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:
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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.
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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.
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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.
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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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