ML14139A009

Wolf Creek - Guarantee of Payment of Deferred Premiums, 10 CFR 140.21

ML14139A009
Person / Time
Site:	Wolf Creek
Issue date:	05/08/2014
From:	Stull A F Wolf Creek
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
CO 14-0003
Download: ML14139A009 (14)

Text

W*LF CREEK'NUCLEAR OPERATING CORPORATIONAnnette F. StullVice President and Chief Administrative OfficerMay 8, 2014CO 14-0003U. S. Nuclear Regulatory CommissionATTN: Document Control DeskWashington, DC 20555

Subject:

Docket No. 50-482: Guarantee of Payment of DeferredPremiums, 10 CFR 140.21Gentlemen:Pursuant to the requirements of 10 CFR 140.21, each operating reactor licensee is required tomaintain financial protection through guarantees of payment of deferred premiums. Theowners of Wolf Creek Generating Station (WCGS) are providing the enclosed documentation oftheir ability to pay deferred premiums in the amount of eighteen million nine hundred sixty-threethousand dollars, as determined by 10 CFR 140.11(a)(4).Kansas Gas and Electric Company (KGE), a wholly-owned subsidiary of Westar Energy, Inc.,Kansas City Power & Light Company (KCPL), a wholly-owned subsidiary of Great PlainsEnergy Incorporated, and Kansas Electric Power Cooperative, Inc. (KEPCo), have eachprovided audited Consolidated Statements of Cash Flows in order to demonstrate sufficientfunds are available to meet their share of the deferred premiums.This letter contains no commitments. If you have any questions concerning this matter, pleasecontact me at (620) 364-4004, or Mr. Michael J. Westman at (620) 364-4009.Sincerely,~z~6\J )zAnnette F. StullAFS/rlt

Enclosures:

I Kansas Gas and Electric Company Consolidated Statements of Cash FlowsII Kansas City Power & Light Company Consolidated Statements of CashFlowsIII Kansas Electric Power Cooperative, Inc. Statement of Cash Flowscc: M. L. Dapas (NRC) w/eC. F. Lyon (NRC), w/eN. F. O'Keefe (NRC), w/eSenior Resident Inspector (NRC), w/eP.O. Box 411 / Burlington, KS 66839 / Phone: (620) 364-8831An Equal Opportunity Employer M/F/HCNETýA IýJ 13 \

Enclosure I to CO 14-0003Kansas Gas and Electric Company Consolidated Statements of Cash Flows(6 pages)

KGEMMay 6, 2014Mr. Todd N. LaflinWolf Creek Nuclear Operating CorporationPO Box 411Burlington, KS 66839

Dear Todd:

Pursuant to the requirements of 10 CFR 140.21, we are providing the attached audited 2013Consolidated Statements of Cash Flows, with independent auditor's opinion, for Kansas Gas &Electric. The statement is provided to assess Kansas Gas & Electric's ability to make payment ofits share of deferred premiums in an amount of $8,912,610.Sincerely,Kevin L. KongsVice President, ControllerWestar Energy, Inc.Imsattachments818 South Kansas Avenue / P.O. Box 889 / Topeka, Kansas 66601Office Telephone: (785) 575-6300 INDEPENDENT AUDITORS' REPORTTo the Board of Directors and Stockholder ofKansas Gas and Electric CompanyTopeka, KansasWe have audited the accompanying consolidated financial statements of Kansas Gas and Electric Company and its subsidiaries(the "Company"), a wholly-owned subsidiary of Westar Energy, Inc., which comprise the consolidated balance sheets as ofDecember 31, 2013 and 2012, and the related consolidated statements of income, changes in equity, and cash flows for theyears (lien ended, and the related notes to the consolidated financial statements.Management's Responsibility for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordancewith accounting principles generally accepted in the United States of America; this includes the design, implementation, andmaintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that arefree from material misstatement, whether due to fraud or error.Auditors' ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted ouraudits in accordance with auditing standards generally accepted in the United States of America. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free frommaterial misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidatedfinancial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks ofmaterial misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the Company's preparation and fair presentation of the consolidated financialstatements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimatesmade by management, as well as evaluating the overall presentation of the consolidated financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financialposition of Kansas Gas and Electric Company and its subsidiaries as of December 31, 2013 and 2012, and the results of theiroperations and their cash flows for the years then ended in accordance with accounting principles generally accepted in theUnited States of America.Deloitte & Touche LLPKansas City, MissouriFebruary 26, 2014 KANSAS GAS AND ELECTRIC COMPANYCONSOLIDATED BALANCE SHEETS(Dollars in Thousands)As of As ofDecember 31,2013 December 31, 2012ASSETSCURRENT ASSETS:Accounts receivable, net of allowance for doubtful accounts of $2,412 and $2,614, respectively...... S 98,716 S 88.164Fuel inventory and supplies ................................................................................................................ 96,860 99,600Deferred tax assets .......................................................................................................................... 24,143 -Prepaid expenses ...................................................................... .......................................................... 5,404 5,997Regulatory assets ......................................................................... ..................................................... 63,996 28,125O ther .................................................................................................................................................... 3,740 12 ,4 86Total Current Assets .................................................................................................................... 292,859 234,372PROPERTY. PLANT AND EQUIPMENT, NET ............................................ 3,627,331 3,263,831PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITY, NET .................... 204,739 211,854OTHER ASSETS:Regulatory assets ................................................................................................................................. 277,352 317,169Nuclear decommissioning trust ............................................................................................................. 175,625 150,754O ther ........................................................ ...................................................... ..................................... 6 5,9 18 7 1,138Total O ther A ssets ........................................................................................................................ 518,895 539.06 1TOTAL ASSETS ........................................................................................................................................... $ 4.643,824 $ 4,249,118LIABILITIES AND EQUITYCURRENT LIABILITIES:Current maturities of long-term debt of variable interest entity ......................... $ 22,332 $ 21,005A ccounts payable .................................................................................................................................. 95,2 11 96,6 17Payable to am liate ................................................................................................ .............................. 105,968 63,724A ccrued interest .................................................................................................................................... 38,735 40,039A ccru ed taxes ............................................................... * ........................................................................ 23,145 2 1,343R egulatory liabilities ........................................................................... .................................................. 5,562 5,732Customer deposits ......................................................................................................................... 15,511 13,993Other............................................................................................................ _.... 7,033 7,056Total Current Liabilities ............................................................................................................. 313,497 269.509LONG-TERM LIABILITIES:Long-term debt, net ............................................................................................................................. 898,644 998.590Long-term debt of variable interest entity, net ....................................................... ........................ 185,791 208,123Deferred income taxes ............ .............................................. 779,010 712,492Unamortized investment tax credits ..................................................................................................... 32,676 34,563R egulatory liabilities ............................................................................................................................. 205,725 198,336Asset retirement obligations ................................................................................................................. 152,747 144,418O th er ..................................................................................................................................................... 95 ,6 86 125,2 80Total Long-Term Liabilities ............................................................................................. 2,350,279 2,421,802COMMITMENTS AND CONTINGENCIES (See Notes 12 and 14)EQUITY:Kansas Gas and Electric Company Shareholders Equity:Common stock, without par value, authorized, issued and outstanding 1,000 shares ................. 1.065,634 1,065,634Paid-in capital .............. .............................................. 680.457 380,457Retained earnings ..................... ............ ................................... 305.839 184,858Total Kansas Gas and Electric Company Shareholder's Equity ........................ 2,051.930 1,630,949Noncontroling Interest ....................................................................................................................... (71,882) (73,142)Tota l Equity ....................................................... ................................................................ 1.980,04 8 1.557,807TOTAL LIABILITIES AND EQUITY ........................................................................................................ $ 4,643,824 S 4,249,118The accompanying notes are an integral part of these consolidated financial statements.

KANSAS GAS AND ELECTRIC COMPANYCONSOLIDATED STATEMENTS OF INCOME(Dollars in Thousands)Year Ended December 3 1,2013 2012R EV E N U ES ......................................................................................................................... S 1,00 1,538 S 946,34 1OPERATING EXPENSES.Fuel and purchased power ................................................................................. 241.545 216,686SPP transmission network costs .................................................................................... 89,302 83.274Operating and maintenance ........................................................................................... 196,756 188,867Depreciation and amortization .....................................................................................2 16,808 119,929Selling, general and administrative ......................................... 111,008 112,516Taxes other than income tax ........................................................................................ 43,139 42,119Total Operating Expenses ..................................................................................... 798,558 763,391INCOME FROM OPERATIONS ........................................................................................ 202,980 182,950OTHER INCOME (EXPENSE):O ther incom e ................................................................................................................ 32,209 29.6 11Other expense ................................................................................................................ (18,098) (19,987)T otal O ther Incom e .............................................................................................................. 14,111 9,624Interest expense .................... ............................................. .............................................. 60,448 68,675INCOME BEFORE INCOME TAXES ................................................................................ 156.643 123,899Income tax expense .......................................... ....................................................... 34,402 25,453NET INCOME............................................................................................................. 122,241 98,446Less: Net income (loss) attributable to noncontrolling interests ............................................ 1.260 (442)NET INCOME ATTRIBUTABLE TO KANSAS GAS AND ELECTRIC COMPANY...- S 120,981 S 98,888The accompanying notes are an integral part of these consolidated financial statements.

KANSAS GAS AND ELECTRIC COMPANYCONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in Thousands)Year Ended December 31,2013 2012CASH FLOWS FROM (USED IN)OPERATING ACTIVI'fILSNet income ..................................................... ...S 122,241 S 98.446Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation and amortization ....... ............... ........... 116,808 I 19.929Amortization of nuclear fuel .......................... ..................... 22,690 24.369Amortization of deferred regulatory gain Irom sale Icaseback .............................. .(5,495) (5.495)Amortization of corporate-o%%ned lire insurance ... ................................ 18J179 20,000Net deferred income taxes and credits ................................ ............................ 34,236 25.964Allowance for equity funds used during construction (11,168) (7.049)Changes in working capital items:A ccounts receivable ..... ........................................................................................ (10.552) (2.110 )Fuel inventory and supplies ....2. ............ ................................................. ............ 2.765 (6.990)Prepatd expenses and o lher ..................................................................... ..................... (9,472) 19.785Accounts payable ...... ....... .......................................... (32.118) 19.728O ther current liabilities ...................... ........................ ... .................... ... .................. (47.86 1) (6 1,826)C hanges in other assets ........... ................................ ............. ............................. .. (13,709 ) (4,755)C hanges in other liabilities ...... ........................................................... ................................. 6.734 (1.737)Cash Flows from Operating A ctivities .................. ... ............................................................ ... 193,278 238,259CASH FLOWS FROM (USED IN) INVESTING AC fIVI'IES.Additions to property, plant and equipment ........................ ......... ..................... ... ...... (455.624) (431.388)Purchase of securities -trust ........................................ ...................... .................................. .(64.602) (19.4 17)S ale o f securities -trust ............. ....... ................................ .........................6......... .... .... 6 4.656 18.52 7Investment in corporate-owncd life insurance .................................................................... ... (17,408) (18.167)Proceeds from investment in corporate-ovwned life insurance ............ ................... 85.228 32,718Other investing activities ........................ ............................. (2,913) 890Cash Flows used in Investing Activities ................... ................ (390,663) (416,837)CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:Retirem ents of long-term debt ........................................ ....... ........................................... (100,000) (13,318)Retirements of long-terin debt of variable interest entity ..... ...... ..................... (21.005) (19,186)Borrowings from parent ...................................... ................. 42.244 14.425Investm ent by parent ................................................................................................ 300,000 160.457Borrowings against cash surrender value of corporate-o%%ned life insurance ............................. 59,565 67.791Repayment or borrowings against cash surrender value of corporate.owned lile insurance (83,419) (31.591)Cash Flows from Financing Activities ............................................................. 197.385 178.578NET CHANGE IN CASIH AND CASI I EQUIVALEN I'S ...... ..................................................... --CASh) AND CASH EQUIVALENTS:B eg inn ing o f perio d ................. ............. ........ ............... ..........................................._...............E nd o l'p e riod ... ..................... ....... .......................................... .......................................S...... $-SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION-CASH PAID FOR:Interest on financing activities, net of amount capitalized ..................... S 46646 S 52.942Inlerest on financing activities of variable interest entity ................. ............. 12,346 14.022NON-CASI I INVESTING TRANSACTIONS.Property. plant and equipment additions ........ ................... ................... ... .... 77.140 41,546The accompanying notes are an integral part of ihese consolidated financial statements KANSAS GAS AND ELECTRIC COMPANYCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(Dollars In Thousands)Kansas Gas and Electric CompanyCommon Paid-in Retained Noncontrolling Totalstock capital earnings interest equityBalance as of December 31, 2011 ........... S 1,065,634 $ 220,000 $ 85,970 $ (72,699) S 1,298,905Net income (loss) ...................................... --98,888 (442) 98.446Investment by parent company -160,457 --160,457O ther ......................................................... ---(I) (I)Balance as of December 31, 2012 ........... S 1,065,634 S 380,457 S 184,858 $ (73,142) S 1,557.807Net income ---. .......... --120,981 1,260 122,241Investment by parent company ................. -300.000 --300,000Balance as of December 31, 2013 ........... $ 1,065,634 $ 680,457 $ 305,839 S (71.882) S 1,980.048The accompanying notes are an integral part of these consolidated financial statements.

Enclosure II to CO 14-0003Kansas City Power & Light Company Consolidated Statements of Cash Flows(2 pages)

May 7, 2014Wolf Creek Nuclear Operating CorporationPO Box 411Burlington, KS 66839

Dear Todd:

Pursuant to the requirements of 10 CFR 140.21(e), Kansas City Power & LightCompany, is providing the attached audited Consolidated Statements of CashFlows as evidence of the ability to make payment of its share of deferredpremiums in an amount of $8.9 million.The undersigned certifies that the foregoing memorandum with respect toKansas City Power & Light Company's cash flow for the year 2013 is true andcorrect to the best of their knowledge and belief.Sincerely,Lorýi WrightVice President -Business Planning and Controllerattachment KANSAS CITY POWER & LIGHT COMPANYConsolidated Statements of Cash FlowsYear Ended December 31 2013Cash Flows from Operating Activities (millions)Net income $ 169.0Adjustments to reconcile income to net cash from operating activities:Depreciation and amortization 198.3Amortization of:Nuclear fuel 22.8Other 34.3Deferred income taxes, net 92.1Investment tax credit amortization (1.1)Other operating activities (9.2)Net cash from operating activities 506.2Cash Flows from Investing ActivitiesUtility capital expenditures (521.9)Allowance for borrowed funds used during construction (10.6)Purchases of nuclear decommissioning trust investments (73.5)Proceeds from nuclear decommissioning trust investments 70.2Other investing activities (12.4)Net cash from investing activities (548.2)Cash Flows from Financing ActivitiesIssuance of long-term debt 412.5Issuance fees (5.7)Repayment of long-term debt (2.6)Net change in short-term borrowings (267.8)Net money pool borrowings (3.6)Dividends paid to Great Plains Energy (92.0)Net cash from financing activities 40.8Net Change in Cash and Cash Equivalents (1.2)Cash and Cash Equivalents at Beginning of Year 5.2Cash and Cash Equivalents at End of Period $ 4.0 Enclosure III to CO 14-0003Kansas Electric Power Cooperative, Inc. Statement of Cash Flows(2 pages)

Kansas ElectricPower Cooperative, Inc.P.O. Box 4877, Topeka, KS 66604-0877600 Corporate View, Topeka, KS 66615Phone (785) 273-7010 Fax (785) 271-4888www.kepco.orgApril 17, 2014Mr. Todd N. LaflinWolf Creek Nuclear Operating CorporationP.O. Box 411Burlington, KS 66839

Dear Todd:

Pursuant to the requirements of 10 CFR 140.21(e), Kansas Electric Power Cooperative,Inc. is providing the attached audited Statement of Cash Flows as evidence of the abilityto make payment of its share of deferred premiums in an amount of $1.5 million.The undersigned certifies that the foregoing memorandum with respect to KansasElectric Power Cooperative, Inc.'s. Cash flow for the year 2013 is true and correct to thebest of their knowledge and belief.Sincerely yours,Coleen M. WellsVP and CFOEnclosure (1)WVL-KANSAS ELECTRIC POWER COOPERATIVE, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFor the years endingDecember 31,2013 2012Cash Flows From Operating ActivitiesNet margin $ 2.593.780 $11,916,571Adjustments to reconcile net margin to net cash flows from operating activitiesDepreciation and amortization 6.540,599 6.417,670Decommissioning 2,904,092 1,500,024Amortization of nuclear fuel 2,819.442 3.004.990Amortization of deferred charges 4,175,257 4,245,720Amortization or deferred incremental outage costs 5,386.940 7,179.415Amortization of debt issuance costs 77.813 86,953Changes inMember accounts receivable 7,609.332 (5,624.402)Materials and supplies (485,950) (899.836)Other assets and prepaid expense 106,504 (305.776)Accounts payable 599,854 2,607,180Payroll and payroll-related liabilities (102,839) 17,531Accrued property tax (67,149) 180,292Accrued interest payable 12,556 (34,313)Accrued income taxes 1,092 (847)Other long-term liabilities 1,147,579 (106.340)Prepaid pension cost (1,545,694)Deferred revenue 1,224.424Net cash flows from operating activitiesCash Flows From Investing ActivitiesAdditions to electrical plantAdditions to nuclear fuel(Reductions inyadditions to deferred chargesAdditions to deferred incremental outage costsInvestments in decommissioning fund assetsInvestments In associated organizationsInvestments in bond reserve assetsProceeds from the sale of propertyNet cash flows from investing activitiesCash Flows From Financing ActivitiesPrincipal payments on long-term debtProceeds from issuance of long-term debtShort term notes payablePayments unappliedNet cash flows from financing activities32,997.632(17,278,012)(503.127)95.335(10.359,443)(2,942,327)17.442(26.164)41.837(30,954.459)(20,168,539)11,594,2736.500=0002,388,503314,2372,357,4102,824.134$ 5,181.54430,184,832(9,658,692)(3,709,772)(280,455)(900,384)(1.966,895)304,392(24,930)7.958(16,228,778)(18.781,860)1,048,000(2,388,504)(20.122.364)(6.166,310)8.990,444S 2,824.134$10,417,400Net increase (decrease) in cash and cash equivalentsCash and Cash Equivalents, Beginning of YearCash and Cash Equivalents, End of YearSupplemental Disclosure of Cash Flow InformationInterest paid $ 9,776,900See Notes to the Consolidated Financial Statements0