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RATE MATTERS AND REGULATION | 12 Months Ended
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Dec. 31, 2023
Regulated Operations [Abstract] |
RATE MATTERS AND REGULATION | RATE MATTERS AND REGULATION KCC Proceedings Evergy Kansas Central's and Evergy Metro's 2023 Rate Case Proceeding In April 2023, Evergy Kansas Central and Evergy Metro filed applications with the KCC to request increases to their retail revenues of approximately $204 million and $14 million, respectively. Evergy Kansas Central's request reflected a return on equity of 10.25% (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, the inclusion of Evergy Kansas Central's non-regulated 8% ownership share of Jeffrey Energy Center (JEC) in rate base and the management of the previously established end to a COLI program. Evergy Kansas Central also requested the inclusion of the cost of Persimmon Creek of approximately $220.9 million. The cost of Persimmon Creek was not included in Evergy Kansas Central's approximately $204 million increase to retail revenue requested in the case but would have resulted in an additional $21.5 million increase to Evergy Kansas Central's retail revenues. The addition of Persimmon Creek is consistent with the preferred plan identified through Evergy Kansas Central's integrated resource plan filed with the KCC in June 2023, which identified the wind farm as part of the lowest-cost resource plan to serve customers. Evergy Metro's request reflected a return on equity of 10.25% (with a capital structure composed of 52% equity) and increases related to recovery of infrastructure investments made to improve reliability and enhance customer service. Requests for increases in retail revenues in both proceedings were partially offset by significant customer savings and cost reductions. In September 2023, Evergy Kansas Central, Evergy Metro, KCC staff and other intervenors reached a unanimous settlement agreement to settle all issues in the case. The unanimous settlement agreement provided for an increase in retail revenues of $74.0 million for Evergy Kansas Central and a decrease in retail revenues of $32.9 million for Evergy Metro. For Evergy Kansas Central, the settlement included the recovery of Persimmon Creek costs through a levelized revenue requirement approach at a fixed rate of $18.6 million for the first 20 years, after which the levelized revenue requirement will be reevaluated. The parties agreed to include Evergy Kansas Central's non-regulated 8% ownership share of JEC in rate base. The fuel costs and wholesale sales associated with Evergy Kansas Central's non-regulated 8% ownership share of JEC will be included in Evergy Kansas Central's fuel recovery mechanism effective with the new rates. The settlement included a refund to Evergy Kansas Central customers of $96.5 million amortized over three years to account for the difference between the expected amount of COLI rate credits approved and the actual amount of COLI rate credits received by customers from 1987 through December 31, 2023. This amount was recorded as a regulatory liability as of December 31, 2023 with a corresponding reduction to revenues in 2023. In November 2023, the KCC approved the unanimous settlement agreement. New rates became effective in December 2023. Evergy Kansas Central 2023 Transmission Delivery Charge (TDC) In April 2023, the KCC issued an order adjusting Evergy Kansas Central's retail prices to include updated transmission costs as reflected in the FERC transmission formula rate (TFR). The new prices were effective in May 2023 and included the adjustments to the 2023 TFR described under "Evergy Kansas Central TFR Formal Challenge" within this Note 4. The new prices are expected to decrease Evergy Kansas Central's annual retail revenues by $22.3 million when compared to 2022. Evergy Metro 2023 TDC In April 2023, 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 were effective in May 2023 and are expected to increase Evergy Metro's annual retail revenues by $4.0 million when compared to 2022. Evergy Kansas Central and Evergy Metro Earnings Review and Sharing Plan (ERSP) As part of their 2018 merger settlement agreement with the KCC, Evergy Kansas Central and Evergy Metro agreed to participate in an ERSP for the years 2019 through 2022. Under the ERSP, Evergy Kansas Central's and Evergy Metro's Kansas jurisdiction are required to refund to customers 50% of annual earnings in excess of their authorized return on equity of 9.3% to the extent the excess earnings exceed the amount of annual bill credits that Evergy Kansas Central and Evergy Metro agreed to provide in connection with the merger that resulted in the formation of Evergy. As of December 31, 2022, Evergy Kansas Central estimated that its 2022 annual earnings did not result in a refund obligation. As of December 31, 2022, Evergy Metro estimated that its 2022 annual earnings resulted in a $16.7 million refund obligation, which was recorded in the fourth quarter of 2022. Evergy Kansas Central and Evergy Metro filed their 2022 ERSP calculations with the KCC in March 2023. As part of these filings, Evergy Metro filed for a lower refund obligation for 2022 of approximately $6 million (compared with its $16.7 million refund obligation estimate) as a result of certain intercompany billings to Evergy Kansas Central. In May 2023, the KCC approved Evergy Metro's application ordering it to refund approximately $6 million. MPSC Proceedings Evergy Missouri West's 2024 Rate Case Proceeding In February 2024, Evergy Missouri West filed an application with the MPSC to request an increase to its retail revenues of approximately $104 million. Evergy Missouri West's request reflected a return of 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 inclusion of costs related to Dogwood and Crossroads Energy Center (Crossroads), two natural gas plants. New rates are expected to be effective in January 2025. Evergy Missouri West February 2021 Winter Weather Event Securitization In February 2021, much of the central and southern United States, including the service territories of the Evergy Companies, experienced a significant winter weather event that resulted in extremely cold temperatures over a multi-day period. In November 2022, the MPSC issued a revised financing order authorizing Evergy Missouri West to issue securitized bonds to recover its extraordinary fuel and purchased power costs incurred as part of the February 2021 winter weather event. As part of the order, the MPSC found that Evergy Missouri West's costs were prudently incurred, that it should only be allowed to recover 95% of its extraordinary fuel and purchased power costs consistent with the 5% sharing provision of its fuel recovery mechanism, that it should be allowed to recover carrying costs incurred since February 2021 at Evergy Missouri West's long-term debt rate of 5.06% and approved a 15 year repayment period for the bonds with a 17 year legal maturity. As of December 31, 2023 and December 31, 2022, the value of Evergy Missouri West's February 2021 winter weather event regulatory asset was $323.8 million and $309.0 million, respectively. Evergy Missouri West continued to record carrying charges on its February 2021 winter weather event regulatory asset until it issued the securitized bonds in February 2024. In January 2023, the Office of the Public Counsel (OPC) filed an appeal with the Missouri Court of Appeals, Western District, challenging the financing order regarding the treatment of income tax deductions, carrying costs and discount rates related to the financing of the extraordinary fuel and purchased power costs incurred as part of the February 2021 winter weather event. In September 2023, the Missouri Court of Appeals, Western District, affirmed the November 2022 MPSC revised financing order. In October 2023, the Missouri Court of Appeals, Western District, rejected the OPC's request for rehearing. The OPC did not file an appeal with the Supreme Court of the State of Missouri by the mid-November 2023 deadline and therefore, the financing order is final and nonappealable. In February 2024, Evergy Missouri West issued the securitized bonds. See Note 12 for additional information regarding the issuance of the securitized bonds. 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 In the most recent three years, the updated TFR was expected to adjust Evergy Kansas Central's annual transmission revenues by approximately: •$115.8 million increase effective in January 2024; •$21.7 million decrease effective in March 2023; and •$33.2 million increase effective in January 2022. See "Evergy Kansas Central TFR Formal Challenge" within this Note 4 for more information regarding the March 2023 adjustment. Evergy Kansas Central TFR Formal Challenge In March 2022, certain Evergy Kansas Central TFR customers submitted a formal challenge regarding the implementation of Evergy Kansas Central's TFR, specifically with regard to how Evergy Kansas Central's capital structure was calculated as part of determining the Annual Transmission Revenue Requirement (ATRR). As part of this challenge, the customers requested that Evergy Kansas Central make refunds for over-collections in rate years 2018 through 2022 as a result of the calculation of its capital structure included in the TFR. Evergy Kansas Central disputed that any refunds for 2018 through 2022 were required because Evergy Kansas Central was following its approved TFR formula. In December 2022, FERC issued an order upholding in part, and denying in part, the formal challenge of Evergy Kansas Central's TFR by certain customers. As a result of this order, Evergy and Evergy Kansas Central recorded a $32.8 million regulatory liability on their consolidated balance sheets as of December 31, 2022 for the estimated refund of TFR revenue over-collections related to the calculation of Evergy Kansas Central's capital structure for rate years 2018 through 2022. In March 2023, Evergy Kansas Central refiled its annual update to include the refund of the 2020, 2021 and 2022 over-collections as part of its 2023 TFR effective in March 2023. In February 2023, certain Evergy Kansas Central TFR customers submitted a formal complaint with FERC requesting the refund of over-collections related to the 2018 and 2019 rate years. A decision from FERC regarding this complaint is expected in 2024. Evergy Metro TFR Annual Update In the most recent three years, the updated TFR was expected to adjust Evergy Metro's annual transmission revenues by approximately: •$23.7 million increase effective in January 2024; •$8.6 million increase effective in January 2023; and •$18.1 million increase effective in January 2022. Regulatory Assets and Liabilities The Evergy Companies have recorded assets and liabilities on their consolidated balance sheets resulting from the effects of the ratemaking process, which would not otherwise be recorded if they were not regulated. Regulatory assets represent incurred costs that are probable of recovery from future revenues. Regulatory liabilities represent future reductions in revenues or refunds to customers. Management regularly assesses whether regulatory assets and liabilities are probable of future recovery or refund by considering factors such as decisions by the MPSC, KCC or FERC in Evergy Kansas Central's, Evergy Metro's and Evergy Missouri West's rate case filings; decisions in other regulatory proceedings, including decisions related to other companies that establish precedent on matters applicable to the Evergy Companies; and changes in laws and regulations. If recovery or refund of regulatory assets or liabilities is not approved by regulators or is no longer deemed probable, these regulatory assets or liabilities are recognized in the current period results of operations. The Evergy Companies continued ability to meet the criteria for recording regulatory assets and liabilities may be affected in the future by restructuring and deregulation in the electric industry or changes in accounting rules. In the event that the criteria no longer applied to any or all of the Evergy Companies' operations, the related regulatory assets and liabilities would be written off unless an appropriate regulatory recovery mechanism were provided. Additionally, these factors could result in an impairment on utility plant assets. The Evergy Companies' regulatory assets and liabilities are detailed in the following tables.
|  | December 31
|  | 2023 |  | 2022
|  | Evergy |  | Evergy Kansas Central |  | Evergy Metro |  | Evergy |  | Evergy Kansas Central |  | Evergy Metro
Regulatory Assets |  | (millions)
Pension and post-retirement costs |  | $ | 91.6 |  |  | $ | 29.7 |  |  | $ | — |  |  | $ | 137.3 |  |  | $ | 54.9 |  |  | $ | — |
Debt reacquisition costs |  | 81.2 |  |  | 75.3 |  |  | 5.3 |  |  | 87.7 |  |  | 80.9 |  |  | 6.0 |
Debt fair value adjustment |  | 87.0 |  |  | — |  |  | — |  |  | 92.1 |  |  | — |  |  | — |
Asset retirement obligations fair value adjustment |  | 120.7 |  |  | — |  |  | — |  |  | 119.4 |  |  | — |  |  | — |
Depreciation |  | 168.7 |  |  | 44.6 |  |  | 66.0 |  |  | 159.1 |  |  | 47.2 |  |  | 57.1 |
Cost of removal |  | 372.3 |  |  | 165.6 |  |  | 168.2 |  |  | 346.8 |  |  | 158.2 |  |  | 140.6 |
Asset retirement obligations |  | 152.9 |  |  | 65.9 |  |  | 64.0 |  |  | 127.5 |  |  | 54.5 |  |  | 53.4 |
Analog meter unrecovered investment |  | 8.3 |  |  | 8.3 |  |  | — |  |  | 12.6 |  |  | 12.6 |  |  | — |
Treasury yield hedges |  | 18.1 |  |  | 18.1 |  |  | — |  |  | 19.2 |  |  | 19.2 |  |  | — |
Iatan No. 1 and common facilities |  | 5.9 |  |  | — |  |  | 2.5 |  |  | 6.2 |  |  | — |  |  | 2.6 |
Iatan No. 2 construction accounting costs |  | 23.4 |  |  | — |  |  | 11.7 |  |  | 24.0 |  |  | — |  |  | 12.0 |
Property taxes |  | 56.0 |  |  | 28.3 |  |  | 25.3 |  |  | 51.4 |  |  | 33.0 |  |  | 15.8 |
Disallowed plant costs |  | 13.5 |  |  | 13.5 |  |  | — |  |  | 13.9 |  |  | 13.9 |  |  | — |
La Cygne environmental costs |  | 8.8 |  |  | 6.8 |  |  | 2.0 |  |  | 10.0 |  |  | 7.9 |  |  | 2.1 |
Deferred customer programs |  | 20.3 |  |  | 6.7 |  |  | 11.2 |  |  | 14.3 |  |  | 6.5 |  |  | 6.7 |
Fuel recovery mechanisms |  | 101.3 |  |  | — |  |  | 14.1 |  |  | 188.5 |  |  | — |  |  | 13.5 |
February 2021 winter weather event |  | 403.5 |  |  | 79.7 |  |  | — |  |  | 430.9 |  |  | 121.9 |  |  | — |
Solar rebates |  | 9.9 |  |  | — |  |  | — |  |  | 15.6 |  |  | — |  |  | — |
Transmission delivery charge |  | 2.0 |  |  | 0.9 |  |  | 1.1 |  |  | 1.5 |  |  | — |  |  | 1.5 |
Wolf Creek outage |  | 8.4 |  |  | 4.2 |  |  | 4.2 |  |  | 22.8 |  |  | 11.4 |  |  | 11.4 |
Pension and other post-retirement benefit non-service costs |  | 85.8 |  |  | 32.0 |  |  | 34.2 |  |  | 75.3 |  |  | 24.8 |  |  | 30.7 |
Retired generation facilities |  | 138.2 |  |  | — |  |  | — |  |  | 146.3 |  |  | — |  |  | — |
Merger transition costs |  | 23.1 |  |  | 11.0 |  |  | 8.6 |  |  | 28.1 |  |  | 13.3 |  |  | 10.5 |
Other regulatory assets |  | 86.5 |  |  | 42.3 |  |  | 15.6 |  |  | 83.8 |  |  | 51.7 |  |  | 9.9 |
Total |  | 2,087.4 |  |  | 632.9 |  |  | 434.0 |  |  | 2,214.3 |  |  | 711.9 |  |  | 373.8 |
Less: current portion |  | (292.1) |  |  | (127.7) |  |  | (53.2) |  |  | (368.0) |  |  | (121.9) |  |  | (42.3) |
Total noncurrent regulatory assets |  | $ | 1,795.3 |  |  | $ | 505.2 |  |  | $ | 380.8 |  |  | $ | 1,846.3 |  |  | $ | 590.0 |  |  | $ | 331.5 |
|  | December 31
|  | 2023 |  | 2022
|  | Evergy |  | Evergy Kansas Central |  | Evergy Metro |  | Evergy |  | Evergy Kansas Central |  | Evergy Metro
Regulatory Liabilities |  | (millions)
Taxes refundable through future rates |  | $ | 1,737.8 |  |  | $ | 1,047.2 |  |  | $ | 519.2 |  |  | $ | 1,866.6 |  |  | $ | 1,084.2 |  |  | $ | 586.6 |
Deferred regulatory gain from sale leaseback |  | 31.6 |  |  | 31.6 |  |  | — |  |  | 37.1 |  |  | 37.1 |  |  | — |
Emission allowances |  | 34.2 |  |  | — |  |  | 34.2 |  |  | 38.2 |  |  | — |  |  | 38.2 |
Nuclear decommissioning |  | 318.7 |  |  | 125.5 |  |  | 193.2 |  |  | 246.3 |  |  | 103.4 |  |  | 142.9 |
Pension and post-retirement costs |  | 124.8 |  |  | 21.9 |  |  | 100.5 |  |  | 98.4 |  |  | 23.0 |  |  | 72.5 |
Jurisdictional allowance for funds used during construction |  | 24.4 |  |  | 22.7 |  |  | 1.7 |  |  | 25.9 |  |  | 24.2 |  |  | 1.7 |
La Cygne leasehold dismantling costs |  | 29.6 |  |  | 29.6 |  |  | — |  |  | 29.6 |  |  | 29.6 |  |  | — |
Kansas tax credits |  | 16.8 |  |  | 16.8 |  |  | — |  |  | 23.5 |  |  | 23.5 |  |  | — |
Purchase power agreement |  | 3.7 |  |  | 3.7 |  |  | — |  |  | 4.1 |  |  | 4.1 |  |  | — |
Fuel recovery mechanisms |  | 34.7 |  |  | 34.7 |  |  | — |  |  | 4.7 |  |  | 4.5 |  |  | 0.2 |
February 2021 winter weather event |  | 13.0 |  |  | — |  |  | 13.0 |  |  | 37.8 |  |  | — |  |  | 37.8 |
Sibley AAO |  | 79.2 |  |  | — |  |  | — |  |  | 108.0 |  |  | — |  |  | — |
TFR refunds |  | 11.2 |  |  | 11.2 |  |  | — |  |  | 55.5 |  |  | 55.5 |  |  | — |
COLI rate credits refund |  | 96.5 |  |  | 96.5 |  |  | — |  |  | — |  |  | — |  |  | — |
Phase-in plan |  | 38.1 |  |  | 38.1 |  |  | — |  |  | 25.1 |  |  | 25.1 |  |  | — |
Other regulatory liabilities |  | 131.2 |  |  | 57.0 |  |  | 41.4 |  |  | 121.4 |  |  | 26.8 |  |  | 48.2 |
Total |  | 2,725.5 |  |  | 1,536.5 |  |  | 903.2 |  |  | 2,722.2 |  |  | 1,441.0 |  |  | 928.1 |
Less: current portion |  | (183.0) |  |  | (104.1) |  |  | (43.0) |  |  | (155.4) |  |  | (72.1) |  |  | (55.3) |
Total noncurrent regulatory liabilities |  | $ | 2,542.5 |  |  | $ | 1,432.4 |  |  | $ | 860.2 |  |  | $ | 2,566.8 |  |  | $ | 1,368.9 |  |  | $ | 872.8 |
The following summarizes the nature and period of recovery for each of the regulatory assets listed in the table above. Pension and post-retirement costs: Represents unrecognized gains and losses and prior service costs that will be recognized in future net periodic pension and post-retirement costs, pension settlements amortized over various periods and financial and regulatory accounting method differences that will be eliminated over the life of the pension plans. Of these amounts, as of December 31, 2023, $82.1 million and $29.7 million for Evergy and Evergy Kansas Central, respectively, are not included in rate base and are amortized over various periods. Additionally, $91.3 million, $(34.3) million and $65.3 million for Evergy, Evergy Kansas Central and Evergy Metro, respectively, represent differences between pension and post-retirement costs under GAAP and pension and post-retirement costs for ratemaking that will be recovered or refunded in future rates and differences in accumulated unrecognized gains and losses and prior service costs between Evergy and Evergy Metro due to Evergy Metro electing not to apply "push-down accounting" related to the Great Plains Energy and Evergy Kansas Central merger. Debt reacquisition costs: Includes costs incurred to reacquire and refinance debt. These costs are amortized over the term of the new debt or the remaining lives of the old debt issuances if no new debt was issued and are not included in rate base. Debt fair value adjustment: Represents purchase accounting adjustments recorded to state the carrying value of Evergy Metro and Evergy Missouri West long-term debt at fair value in connection with the Great Plains Energy and Evergy Kansas Central merger. Amount is amortized over the life of the related debt and is not included in rate base. Asset retirement obligations fair value adjustment: Represents purchase accounting adjustments recorded to state the carrying value of Evergy Metro and Evergy Missouri West AROs at fair value in connection with the Great Plains Energy and Evergy Kansas Central merger. Amount is amortized over the life of the related plant and is not included in rate base. Depreciation: Represents the difference between regulatory depreciation expense and depreciation expense recorded for financial reporting purposes. These assets are included in rate base and the difference is amortized over the life of the related plant. Cost of removal: Represents amounts spent, but not yet collected, to dispose of plant assets. This asset will decrease as removal costs are collected in rates and is included in rate base. Asset retirement obligations: Represents amounts associated with AROs as discussed further in Note 6. These amounts are recovered over the life of the related plant and are not included in rate base. Analog meter unrecovered investment: Represents the deferral of unrecovered investment of retired analog meters. Treasury yield hedges: Represents the effective portion of treasury yield hedge transactions. Amortization of this amount will be included in interest expense over the term of the related debt and is not included in rate base. Iatan No. 1 and common facilities: Represents depreciation and carrying costs related to Iatan No. 1 and common facilities. These costs are included in rate base and amortized through 2057. Iatan No. 2 construction accounting costs: Represents the construction accounting costs related to Iatan No. 2. These costs are included in rate base and amortized through 2059. Property taxes: Represents actual costs incurred for property taxes in excess of amounts collected in revenues. These costs are expected to be recovered over various periods and are not included in rate base. Disallowed plant costs: The KCC originally disallowed certain costs related to the Wolf Creek plant. In 1987, the KCC revised its original conclusion and provided for recovery of an indirect disallowance with no return on investment. This regulatory asset represents the present value of the future expected revenues to be provided to recover these costs, net of the amounts amortized. La Cygne environmental costs: Represents the deferral of depreciation and amortization expense and associated carrying charges related to the La Cygne Station environmental project. This amount will be amortized over the life of the related asset and is included in rate base. Deferred customer programs: Represents costs related to various energy efficiency programs that have been accumulated and deferred for future recovery. Of these amounts, $13.6 million for Evergy and $11.2 million for Evergy Metro are not included in rate base and are amortized over various periods. Fuel recovery mechanisms: Represents the actual cost of fuel consumed in producing electricity and the cost of purchased power in excess of the amounts collected from customers. This difference is expected to be recovered over a one-year period and is not included in rate base. February 2021 winter weather event: Represents deferred extraordinary fuel and purchased power costs incurred to provide electric service as a result of the February 2021 winter weather event. Of these amounts, $79.7 million for Evergy and Evergy Kansas Central is not included in rate base. Solar rebates: Represents costs associated with solar rebates provided to retail electric customers. These amounts are not included in rate base and are amortized over various periods. Transmission delivery charge: Represents costs associated with the transmission delivery charge. The amounts are not included in rate base and are amortized over a one-year period. Wolf Creek outage: Represents deferred expenses associated with Wolf Creek's scheduled refueling and maintenance outages. These expenses are amortized during the period between planned outages and are not included in rate base. Pension and other post-retirement benefit non-service costs: Represents the non-service component of pension and post-retirement net benefit costs that are capitalized as authorized by regulators. The amounts are included in rate base and are recovered over the life of the related asset. Retired generation facilities: Represents amounts to be recovered for facilities that have been retired, are not included in rate base and recovered through 2030. Merger transition costs: Represents recoverable transition costs related to the merger. The amounts are not included in rate base and are recovered through 2028. Other regulatory assets: Includes various regulatory assets that individually are small in relation to the total regulatory asset balance. These amounts have various recovery periods and are not included in rate base. The following summarizes the nature and period of amortization for each of the regulatory liabilities listed in the table above. Taxes refundable through future rates: Represents the obligation to return to customers income taxes recovered in earlier periods when corporate income tax rates were higher than current income tax rates. A large portion of this amount is related to depreciation and will be returned to customers over the life of the applicable property. Deferred regulatory gain from sale leaseback: Represents the gain Evergy Kansas South recorded on the 1987 sale and leaseback of its 50% interest in La Cygne Unit 2. The gain is amortized over the term of the lease. Emission allowances: Represents deferred gains related to the sale of emission allowances to be returned to customers. Nuclear decommissioning: Represents the difference between the fair value of the assets held in the nuclear decommissioning trust and the amount recorded for the accumulated accretion and depreciation expense associated with the asset retirement obligation related to Wolf Creek. Pension and post-retirement costs: Includes pension and post-retirement benefit obligations and expense recognized in setting prices in excess of actual pension and post-retirement expense. Jurisdictional allowance for funds used during construction: Represents AFUDC that is accrued subsequent to the time the associated construction charges are included in prices and prior to the time the related assets are placed in service. The AFUDC is amortized to depreciation expense over the useful life of the asset that is placed in service. La Cygne leasehold dismantling costs: Represents amounts collected but not yet spent on the contractual obligation to dismantle a portion of La Cygne Unit 2. The obligation will be discharged as the unit is dismantled. Kansas tax credits: Represents Kansas tax credits on investment in utility plant. Amounts will be credited to customers subsequent to the realization of the credits over the remaining lives of the utility plant giving rise to the tax credits. Purchase power agreement: Represents the amount included in retail electric rates from customers in excess of costs incurred under purchase power agreements. Amounts are amortized over a five-year period. Fuel recovery mechanisms: Represents the amount collected from customers in excess of the actual cost of fuel consumed in producing electricity and the cost of purchased power. This difference is expected to be refunded over a one-year period and is not included in rate base. February 2021 winter weather event: Represents the deferral of increased wholesale revenues earned during the February 2021 winter weather event. Sibley Accounting Authority Order (AAO): These amounts were collected in connection with an AAO granted by the MPSC in October 2019 and represent revenues that Evergy Missouri West collected from customers for the return on its unrecovered investment in Sibley Station, non-fuel operations and maintenance costs and other costs associated with Sibley Station following its retirement in November 2018. The amended final order in Evergy Missouri West's 2022 rate case required Evergy Missouri West to refund these revenues to customers over a four-year period. TFR refunds: Represents the amount ordered to be refunded to TFR customers for over-collections related to the calculation of Evergy Kansas Central's capital structure for the rate years 2020 through 2022. This difference was refunded as a part of its 2023 TFR. In addition, this includes amounts probable of refund for similar issues for years 2018 through 2019 and amounts related to the amortization of excess deferred income taxes authorized by FERC in December 2022. See "Evergy Kansas Central TFR Formal Challenge" within this Note 4 for additional information. COLI rate credits refund: Represents the amount ordered to be refunded by Evergy Kansas Central to customers amortized over a three-year period to account for the difference between the expected amount of COLI rate credits approved and the actual amount of COLI rate credits received by customers from 1987 through December 31, 2023. Phase-in plan: Instead of traditional ratemaking, the KCC ordered that Evergy Kansas Central recover the costs of several owned wind farms through a levelized revenue requirement. The levelized recovery of costs defers the rates intended to recover allowable costs for each wind farm beyond the period in which those costs would be charged to expense under traditional ratemaking. The regulatory liability represents the cumulative amount collected in accordance with the ordered ratemaking treatment in excess of the amount that would have been collected under traditional ratemaking. Other regulatory liabilities: Includes various regulatory liabilities that individually are relatively small in relation to the total regulatory liability balance. These amounts will be credited over various periods.

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