Evergy Inc

4. RATE MATTERS AND REGULATION

KCC Proceedings

Evergy Kansas Central's 2025 Rate Case Proceeding

In January 2025, Evergy Kansas Central filed an application with the KCC to request an increase to its retail revenues of approximately $196 million. Evergy Kansas Central's request reflected a return on equity of 10.5% (with a capital structure composed of 52% equity) and increases related to the recovery of infrastructure investments made to improve reliability and enhance customer service and the update of expenses to current levels of spend. An evidentiary hearing in the case is scheduled to occur in July 2025 and new rates are expected to be effective in September 2025.

Applications for Predetermination

The KCC uses a process referred to as ‘predetermination’ to establish ratemaking principles and treatments for certain utility investments before they are included in a utility’s rate base. The process helps balance the interest of utilities and customers by ensuring broad agreement to the reasonableness of the investment and regulatory certainty regarding the recovery of costs associated with the investment. Investment in utility projects may be dependent on acceptable regulatory treatment determined in the predetermination process.

In November 2024, Evergy Kansas Central requested predetermination from the KCC for its planned natural gas plant investments and Kansas Sky solar investment. In April 2025, Evergy Kansas Central and intervenors in the case reached a non-unanimous partial settlement agreement regarding its planned natural gas plant investments and a unanimous partial settlement agreement regarding the Kansas Sky solar investment.

The partial settlement agreement for the natural gas plant investments, if approved by the KCC, establishes that Evergy Kansas Central's investment in its planned natural plants is prudent. Subject to the approval of the KCC and within limitations, the agreement will permit Evergy Kansas Central to implement a CWIP riderone year after construction of each plant begins and Evergy Kansas Central will recover through the CWIP rider the return on up to 100% of amounts recorded to CWIP for each plant. Evergy Kansas Central will be permitted to update rates charged through the CWIP rider everysix months. Evergy Kansas Central will be permitted to collect these amounts through the CWIP rider until new base rates reflecting Evergy Kansas Central's investment in the natural gas plants take effect. Evergy Kansas Central will not be able to accrue AFUDC on these amounts once the CWIP rider becomes effective and is included in customer rates. When new base rates reflecting Evergy Kansas Central's investment in each plant take effect, those base rates would include a deferral for depreciation expense incurred and carrying costs on any unrecovered portion of Evergy Kansas Central's investment in natural gas plants incurred between the time the natural gas plants are placed in service and the time the investment in the natural gas plants is included in base rates. Investments above certain amounts established in the settlement agreement would be subject to a prudence review.

The partial settlement agreement for the Kansas Sky solar investment, if approved by the KCC, allows Evergy Kansas Central’s investment in Kansas Sky to be included in rates at Evergy Kansas Central’s next general rate case at a fixed amount for the first thirty years of the life of the generation site. In addition, Evergy Kansas Central would be permitted to defer to a regulatory asset and recover over the remaining life of the Kansas Sky solar investment depreciation expense, the associated return on investment and other costs incurred between the time the investment is placed in service and the effective date of rates that include the fixed revenue requirement.

Evergy Kansas Central is expecting an order from the KCC on its planned natural gas plant investments and its Kansas Sky solar investment in July 2025.

Evergy Kansas Central 2025 Transmission Delivery Charge (TDC)

In April 2025, the KCC issued an order adjusting Evergy Kansas Central's retail prices to include updated transmission costs as reflected in the Federal Energy Regulatory Commission (FERC) transmission formula rate (TFR). The new prices are effective in May 2025 and are expected to increase Evergy Kansas Central's annual retail revenues by $55.9 million when compared to 2024.

Evergy Metro 2025 TDC

In April 2025, the KCC issued an order adjusting Evergy Metro's retail prices to include updated transmission costs as reflected in the FERC TFR. The new prices are effective in May 2025 and are expected to increase Evergy Metro's annual retail revenues by $4.8 million when compared to 2024.

MPSC Proceedings

Evergy Missouri West's 2024 Rate Case Proceeding

In January 2025, Evergy Missouri West implemented new rates approved by the MPSC in December 2024 providing for an increase to Evergy Missouri West's retail revenues of approximately $55 million after lowering base rates for fuel and purchased power expense of approximately $49 million and rebasing property tax expense.

Requests for Certificate of Convenience and Necessity

Missouri utilities must request a CCN from the MPSC to authorize them to build certain utility projects. The CCN process authorizes utilities to build projects and can provide assurance that the project is prudent and necessary. Investment in projects is dependent upon the granting by the MPSC of a CCN with reasonably acceptable terms. In 2024, Evergy Missouri West filed applications for CCNs for its planned renewable and natural gas plant investments. Final orders from the MPSC are expected in August 2025.

FERC Proceedings

In October of each year, Evergy Kansas Central and Evergy Metro post an updated TFR that includes projected transmission capital expenditures and operating costs for the following year. This rate is the most significant component in the retail rate calculation for Evergy Kansas Central's and Evergy Metro's annual request with the KCC to adjust retail prices to include updated transmission costs through the TDC.

Evergy Kansas Central TFR Annual Update

Most recently, the updated TFR was expected to adjust Evergy Kansas Central's annual transmission revenues by approximately:

•$19.1 million increase effective in January 2025; and

•$115.8 million increase effective in January 2024.

Evergy Kansas Central TFR Formal Complaint

In February 2023, certain Evergy Kansas Central TFR customers submitted a formal complaint with FERC requesting the refund of over-collections related to the capital structure calculation in determining Evergy Kansas Central's Annual Transmission Revenue Requirement for the 2018 and 2019 rate years. As of March 31, 2025 and December 31, 2024, Evergy and Evergy Kansas Central had recorded a $7.1 million regulatory liability related to the 2018 and 2019 rate year refund request. Evergy and Evergy Kansas Central are awaiting a response from FERC.

Evergy Metro TFR Annual Update

Most recently, the updated TFR was expected to adjust Evergy Metro's annual transmission revenues by approximately:

•$1.0 million increase effective in January 2025; and

•$23.7 million increase effective in January 2024.