Great Plains Energy (NYSE:GXP) Chairman, President and CEO Terry Bassham on Feb. 24 said that the company is on track to secure all necessary approvals for its pending acquisition of Westar Energy (NYSE:WR) by 2Q17.
“[L]ast month, we obtained the required Federal Communications Commission approval for the transaction,” he said during the company’s 4Q16 earnings call. “On the federal level, that leaves [U.S. Nuclear Regulatory Commission, or] NRC approval, which we anticipate by quarter-end, and FERC approval.”
Noting former FERC Chairman Norman Bay’s resignation, effective earlier this month that left FERC with two commissioners – a quorum for the transaction of business consists of at least three members present – Bassham said: “We’re working with [the Edison Electric Institute, or] EEI and our own legislative delegation to stress the importance of FERC quorum. We are confident that once a quorum is reached, FERC will approve our application in a timely manner.”
At the state level, hearings with the Kansas Corporation Commission ended a few weeks ago, and a commission order is due by April 24, he said.
Also, the Missouri Public Service Commission (PSC) issued an order finding that it has jurisdiction to review the merger, he said, adding that while the company did not agree with that finding, it does not plan to appeal the decision, and recently filed an application with the PSC seeking approval of the acquisition.
“[O]ur integration plans have been underway for months and will allow us to hit the ground running on day one,” he said.
Discussing regulatory initiatives, Bassham said that Missouri’s policies continue to lag behind other states that are adopting more progressive approaches to respond to the changing utility environment and meet customers’ needs.
“Over the past year, we’ve been encouraged by the level of dialogue around the need for reform, and policymakers continue to be actively involved in reviewing ways to move Missouri utility regulation forward,” he said. “This year, we are again working with stakeholders on legislation to modernize the regulatory constructs to sustain investments in our energy infrastructure and to meet the needs of all stakeholders.”
The legislative session ends in May, he said.
Bassham also noted that KCP&L’s Missouri rate case remains on schedule, with evidentiary hearings expected to conclude soon.
According to the company’s earnings presentation, KCP&L is seeking a $62.9m, or 7.52%, increase. That figure does not include net fuel and purchased power of $27.2m that absent the case would flow through a fuel recovery mechanism, the company said, adding that the total requested increase in base rates, including net fuel and purchased power, is $90.1m, or 10.77%.
Primary drivers for the rate case include new infrastructure investments to ensure reliability, security, and dependable service to customers, the company said.
The requested effective date of the new rates is May 31, the company said.
Bassham said, “[L]ast November, we filed an abbreviated rate case in Kansas for a rate decrease of approximately $2.8m,” adding that retail rates are expected to be effective in July.
Among other things, he noted that the company plans to file its next round of rate cases in each of its jurisdictions in 2018.
Great Plains Energy on Feb. 23 announced 4Q16 earnings of $83.2m, or 39 cents per share of average common stock outstanding, compared with 4Q15 earnings of $22.5m, or 15 cents per share. Great Plains Energy also reported full-year 2016 earnings of $273.5m, or $1.61 per share, compared to $211.4m, or $1.37 per share in 2015.
Great Plains Energy added that its adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) exclude certain costs, expenses, gains, losses and the per share dilutive effect of equity issuances resulting from the anticipated acquisition of Westar. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were $20.2m and 13 cents, respectively, in 4Q16 compared with $22.5m and 15 cents, respectively, in 4Q15, the company said.
Great Plains Energy said that for the full-year 2016, its adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were $286m and $1.85, respectively, compared with $211.4m and $1.37, respectively, in 2015.