Kansas Lends Up To $ 100 Million To Cities With Huge Energy Costs

TOPEKA, Kansas (AP) – Spurred on by appeals from desperate local officials, Kansas lawmakers on Wednesday quickly created a low-interest loan program to help cities cover spikes in costs associated with providing heat and electricity to their residents during the intense cold of the past month. break.

Lawmakers sent Democratic Governor Laura Kelly a bill this would allow the state to immediately lend $ 100 million of its unused funds to cities that operate their own electricity and natural gas utilities, to cover last month’s “extraordinary” energy costs. Cities would have up to 10 years to repay the loans.

The bill was introduced on Tuesday, went to a hearing, cleared a House committee Wednesday morning, and passed the House less than two hours later, 124-0. The Senate approved it, 37-1, in the afternoon, and Kelly signed it on Wednesday night, her office said.

“This loan program is very important to our cities,” Kelly said at a Statehouse press conference. “It gives them the immediate relief they need to avoid dire financial decisions while we seek other long-term solutions.”

Temperatures below zero in mid-February led to a sharp increase in demand for natural gas, and other problems, such as freezing equipment, made gas difficult to obtain, causing prices to soar. That has left dozens of Kansas cities with big energy bills ahead, and bill advocates have said some could go bankrupt without help.

The town of Denison, with about 190 residents 40 miles north of Topeka, was billed about $ 241,000 for gas in February, while its bill last year was about $ 4,100, the clerk said. municipal Yvonne Hamer on the House committee. in a written testimony. She said without help the city will “sink” after 134 years.

“Now I fear I will have to close my doors if the city is to pass on the outrageous gasoline prices incurred in February,” said Samantha Correll, who bought Finer Than A Frog Hair Bar & Grill in Denison. in a report to the committee.

Lawmakers initially focused on helping cities that operate their own utilities, as they have already received a slew of cold snap bills and have another set to come. Kimberly Gencur Svaty, a lobbyist for municipal utilities, said many of those towns used the funds available to cover the first round.

Fifty-three cities provide their residents with natural gas for heating, and 118 operate their own electric utilities, some of which also use natural gas to generate electricity. Svaty said that within a week, gas prices shot up to 200 times what cities were paying.

She said cities that operate their own utilities face “an immediate financial crisis” as Great Depression-era laws aimed at stabilizing their finances severely limit their ability to borrow money. Without help, she and other supporters said, these cities face huge short-term increases in customer bills, when loans allow them to “smooth out” additional costs over time.

Svaty also said that if cities could not pay their gas bills, they risked being excluded from the market, which would prevent some of them from supplying their residents.

“This is something you can do here now that will literally make a difference in people’s lives in the week to 10 days ahead,” Svaty said.

In Argonia, a town of around 500 residents about 80 miles southwest of Wichita, the town expects a bill of over $ 500,000 as of February, when its typical monthly cost is 9,000. $, according to City Clerk Tara Pierce.

“This extreme cost could break us,” she said. in testimony to the House committee.

In the House, Democratic Representative Henry Helgerson of Wichita feared the state would be suspended if a city defaulted on a loan but voted for the bill.

The only vote against in either chamber came from first-year Republican Senator Alicia Straub, of Ellinwood. She said allowing cities to take out low-interest loans “recognizes that somehow the consumer is responsible for this.”

“I don’t think the consumer is at fault, and I don’t think the consumer should have to pay for this in any way,” she said.

But Chris Komarek, administrator of the town of Straub, the hometown of 2,100 Kansas residents, had urged lawmakers to pass the bill, saying in written testimony that it was “huge for the survival of communities of the State of Kansas ”.


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Natalie C. Parsons