View:
As filed with the Securities and Exchange Commission on
March 12, 2001
File No. 70-____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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APPLICATION ON FORM U-1
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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WESTERN RESOURCES, INC.
818 South Kansas Avenue
Topeka, Kansas 66612
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(Name of companies filing this statement and
address of principal executive offices)
WESTERN RESOURCES, INC.
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(Name of top registered holding company
parent of each applicant or declarant)
Richard D. Terrill
Executive Vice President and General Counsel
Western Resources, Inc.
818 South Kansas Avenue
Topeka, Kansas 66612
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(Name and address of agent for service)
The Commission is requested to mail copies of
all orders, notices and communications to:
William S. Lamb
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-4513
TABLE OF CONTENTS
Page
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS.............................1
A. Description of the Parties and Facilities........................1
1. Western Resources, Inc. ....................................1
2. Westar Generating, Inc.......................................2
3. The Empire District Electric Company.........................2
B. State Line Generation Station....................................2
C. Description of Applicant's Requests..............................3
ITEM 2. FEES, COMMISSIONS AND EXPENSES...................................4
ITEM 3. APPLICABLE STATUTORY PROVISIONS..................................4
A. Approval of the Proposed Transactions............................4
1. Section 10(b)(1).............................................4
a. Interlocking Relationships...............................4
b. Concentration of Control.................................4
2. Section 10(b)(2).............................................5
3. Section 10(b)(3).............................................6
4. Section 10(c)(1).............................................6
5. Section 10(c)(2).............................................6
6. Section 10(f)................................................8
B. Exemption Under Section 3(a)(1)..................................8
ITEM 4. REGULATORY APPROVALS.............................................8
ITEM 5. PROCEDURE........................................................8
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS................................9
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.........................10
Western Resources, Inc. submits this application (the "Application") under
Sections 9(a)(2) and 10 of the Public Utility Holding Company Act of 1935, as
amended (the "Act"), to acquire an interest in a public utility company as
described in the Application.
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS
A. Description of the Parties and Facilities
1. Western Resources, Inc.
Western Resources, Inc. ("WRI" or "Applicant") is a public utility holding
company exempt from all provisions of the Act except Section 9(a)(2) under
Section 3(a)(1) pursuant to Rule 2 of the Act. WRI, through its KPL/1 division,
is engaged in the production, purchase, transmission, distribution and sale of
electric energy in the State of Kansas. WRI's assets include security company
holdings through its ownership of Protection One, Inc. ("Protection One"), which
has more than 1.3 million security customers in North America. Its utility
operations, conducted through KPL and WRI's subsidiary, Kansas Gas and Electric
Company ("KGE"), provide electric service to approximately 636,000 customers in
432 communities in the State of Kansas. KGE owns a 47% interest in Wolf Creek
Nuclear Operating Corporation which operates the Wolf Creek Generating Station
on behalf of its owners. Through its ownership interest in ONEOK Inc., an
Oklahoma corporation, WRI has an approximately 45% economic interest/2 in the
eighth largest natural gas distribution company in the nation, serving more than
1.4 million customers. For the year ended December 31, 1999, WRI reported
consolidated revenues of approximately $2,036,158,000. WRI's net income reported
for the same period was $14,296,000. Consolidated assets of WRI at December 31,
1999 were $7,989,892,000.
WRI's other subsidiaries include: Westar Generating, Inc., which is
described in greater detail below; The Wing Group, Limited Co., a Delaware
corporation and wholly owned subsidiary of Westar Industries, Inc. ("Westar
Industries"), which holds an interest in Wing Turkey, Inc.; Western Resources
(Bermuda) Limited, a Bermuda limited liability company, indirectly holding
interests in four power plants in China; Wing Turkey, Inc., a Delaware holding
company, owning a power project in Turkey; and Westar Industries, a Kansas
corporation and wholly owned subsidiary of WRI, a holding company for certain
non-regulated business subsidiaries of WRI including, among others, Protection
One, a Delaware holding company for monitored security alarm businesses, of
which approximately 85% is held by Westar Industries, Protection One
International, Inc. and Protection One (UK) plc, wholly owned subsidiaries which
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1 "KPL" is the trade name for WRI's electric business.
2 Comprised solely of up to 9.9% of the voting stock and shares of nonvoting
convertible preferred stock of ONEOK. WRI has relied on a no-action letter
issued by the Commission's Staff in 1997 for the proposition that ONEOK is
not a subsidiary of WRI and that WRI does not control ONEOK. See Western
Resources, Inc., SEC No-Action Letter (Nov. 24, 1997).
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offer home security services in the United Kingdom and continental Europe,
respectively and Westar Communications, Inc., a Kansas corporation and wholly
owned subsidiary of Westar Industries, providing paging services.
2. Westar Generating, Inc.
Westar Generating, Inc. ("Westar Generating"), a wholly owned subsidiary of
WRI, is a Kansas corporation that holds an undivided 40% ownership interest in a
2X1 F class combined cycle generation facility that is under construction at The
Empire District Electric Company State Line station near Joplin, Missouri - the
facility is the subject of this Application. The Empire District Electric
Company holds the remaining interest and operates the facility pursuant to the
Agreement for the Construction, Ownership and Operation of State Line Combined
Cycle Generating Facility ("Operating Agreement"). See Exhibit A-1. Westar
Generating and Empire (collectively the "Owners") hold their interests as
tenants in common.
3. The Empire District Electric Company
The Empire District Electric Company's ("Empire") Form 10-K for the year
ended December 31, 1999 states that Empire, a Kansas corporation organized in
1909, is an operating public utility engaged in the generation, purchase,
transmission, distribution and sale of electricity in parts of Missouri, Kansas,
Oklahoma and Arkansas. The territory served by the Company's electric operations
embraces an area of about 10,000 square miles with a population of over 330,000.
The service territory is located principally in Southwestern Missouri and also
includes smaller areas in Southeastern Kansas, Northeastern Oklahoma and
Northwestern Arkansas.
B. State Line Generation Station
Pursuant to the Operating Agreement, Empire is constructing a 2X1 F class
combined cycle generating facility on the Missouri side of the Kansas-Missouri
state line just west of Joplin, MO ("State Line"). This site also houses another
generating facility, Unit 1, in which WRI and its subsidiaries do not have an
interest. State Line is not currently operative, and is being upgraded from its
original configuration of a single Westinghouse 501-F.C. turbine installed in
1997 to a Westinghouse 501-F.D1. Empire is adding another 501-F.D2, two heat
recovery steam generators, a steam turbine, a cooling tower, and associated
equipment to create the 2X1 F facility. The new combined cycle facility will
have a nominal rating of 500 MW. State Line began operations in June 1997 and
was removed from service on September 11, 2000 to facilitate the conversion.
Westar Generating currently has a 40% interest in the portion of State Line
under construction. Pursuant to the Operating Agreement, Westar Generating will
acquire a 40% interest in the portion that existed prior to the start of
construction after receipt of the EDE Regulatory Approvals and the Certificate
of Convenience, but "not before the date that exhaust from the Existing CT is
utilized in its associated heat recovery steam generators."/3 Utilization of the
exhaust in this manner will occur when State Line's construction is complete and
the station
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3 EDE Regulatory Approvals, Certificate of Convenience and Existing CT have
the same meaning as in the Operating Agreement.
2
resumes operation. See Exhibit B-1. The Owners anticipate beginning testing of
the new configuration on or about March 19, 2000 and depending upon the success
of the trials, resuming commercial operation as early as May 15, 2000. Westar
Generating also owns a 34% share in non-utility facilities such as offices,
maintenance buildings and fire protection equipment.
Westar Generating's cost associated with acquiring its interest in State
Line will be equal to its share of the costs of constructing State Line. These
costs will be approximately $104,292,841.
WRI entered into the Operating Agreement on July 26, 1999 as a means of
acquiring a generation source to meet the generation needs of KPL, the division
of WRI operating as a public utility. State Line will provide reliable,
inexpensive power to WRI. WRI and Westar Generating have entered into a power
purchase agreement under which Westar Generating will sell its entire 40%
entitlement to the output of State Line to WRI under a cost-based tariff ("Power
Purchase Agreement") which will be approved by the Federal Energy Regulatory
Commission ("FERC"). WRI will also purchase power generated during testing of
State Line. See Exhibit D-1. WRI will receive State Line's output at the high
voltage side of State Line's step-up transformer and, via a thirty-mile 200 MW
point-to-point firm ten-year contract path with the Southwest Power Pool,
transmit it to WRI's electric grid.
C. Description of Applicant's Requests
WRI is seeking authority to retain its 40% indirect interest in State Line
when the plant resumes commercial operation. Because State Line is not presently
operating commercially, Westar Generating is not an "electric utility" as
defined by Section 2(a)(3) of the Act./4 However, upon State Line's resumption
of commercial operations, Westar Generating will become an electric utility. WRI
will qualify as an affiliate of Westar Generating under the Act, and WRI is
already an affiliate, as that term is defined in the Act/5, of KGE and ONEOK.
Retaining the securities of Westar Generating is equivalent to acquiring the
security of a public utility company and requires prior Commission authorization
under Sections 9(a)(2) and 10.
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4 Several Commission no-action letters describe circumstances in which the
Commission has effectively concluded that generation facilities under
construction or conducting tests prior to commercial operation were not
electric utilities. See e.g. ISO & PX Restructuring Trusts, SEC No-Action
Letter, July 25, 1997 (facilities under construction); Midland Cogeneration
Venture Limited, SEC No-Action Letter, December 19, 1989 (facilities
generating power for sale during testing).
5 Section 2(a)(11)(B) of the Act states that affiliates include "any company
five per centum or more of whose outstanding voting securities are owned,
controlled, or held with power to vote, directly or indirectly, by such
specified company."
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ITEM 2. FEES, COMMISSIONS AND EXPENSES
WRI estimates that, in connection with the proposed transactions, they will
pay fees, commissions and expenses of:
Legal Fees...............................................................$25,000
Miscellaneous............................................................$10,000
Total.............................................................$35,000
ITEM 3. APPLICABLE STATUTORY PROVISIONS
Sections 9(a)(2) and 10 of the Act are directly or indirectly applicable to
the authority requested in this Application.
A. Approval of the Proposed Transactions
Section 9(a)(2) makes it unlawful, without approval of the Commission under
Section 10, "for any person . . . to acquire, directly or indirectly, any
security of any public utility company, if such person is an affiliate . . . of
such company and of any other public utility or holding company, or will by
virtue of such acquisition become such an affiliate." The proposed transactions
comply with all of the applicable provisions of Section 10.
1. Section 10(b)(1)
Section 10(b)(1) directs the Commission to approve an acquisition that
meets the requirements of subsection (f) unless it finds that the acquisition
will "tend towards interlocking relations or the concentration of control of
public utility companies, of a kind or to an extent detrimental to the public
interest or the interest of investors or consumers."
a. Interlocking Relationships
State Line is essentially a new facility owned by Empire and Westar
Generating. Retention of Westar Generating's interest after State Line resumes
commercial operations will not create any interlocking relations between
previously unaffiliated utilities. Rather Western Generating and Empire hold
their respective interests as tenants in common and are dividing State Line's
output and construction costs. This type of arrangement is not harmful to the
Act's protected interests.
b. Concentration of Control
Section 10(b)(1) requires the Commission, before blocking an acquisition,
to find that control is "of a kind or to an extent detrimental to the public
interest or the interest of investors or consumers." The framers of the Act
sought through Section 10(b)(1) to avoid "an excess of
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concentration and bigness" while preserving the "opportunities for economies of
scale, the elimination of duplicative facilities and activities, the sharing of
production capacity and reserves and generally more efficient operations"
afforded by certain combinations. American Electric Power Co., Inc., Holding Co.
Act Release No. 20633 (July 21, 1978). In applying Section 10(b)(1) to utility
acquisitions, the Commission must determine whether the acquisition will create
"the type of structures and combinations at which the Act was specifically
directed." Vermont Yankee Nuclear Corp., Holding Co. Act Release No. 15958 (Feb.
6, 1968). State Line will provide a reliable source of power for KPL's utility
businesses and does not involve a combination of previous separate utilities.
Thus, rather than create prohibited corporate structures, State Line will serve
KPL's utility customers by providing reliable inexpensive power.
In addition, other regulatory agencies will review the concentration of
control and any potential anticompetitive effects. In Northeast Utilities,
Holding Co. Act Release No. 25221 (Dec. 21, 1990), the Commission stated that
"antitrust ramifications of an acquisition must be considered in light of the
fact that public utilities are regulated monopolies and that federal and state
administrative agencies regulate the rates charged consumers." The staff of the
Missouri Public Service Commission ("Missouri Commission") has determined that
the State Line project is necessary or convenient for the public service, and
the Missouri Commission granted Westar Generating a certificate of convenience
and necessity to "construct, install, own, operate, control, manage and
maintain" State Line. See Exhibits D-3 and D-4. The State Corporation Commission
of the State of Kansas ("Kansas Commission") also has jurisdiction over the
operation of WRI and its utility businesses but did not have jurisdiction over
construction of State Line or Westar Generating's acquisition of a 40% interest.
However, the Kansas Commission will review the costs of State Line proposed to
be charged to KPL's retail electric customers. Thus, the proposed transactions
do not create the kind of structures that the Act's framers were attempting to
avoid.
Finally, the rates under which State Line provides its output to KPL will
be fully reviewed by FERC pursuant to Section 205 of the Federal Power Act. See
Exhibit D-1.
Accordingly, because State Line is located just across the Missouri border
and because other regulatory agencies have evaluated and approved the proposed
transactions, the Commission should find that the proposed transactions do not
create the type of concentration of control prohibited by Section 10(b)(1).
2. Section 10(b)(2)
Section 10(b)(2) requires the Commission to determine whether the
consideration to be paid in connection with the proposed transactions, including
all fees, commissions and other remuneration, is reasonable and whether it bears
a fair relation to, investment in and earning capacity of the underlying utility
assets.
Westar Generating's share of State Line's construction costs will be
approximately $104,292,841. These costs are the product of arm's-length
negotiations between Empire and/or Westar Generating and service providers.
These negotiations were preceded by due diligence,
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analysis and evaluation of the assets, liabilities and business prospects of
State Line. As recognized by the Commission in Northeast Utilities, Holding Co.
Act Release No. 25221 (Dec. 21, 1990) citing Ohio Power Co., 44 SEC 340, 346
(1970), prices arrived at through arm's-length negotiations are particularly
persuasive evidence that Section 10(b)(2) is satisfied.
As set forth in Item 2 of this Application, WRI expects to incur a combined
total of approximately $35,000 in fees, commissions and expenses. WRI believes
that the estimated fees and expenses in this matter bear a fair relation to the
value of the transactions and the strategic benefits to be achieved, and further
that the fees and expenses are fair and reasonable in light of the complexity of
the transactions. See Northeast Utilities, Holding Co. Act Release No. 25548
(June 3, 1992), modified on other grounds, Holding Co. Act Release No. 25550
(June 4, 1992) (noting that fees and expenses must bear a fair relation to the
value of the company to be acquired and the benefits to be achieved in
connection with the acquisition). Based on construction costs of $104,292,841,
the total estimated fees and expenses represent approximately .03% of the value
of the consideration. This percentage of fees and expenses is less than that of
other transactions approved by the Commission. See Entergy Corp., Holding Co.
Act Release No. 25952 (Dec. 17, 1993) (fees and expenses represented
approximately 1.7% of the value of the consideration paid to the shareholders of
Gulf States Utilities); Northeast Utilities, Holding Co. Act Release No. 25548
(June 3, 1992) (approximately 2% of the value of the assets to be acquired).
3. Section 10(b)(3)
Section 10(b)(3) requires the Commission to determine whether the proposed
transactions will unduly complicate the capital structure of WRI or will be
detrimental to the public interest, the interest of investors or consumers or
the proper functioning of the WRI system. The construction of State Line was
financed through existing financing sources and did not involve issuance of new
securities. In addition, the acquisition of State Line will not be detrimental
to the interest of consumers or the functioning of the WRI system because state
and federal regulators have jurisdiction over many aspects of the sale of State
Line's output. The rate WRI pays for State Line's output is fixed by the Power
Purchase Agreement, which is reviewed by FERC, and the rates KPL's retail
consumers pay are governed by the Kansas Commission.
4. Section 10(c)(1)
Section 10(c)(1) provides that the Commission may not approve a transaction
that is "unlawful under the provisions of section 8 or is detrimental to the
carrying out of the provisions of section 11." Together these sections relate to
the corporate simplification standards of Section 11(b)(2), which require that
each registered holding company take the necessary steps to ensure that the
corporate or continued existence of any company in the holding-company system
does not unduly or unnecessarily complicate the structure of such
holding-company system. Sections 8 and 11, by their terms, only apply to
registered holding companies, and WRI will be exempt from registration under
Section 3(a)(1).
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5. Section 10(c)(2)
Section 10(c)(2) requires that any acquisition not be approved unless the
Commission finds that "such acquisition will serve the public interest by
tending towards the economical and efficient development of an integrated
public-utility system."
Section 2(a)(29)(A) defines an "integrated public utility system" as
applied to electric utility companies as a:
system consisting of one or more units of generating plants and/or
transmission lines and/or distributing facilities, whose utility
assets, whether owned by one or more electric utility companies, are
physically interconnected or capable of physical interconnection and
which under normal conditions may be economically operated as a single
area or region in one or more States, not so large as to impair
(considering the state of the art and the area or region affected) the
advantages of localized management, efficient operation, and the
effectiveness of regulation.
As discussed in Item 1, WRI and Westar Generating have entered into a power
purchase agreement under which Westar Generating will sell its entire 40%
entitlement to the output of State Line under a cost-based tariff which will be
approved by the FERC. WRI will receive State Line's output at the high voltage
side of State Line's step-up transformer and, via a thirty-mile 200 MW
point-to-point firm ten-year contract path with the Southwest Power Pool,
transmit it to WRI's electric grid. In prior applications, the Commission has
found a contract path sufficient to interconnect utilities. See Unitil Corp.,
Holding Co. Act Release No. 25524 (April 24, 1992). WRI will dispatch State Line
using the same mechanisms and same system operator as it does to operate its
existing generation and thereby meets the Commission's requirements for
economical operation. See Conectiv, Inc., Holding Co. Act Release No. 26832
(Feb. 25, 1998). WRI's utility businesses are located in Kansas, and State Line
is being built in neighboring Missouri. Accordingly, the proposed acquisitions
comply with the single area or region requirement of 10(c)(2).
As previously described in Item 3A, the Missouri Commission approved Westar
Generating's acquisition of its 40% interest in State Line and granted Westar
Generating a certificate of convenience and necessity for State Line. See
Exhibits D-3 and D-4. After consummation of the proposed transactions, WRI will
continue to be subject to regulation by the Kansas Commission and Westar
Generating will also be regulated by the Missouri Commission. The Commission has
previously found that state regulation is not impaired when a holding company's
utility subsidiaries remain subject to the same state regulators as prior to a
transaction. See Conectiv, Inc., Holding Co. Act Release No. 26832 (Feb. 25,
1998). Accordingly, the proposed transactions do not impair effective state
regulation. Finally, since State Line is located just across the Missouri
border, the proposed transactions will not impair the effectiveness of local
management.
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6. Section 10(f)
Section 10(f) prohibits the Commission from approving the proposed
transactions unless the Commission is satisfied that the they will be undertaken
in compliance with applicable state laws. All the required state regulatory
approvals have been obtained as described in Item 4, and WRI shall undertake to
complete the transaction in a manner consistent with the laws of the States of
Kansas and Missouri.
B. Exemption Under Section 3(a)(1)
WRI claims exemption, under Section 3(a)(1), from all provisions of the Act
except Section 9(a)(2). WRI will continue to be entitled to this exemption after
State Line commences commercial operation because it and each of its public
utility subsidiaries from which it derives a material part of its income will be
predominantly intrastate in character and will carry on their businesses
substantially within Kansas. WRI will not derive a material part of its income
from State Line.
ITEM 4. REGULATORY APPROVALS
The Missouri Commission has previously approved Empire's transfer, and
Westar Generating's acquisition of, a 40% interest in State Line and also
granted Westar Generating a certificate of convenience and necessity to
"construct, install, own, operate, control, manage and maintain" the State Line
facility. See Exhibits D-3 and D-4. The Kansas Commission does not have
jurisdiction over the transactions proposed in this Application but does have
jurisdiction over the retail rates of KPL. The FERC, pursuant to Section 205 of
the Federal Power Act has jurisdiction over the rates of the sales between
Westar Generating and WRI, and Westar Generating's application to the FERC is
attached as Exhibit D-1.
ITEM 5. PROCEDURE
WRI requests that the Commission issue and publish no later than March 23,
2001, the requisite notice under Rule 23 with respect to the filing of this
Application, such notice to specify a date not later than April 17, 2001 as the
date after which an order granting and permitting this Application to become
effective may be entered by the Commission and that the Commission enter not
later than May 8, 2001 an appropriate order granting and permitting this
Application to become effective.
No recommended decision by a hearing officer or other responsible officer
of the Commission is necessary or required in this matter. The Division of
Investment Management of the Commission may assist in the preparation of the
Commission's decision in this matter. There should be no thirty-day waiting
period between the issuance and effective date of any order issued by the
Commission in this matter, and WRI respectfully requests that any such order be
made effective immediately upon the entry thereof.
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ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
A. Exhibits
A-1 Articles of Incorporation of Westar Generating, Inc., as
amended
B-1 Agreement for the Construction, Ownership and Operation of
State Line Combined Cycle Generating Facility by and among
The Empire District Electric Company, as an Owner, Westar
Generating, Inc., as an Owner, and The Empire District
Electric Company, as Agent dated July 26, 1999, as amended
(Filed on Form SE).
D-1 Application before the Federal Energy Regulatory Commission
(To be Filed by Amendment)
D-2 Order of the Federal Energy Regulatory Commission (to be
filed by Amendment)
D-3 Application to the Missouri Public Service Commission
D-4 Order of the Missouri Public Service Commission
F-1 Opinion of Counsel (To be filed by amendment)
F-2 "Past Tense" Opinion of Counsel (To be filed by amendment)
H-1 Form of Notice
H-2 WRI's 1999 Annual Report (filed on March 29, 2000 and
amended by WRI's 10-K/A-2 filed on February 2, 2001 (File
No. 1-3523) and incorporated by reference herein).
B. Financial Statements
FS-1 Consolidated Balance Statement and Statement of Income of
WRI for the year ended December 31, 1999 (filed on March 29,
2000 and amended by WRI's 10-K/A-2 filed on February 2, 2001
(File No. 1-3523) and incorporated by reference herein).
FS-2 WRI's Consolidated Statement of Income for the Preceding
Three years (filed on March 29, 2000 and amended by WRI's
10-K/A-2 filed on February 2, 1001 (File No. 1-3523) and
incorporated by reference herein).
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ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
None of the matters that are the subject of this Application involve a
"major federal action" nor do they "significantly affect the quality of the
human environment" as those terms are used in Section 102(2)(C) of the National
Environmental Policy Act. None of the proposed transactions that are the subject
of this Application will result in changes in the operation of WRI that will
have an impact on the environment. WRI is not aware of any federal agency which
has prepared or is preparing an environmental impact statement with respect to
the transactions proposed herein.
10
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned has duly caused this application and declaration to be
signed on their behalf by the undersigned thereunto duly authorized.
WESTERN RESOURCES, INC.
By: /s/ Richard D. Terrill
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Name: Richard D. Terrill
Title: Executive Vice President and
General Counsel
March 8, 2001
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ARTICLES OF INCORPORATION
OF
WESTAR GENERATING, INC.
The undersigned sole incorporator hereby undertakes to form and establish a
corporation FOR PROFIT under the laws of the State of Kansas.
FIRST: The name of the Corporation is Westar Generating, Inc.
SECOND: The location of its registered office in this state is 818 Kansas
Avenue, Topeka, Shawnee County, Kansas, 66612.
THIRD: The name and address of its resident agent in this state is Stacy F.
Kramer, 818 Kansas Avenue, Topeka, Shawnee County, Kansas 66612.
FOURTH: This Corporation is organized FOR PROFIT and the nature of its
business is to engage in any lawful act or activity for which corporations may
be organized under the Kansas General Corporation Code. Provided however, this
Corporation may not engage in the business of an electric or retail natural gas
utility.
FIFTH: The Corporation is authorized to issue only one class of common
stock. The total number of shares of stock which the Corporation shall have
authority to issue shall be ONE THOUSAND (1,000) Shares of NO PAR VALUE COMMON
STOCK. Such shares may be issued for such consideration as is determined from
time to time by the Board of Directors of the Corporation.
SIXTH: The business and affairs of the Corporation shall be managed by its
Board of Directors. The powers of the Incorporator are to terminate upon the
filing of the ARTICLES OF INCORPORATION with the Secretary of State. The name
and mailing address of the person who is to serve as sole Director until the
first meeting of Stockholders or until his successor is duly elected and
qualified is:
1
Thomas L. Grennan
514 Mariner
Silver Lake, Kansas 66539
The number of Directors, if more than one, shall be fixed by, or in the
manner provided in, the BYLAWS of the Corporation. Directors need not be
Stockholders of the Corporation.
SEVENTH: The name and mailing address of the sole incorporator is:
Martin J. Bregman
4505 Cedar Ridge Court
Lawrence, Kansas 66049
EIGHTH: For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and regulation
of the powers of the Corporation and its Directors and Stockholders, it is
further provided:
a. In furtherance, and not in limitation of the powers conferred by the
laws of the State of Kansas, the Board of Directors is expressly authorized and
empowered:
(1) To make, alter, amend or repeal the Bylaws in any manner not
inconsistent with the laws of the State of Kansas or these Articles of
Incorporation, subject to the power of the Stockholders to amend, alter or
repeal the Bylaws made by the Board of Directors or to limit or restrict the
power of the Board of Directors so to make, alter, amend or repeal the Bylaws;
(2) Without the assent or vote of the Stockholders, to authorize and issue
obligations of the Corporation, secured or unsecured, to include therein such
provisions as to redeemability, convertibility or otherwise, as the Board of
Directors in its sole discretion may determine, and to authorize the mortgaging
or pledging, as security therefor, of any property of the Corporation, real or
personal, including after-acquired property;
(3) To determine the manner in which the votes of Stockholders for the
election of Directors shall be evidenced, which need not be by written ballot.
2
b. Any Director or any Officer elected or appointed by the Stockholders or
by the Board of Directors may be removed at any time in such manner as shall be
provided in the Bylaws of the Corporation.
c. The holders of this Corporation's Common Stock shall not have preemptive
rights.
d. Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them or between this Corporation
and its Stockholders or any class of them, any court of competent jurisdiction
within the State of Kansas, on the application in a summary way of this
Corporation or of any creditor or Stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions of
K.S.A. 17-6901 or on the application of trustees in dissolution or of any
receiver or receivers appointed for this Corporation under the provisions of
K.S.A. 17-6808, may order a meeting of the creditors or class of creditors, or
of the Stockholders or class of Stockholders of this Corporation, as the case
may be, to be summoned in such manner as said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, or of the Stockholders or class of Stockholders of this Corporation,
as the case may be, agree to any compromise or arrangement and to any
reorganization of this Corporation as consequence of such compromise or
arrangement, said reorganization, if sanctioned by the court to which said
application has been made, shall be binding on all the creditors or class of
creditors, or on all the Stockholders or class of Stockholders of this
Corporation, as the case may be, and also on this Corporation.
NINTH:
1. Elimination of Certain Liability of Directors.
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under the provisions of K.S.A. 17-6424 and amendments
thereto, or (iv) for any transaction from which the director derived an improper
personal benefit.
3
2. Indemnification and Insurance.
(a) Right to Indemnification.
Each person who was or is made a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the legal representative,
is or was a director or officer, of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a director,
officer, employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Kansas General Corporation
Law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators: provided, however, that, except as provided in paragraph (b)
hereof, the Corporation shall indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. The right to indemnification conferred in this Section shall be
a contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition: provided, however, that, if the Kansas General Corporation Law
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or
4
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such director
or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Section or otherwise. The Corporation may, by action of its Board of
Directors, provide indemnification to employees and agents of the Corporation
with the same scope and effect as the foregoing indemnification of directors and
officers.
(b) Right of Claimant to Bring Suit.
If a claim under paragraph (a) of this Section is not paid in full by the
Corporation within thirty days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Kansas
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Kansas General Corporation Law,
nor an actual determination by the Corporation (including its Board of
Directors, independent, legal counsel, or its stockholders) that the claimant
has not met such applicable standard or conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
5
(c) Non-Exclusivity of Rights.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Article shall not be exclusive of any other right which any person may have or
hereafter acquire under any statue, provision of the Articles of Incorporation,
by-law, agreement, vote of stockholders or disinterested directors or otherwise
and the Corporation is specifically authorized to provide indemnification to its
directors and officers providing broader coverage than that afforded by the
Kansas General Corporation Law through indemnification agreements.
(d) Insurance.
The Corporation may maintain insurance, at its expense, to protect itself
and any director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
such expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss under the
Kansas General Corporation Law.
TENTH: To the extent permitted by the Kansas General Corporation Code, any
action which may be taken at any annual or special meeting of either
stockholders or directors may be taken without a meeting, without prior notice
and without a vote if a consent in writing, setting forth the action taken is
signed by (i) all of the holders of the Corporation's issued and outstanding
shares in the case of the Stockholders or (ii) all of the duly elected and
serving Directors, in the case of the Directors.
IN WITNESS WHEREOF, I have hereunto subscribed my name as sole incorporator
this 7th day of April, 1999.
/s/ Martin J. Bregman
----------------------------------
Martin J. Bregman
6
STATE OF KANSAS )
) ss:
COUNTY OF SHAWNEE )
BE IT REMEMBERED, that on this 7th day of April, 1999, before me, the
undersigned, a Notary Public in and for the County and State aforesaid, came
Martin J. Bregman who personally is known to me to be the same person who
executed the foregoing ARTICLES OF INCORPORATION and duly acknowledged the
execution of the same as his free and voluntary act and deed.
IN WITNESS WHEREOF, I have hereto set my hand affixed my notarial seal the
day and year last above written.
/s/ Patti Beasley
-----------------------------------
Notary Public
My Appointment expires: November 18, 2000
7
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
WESTAR GENERATING, INC.
We, Thomas L. Grennan, President, and Leslie D. Morgan, Vice President,
Secretary and Treasurer, of Westar Generating, Inc., a corporation organized and
existing under the laws of the State of Kansas, do hereby certify that a
resolution was adopted by unanimous written consent of the Board of Directors of
said corporation on May 19, 2000 setting forth the following amendment to the
Articles of Incorporation of the corporation and declaring its advisability:
RESOLVED, that Article IV of the Company's Articles of Incorporation
be amended to read as follows:
"ARTICLE FOURTH: This Corporation is organized FOR PROFIT and the
nature of its business is to engage in any lawful act or activity for which
corporations may be organized under the Kansas General Corporate Code."
We further certify that thereafter, pursuant to said resolution, and in
accordance with the bylaws of the corporation and the laws of the State of
Kansas, the sole stockholder of the corporation considered and adopted the
proposed amendment by unanimous written consent.
We further certify that the amendment was duly adopted in accordance with
the provision of K.S.A. 17-6602, as amended.
We further certify that the capital of said corporation will not be reduced
under or by reason of said amendment.
IN WITNESS WHEREOF, we have hereunto set our hands and affixed the seal of
said corporation the 19th day of May, 2000.
8
WESTAR GENERATING, INC.
By /s/ Thomas L. Grennan
------------------------
Thomas L. Grennan
President
By /s/ Leslie D. Morgan
-------------------------
Leslie D. Morgan
Vice President, Secretary and Treasurer
State of Kansas )
) ss.
County of Shawnee )
Be it remembered that before me, a Notary Public in and for the aforesaid
county and state, personally appeared Thomas L. Grennan, President, and Leslie
D. Morgan, Vice President, Secretary and Treasurer, of the corporation named in
this document, who are known to me to be the same persons who executed the
foregoing certificate and duly acknowledge that execution of the same this 19th
day of May, 2000.
/s/ Patti Beasley
------------------------
Notary Public
9
BEFORE THE PUBLIC SERVICE COMMISSION
STATE OF MISSOURI
In the matter of the application of )
Westar Generating, Inc. )
for a certificate of public convenience and )
necessity authorizing it to construct, )
install, own, operate, control, manage ) Case No. EA-2000-145
and maintain electric production facilities )
in Jasper County, Missouri, pursuant to the )
terms of a July 26, 1999 Agreement for the )
Construction, Ownership and Operation of )
State Line Combined Cycle Generating Facility. )
APPLICATION
COMES NOW Westar Generating, Inc. ("WGI" or "Applicant"), pursuant to
Section 393.170, RSMo 1994,/1/ and 4 CSR 240-2.060(2), and for its application
to the Public Service Commission of the State of Missouri ("Commission") for a
certificate of public convenience and necessity, states as follows:
1. Applicant is a corporation duly organized and existing under the laws of
the State of Kansas with its principal place of business located at 818 Kansas
Avenue, Topeka, Kansas. Attached hereto as Appendix 1 and incorporated herein by
reference is a certified copy of Applicant's Certificate to Transact Business as
a Foreign Corporation issued by the Missouri Office of the Secretary of State.
Applicant is a wholly-owned subsidiary of Western Resources, Inc., a Kansas
corporation that operates its utility operations under its trade name KPL, and
its subsidiary, KGE, a Kansas corporation.
- --------
/1/ All statutory references are to Revised Statutes of Missouri 1994, unless
otherwise noted.
- -----
1
2. Applicant proposes to own a 40 percent (40%) interest in an
approximately 500 mega-watt (MW) combined cycle generation station to be
constructed at the site of The Empire District Electric Company's ("EDEC")
existing State Line facility in Jasper County, Missouri ("State Line Combined
Cycle" or "SLCC"), consisting, in part, of (i) one Westinghouse W501F combustion
turbine (the "Existing CT") which is currently owned by EDEC, (ii) one new W501F
combustion turbine, (iii) two new heat recovery steam generators, (iv) one new
steam turbine, (v) one new cooling tower, and (vi) other associated equipment.
EDEC and WGI have entered into an Agreement for the Construction, Ownership and
Operation of State Line Cycle Generating Facility dated July 26, 1999,
("Agreement"), a copy of which was filed with the Application in Case No.
EA-2000-145, and is incorporated herein by reference, which more fully describes
the ownership and operation of the SLCC.
3. Communications in regard to this Application should be addressed to:
Martin J. Bregman James M. Fischer
Executive Director, Law Fischer & Dority, P.C.
Western Resources, Inc. 101 Madison Street
818 Kansas Avenue Suite 400
Topeka, Kansas 66612 Jefferson City, Missouri 65101
4. Pursuant to the Agreement, EDEC and WGI propose to share the costs of
construction of the addition to the SLCC on a 60/40 percent basis, respectively.
EDEC will refurbish a 150 MW unit presently used to serve its customers.
Pursuant to the Application filed in Case No. EA-2000-145, EDEC will also
construct and operate the facility. EDEC is proposing to transfer a portion of
that facility to WGI. EDEC will continue to serve retail customers from its
share of the
2
SLCC. WGI will sell some or all of its 40 percent share of the output from SLCC
to its franchised utility affiliates, KPL and KGE.
5. Specifically, Applicant requests the Commission to issue its order
granting Applicant a Certificate of Public Convenience and Necessity to
construct, install, own, operate, control, manage and maintain electric
facilities in Jasper County, Missouri, pursuant to the Agreement. The area
sought to be certificated is set forth on the maps attached hereto as Appendix 2
and incorporated herein by reference. A description of the area proposed to be
served is marked as Appendix 3, attached hereto and incorporated herein by
reference. The area sought to be certificated is the same area where EDEC
currently operates its SLCC; however, Applicant does not request authority to
provide retail service within this certificated area.
6. The SLCC will be constructed upon EDEC's existing site for its state
line facility. However, it will be necessary to move electric and telephone
lines of regulated utilities, including those of EDEC and Southwestern Bell
Telephone Company. No railroad tracks or any underground facility, as defined in
Section 319.015, will be crossed or otherwise affected by the project.
7. A description of plans and specifications for the construction of the
project are voluminous, and will be made available to the Commission Staff and
Public Counsel, upon request. Additional information regarding the estimated
cost of construction, plans for financing, and projected revenues and expenses
will also be made available to the Commission Staff and Public Counsel, upon
request. Applicant also respectfully requests that the provisions of 4 CSR
240-2.060(2)(F)(1), (2), and (5) be waived, since these provisions are designed
for an Application for a retail service area and/or a start-up utility which are
not applicable to this request.
3
8. No additional municipal or other governmental approvals, with the
exception of permits from the Department of Natural Resources and the United
States Environmental Protection Agency are required.
9. The granting of this Application is in the public interest since the
SLCC will provide additional power for the customers of Western Resources'
franchised utility affiliates, KPL and KGE, so that the public needs may be
served.
WHEREFORE, Applicant Westar Generating, Inc. prays the Commission issue to
it an area certificate of public convenience and necessity authorizing it to
construct, install, own, operate, control, manage and maintain electric
production facilities in Jasper County, Missouri, in accordance with the
above-stated provisions.
Respectfully submitted,
/s/ James M. Fischer
-----------------------------------_
James M. Fischer, Esq. MBN 27543
JAMES M. FISCHER, P.C.
101 Madison Street, Suite 400
Jefferson City, Missouri 65101
Telephone: (573) 636-6758
Fax: (573) 636-0383
e-mail: jfischerpc@aol.com
Martin J. Bregman MBN 265449
Executive Director, Law
WESTERN RESOURCES, INC.
818 South Kansas Avenue
Topeka, Kansas 66612
Telephone: (785) 575-1986
Fax: (785) 575-8136
e-mail:
4
ATTORNEYS FOR WESTAR GENERATING, INC.
Dated: August 16, 1999
5
CERTIFICATE OF SERVICE
I do hereby certify that a true and correct copy of the foregoing
Application has been hand-delivered or mailed, First Class mail, postage
prepaid, this 17th day of August, 1999, to:
Office of the Public Counsel
P.O. Box 7800
Jefferson City MO 65102
/s/ James M. Fischer
--------------------------------------
James M. Fischer
6
VERIFICATION
STATE OF KANSAS )
) ss.
COUNTY OF SHAWNEE )
Thomas L. Grennan, President, Westar Generating, Inc., being duly sworn
upon his oath, states that the matters set forth in the foregoing Application
are true and correct according to the best of his knowledge, information and
belief.
/s/ Thomas L. Grennan
--------------------------------------
Thomas L. Grennan
Subscribed and sworn to before me, a Notary Public, this 16th day of
August, 1999.
(Seal) /s/ Glenda Guilfoil
--------------------------------------
Notary Public
My Commission Expires: June 2, 2003
7
STATE OF MISSOURI
PUBLIC SERVICE COMMISSION
At a Session of the Public Service
Commission held at its office in Jefferson City on the 1st day of
June, 2000.
In the Matter of the Application of )
The Empire District Electric Company for )
Permission and Authority to Transfer a )
Partial, Undivided Interest in Certain )
Generation Facilities, Land and Related ) Case No. EM-2000-145
Property Owned by It to Westar Generating, )
Inc., in Accordance with a Contract Dated )
July 26, 1999. )
In the Matter of the Application of )
Westar Generating, Inc. for a Certificate )
of Public Convenience and Necessity )
Authorizing it to Construct, Install, )
Own, Operate, Control, Manage, and ) Case No. EA-2000-153
Maintain Electric Production Facilities )
in Jasper County, Missouri, Pursuant to )
the terms of a July 26, 1999 Agreement for )
the Construction, Ownership and Operation )
of State Line Combined Cycle Generating )
Facility. )
ORDER APPROVING APPLICATION TO TRANSFER ASSETS AND ORDER GRANTING
CERTIFICATE OF CONVENIENCE AND NECESSITY
On August 13, 1999, The Empire District Electric Company (Empire) filed an
application with the Commission requesting permission and authority to sell and
transfer an interest in certain assets to Westar Generating, Inc. (WGI) for the
purpose of constructing additional electric generating facilities at the "State
Line" facility owned by Empire. That application was assigned case number
EM-2000-145. The application indicates that Empire, in conjunction with WGI,
plans to construct a 500 megawatt combined cycle generating station utilizing
portions of the existing site and State Line Unit 2. Empire and WGI will have a
joint ownership in certain common facilities, the land and in the existing and
new facilities pursuant to a Construction, Ownership and Operation Agreement
dated July 26, 1999.
On August 17, 1999, WGI filed an application with the Commission for a
certificate of public convenience and necessity to allow it to "construct,
install, own, operate, control, manage and maintain" the electric generating
facilities that Empire seeks to convey to it. WGI's application was assigned
case number EA-2000-153.
1
On August 17, 1999, the Commission issued an Order and Notice in case number
EM-2000-145 that directed interested parties wishing to intervene in that case
to file an application on or before September 7, 1999. Similarly, on August 20,
1999, the Commission issued an Order and Notice in case number EA-2000-153
directing interested parties to file an application to intervene on or before
September 9. No party requested intervention in either case.
In response to a Joint Motion to Consolidate filed by Empire and WGI in both
cases, the Commission consolidated the two applications into a single case by an
order issued on August 31, 1999. No party has requested a hearing. The
requirement for a hearing is met when the opportunity for hearing has been
provided and no proper party has requested the opportunity to present evidence.
State ex rel. Rex Deffenderfer Enterprises, Inc. v. Public Service Commission,
776 S.W.2d 494, 496 (Mo. App. 1989). Since no one has asked permission to
intervene or requested a hearing, the Commission may grant the relief requested
based on the application.
On May 11, 2000, Staff filed a recommendation and memorandum. No party filed a
response to that recommendation and memorandum. Based on its review and
analysis, the Staff concludes that Empire has demonstrated that its application
to sell and transfer certain assets to WGI is "not detrimental to the public
interest." Staff recommends that the Commission issue an order granting Empire's
application. Further, Staff recommends that the Commission reserve all
ratemaking treatment associated with this transaction for a future rate
proceeding.
With regard to WGI's application for a certificate of convenience and
necessity, Staff states that WGI is not requesting authority to provide retail
service within the area for which it seeks certification, as that area is the
same as that in which Empire currently operates its State Line facility. Indeed
WGI does not have any retail customers anywhere in Missouri. This fact raises
the question of whether or not WGI should be required to apply for a certificate
of convenience and necessity.
Staff's recommendation indicates that Section 393.170.1, RSMo 1994 states, in
pertinent part, "No . . . electrical corporation . . . shall begin construction
of a[n] . . . electric plant . . . without first having obtained the approval of
the commission." Section 386.020(15), RSMo Supp. 1999, in pertinent part,
defines an electrical corporation as including: "every corporation . . . owning,
operating, controlling or managing any electric plant . . . ." In State ex rel
Danciger & Co. v. Public Serv. Comm'n, 205
2
S.W. 36 (Mo. 1918), the Missouri Supreme Court added a requirement to the
statutory definition by finding that an electric corporation is not subject to
regulation by the Commission unless it is offering electricity for "public use."
The question then becomes whether or not WGI will be offering electricity for
"public use."
WGI does not have any customers in Missouri at this time. However, in Staff's
opinion, WGI's ownership interest, in partnership with Empire, a utility
regulated by the Commission, in a facility that will serve retail customers in
this state implicates the interests of Missouri ratepayers and justifies the
exercise of the Commission's authority. Staff concludes that WGI's project is
necessary or convenient for the public service and should be approved and a
certificate of convenience and necessity should be granted.
The Commission has reviewed the applications of Empire and WGI, the accompanying
documentation, and Staff's recommendation and memorandum. The Commission finds
that Empire's application to sell and transfer certain assets to WGI is not
detrimental to the public interest and should be approved. The Commission also
finds that WGI's application for a certificate of convenience and necessity is
necessary and convenient for the public service and should be approved.
IT IS THEREFORE ORDERED:
1. That the Application filed by The Empire District Electric Company for
authority to sell and transfer certain assets to Westar Generating, Inc. is
approved.
2. That nothing in this order shall be considered a finding by the Commission of
the value for ratemaking purposes of the transactions approved by this order.
3. That the Commission reserves the right to consider any ratemaking treatment
to be afforded the transactions approved by this order in a later proceeding.
4. That no later than 90 days after the closing date of the transaction, The
Empire District Electric Company shall submit to Staff (Utility Services) a copy
of all journal entries made in connection with this sale and transfer.
5. That the application filed by Westar Generating, Inc., for a certificate of
convenience and necessity is granted.
6. That Westar Generating, Inc., is granted a certificate of convenience and
necessity to construct, install, own, operate,
3
control, manage and maintain electric facilities in Jasper County, Missouri in
an area set forth on the maps attached to its Application as Appendix 2. A legal
description of the area is attached to Westar's Application as Appendix 3.
7. That this order shall become effective on June 13, 2000.
BY THE COMMISSION
Dale Hardy Roberts
Secretary/Chief Regulatory Law Judge
( S E A L )
Lumpe, Ch., Murray, Schemenauer,
and Drainer, CC., concur
Woodruff, Regulatory Law Judge
4
Exhibit H
Proposed Form Of Notice
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-_____)
Filings under the Public Utility Holding Company Act of 1935, as amended ("Act")
__, 2001
Notice is hereby given that the following filing(s) has/have been made with
the Commission pursuant to provisions of the Act and rules promulgated
thereunder. All interested persons are referred to the application(s) and/or
declaration(s) for complete statements of the proposed transaction(s) summarized
below. The application(s) and/or declaration(s) and any amendments thereto
is/are available for public inspection through the Commission's Office of Public
Reference. Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in writing by __,
2001 to the Secretary, Securities and Exchange Commission, 450 5th Street, N.W.,
Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or
declarant(s) at the address(es) as specified below. Proof of service (by
affidavit or, in case of an attorney at law, by certificate) should be filed
with the request. Any request for hearing shall identify specifically the issues
of fact or law that are disputed. A person who so requests will be notified of
any hearing, if ordered, and will receive a copy of any notice or order issued
in the matter. After __, 2001, the application(s) and/or declaration(s), as
filed or as amended, may be granted and/or permitted to become effective.
* * *
Western Resources, Inc.
Western Resources, Inc. ("WRI") is a public utility holding company exempt
from all provisions of the Public Utility Holding Company Act of 1935 ("Act")
except Section 9(a)(2) under Section 3(a)(1) pursuant to Rule 2 of the Act. WRI,
through its KPL1 division, is engaged in the production, purchase, transmission,
distribution and sale of electric energy in the State of Kansas. WRI's assets
include security company holdings through its ownership of Protection One, Inc.
("Protection One"), which has more than 1.3 million security customers in North
America. Its utility operations, conducted through KPL and WRI's subsidiary,
Kansas Gas and Electric Company ("KGE"), provide electric service to
approximately 636,000 customers in 432 communities in the State of Kansas. KGE
owns a 47% interest in Wolf Creek Nuclear Operating Corporation which operates
the Wolf Creek Generating Station on behalf of its owners. Through its ownership
interest in ONEOK Inc., ("ONEOK") an Oklahoma corporation, WRI has an
approximately 45% economic interest in the eighth largest natural gas
distribution company in the nation, serving more than 1.4 million customers.
Westar Generating, Inc. ("Westar Generating"), a wholly owned subsidiary of
WRI, is a Kansas corporation that holds an undivided 40% ownership interest in a
2X1 F class combined cycle generation facility ("State Line") that is under
construction at The Empire District Electric Company State Line station near
Joplin, Missouri. The Empire District Electric Company holds the remaining
interest and operates the facility pursuant to the Agreement for the
Construction, Ownership and Operation of State Line Combined Cycle Generating
Facility. Westar Generating and Empire hold their interests as tenants in
common.
WRI is seeking authority to retain its 40% indirect interest in State Line
when the plant resumes commercial operation. Because State Line is not presently
operating commercially,
- --------
1 "KPL" is the trade name for WRI's electric business.
Westar Generating is not an "electric utility" as defined by Section 2(a)(3) of
the Act. However, upon State Line's resumption of commercial operations, Westar
Generating will become an electric utility. WRI will qualify as an affiliate of
Westar Generating under the Act, and WRI is already an affiliate of KGE and
ONEOK.