Watchdog group highlights Evergy

Public Citizen, a nonprofit, says that activist shareholders are influencing policy at Evergy.



July 6, 2021 - 9:33 AM

KANSAS CITY, Mo. — A consumer watchdog wants federal regulators to acknowledge the influence of activist shareholders on Evergy’s decision-making, mirroring a local push that Kansas regulators rejected. 

Public Citizen, a 40-year-old nonprofit representing consumers, is pushing the Federal Energy Regulatory Commission to recognize two investment firms as part of Evergy, arguing last year that one of the companies purchased shares “for the purpose of obtaining control over the company’s management.” 

Last month, Public Citizen once again insisted in a filing with FERC that Elliott Management Corp. and Bluescape Energy Partners be considered affiliates of Evergy after the company did not list them in response to an inquiry from the commission.

“These non-arm’s length transactions raise serious concerns about the influence wielded by both Bluescape and Elliott Management,” the organization’s filing said. 

The relationship between Evergy and Elliott has been a subject of scrutiny for other interested groups since last year when Elliott, an Evergy shareholder, sent a letter to Evergy’s board urging the company to either consider a sale or invest in capital. That type of spending is the primary way heavily regulated monopoly utilities can raise their rates. Elliott then gained two seats on Evergy’s board.

Evergy, which serves 1.6 million electric customers in Kansas and Missouri, last year announced its Sustainability Transformation Plan, a $8.9 billion capital plan developed under pressure from Elliott.

Bluescape bought interest in Evergy earlier this year, and its executive chairman gained a seat on the company’s board.

“We are simply saying if these companies want to invest in Evergy, if these companies want to influence the future direction of Evergy, then they’ve got to do it by the book,” said Tyson Slocum, energy program director for Public Citizen.

In a statement, Evergy spokeswoman Gina Penzig said neither Elliott nor Bluescape fits the definition of an affiliated party.

“These are shareholders with no more or less control than any other shareholder,” Penzig said. “We have engaged in a dialogue with them over a process and have been transparent about that process. We frequently have dialogue with shareholders about our business operations and strategy.”

FOR months, the Kansas Corporation Commission has been reviewing Evergy’s Sustainability Transformation Plan. When it developed the STP, Evergy went through a 12-week analysis by the Boston Consulting Group, which has been kept confidential as part of proceedings before the Kansas Corporation Commission. Several groups criticized what they saw as limited transparency in the STP proceedings, leading the KCC to open the case to public comment. That window closes July 7.

The Kansas Industrial Consumers Group petitioned the KCC to require Elliott to be party to the STP investigation, arguing interested parties should be able to review Elliott’s influence in creating the plan.

“Elliott has amassed a significant amount of ‘economic exposure’ to, and influence over, Evergy,” the filing says. “This influence has caused Evergy to revise its capital plans by billions of dollars that could ultimately fall upon ratepayers. The commission should order the STP’s key architects participate in this investigation.”

Evergy responded in a filing, saying Elliott was not involved in the decision to pursue the STP or develop the plan itself.

“KIC’s allegation that Elliott is somehow exercising control over Evergy in a way that led to the development and approval of the STP is both false and offensive,” the company says. “In reality, the ‘key architects’ of the STP are Evergy and its management team — who are already under the commission’s jurisdiction and party to this docket.” 

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