As utility customers across the country face rising rates and growing pressure on household budgets, the Kansas City Board of Public Utilities (BPU) has secured a long-term energy strategy projected to save its electric customers approximately $150 million over the next 30 years, the Kansas public power utility reported on Sept. 23.
Through a new energy prepay agreement, BPU will pay less for certain energy purchases and pass those savings directly to electric customers beginning Jan. 1, 2027. As a publicly owned, not-for-profit utility, BPU does not retain those savings as profit.
“Affordability has to be part of every decision we make,” said BPU General Manager Jeremy Ash. “Our customers are counting on us to look ahead, manage expenses responsibly, and find opportunities to protect them from costs they don't have to bear. When BPU can spend less to provide the energy our community needs, our customers benefit. What's right for BPU should ultimately be right for the customers and community we serve.”
For an average residential customer using 1,000 kilowatt-hours of electricity per month, the prepay is expected to initially reduce energy costs by just over $10 annually, with those savings projected to more than double by 2030.
Across BPU's electric system, those individual savings add up. BPU projects approximately $21.1 million in energy cost savings through Sept. 30, 2032, with annual savings expected to continue in the years that follow.
“We know household budgets are under pressure, and every dollar matters to our customers,” said BPU Chief Financial Officer Andrew Ferris. “Our goal goes beyond managing rising costs and stabilizing rates. We have to keep looking for responsible opportunities to reduce costs and lower what our customers have to pay. That's what this agreement allows us to do, and that's a significant win for our customers.”
An energy prepay uses a long-term financial structure to secure certain energy purchases at a lower cost. BPU's new arrangement generates savings on market energy purchases and existing power purchase agreements, including Cimarron Bend Wind Farm and the Ninnescah Solar and Battery Farm.
As BPU's energy needs increase, the prepay's value is expected to grow as it purchases more energy through the arrangement. BPU projects nearly $2 million in savings in 2027, increasing to approximately $5.5 million to $6 million annually in later years.
The prepay is one part of BPU's broader strategy to manage costs and prepare for future energy needs. BPU maintains a diverse energy portfolio that includes wind, solar, hydro, landfill gas, coal, and natural gas. More than 50% of BPU's retail energy sales come from carbon-free energy resources.
“Affordability isn't just about responding to the costs we face today,” Ash said. “It's about planning years ahead, making smart investments and continually finding ways to reduce costs before they reach our customers. This agreement is that work in action. It's a strategic decision we're making today to protect affordability for our customers and community for decades to come.”
The Kansas City Board of Public Utilities is a community-owned, not-for-profit utility providing electric and water services to more than 67,000 electric and 53,000 water customers in Wyandotte County, Kansas.
