KCP&L, a subsidiary of Great Plains Energy Incorporated
(NYSE: GXP), today filed a request with the Missouri Public Service
Commission to increase base rates for electric service for some of
its Missouri customers. The Company is requesting a 7.5% rate
increase. If approved, the increase would result in an average
residential customer* paying approximately $9 more each month. We
have requested a 10 month process in our filing. Until recently,
the rate request process has taken approximately 11 months in
Missouri, so any resulting rate changes would be expected to take
effect in April or May 2017.
This rate increase request does not impact all Missouri
customers served by KCP&L. To better understand the areas
impacted by this rate increase request, please visit
www.kcpl.com/servicearea.
The proposed price increase is needed to recover money spent
upgrading the company’s infrastructure, adding regional
transmission lines, and complying with environmental and
cybersecurity mandates.
“Our customers depend on KCP&L to deliver electricity to
their homes and businesses each day,” said Terry Bassham, President
and CEO of Great Plains Energy and KCP&L. “KCP&L has one of
the most reliable electrical grids in the country, and continuing
that track record and quality requires investment in systems,
infrastructure and equipment upgrades.”
KCP&L is recommending that the requested increase be spread
equally across all customer classes and all components of
customers’ bills, including the Customer Charge. The Customer
Charge is a fixed monthly charge that includes the cost to provide
service to each customer’s home or business, including equipment,
administrative systems and other items. Additionally, the Company
has asked the Commission to continue reflecting fuel and purchased
power increases and decreases in the Fuel Adjustment Clause** (FAC)
on customer bills. KCP&L’s FAC in Missouri gets reset in each
rate request proceeding. In this case, it will result in a 3.3%
increase in the line on the bill reflecting a customer’s energy
usage and a corresponding decrease to the FAC line item on their
bill.
KCP&L customers receive reduced electric rates when
KCP&L sells electricity to other utilities across the country.
Over the last year, low natural gas prices and decreased demand
have significantly decreased the price and amount of electricity
KCP&L is able to sell outside of its service territory, which
has reduced this benefit to customers.
Customer Assistance
“Our employees work hard to manage our costs to keep our rates
competitive,” said Bassham. “However, we have to make additional
investment in our system that isn’t covered in the current price
our customers pay for electricity. We do understand that price
increases can be difficult, as a result, we offer programs and
assistance for those customers that need help.”
Some of the helpful resources include:
- KCP&L offers its Connections
programs and bill payment assistance programs specifically offered
to customers who need help paying their electricity bills. Check
out our billing and payment options online or contact KCP&L at
816-471-5275 to discuss payment options available to you.
- KCP&L’s Economic Relief Pilot
Program offers up to a $65 monthly bill credit to qualifying
Missouri customers. KCP&L partners with the Salvation Army to
administer the program and customers should contact the Salvation
Army at 1-877-566-2769, Ext.1 to find out if they qualify for the
bill credit.
- Local United Way offices can also
connect customers with available community resources and utility
financial assistance. Contact the United Way of Greater Kansas City
at 2-1-1 or 1-866-320-5764.
- There is federal assistance available
to help customers pay their energy bills. In Missouri, customers
may contact the Missouri Low Income Home Energy Assistance Program
(LIHEAP) at 855-373-4636.
Ongoing Investments
Great Plains Energy recently announced its intent to acquire
Westar Energy, the largest investor-owned utility in Kansas. If all
required regulatory and shareholder approvals are obtained, once
the transaction is complete in 2017, Great Plains Energy would have
more than 1.5 million customers in Kansas and Missouri, nearly
13,000 megawatts of generation capacity, almost 10,000 miles of
transmission lines and over 51,000 miles of distribution lines. In
addition, more than 45 percent of the combined utility’s retail
customer demand could be met with emission-free energy. The
requested rate increase is not related to this pending acquisition.
KCP&L expects all customers in Missouri and Kansas will benefit
from this transaction, as the anticipated savings created from
combining the two companies are expected to result in smaller rate
increases over time.
KCP&L also has a separate and distinct rate increase request
that is being considered for its KCP&L Greater Missouri
Operations Company (GMO) customers. Similarly, that request seeks
to recover investments made to comply with environmental mandates,
add regional transmission lines, upgrade infrastructure and systems
and continuation of GMO’s FAC.
For more information on this rate increase request, visit
www.kcpl.com/MORates.
* An average residential customer is defined as using 1020 kWh
per month in the summer and 690 kWh per month in the winter.
** The fuel adjustment clause (FAC) is a way for KCP&L to
collect costs associated with fuel, and purchased power that are
best recovered in smaller, more gradual amounts. To increase
transparency the FAC is a separate line item on customers’
bills.
About Great Plains
Energy:
Headquartered in Kansas City, Mo., Great Plains Energy
Incorporated (NYSE: GXP) is the holding company of Kansas City
Power & Light Company and KCP&L Greater Missouri Operations
Company, two of the leading regulated providers of electricity in
the Midwest. Kansas City Power & Light Company and KCP&L
Greater Missouri Operations Company use KCP&L as a brand name.
More information about the companies is available on the Internet
at: www.greatplainsenergy.com or www.kcpl.com.
Forward-Looking Statements
Statements made in this release that are not based on historical
facts are forward-looking, may involve risks and uncertainties, and
are intended to be as of the date when made. Forward-looking
statements include, but are not limited to, statements relating to
Great Plains Energy’s proposed acquisition of Westar, shareholder
and regulatory approvals, the completion of the proposed
transactions, benefits of the proposed transactions, and
anticipated future financial measures and operating performance and
results, including estimates for growth and other matters affecting
future operations. In connection with the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995, Great
Plains Energy and KCP&L are providing a number
of important factors that could cause actual results to differ
materially from the provided forward-looking information. These
important factors include: the risk that Great Plains Energy or
Westar may be unable to obtain shareholder approvals for the
proposed transactions or that Great Plains Energy or Westar may be
unable to obtain governmental and regulatory approvals required for
the proposed transactions, or that required governmental and
regulatory approvals or agreements with other parties interested
therein may delay the proposed transactions or may be subject to or
impose adverse conditions or costs; the occurrence of any event,
change or other circumstances that could give rise to the
termination of the proposed transactions or could otherwise cause
the failure of the proposed transactions to close; risks relating
to the potential decline in the Great Plains Energy share price
resulting in an increase in the exchange ratio of Great Plains
Energy shares offered to Westar shareholders in accordance with the
transaction agreement and resulting in reduced value of the
proposed transactions to Great Plains Energy shareholders; the risk
that a condition to the closing of the proposed transactions or the
committed debt or equity financing may not be satisfied; the
failure to obtain, or to obtain on favorable terms, any equity,
debt or equity-linked financing necessary to complete or
permanently finance the proposed transactions and the costs of such
financing; the outcome of any legal proceedings, regulatory
proceedings or enforcement matters that may be instituted relating
to the proposed transactions; the receipt of an unsolicited offer
from another party to acquire assets or capital stock of Great
Plains Energy or Westar that could interfere with the proposed
transactions; the timing to consummate the proposed transactions;
the costs incurred to consummate the proposed transactions; the
possibility that the expected value creation from the proposed
transactions will not be realized, or will not be realized within
the expected time period; the credit ratings of the companies
following the proposed transactions; disruption from the proposed
transactions making it more difficult to maintain relationships
with customers, employees, regulators or suppliers; the diversion
of management time and attention on the proposed transactions;
future economic conditions in regional, national and international
markets and their effects on sales, prices and costs; prices and
availability of electricity in regional and national wholesale
markets; market perception of the energy industry, Great
Plains Energy and KCP&L changes in business
strategy, operations or development plans; the outcome of contract
negotiations for goods and services; effects of current or proposed
state and federal legislative and regulatory actions or
developments, including, but not limited to, deregulation,
re-regulation and restructuring of the electric utility industry;
decisions of regulators regarding rates the Companies can charge
for electricity; adverse changes in applicable laws, regulations,
rules, principles or practices governing tax, accounting and
environmental matters including, but not limited to, air and water
quality; financial market conditions and performance including, but
not limited to, changes in interest rates and credit spreads and in
availability and cost of capital, derivatives and hedges and the
effects on nuclear decommissioning trust and pension plan assets
and costs; impairments of long-lived assets or goodwill; credit
ratings; inflation rates; effectiveness of risk management policies
and procedures and the ability of counterparties to satisfy their
contractual commitments; impact of terrorist acts, including but
not limited to cyber terrorism; ability to carry out marketing and
sales plans; weather conditions including, but not limited to,
weather-related damage and their effects on sales, prices and
costs; cost, availability, quality and deliverability of fuel; the
inherent uncertainties in estimating the effects of weather,
economic conditions and other factors on customer consumption and
financial results; ability to achieve generation goals and the
occurrence and duration of planned and unplanned generation
outages; delays in the anticipated in-service dates and cost
increases of generation, transmission, distribution or other
projects; Great Plains Energy’s ability to successfully manage
transmission joint ventures or to integrate the transmission joint
ventures of Westar; the inherent risks associated with the
ownership and operation of a nuclear facility including, but not
limited to, environmental, health, safety, regulatory and financial
risks; workforce risks, including, but not limited to, increased
costs of retirement, health care and other benefits; and other
risks and uncertainties.
This list of factors is not all-inclusive because it is not
possible to predict all factors. Additional risks and uncertainties
will be discussed in the joint proxy statement/prospectus and other
materials that Great Plains Energy will file with the SEC in
connection with the proposed transactions. Other risk factors are
detailed from time to time in Great Plains Energy’s and KCP&L’s
quarterly reports on Form 10-Q and annual report on Form 10-K filed
with the Securities and Exchange Commission. Each
forward-looking statement speaks only as of the date of the
particular statement. Great Plains
Energy and KCP&L undertake no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any proxy, vote or approval, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. In connection with
the proposed transactions, Great Plains Energy will file a
Registration Statement on Form S-4, that includes a joint proxy
statement of Great Plains Energy and Westar, which also constitutes
a prospectus of Great Plains Energy, as well as other materials. WE
URGE INVESTORS TO READ THE REGISTRATION STATEMENT AND JOINT PROXY
STATEMENT/PROSPECTUS AND THESE OTHER MATERIALS CAREFULLY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT GREAT PLAINS ENERGY, WESTAR AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the registration
statement and joint proxy statement/prospectus (when available) and
other documents that will be filed by Great Plains Energy and
Westar with the SEC at http://www.sec.gov, the SEC’s website, or
from Great Plains Energy’s website
(http://www.greatplainsenergy.com) under the tab, “Investor
Relations” and then under the heading “SEC Filings.” These
documents will also be available free of charge from Westar’s
website (http://www.westarenergy.com) under the tab “Investors” and
then under the heading “SEC Filings.”
Participants in Proxy Solicitation
Great Plains Energy, Westar and their respective directors and
certain of their executive officers may be deemed, under SEC rules,
to be participants in the solicitation of proxies from Great Plains
Energy’s and Westar’s shareholders with respect to the proposed
transaction. Information regarding the officers and directors of
Great Plains Energy is included in its definitive proxy statement
for its 2016 annual meeting filed with SEC on March 24, 2016.
Information regarding the officers and directors of Westar is
included in its definitive proxy statement for its 2016 annual
meeting filed with the SEC on April 1, 2016. More detailed
information regarding the identity of potential participants, and
their direct or indirect interests, by securities, holdings or
otherwise, will be set forth in the registration statement and
joint proxy statement/prospectus and other materials when they are
filed with the SEC in connection with the proposed transaction.
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