Bill Summary – FastDemocracy

Division of the Budget
Landon State Office Building                                                                        Phone: (785) 296-2436
900 SW Jackson Street, Room 504                                                                     larry.campbell@ks.gov
Topeka, KS 66612                               Division of the Budget                              http://budget.kansas.gov
Larry L. Campbell, Director                                                                       Laura Kelly, Governor


                                                 February 15, 2019


        The Honorable Joe Seiwert, Chairperson
        House Committee on Energy, Utilities and Telecommunications
        Statehouse, Room 481-W
        Topeka, Kansas 66612
        Dear Representative Seiwert:
                  SUBJECT:        Fiscal Note for HB 2231 by House Committee on Energy, Utilities and
                                  Telecommunications
                In accordance with KSA 75-3715a, the following fiscal note concerning HB 2231 is
        respectfully submitted to your committee.
                 HB 2231 would require the Legislative Coordinating Council (LCC) to authorize a study
        of retail rates of Kansas electric public utilities. To conduct the study, the LCC would be required
        to select one or more independent organizations that have experience with evaluating electric
        utilities and include input from residential, commercial and industrial customers, as well as
        advanced energy stakeholders. The bill would establish the issues the study must address and
        would require every Kansas electric public utility to provide relevant information when requested.
        Any disputes regarding provision of information would be decided by the Kansas Corporation
        Commission (KCC). The study would be paid for by the KCC from assessments on the utilities
        that are subject to the study. The study would be completed and delivered to the Legislature by
        December 31, 2019.
                The bill would also amend existing law concerning requirements for electric public utilities
        to establish just and reasonable rates to require the KCC to evaluate competitiveness of any
        proposed electric rate with those of comparable public utilities in surrounding states. As part of
        its statutory annual report to the Legislature, the KCC would also be required to include an
        assessment of the regional competitiveness of electric and natural gas rates and to report the
        circumstances that led to the approval of any rate increase.
The Honorable Joe Seiwert, Chairperson
Page 2—HB 2231

                                 Estimated State Fiscal Effect
                            FY 2019         FY 2019            FY 2020               FY 2020
                             SGF            All Funds           SGF                  All Funds
  Revenue                            --                 --              --            $1,150,000
  Expenditure                        --                 --        $12,475             $1,162,475
  FTE Pos.                           --                 --              --                   2.00
        According to the Legislative Coordinating Council, enactment of HB 2231 would result in
additional expenditures for compensation, subsistence, mileage and tolls for LCC members to
attend two to three meetings held to select the one or more independent organizations based on the
requests for proposal. Assuming seven legislators attending three meetings and that salary and
subsistence rates are the same on July 1, 2019 as during the 2019 Legislative Session, the LCC
estimates expenditures for the agency would be approximately $12,475 from the State General
Fund. These costs consist of $1,862 for legislator pay ($88.66 X 3 X 7), $3,129 for subsistence
($149 X 3 X 7), $3,124 for mileage ($.595 X 250 X 3 X 7), $126 for tolls ($6 X 3 X 7), $3,129 for
en route day ($149 X 3 X 7) and $1,105 for employer costs associated with salaries and wages.
The LCC points out that the cost of rate studies of the magnitude and conducted within the short
time frame of those required by this bill will easily exceed $1.0 million.
        The KCC estimates that enactment of HB 2231 would result in increased expenditures for
the agency of $1,150,000 in FY 2020 and approximately $137,500 in out years. The FY 2020
costs are based on paying $1.0 million for the study and filling 2.00 additional FTE positions, 1.00
at a cost of $71,500 annually and 1.00 at a cost of $58,500 annually. In addition, in order to comply
with section 2 of the bill, the agency would need to obtain IMPLAN, which is an economic impact
assessment modeling system, at a cost of $20,000 the first year and not more than $7,500 for each
year after. The agency would pay for the study through assessments on the utilities that are subject
to the study. Those assessments would be recouped by the utilities through assessments on utility
users. Any fiscal effect associated with HB 2231 is not reflected in The FY 2020 Governor’s
Budget Report.


                                                      Sincerely,

                                                      Larry L. Campbell
                                                      Director of the Budget


cc: Jake Fisher, KCC
Statutes affected: 
As introduced: 66-101b, 66-117b