KANSAS CITY, Mo. — Kansas Gas Service will include a separate line item labeled “Winter Event Securitized Cost” on residential and commercial customer billing statements starting in December, the company announced Friday.
The new line item results from the company’s securitization of the extraordinary costs it incurred to provide natural gas service to homes and businesses during Winter Storm Uri in February 2021.
Kansas Gas Service experienced unusually high natural gas costs when there was a significant increase in natural gas market prices from high demand during the winter storm.
The price that the company pays for its gas supply is a pass-through to customers without markup.
The monthly securitization charge for residential customers is $5.64 and is estimated to decrease to $5.11 at the first adjustment occurring mid-year in 2023. The monthly securitization charge will be updated, either upwards or downwards depending on collections, twice a year over a 10-year term.
In August, the Kansas Corporation Commission approved a settlement agreement and financing order to allow Kansas Gas Service to issue securitized bonds to recover the extraordinary costs resulting from the storm.
“Knowing the high cost of gas would have made our customers’ bills significantly more than usual, we worked to find a solution to minimize the monthly impact to customers,” said Jeff Husen, vice president of rates and regulatory for ONE Gas, parent company of Kansas Gas Service. “Spreading the costs over a longer time frame helps keep customers’ monthly bills lower and more manageable than recovery through traditional approaches to setting rates.”
The company estimates that securitization will save customers approximately $36.3 million.