Westar Energy files plan with the KCC to reduce debt

TOPEKA, Kan., Feb. 6, 2003 -- Westar Energy Inc. on Thursday filed a comprehensive plan with the Kansas Corporation Commission outlining how the company intends to reduce debt and become exclusively an electric utility.

The plan calls for Westar Energy to sell its non-utility and non-core assets, reduce its common dividend and refocus the company solely on its electric utility operations. Westar Energy's plan, when fully implemented, will reduce the company's debt to the level appropriate for Westar Energy's utility operations in accordance with the KCC's orders.

"When the plan is fully implemented, Westar Energy will be a pure electric utility company with a sound capital structure and investment grade credit quality, providing safe, adequate, reliable and affordable electric service to our Kansas customers," said James Haines, Westar Energy president and chief executive officer.

Westar Energy is filing the plan to comply with an order issued by the KCC in late 2002. Following are highlights of the plan:

* Since November 2002, Westar Energy has identified and has begun eliminating 12 organizational entities to simplify the company's structure. (see page 4 of Westar Energy Debt Reduction and Restructuring Plan -- Executive Summary)

* The company has terminated or reversed agreements that might prevent or impede returning to being solely an electric utility.

* Westar Energy raised $300 million for debt reduction through a sale of ONEOK stock to ONEOK on Feb. 5.

* Westar Energy's Board of Directors has established a dividend policy that will lower the common dividend by 37 percent to an indicated annual rate of $0.76 per share from the current indicated rate of $1.20 per share. Cash available from the dividend reduction will be used to reduce debt.

* The planned dividend reduction and the sale of ONEOK stock that closed Wednesday accomplish almost one-fifth of the targeted debt reduction.

* The company is in the process of selling Protection One Europe, and in cooperation with Protection One, Inc., is exploring strategic options for divesting its investment in Protection One North America. All net proceeds will be used to reduce debt.

* Westar Energy plans to sell all of its remaining shares of ONEOK stock in late 2003 and 2004. Net proceeds will be used to reduce debt.

* Orderly and deliberate implementation of the plan will allow Westar Energy to maximize proceeds from non-utility asset dispositions to reduce debt.

* If necessary to reach debt reduction targets, Westar Energy will issue new equity following the sale of its non-utility assets.

* Westar Energy will make periodic reports to the KCC to demonstrate progress and show that electric utility customers are being protected from risks associated with non-utility investments until these investments are divested.

* Target date for completing the plan is year-end 2004.

The plan was filed publicly. Only commercially sensitive information related to pricing and negotiating strategy for divesting non-utility investments was filed confidentially.

Westar Energy expects that a first-quarter dividend of $0.19 per share, consistent with the new dividend policy approved by its Board of Directors, will be declared in late February 2003.

Westar Energy, Inc. is a consumer services company with interests in monitored services and energy. The company has total assets of approximately $7 billion, including security company holdings through ownership of Protection One, Inc. and Protection One Europe, which have approximately 1.2 million security customers.

Westar Energy is the largest electric utility in Kansas providing service to about 647,000 customers in the state. Westar Energy has nearly 6,000 megawatts of electric generation capacity and operates and coordinates more than 34,700 miles of electric distribution and transmission lines.

Through its ownership in ONEOK, Inc., a Tulsa, Okla.-based natural gas company, Westar Energy has a 27.4 percent interest in one of the largest natural gas distribution companies in the nation, serving more than 1.4 million customers.

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

Sponsored by FLSmidth

Related Articles

Workers put out generator fire at Wolf Creek nuclear power plant

A fire was quickly extinguished at the 1,200-MW Wolf Creek nuclear power plant in Kansas on Monday.

Westar Energy approved Kansas Corporation Commission transmission project Kansas ITC Great Plains Mid-Kansas

Westar receives Kansas transmission route approval

The Kansas Corporation Commission has approved the route for a Westar Energy Inc. transmission project that Westar says will improve electric reliability and efficiency in central Kansas.

Follow Power Engineering on Twitter

Products Showcase

Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Latest News

Shutterstock coal production trucks

Weekly Coal Production

The Weekly Coal Production shows how much coal is being produced across the U.S.

Federal Reserve Bank of Dallas Weekly Economic Indicators financial business

The Federal Reserve Bank of Dallas' Economic Indicators

The Federal Reserve Bank of Dallas offers a glimpse into how the markets are doing domestical...

Kvaerner awarded contract for gas-fired power plant in Delaware

Kvaerner North American Construction Inc. and its joint venture partner, Parsons Brinckerhoff...

Canadian Solar purchases two solar projects

Canadian Solar Inc. has acquired a majority interest in two utility-scale solar power project...

Operators Restart Unit 2 at PPL Susquehanna

Unit 2 at the PPL Susquehanna nuclear power plant near Berwick, Pa. resumed generating electr...

Settlement agreement limits cost recovery at Edwardsport

The Indiana Utility Regulatory Commission (IURC) on Dec. 27 modified and approved a settlemen...

Toshiba in talks to sell portion of Westinghouse nuclear unit

Toshiba Corp is in talks  to sell up to 16% of its stake in the Westinghouse Electric Co...

Utah nixes nuclear waste storage facility

Plans to park radioactive waste at a storage facility in Utah have been officially called off.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013

Power Engineering Current Issue

03/01/2014
Volume 118, Issue 3
1403PE-cover

Power Industry Wire News

Hula Partners Names Luke Marson as Chief Cloud HCM Architect

Hula Partners Names Luke Marson as Chief Cloud HCM Architect

Shipments of Princeton Power Systems' GTIB Converter Product Line Surpass 50 Megawatts

Shipments of Princeton Power Systems' GTIB Converter Product Line Surpass 50 Megawatts

The 2.4 Million Reasons We're Flying the Flag for Lung Month

The 2.4 Million Reasons We're Flying the Flag for Lung Month

CyberFuels, Inc. "Singular 96(TM)" Certified by California Independent Laboratory for Measures of MPG, Performance, and Environmental Impact

CyberFuels, Inc. "Singular 96(TM)" Certified by California Independent Laboratory for M...

Midwest Energy Emissions Corp. Announces 2014 Annual Meeting of Shareholders, and Business Update Meeting

Midwest Energy Emissions Corp. Announces 2014 Annual Meeting of Shareholders, and Busin...

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>


Power Engineering Newscasts

EPA chief: carbon caps will boost economy
Australia, Russia enter nuclear power agreement with Argentina
Largest battery energy storage in North America now operational
EPA chief: carbon caps will boost economy Largest battery energy storage in North America now operational Australia, Russia enter nuclear power agreement with Argentina Texas’ Panda Temple combined cycle plant up and running
Siemens agrees to acquire Dresser-Rand
Safety concrete poured at UAE nuclear reactor power project
Foster Wheeler to upgrade natural gas-fired power plant’s emission controls
GE, TransCanada partner on natural gas turbine design
Energy storage global market to grow to $15.6B by 2024; DOE awards $2M to support taller wind turbine towers; Hinkley Point C nuclear project have financial incentives approved; N.J. company building waste-to-energy project in Ireland