Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - WESTAR ENERGY INC /KS | d8k.htm |
 Citi Power and Utility Conference
Boston, MA
June 2, 2011
Citi Utility Conference June 2, 2011
Exhibit 99.1 |
 2
Forward Looking Disclosures
Forward-looking
statements:
Certain
matters
discussed
in
this
presentation
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
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;
and
(2)
those
discussed
in
the
company’s
Quarterly
Report
on
Form
10-
Q
filed
May
5,
2011
(a)
in
ITEM
7.
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.
Citi Utility Conference June 2, 2011 |
 3
•
Mark Ruelle selected to succeed Bill Moore as CEO
•
New KCC Commissioner elected as chairman
•
Wolf Creek update -
performance indicators and outage
•
Predetermination request for additional 370MW of renewables
approved
•
Q1 2011 EPS of $0.27 flat compared with 2010
Recent Events
Citi Utility Conference June 2, 2011 |
 4
•
Kansas Corporation Commission
–
Three-member board appointed by governor
–
Serve staggered four year terms
•
Newest commissioner
–
Mark Sievers (R)
•
Appointed by governor to serve 4-year term, expiring March 2015
–
Elected chairman
•
Attorney and economist
•
Executive experience in telecommunications industry
•
Current KCC commissioners
–
Thomas Wright (D)
•
Term expires March 2014
–
Ward Loyd (R)
•
Term expires March 2012
Kansas Regulators
Citi Utility Conference June 2, 2011 |
 5
•
NRC performance indicators all “green”
–
NRC returned station to desired “Column 1”
oversight
•
NRC examinations of all U.S. plants after Japanese event reaffirmed
capability
to
maintain
reactor
safety
following
large
explosions
or
fires
–
NRC concluded Wolf Creek disaster plans adequately address expected
emergencies, including tornado threat
•
NRC safety review is an ongoing improvement cycle based on lessons learned
•
Turbine upgraded during spring refuel and maintenance outage
–
Upgrade follows early 20-year license extension received in 2009
–
Required longer planned outage than typical
•
Also provided opportunity for more detailed equipment inspections
–
Scope of work increased length of outage beyond plan
–
Outage extended further to address generator grounding issue
»
Expect extension of 4 to 6 weeks
Wolf Creek Update
Citi Utility Conference June 2, 2011 |
 6
•
Statute
requires
<
200
MW
additional
renewables
by
2011
–
Potential to satisfy requirement with RECs until projects placed
in-service in late 2012
•
KCC
approved
request
for
<
370
MW
through
PPAs
–
Tentative agreements for 2 projects
•
Post Rock Wind Farm -
201 MW
•
Ironwood Wind Farm –
168 MW
–
Expect both projects to be in-service by end 2012
–
Recover through the fuel adjustment clause
•
20 year agreements priced < $35/MWh
•
Unanimous settlement and agreement among WR, Staff and
CURB
Predetermination Request for Additional Renewables
Approved
Citi Utility Conference June 2, 2011 |
 7
2011 Plans
Citi Utility Conference June 2, 2011 |
 8
Significant Planned Regulatory Agenda
•
Predetermination request for 370MW of renewables approved
•
Updated TDC tariff approved
•
KCC docket reviewing retrofit economics for coal plants
•
Predetermination of La Cygne environmental project (intervenor)
•
Request siting authority for Prairie Wind Transmission line
•
Update ECRR tariff
•
Update energy efficiency rider
•
Plan to file general rate case late spring or early summer
Citi Utility Conference June 2, 2011
Complete
In process |
 9
2011 Earnings Guidance of $1.65 to $1.80
•
Planned price adjustments via tracking adjustments
•
Expect
weather
adjusted
retail
sales
to
grow
<1
% •
O&M
increase
<2
% •
SG&A
flat
to
decrease
<1%
•
Depreciation
increase
<$15
million
•
AFUDC
equity
decrease
<$2
million
•
COLI
proceeds
of
<$0.10
per
share
•
Interest
charges
increase
<$5
million
•
Effective tax rate of 29% -
31%
•
Funding 2011 construction program
–
Issue 12.7 million shares already priced under forward sale agreements
–
Draw on revolving credit facilities and/or issuance of debt
Citi Utility Conference June 2, 2011 |
 10
Annualized Rate & Revenue Changes
Actual and Estimated
2010
2011
2012
(Estimated)
Base rates
$17
million
Feb
(Abbreviated rate case)
TBD
Transmission rates
$16
million
Jan 1
$17
million
Jan 1
<$
17 million
Jan 1
ECRR
$14
million
June 1
$10
million
June 1
<$
29 million
June 1
Energy Efficiency
$6 million
November
<$11
million
November
(Estimated)
<$13
million
November
Citi Utility Conference June 2, 2011
Complete
In process |
 11
Major Construction Projects Underway
•
Environmental (Air Quality)
–
Lawrence Energy Center
•
Fabric filters, rebuild scrubbers, precipitator, low NOx system
–
Jeffrey Energy Center
•
SCR on 1 unit
–
La Cygne Energy Center
•
Scrubbers, fabric filters, common chimney, SCR and low NOx system
•
Transmission
–
Wichita to Oklahoma 345 kV
–
Planning
and
design
Prairie
Wind
line
(<100
mile
double
circuit
345
kV)
•
SmartStar Lawrence
–
$40 million project reduced by 50% DOE match
•
Advanced outage management
•
Automated metering infrastructure
Citi Utility Conference June 2, 2011 |
 12
Capital Expenditure Forecast 2011 -
2013
Actual
Forecast
Forecast
Forecast
Forecast
2010
2011
2012
2013
2011 - 2013
Method of Cost Recovery
Generation replacements and other
83.4
$
130.4
$
146.4
$
150.6
$
427.4
$
General Rate Case (GRC)
Westar environmental
107.7
181.1
200.1
154.3
535.5
ECRR
La Cygne environmental
3.9
63.0
171.0
195.1
429.1
ECRR
Nuclear Fuel
35.3
25.1
30.1
41.7
96.9
Fuel adjustment clause
Transmission
197.3
192.7
161.3
164.1
518.1
FERC formula rate/TDC
Distribution
New customers, replacements & other
78.7
95.9
102.2
106.4
304.5
GRC
Smart grid (a)
10.3
13.6
13.6
GRC
Other
23.5
19.8
15.0
11.0
45.8
GRC
Total
540.1
$
721.6
$
826.1
$
823.2
$
2,370.9
$
(a) net of DOE matching grant
In 2011, 2012 and 2013, Westar plans to incur additional expenditures related to
the Prairie Wind Transmission joint venture (not inlcuded in above forecast amounts).
Prairie Wind Transmission joint venture
2.7
$
22.5
$
13.8
$
39.0
$
Citi Utility Conference June 2, 2011 |
 13
Capital Expenditure Forecast 2011 -
2013
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2010
2011
2012
2013
$540
$722
$826
$823
Environmental
Other
Transmission
62%
65%
61%
Citi Utility Conference June 2, 2011
57% |
 14
Cash Flow Guidance
Citi Utility Conference June 2, 2011
2011E
(Millions)
Net income
205
$
Depreciation and amortization
285
Cash from operations
490
Less: Cash dividends
145
Internally generated cash
345
Less: CapEx
722
Net cash flow required
(377)
$
Assumptions and notes:
Net Income –
midpoint of 2011 EPS guidance times average shares outstanding
Average shares assumes issuance of shares priced under forward sale
agreements Cash dividends -
$1.28 indicated annual dividend with 6.5% of common dividend being
reinvested |
 15
Projected
Rate
Base
2010
–
2015
(in
billions)
2010
2011
2012
2013
2014
2015
Base
Environmental
Transmission
$6.7
$6.3
$5.9
$5.4
$5.0
$4.5
$3.5
$3.5
$3.5
$3.6
$3.7
$3.8
Citi Utility Conference June 2, 2011
$0.6
$0.8
$1.0
$1.1
$1.2
$1.4
$0.4
$0.6
$0.9
$1.2
$1.4
$1.5 |
 16
Transmission
Citi Utility Conference June 2, 2011 |
 17
Major Transmission Investments Underway
•
Rose Hill –
Oklahoma
Under construction
•
Target completion mid 2012
•
Investment
<$100
million
•
Prairie Wind Transmission
•
50/50 JV with ETA
•
Siting request Feb 2011
•
Begin construction mid 2012
•
Approximately 110 miles
•
Estimated completion 2014
•
Project
cost
<$225
million
Citi Utility Conference June 2, 2011 |
 18
Prairie Wind Transmission Regulation
•
Received FERC incentives
–
Recovery of pre-commercial development costs
–
CWIP recovery in rate base
–
Allowed ROE of 12.8%
•
KCC
–
Siting request filed Feb 28, 2011
–
Decision expected by June 28, 2011
•
Southwest Power Pool
–
Regional cost allocation approved by FERC
–
“Notice
to
Construct”
accepted
–
JV became a member of the SPP
–
Awaiting SPP adoption of formula rate
Citi Utility Conference June 2, 2011 |
 19
Potential for High Voltage Transmission Growth
A.
JEC to Iatan
Energy Center
B.
JEC to Concordia
C.
Concordia to
Salina
D.
Salina to Hays
E.
JEC to Swissvale
F.
Hutchinson to
Spearville
G.
Wichita to Rose
Hill
H.
Wolf Creek to
Emporia
F
G
A
B
C
E
D
H
Citi Utility Conference June 2, 2011 |
 20
Profile
Citi Utility Conference June 2, 2011 |
 21
Strategic Approach
•
Embrace uncertainty and acknowledge inability to predict the
future
•
Place a high value on flexibility
–
Operational
–
Financial
–
Regulatory
•
Leverage actions and strategies around intrinsic advantages
•
Seek collaborative and constructive approaches to regulation
•
Value proposition
–
Protect against downside while growing investor returns
Citi Utility Conference June 2, 2011
Pure-play, vertically
integrated, rate-regulated
•
<7,000
MW
of
generation
•
6,200 miles transmission
•
687,000 customers |
 22
Regulatory Approach
•
A sound regulatory and energy policy platform
–
KCC and FERC
•
Ultimately results in lower rates for customers
Time
Traditional GRC
Riders coupled with GRC
Ultimately,
lower rates
Citi Utility Conference June 2, 2011 |
 23
Favorable Supply Portfolio
$53.42
$17.69
$6.53
Uranium
Coal
Gas
Ave. Fuel Cost
$18.41/MWh
Fuel Mix
Coal
49%
Gas
39%
Wind
4%
Uranium
8%
MW Capacity
5.0¢
6.0¢
7.0¢
8.0¢
9.0¢
10.0¢
Westar Energy
Kansas City Power
and Light (KS)
Empire District
Electric (KS)
National
Average
7.8¢
8.6¢
9.3¢
Low Rates
Source: Edison Electric Institute 01/01/2011
Coal
74%
Gas
7%
Wind
3%
Uranium
16%
Cost of Fuel
Citi Utility Conference June 2, 2011 |
 24
Diverse Energy Sales (MWh)
Chemical & oil
Food
processing
Aerospace
Consumer
manufacturing
Other
Commercial
38%
Residential
35%
Industrial
27%
39%
17%
16%
16%
12%
12%
18%
8%
7%
3%
4%
48%
Other
General
merchandise
Grocery/
Convenience
Real estate
Health care
Government
Education
Citi Utility Conference June 2, 2011 |
 25
Strong Service Territory
•
Overall economic conditions
significantly better than nation
–
No real estate crash
–
State unemployment remains
2+ pts favorable to nation
•
Industrial sales showing signs
of recovery
–
Sales continue to be up 6%
over rolling 12 month period
ending March 2011
•
Pentagon awards refueling
tanker contract to Boeing
–
Benefits Wichita and Kansas
economy
Citi Utility Conference June 2, 2011 |
 26
Capitalization and Liquidity
•
Target
<50/50
capital
structure
•
Solid investment grade credit
•
Total credit facility capacity $1 billion
•
No bonds mature before 2014
March 31, 2011
(a)
(millions)
Long-term, net
$2,491
Preferred
21
Common
2,409
Total Capitalization
$4,921
Debt
51%
Equity
49%
Preferred
<1%
(a) Capitalization excludes short-term debt and
adjustments for VIEs
Citi Utility Conference June 2, 2011 |
 27
$0.92
$1.00
$1.08
$1.16
$1.20
$1.24
$1.28
$0.75
$0.85
$0.95
$1.05
$1.15
$1.25
$1.35
2005
2006
2007
2008
2009
2010
2011
Dividend
•
Quarterly dividend increased 3% effective April 1
•
Long-standing dividend payout target of 60%-75% of earnings
–
2011 guidance implies payout at upper end of range
Indicated
annual rate
Citi Utility Conference June 2, 2011 |
 28
Westar’s Value Proposition
•
Solid, transparent business strategy
•
Strong, experienced utility management team
•
Thoughtful, disciplined approach to operations, capital planning
and financing
•
Constructive regulatory and policy environment
–
Results in lower prices for customers
–
Provides investors clarity
•
Focus on containing risks and maintaining returns
•
Diverse customer base and stable service territory
Citi Utility Conference June 2, 2011 |
 29
Rates and Regulation
Citi Utility Conference June 2, 2011 |
 30
Regulatory Approach
•
A sound regulatory and energy policy platform
–
KCC and FERC
•
Ultimately results in lower rates for customers
Time
Traditional GRC
Riders coupled with GRC
Ultimately,
lower rates
Citi Utility Conference June 2, 2011 |
 31
Methods of Cost Recovery
Revenue Requirement
Method of Recovery
Comment
1.
Fuel, purchased power and
environmental consumables
Quarterly adjustment based on
forecasted cost, with annual true-up
Adjusts prices for actual costs,
protecting both customers and
investors from mispricing
2.
Environmental capital
Environmental Cost Recovery Rider
adjusts annually
Allows annual price adjustment to
reflect capital costs for investments
in emission controls
3.
Transmission rate recovery
FERC formula rate adjusts annually;
companion retail tariff to reflect
current revenue requirement
Timely recovery of transmission
system operating and capital costs
4.
General capital investments
Traditional rate case, but with
predetermination and CWIP
Typical rate case reflects current
level of operating expenses and
most recent plant investment
5.
Property taxes
Annual adjustment to reflect current
property taxes
Allows timely recovery of actual
property tax costs in current rates
6.
Extraordinary storm damages
Traditionally deferred accounting
treatment as rate base
Smoothes period expenses for
extraordinary storm restoration costs
7.
Pension expenses
Deferred as a regulatory asset for
subsequent recovery
Smoothes period expenses in
excess of amount in base rates
8.
Energy efficiency programs
Deferred as a regulatory asset for
subsequent recovery
Smoothes period expenses for
energy efficiency programs
Citi Utility Conference June 2, 2011 |
 32
Retail Energy Cost Adjustment (RECA)
•
Provides timely price adjustments for fuel and purchased power
costs
•
Retail rates based on forecast of fuel and purchased power costs
and retail sales
–
Set quarterly
–
Difference between forecast and actual is deferred
•
Quarterly approach produces more stable prices
•
Annual settlement of deferred balance
•
RECA also used to rebate wholesale margins as a credit to retail
cost of service
–
Energy Marketing (i.e., non-asset) margins continue to be excluded
from rate setting
Citi Utility Conference June 2, 2011 |
 33
Environmental Cost Recovery Rider Mechanics
•
ECRR adjusts retail rates annually to reflect capital investments in
emission controls
–
Investments as of December 31 recovered in rates subsequent June
–
Eliminates need to file a rate case to capture rate base additions
•
Return of
and on
capital that is in service December 31
•
Return on
capital not yet placed in service December 31 (i.e., CWIP)
•
ECRR reduces regulatory lag
–
Regulatory lag limited to months, rather than longer lag typically
associated with traditional rate case filings
Citi Utility Conference June 2, 2011 |
 34
Illustrative ECRR Mechanics
(1)
Illustration reflects only the projects publicly announced and assumes one-half of annual
investment in service at year end (2)
Illustration uses <12%
pretax return and 4% depreciation recovery (3)
Annual ECRR Tariff is effective June 1; assume Jan-May at prior year revenue requirement and
Jun-Dec at new revenue requirement Citi Utility Conference June 2, 2011
|
 35
Transmission Cost Recovery
•
FERC formula transmission rate
–
Changes in cost of service reflected in annual update of FERC tariff
•
Update posted each October using projected test year
–
Capital expenditures
–
O&M
–
Tariff based on year-end consolidated capital structure
•
FERC transmission changes effective January 1
•
Allowed ROE 11.3%
•
Annual true-up compares projected revenue requirement to actual, with
difference incorporated into next update
–
Incentives on recently completed central Kansas line
•
12.3% ROE
•
Accelerated book depreciation of 15 vs. 45 years
•
Transmission Delivery Charge (TDC)
–
Retail rates adjusted to match changes to FERC tariff
Citi Utility Conference June 2, 2011 |
 36
Transmission Formula Rate Mechanics
•
Fixed formula with changing inputs
–
Updated annually using Form 1 data
–
Established protocols for updates
•
Uses projected test year
–
Rate base (based on 13 month average)
–
O&M, depreciation and taxes
–
Cost of debt
•
Annual true-up
incorporated in subsequent year’s formula inputs
Establish
Proj. 2011
Rev. Req.
Establish
Proj. 2012
Rev. Req.
Start of 2012
Rate Year
Start of 2011
Rate Year
FERC
Form 1
Released
True-up between ’10
Proj. Rev. Req. and
Actual Rev. Req.
Transmission Formula Rate Time Line
Citi Utility Conference June 2, 2011 |
 37
Statutes for Predetermination and CWIP
•
Predetermination
–
Utilities can obtain order establishing ratemaking principles that will
apply over the life of the asset
•
Construction Work in Progress (CWIP)
–
Utilities can include CWIP in rate cases
Citi Utility Conference June 2, 2011 |
 38
Pension Tracker
•
Defer as regulatory asset shortfall between funding of GAAP
pension/OPEB expense and pension/OPEB currently authorized
in rates
•
Maintain minimum funding level equal to GAAP pension/OPEB
expense
•
Recover deferred expenses through multi-year amortization as
part of next rate case
Citi Utility Conference June 2, 2011 |
 39
Energy Efficiency Initiatives
•
SmartStar Lawrence smart grid project
–
Installing <48,000
“smart” meters
–
Advanced outage management system
–
Total project cost of <$40
million •
Reduced by 50% DOE match
–
Expect to implement over 2 -
3 years
•
Deferred accounting for the cost of energy efficiency initiatives,
such as
–
Smart thermostats
–
Customer educational programs
–
Demand response programs
Citi Utility Conference June 2, 2011 |
 40
Kansas’
Renewable Requirements
•
Renewable Portfolio Standard established
–
Installed capability standard in lieu of energy standard
•
10%
of
peak
load
by
2011,
15%
by
2016
and
20%
after
2020
–
If generated in Kansas, treated at 110% of requirement
–
Relief from standard possible if costs would increase prices >1%
•
Potential to offset with RECs for initial period
•
Limited net metering
–
Limited to 1% of peak demand
–
Customer’s net metered sales can’t produce net negative sales
•
Environmental predictability
–
Legislation precludes state air emission levels from being more
stringent than federal standards
Citi Utility Conference June 2, 2011 |
 41
Capital Structure for Ratemaking (Per Recent Orders)
Capitalization
Ratio
Cost of
Capital
Weighted Cost
of Capital
Pre-tax Weighted
Cost of Capital
Long-term debt
48.66%
6.55%
3.19%
3.19%
Preferred
0.51
4.55
.02
.04
Common
50.83
10.40
5.29
8.77
100.00%
8.50%
12.00%
Capitalization
Ratio
Cost of
Capital
Weighted Cost
of Capital
Pre-tax Weighted
Cost of Capital
Long-term debt
52.38%
6.13%
3.21%
3.21%
Preferred
0.45
4.52
.02
.03
Common
47.17
11.30
5.33
8.82
100.00%
8.56%
12.06%
KCC
FERC Transmission
(1) Incentive ROE of 12.3% for applicable rate base
(1)
Citi Utility Conference June 2, 2011 |
                                     42
General Rate Case Process
Citi Utility Conference June 2, 2011
Prepare case using
historical test year
w/pro forma updates
Company files its
request
Interventions
Discovery
Technical hearings
Briefs
Decision
(240 days after filing)
Staff / Interveners
file response to
company request
Rebuttal testimony
Public hearings
(typically at multiple
locations
in
service
area)
Settlement / Pre-hearing
conference
Rates implemented
(generally within
30
days) |
 43
Background
Citi Utility Conference June 2, 2011 |
 44
Westar Energy Legal Structure
Kansas Gas and
Electric Company
Consolidated capital
structure is used for
ratemaking
(Rate regulated utility)
(Rate regulated utility)
Westar Energy, Inc.
Parent
Subsidiary
Combined company
does business under
the name “Westar
Energy”
Citi Utility Conference June 2, 2011 |
 45
Westar’s Generating Resources
Citi Utility Conference June 2, 2011
Indicates proposed facility |
 46
Westar’s Plants
Westar's
MW
Operator
Years Installed
Pulverized coal
Jeffrey Energy Center
1,992
Westar
1978, 1980, 1983
Lawrence Energy Center
531
Westar
1954, 1960, 1971
Tecumseh Energy Center
205
Westar
1957, 1962
LaCygne Station
709
KCPL
1973, 1977
Nuclear
Wolf Creek
544
WCNOC (1)
1985
Gas steam turbine
Gordon Evans Energy Center
539
Westar
1961, 1967
Hutchinson Energy Center
167
Westar
1965
Murray Gill Energy Center
293
Westar
1952, 1954, 1956, 1959
Gas combustion turbine
Abilene Energy Center
68
Westar
1973
Gordon Evans Energy Center
294
Westar
2000, 2001
Hutchinson Energy Center
230
Westar
1974, 1975
Spring Creek Energy Center
279
Westar
2001
Tecumseh Energy Center
37
Westar
1972
Emporia Energy Center
663
Westar
2008, 2009
Gas combined cycle
State Line
201
EDE Co.
2001
Wind
Meridian Way
96
Horizon (2)
2008
Central Plains
99
Westar
2009
Flat Ridge
100
Westar (3)
2009
Available generation
At Dec. 31, 2010
7,047
(1)
Wolf Creek Nuclear Operating Company is a company formed specifically to operate
Wolf Creek for its owners. WCNOC is governed by a board of directors
consisting of the CEO of WCNOC and senior executives of the plant
owners. (2)
100% of generation purchased under Power Purchase Agreement (PPA)
(3)
50% owned and 50% of generation purchased under PPA from BP Alternative
Energy Westar Energy
2010 Results
NERC
5-Year Average
Plant Performance
94.0%
83.0%
92.6%
89.3%
87.0%
90.1%
71.3%
73.7%
0%
20%
40%
60%
80%
100%
Coal Capacity
Factor
Wolf Creek
Capacity Factor
Coal Availability
Factor
Wolf Creek
Availability
Factor
Citi Utility Conference June 2, 2011 |
 47
Low-Cost Coal Fleet
•
Very low fuel cost
–
PRB coal
–
Excellent rail arrangements
–
Proximity to mines
•
Low embedded capital cost
•
No high-heat rate obsolete
plants
LAC 2 subject to lease agreement
Citi Utility Conference June 2, 2011 |
 48
Westar Energy Coal Fleet
Unit
Capacity
(MW)
WR Share
(MW)
Age
Heat Rate
(Btu/kWh)
Net Book
Value
(Millions)
$/KW
Jeffrey 2
725
667
30
11,256
154
$
231
$
Jeffrey 1
722
665
32
11,204
166
$
250
$
Jeffrey 3
716
659
27
11,265
255
$
387
$
Lawrence 5
371
371
39
10,713
71
$
190
$
La Cygne 1
736
368
37
10,497
114
$
309
$
La Cygne 2
(a)
682
341
33
10,500
14
$
41
$
Tecumseh 8
129
129
48
11,189
17
$
134
$
Lawrence 4
108
108
50
11,605
47
$
438
$
Tecumseh 7
73
73
53
11,749
26
$
359
$
Lawrence 3
50
50
56
11,707
26
$
509
$
3,431
(a) Subject to lease agreement
Citi Utility Conference June 2, 2011 |
 49
Westar Coal Fleet Emission Control Equipment
Unit
Scrubber
Precipitator
Fabric Filter
Low NOx
SCR
Jeffrey 1
Yes
Yes
No plans
Yes
Planned
Jeffrey 2
Yes
Yes
No plans
Planned
No plans
Jeffrey 3
Yes
Yes
No plans
Yes
No plans
La Cygne 1
Yes
NA
Planned
Yes
Yes
La Cygne 2
Planned
Yes
Planned
Planned
Planned
Lawrence 3
No plans
Yes
No plans
Planned
No plans
Lawrence 4
Yes
NA
Planned
Planned
No plans
Lawrence 5
Yes
NA
Planned
Planned
No plans
Tecumseh 7
No plans
Yes
No plans
Planned
No plans
Tecumseh 8
No plans
Yes
No plans
Planned
No plans
NA - Not Applicable
No present projects underway for CO2
Citi Utility Conference June 2, 2011 |
 50
Dramatic Improvement in Air Quality
0
40
80
120
2005
2006
2007
2008
2009
2010
20
40
60
2005
2006
2007
2008
2009
2010
Sulfur Dioxide
82%
(000 tons)
Nitrogen Oxide
48%
(000 tons)
Citi Utility Conference June 2, 2011 |
 51
Westar-operated plant fuel supply (80%)
•
JEC supply under contract through 2020 (10+ million tons/year)
–
70% has no market openers
–
30% reopened on price every 5 years
•
Next re-pricing will occur in 2013
–
All volumes have cost escalators
–
Rail contract through 2013
•
LEC/TEC supply under contract until 2012 (3.5 million tons/year)
–
100% at fixed price or capped through 2012
–
Rail contract through 2013
Co-owned plant fuel supply managed by GXP (20%)
•
LAC supply (3 million tons/year)
Coal Supply
Citi Utility Conference June 2, 2011 |