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FORM 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 25, 2011

 

 

WESTAR ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

 

 

KANSAS   1-3523   48-0290150

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

818 South Kansas Avenue, Topeka, Kansas   66612
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (785) 575-6300

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


WESTAR ENERGY, INC.

 

Item 7.01. Regulation FD Disclosure.

On August 25, 2011, we filed an application with the Kansas Corporation Commission to propose changes to our electric rates. We are seeking an approximate 5.85 percent, or $91 million, increase in our rates. A copy of a press release and materials that discuss the rate review are attached to this report.

On August 19, 2011, the Kansas Corporation Commission issued an order in a proceeding involving environmental upgrades at the La Cygne Generating Station. A summary of the order is attached to this report.

The information furnished pursuant to this Item 7.01, including the exhibits to this report, will not be incorporated by reference into any registration statement filed by us under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference. Copies of the exhibits to this report are available to the public on our website, http://www.WestarEnergy.com.

 

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1     Press Release dated August 25, 2011

Exhibit 99.2     Summary of rate application

Exhibit 99.3     Summary of order in La Cygne Generating Station proceeding

Forward-looking statements: Certain matters discussed in this Current Report on Form 8-K, including the exhibit hereto, are “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although we believe that our expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. The factors that could cause actual results to differ materially from these forward-looking statements include those discussed herein as well as (1) those discussed in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 (a) under the heading, “Forward-Looking Statements,” (b) in ITEM 1. Business, (c) in ITEM 1A. Risk Factors, (d) in ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (e) in ITEM 8. Financial Statements and Supplementary Data: Notes 13 and 15; (2) those discussed in the company’s Quarterly Report on Form 10-Q filed Aug. 4, 2011 (a) in ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (b) in Part I, Financial Information, ITEM 1. Financial Statements: Notes 8 and 9; and (3) other factors discussed in the company’s filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Westar Energy, Inc.
Date: August 25, 2011     By:  

/s/ Larry D. Irick

    Name:   Larry D. Irick
    Title:   Vice President, General Counsel and Corporate Secretary


EXHIBIT INDEX

 

Exhibit Number

  

Description of Exhibit

Exhibit 99.1    Press Release dated August 25, 2011
Exhibit 99.2    Summary of rate review
Exhibit 99.3    Summary of order in La Cygne Generating Station proceeding
Press Release dated August 25, 2011

Exhibit 99.1

 

LOGO  

Media contact:

Gina Penzig,

director, corporate

communications

Phone: 785.575.8089

gina.penzig@WestarEnergy.com

 

Investor contact:

Bruce Burns,

director, investor relations

Phone: 785.575.8227

bruce.burns@WestarEnergy.com

 

 

WESTAR REQUESTS 5.85% PRICE INCREASE

Request driven by tree trimming,

new regulations, higher operating costs.

TOPEKA, Kan., Aug. 25, 2011 — Westar Energy, Inc. (NYSE:WR) today filed with the Kansas Corporation Commission (KCC) a request to recover the increased costs of providing electric service to customers. Westar is seeking to increase its base prices about 5.85 percent. Adjusted for inflation, Westar’s average rates for electricity if the full request is granted would be nearly the same as they were almost 20 years ago.

“Our customers and our state depend on reliable electric infrastructure. Unfortunately the cost of keeping our system reliable has gone up,” Mark Ruelle, Westar Energy chief executive officer, said. “We are asking the KCC to allow us to increase our prices to reflect the higher cost of providing service. While we continue to implement efficiencies in how we operate, we can only tighten the purse strings so much, given the increasing regulatory demands out of Washington as well as higher operating costs to keep equipment in good condition to provide the reliable service our customers expect and deserve.”


Westar Energy requests price increase

     Page 2 of 2   

Reliability is increasingly crucial to all customers. As Westar works with the state and communities to help them attract new businesses or encourage existing businesses to expand, the availability of reliable electricity is a top concern.

“We have competitive electricity prices, and that attracts new businesses,” Ruelle said. “We have to deliver them reliability as well, or they won’t expand in Kansas.”

The increase for a typical residential customer would be about $6.50 per month. In aggregate, across the state to its nearly 700,000 retail customers, the amount of the price adjustment is about $91 million annually.

Among the causes for the increase, the company cited increasing costs of: complying with federal regulatory requirements; maintaining power plants and wires in good repair, rather than replacing them at higher cost; keeping trees away from power lines; and keeping commitments to its employees who do whatever it takes to bring reliable service to its customers.

 

 

Westar Energy, Inc. (NYSE: WR) is the largest electric utility in Kansas, providing electric service to about 687,000 customers in the state. Westar Energy has about 7,100 megawatts of electric generation resources and operates and coordinates more than 35,000 miles of electric distribution and transmission lines.

For more information about Westar Energy, visit us on the Internet at http://www.WestarEnergy.com.

Forward-looking statements: Certain matters discussed in this news release are “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although we believe that our expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. The factors that could cause actual results to differ materially from these forward-looking statements include those discussed herein as well as (1) those discussed in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 (a) under the heading, “Forward-Looking Statements,” (b) in ITEM 1. Business, (c) in ITEM 1A. Risk Factors, (d) in ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (e) in ITEM 8. Financial Statements and Supplementary Data: Notes 13 and 15; (2) those discussed in the company’s Quarterly Report on Form 10-Q filed Aug. 4, 2011 (a) in ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (b) in Part I, Financial Information, ITEM 1. Financial Statements: Notes 8 and 9; and (3) other factors discussed in the company’s filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made.

Summary of rate application

Exhibit 99.2

LOGO

 

 

Investor Fact Sheet

 

August 2011 Rate Filing

 

Overview:

Filing date August 25, 2011

Based on a 240-day regulatory calendar plan for a decision by late April 2012

New rates approximately May 2012

Request 5.8% or $91 million revenue increase

Test Year

Twelve months ended March 31, 2011 with known and measurable adjustments.

Proposed Rate Base: $3.4 billion

Excludes: $722 million of transmission rate base as of Dec. 31, 2010; and

  $393 million of environmental rate base as of Dec. 31, 2010 under ECRR

Proposed Return

Request 10.6% ROE and 8.68% overall return

Currently implied authorized return is 10.4% ROE and 8.50%

Capital structure (pro forma including settlement of forward equity sales)

 

          A     B     C  
          % of
Capitalization
    Cost     Weighted Avg.
Cost
 

1

   Debt      47.97     6.65     3.19

2

   Preferred equity      0.41     4.55     0.02

3

   Common equity      51.62     10.60     5.47
     

 

 

     

 

 

 

4

  

Total

     100.00       8.68

Current prices based on 50.83% equity ratio

Rate Case Drivers:

Increased O&M:

Higher tree trimming costs

Increasing regulatory compliance costs

Higher employee benefit costs

Reduced depreciation and amortization

Lower energy sales

Requesting no changes in principal ratemaking methods

Request to use follow-on abbreviated rate case for La Cygne environmental project

 

 

For more information contact investor relations:

Bruce Burns

785-575-8227

bruce.burns@westarenergy.com

 


1
General Rate Case Process
August 2011 Rate Filing
Prepare case using
historical test year
w/pro forma updates
Company files its
request
(August 25, 2011)
Interventions
Discovery
Technical hearings
Briefs
Decision
(240 days after filing)
(Decision late April 2012)
Staff / Interveners
file response to
company request
Rebuttal testimony
Settlement / Pre-hearing
conference
Rates implemented
(generally within
30 days)
Public hearings 
(typically at multiple
locations in service area)
Summary of order in La Cygne Generating Station proceeding

Exhibit 99.3

 

LOGO

  

KCC Decision

La Cygne Predetermination

In February 2011, KCP&L filed a request with the Kansas Corporation Commission (KCC) for predetermination of ratemaking principles regarding significant environmental upgrades at the La Cygne Generating Station. Westar Energy is 50% owner of the La Cygne Generating Station and intervened in the proceeding.

The upgrades, projected for completion by June 2015, include wet scrubbers, baghouses, a selective catalytic reduction (SCR) system, low-NOx burners and other facilities. The estimated project cost is $1.23 billion. Westar Energy’s share of the estimated cost is $615 million.

On August 19, 2011, the KCC issued its Order ruling that the decision to make the upgrades was reasonable, reliable, efficient and prudent and that the $1.23 billion project cost estimate (excluding AFUDC and property tax) is reasonable.

The KCC denied Westar’s request to recover construction costs through its Environmental Cost Recovery Rider (ECRR); however, Westar Energy still expects to recover construction work in progress (CWIP) as statutorily permitted in Kansas. The KCC confirmed that the cost of capital and return on equity for the upgrade project will be the same as the rates established generally for Westar’s overall rate base.

Parties to the case may file petitions for reconsideration with the KCC by September 6, 2011. However, the Order will be effective unless and until modified by the KCC or stayed by a court.

We expect that the upgrades will proceed in September 2011.

Forward-looking statements: Certain matters discussed herein are “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although we believe that our expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. The factors that could cause actual results to differ materially from these forward-looking statements include those discussed herein as well as (1) those discussed in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 (a) under the heading, “Forward-Looking Statements,” (b) in ITEM 1. Business, (c) in ITEM 1A. Risk Factors, (d) in ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (e) in ITEM 8. Financial Statements and Supplementary Data: Notes 13 and 15; (2) those discussed in the company’s Quarterly Report on Form 10-Q filed Aug. 4, 2011 (a) in ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (b) in Part I, Financial Information, ITEM 1. Financial Statements: Notes 8 and 9; and (3) other factors discussed in the company’s filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made.

 

 

For more information contact investor relations:

Bruce Burns

785-575-8227

bruce.burns@westarenergy.com