Westar Energy’s (NYSE:WR) new five-year capital forecast exceeds $4bn, which is up 20% from last year’s forecast and includes more than $1bn in 2016 alone, Tony Somma, Westar senior vice president, CFO/Treasurer, said Feb. 25 during the company’s 4Q15 earnings call.
That forecast reflects the company’s “continued focus on transmission investment, which we forecast to be around a quarter of $1bn annually,” he said.
He noted that following a request for proposals that the company had issued for up to 500 MW of renewable energy, Westar has closed deals involving 480 MW of renewable energy.
As noted in a Dec. 31, 2015, company statement, Westar has reached an agreement with an affiliate of NextEra Energy Resources to purchase another 200 MW of Kansas wind energy. Westar said that it will purchase energy generated at the Kingman Wind Energy Center in Kingman County, which will be in service by early 2017. As part of the transaction, Westar said that it will have the option to purchase one-half of the facility before substantial completion.
In a Dec. 22, 2015, statement, Westar said that in collaboration with Infinity Wind Power, it will build the Western Plains Wind Farm, a 280 MW wind farm in Ford County, Kan.
Also speaking on the Feb. 25 call, Westar President and CEO Mark Ruelle said that the company has developed a much cleaner, yet still diverse, power supply.
“We’ve shut down some older, small coal plants, cleaned up the more modern, more efficient ones, added significant renewables, and yet still maintain an all-of-the-above supply strategy,” he said. “Combined with our nuclear production, we’ll have carbon-free power equal to more than half our retail load.”
Ruelle also discussed the U.S. Environmental Protection Agency’s Clean Power Plan, which has been stayed by the U.S. Supreme Court.
“We were among those challenging the rule, so we were pleased to hear of the stay, which protects our customers from the cost of that regulation,” as the rule is being reviewed, he said.
Noting that “nothing’s certain,” he said that the company’s “focus remains on maintaining a power supply that helps Kansas be as competitive as possible, while taking great care of the environment.”
Among other things, Ruelle noted that the company plans to file an abbreviated rate case with the Kansas Corporation Commission (KCC) this fall, probably in October.
“It will be limited to recognizing about $120m of additional investment without opening up a full blown rate case,” he said.
Regarding rate design coming out of last year’s general rate case, he said: “[W]e were able to make some good progress on a couple of issues. We now have a separate rate for new distributed generation customers.”
He added, “Currently, the [distributed generation] rate is just a carbon copy of our standard residential tariff, but we’ve laid the groundwork to future changes that accommodate distributed generation in a way that works for all of our customers.”
Westar on Feb. 24 announced earnings of $292m, or $2.11 per share, for 2015 compared with earnings of $313m, or $2.40 per share, for 2014. The company said that 4Q15 earnings were $39m, or 28 cents per share, compared with earnings of $43m, or 33 cents per share, for 4Q14.
Net income for 2015 decreased primarily from lower retail sales, due largely from the effects of mild weather, with the fourth quarter being the second-warmest in more than a century, the company said. Additionally, energy marketing margins were $11m lower than the unusually strong results from the year prior and the company recorded a $14m customer refund obligation for transmission revenues, Westar said. The decrease in revenues was partially offset with rate adjustments and lower operating and maintenance expense, the company said.
Net income for 4Q15 decreased primarily from lower retail sales due to the extremely warm winter weather and a $3m customer refund obligation for transmission revenues, Westar said, adding that for the quarter, too, the decrease in revenues was partially offset with rate adjustments and lower operating and maintenance expense.