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) |
Registrants 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 companys 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. Managements 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 companys Quarterly Report on Form 10-Q filed Aug. 4, 2011 (a) in ITEM 2. Managements 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 companys 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 |
Exhibit 99.1
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, Westars 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 wont 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 companys 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. Managements 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 companys Quarterly Report on Form 10-Q filed Aug. 4, 2011 (a) in ITEM 2. Managements 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 companys 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.
Exhibit 99.2
|
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) |
Exhibit 99.3
|
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 Energys 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 Westars 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 Westars 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 companys 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. Managements 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 companys Quarterly Report on Form 10-Q filed Aug. 4, 2011 (a) in ITEM 2. Managements 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 companys 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
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