and second phases for $309,000 and Energy and Environmental Economics to do the final piece for $100,000. This idea also failed 2-5.
House Speaker Ron Ryckman, an Olathe Republican, said Democrats should have respected bipartisan sentiment in the House and Senate for the study and could have endorsed Denning’s proposal to keep the project on schedule.
He said the requirement the consulting contract receive at least one vote by a Democrat sounded like a good idea during the last legislative session but now was responsible for undermining the project.
Alan Cobb, president of the Kansas Chamber, said the problem was special-interest groups muddled the process by attempting to steer the utility rate study contract to a particular bidder.
“The delay is disappointing, but we are confident legislative leaders will resolve the questions and concerns they have before next session so they can move forward with the electricity study,” he said. “This is an important issue to all Kansas electricity consumers who are concerned about the increasing costs to heat, cool and light their homes, schools, office buildings and factories.”
Tim Carpenter, firstname.lastname@example.org