The Kansas Corporation Commission has opened an investigation into an agreement between Evergy Inc. and investor Elliott International.
According to a news release Thursday from KCC spokeswoman Linda Berry, there are concerns about how the agreement could negatively affect Kansas electric customers.
Evergy and Elliott came to an agreement in March after months of negotiations. The utility company and Elliott agreed to appoint two new members to Evergy’s board of directors and to the creation of a special committee that would find new ways to increase the utility’s shareholder value.
Berry said in the news release the agreement requires Evergy to consider cutting costs or pursue a merger that would increase shareholder profits.
"Staff is very concerned that Elliott’s focus on increasing shareholder value will place Evergy’s customers at a high risk of paying higher rates or receiving lower quality service in order to support an increase in shareholder value," the KCC filing said.
The report details several issues that pose a challenge to Elliott’s shareholder enhancement concept, including previous merger commitments approved by KCC, rate studies that show capital expense investments and reduced sales as drivers of Evergy’s rate increases, legislative efforts to reduce Evergy’s rates and economic impacts brought on by COVID-19.
Berry said Evergy will be required to file its own report and address KCC’s questions two weeks after its board decides whether to pursue a cost reduction plan or a merger transaction.