ML20107M812
| ML20107M812 | |
| Person / Time | |
|---|---|
| Site: | Wolf Creek  |
| Issue date: | 12/31/1995 |
| From: | KANSAS CITY POWER & LIGHT CO. |
| To: | |
| Shared Package | |
| ML20107M791 | List: |
| References | |
| NUDOCS 9605010132 | |
| Download: ML20107M812 (36) | |
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9605010132 9604&'3 1995-.
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A :8 0~U T THE C 0 M P A N Y Year of a Glance
- EPS increases to $1.92 from $1.64. Last year's eamings reflect a $0.22 per share charge for the early retirement program in 1994.
Kansas City Power Er Light Company is a low-cost
- Board increases quartorly common stock diviuend to ,
$0.39 per share.
electric power producer providing energy-related products
'KCPl?s open access transmission tariff one of the first in laWe elleet and services to customers in our service territory and ,
the electric utility industry that FERC accepted for filing worldwide. after the announcement of its new comparability standard.
Ihghlights althe Year I
'KCPL takes initial steps to embrace Economic Value Messaget Shareholders Headquartered in Kansas City Missouri. KCPL serves the Added (EVA") companywide.
focn on aNe electric power needs of over 430.000 customers in and
.latan Plant named a least-cost producer for 1990-1994 Pacer Supp') by Utility Data Institute (UDI).
around the metropolitan Kansas City area. Included in a I
htailServices diverse customer base are about 379.000 residences.
- Wolf Creek achieves superior ratings in operations and Ellac. ' 50.000 commercial firms and 3,000 industrials, municipali-O ties and other electric utilities. Low fuel costs and superior ' Customers set records for peak seasonal demands in Directors and Officers third and fourth quarters.
12 plant performance enable KCPL to serve its customers Management'sDiscussionI Analysis
. Exceptional operating performance of plants continues 13 well while maintaining a leadership position in the bulk throughout yeat ConsakdatedImasial!!atements 1 power market
- KCPL continues positioning for increased competition. f
,3 22 lleport ofIndependent Accountants KLT Inc., a wholly-owned, unregulated subsidiay of KCPL, .* KLT Inc. expands investments into domestic and ,
gj intemational independent power projects.
Summarr0perations!FinanaalData pursues opportunities in primarily energy-related ventures 32
- January 1996, KCPL announces proposed merger '
throughout the nation and world. Our commitment to flectnc Statstics with UtiliCorp United inc. to create a new company offering 33 long-term value to shareholders.
KLT Inc. and its holdings reflects our plans to enhance ShareholderInformation 34 shareholder value by capturing growth opportunities in DAR $ a regstered tadersk of stem stewt & Co o the united s:ates &
CrrporateInformaten Amen hante3e Uruted Ogdom. Canwja Austrab anWeE0 36 energy-related markets outside KCPL's regulated core utility business.
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, eh Highlights of the Year (, s s
increase a
. 1995 1994 (Decrease) g o
y (dollars in thousands euept per share amounts) 91 92 9 $
Electric operating revenues $ 885,955 $ 868,272 2.0 % Per Siiore Data M Earnmps M Dnndends Net income $ 122,586 $ 104.775 17.0 %
Earnings available for common $ 118,575 $ 101,318 17.0 % ,iss Average number of shares 61,902,081 61,903,437 -%
Per common share: 79g Eamings $ 1.92 $ 1.64' 17.1 %
i Dividends $ 1.54 $ 1.50 2.7 %
Book value $' 14.50 $ 14.13 2.7 % f ;j Year-end stock price $ 26A $ 23Ve 12.3 % d ki Retum on year-end common equity 13% 12%
CPL EUI s&P Common drvidend payout 80% 91 % 5-Year Return On Common Stock Utility capital expend;tures $ 134.070 $ 124,965 7.3 % " eel Electnc Utuy index Electric plant $ 3,388.538 $ 3.330.478 1.7 %
Selected statistics $8" Retail megawatt-hour sales 11,941,427 11 559.980 3.3 % $868 Peak load-summer (mw) 2.909 2,714 7.2 %
Peak load-winter (mw) 1,864 1,810 3.0 %
Average number of retail customers 429,907 424,262 1.3 % sa2s Number of common shareholders 29.657 31,613 (6.2)%
$303 . y Capitalization (% of total) g, g3 , gg Common equity 49% 50% Electric Operating Revenue Prefened stock 5% 5%
Long-term debt " 46% 45%
00 and Reflects a $0.22 per share charge for costs of a voluntary early retirement program Y Nat
" Excludes current maturities
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to Total Blu Generation (ool 50 89 per milhr,a Blu liutlear s0 40 per million Riu y System Amage 50 77 per milhon Blu
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To Our Shareholders:
,_, effectively shows managers at KCPL that the capital they z use to operate, maintain and expand the system has a m M e r g e r o f E q u o f s A n n o u n c e! On January 22, cost. Value is created when managers make decisions 1996, we announced our intentions to create a new that result in positive financial returns after they subtract energy company by merging with UtiliCorp United loc.
the cost of capital from their operating income. Our This proposed merger will create the twelfth largest gas managers are very enthusiastic about deploying this and electric company in America, providing expanded new tool throughout KCPL in 1996 and we look forward to access to markets, opportunities for growth, and a strong a financial foundation for continued growth in a competitive energy marketplace. While cost savings is a primary z PdmebhhS@hha@%p reason many companies merge, the merger between achieved distinguished levels. Our latan plant was on the KCPL and UtiliCorp boasts a more complex strategy:
em WeaMW WWeMe em the benefits accrue over time as access to new markets Wolf Creek was praised by the Nuclear Regulatory with new products and services join with operating ,
excellence to create real value. Though not a primary am wiMah a ne h amM objective of this merger, we anticipate certain savings will for filing by the Federal Energy Regulatory Commission be realized as a result of this combination. We expect the (FERC) after the announcement of its new comparability process of completing the merger to require more than standard.
one year; you will have the opportunity to vote on the '
merger at a shareholders' meeting later this year.
Innovations In Ge RetailServices division the deployment of ct wireless meter reading system News of the proposed combination with UtiliCorp nearly continues with approximately 100,000 meters now evershadowed a simply outstanding year for KCPL.
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Earnings per share increased 17% to $1.92 in 1995 meter information and more. Installation in KCPL's service from $1.64 in 1994. The Board increased the dividend t territory is scheduled for completion by the end of this an indicated annuallevel of $1.56 per share. All of our year, establishing a platform for growth and development key cost centers fuel, operations, maintenance and d eh he m%ema@ Wem administrative - were well within our target operating KCPL's CellNet technology and UtiliCorp's initiative with and performance ranges, suggesting that our managers are paying attention to the right things.
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Novell Corporation to bring power line carrier technology to market is another beneficial characteristic of our proposed combination. Among the benefits will be the expanded base from which to offer new and improved <
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l 4 Subsidiary Growth Our KLT family of companies l w l continues to grow and expand their maket penetration in the areas of power supply, gas, telecommunications '
and energy services The combination we propose with !
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time necessary to bnng its new ideas to market. One of the most promising KLT investments in 1995 brought , ,
l small-scale power projects to mainland China. These projects were structured to ensure minimized risk while power plants and the condition of our distribution and preserving the attractive retums available from areas transmission system are excellent, and our people are where demand for energy is great and growing. World well-trained and well-motivated to do the right thing and demand for energy is tremendous and KLT plans to do it well. We look forward to a very promising future, expand its reach into Latin America and Asia to take and appreciate your continued confidence and support.
advantage of this opportunity.
For the Board of Directors, B uil d in g o u r F u t u r e The strategic fit of our ,
Company with UtiliCorp to form a new energy company M nMM will take advantage of the complementary financial and operational strength of KCPL and the impressive growth Drue Jennings and disciplined expansion strategy of UtiliCorp. Over the Chairman of the Board and President years, we have discussed business combination as an I option for KCPL to grow and expand its activities to create value. At the same time, we have reminded you that our principal responsibility to serve customers well and grow l our markets efficienth continues to be our primary focus.
We serve a growing and expanding marketplace, our
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W* rep The Energy Policy Act of 1992 effectively initiated direct -
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g Value is created and reflected in our share price through
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A new financial measurement tool, Economic Value Added (EVA*), fills in the gaps left by measurements such as EPS and ROE. In 1995, KCPL took initial steps in embracing EVA' companywide. In doing so, we joined
. leading companies throughout the world in pursuit of greater company value. How does it work? EVA* is calculated by taking a business' net operating profit after taxes and subtracting a charge for the use of the capital needed to generate that profit. EVA* is a dramatic shift in mindset from the traditional deployment of capital in a regulated environment. In a more competitive environment, one in which revenues will be largely influenced by the marketplace, a business will create value only when its profit exceeds the charge for the capital it uses. By providing the necessary tools. EVA* m. ?~{ >
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. As the game progresses, challenges arise.
Power Supply at KCPL creates its own opportunities to add -
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The success of Power Supply and our Company lies in the -
value and diversity of its people. By placing a high value on gn m our human resources, we continue to employ a skilled c'; 7 'IA group of people, responsive to change, with the ability to
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from 1990 to 1994. In their fall report, the Nuclear Regulatory Commission noted superior performance in
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operational excellence, we cannot limit oursebes to the}
way we have done things in the past.' The dscisiori to .j:, ,Yee heve 5
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te n3ve opportunities propels KCPL into an exciting new age for, M , ,,.
the utility industry. New ways of thinkind have'afready 7 ?' ,
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brought about changes in Power Supply. We continue 1 4
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sa h abb additional purchased capacity contracts and futures contracts. Steel coal railcars were replaced with more economicalleased aluminum ones. And KCPL's open further access transmission tariff became one of the first from the aheed electric utility industry that the Federal Energy Regulatory
.then your Commission (FERC) accepted for filing after the announce-ment of its new comparability standard. 8PPoaeei does.'
We will take advantage of an increasingly competitive market tiy continuing to invest in people, pursuing high value business opportunities and continuing to aggressively (6nian o manage our costs.
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Time is of the essence. While some pieces romain on the board, others, strategically: have been removed It's our move.
.m m The winners in this new game will be those compan;es that l w have access to now markets and can provide customers
> valuable choices. CellNet, the wireless communication technology KCPL is currently deploying in its service territory, is already bringing choices to our customers. KCPL was the first
.1 m electric utility in the country to begin permanent installation of m the CellNet technology. Once installation is complete in 1996, 1
= greater opportunities for services will emerge, such as choice
- 'l of billing arrangements, time-of41se electric rates, smoke and j fire monitoring services plus many more. The longer term process of fully automating the electric distribution system, of m which CellNet is a part, will help us achieve greator efficiencies in operations while offering customers these new services.
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. First in choice, first in service. At KCPL, our commitment to m: . -
' hl complete customer satisfaction is an everyday KCPL standard
. ' . of service among our employees. In 1995, this became a promise that's as good as gold. Because now, if we fail to provide satisfactory customer service, we'll compensate the -
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- t.H pf 9 3g 7 ]g.g. QSM But we are not stopping there. We are developing innovative ,, l ? $P , ' Q ideas to effectively tap the Midwest's growth and economic QJ[$
h2 db * ,k strength. With UtiliCorp, the new company will expand these -
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3g to open new opportunities in our regulated business by bring- g y' @6:s .. oh@ J ing more energy-related products and services to the market- ,
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vp opportunity. We can provide lighting design and placement, , ~ kt
, q cost control and maintenance in a package to municipalities both in and out of our market. Our ideas have also been well received in marketing products and services that create full *Tbe g e in e , e f ',
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energy environments for new buildings or renovations.
Iske in The opportunities will come for those utilities who can do it vbich a first and do it best. We are preparing to meet ,,,,,,,,, ,,,
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Several years ago, the dechion was made to increase the GM '
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value of KCPL by augmenting its growth th' rough KLT Inc.,
KCPL's unregulated subsidiary. Strategic alliances were formed, blending the distinctive and complementary strengths of each partner to achieve a greater combined s
benefit. In 1995, several new energy-related partnerships were formed to expand internationally into the booming coastal area of China with the construction of two diesel
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an interior province. World energy needs are great, and we
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] pbwer plant in th' midwest. e proceeded during the year. .
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KLT has panneied with other energy companies in oil and r- ~+ , >o b:v1a g ei-gas development and exploration. Participating in several -
piss s h 'e s' d * -
joint ventures with experienced industry partners allows us 'e to manage risks to acceptable levels. ... e a d.
'N ll.
t e e l l e n ; ' b y -.
Other ventures of KLT partner with Dusinesses whose .
access to new and emerging markets provide growth and 'havias1:e valuable opportunities. For example, we are participating ,,i:,,:,. (j with other industry leaders in studies exploring potential o nonutility uses of the CellNet technology. These '
opportunities are taking our Company around the nation and around the world. We expect KLT to increase KCPL's mekiea basty growth by investing in a portfoiio of business activities ,,
earning returns that exceed KCPL's cost of capital and R e ala nts Fre skila . "
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Kansas City Power fr Light Company KCPL Ofliters* KLT Inc. Officers ** W. Thomas Grant !!
Chairman of the Board and Chief Drue Jennings,49 Bernard J. Beaudoin, 55 Executive Officer.
Chairman of the Board and President President Seafield Capital Corporation 1980 1992 a holding company with a focus on John J. DeStefano,46 Ronald G. Wasson, 51 health care andinsurance semices Senior Vice President - Finance, Executive Vice President Chairman of the Board and Chief Treasurer and Chief Financial Officer 1995 Executive Officer.
1989 Lab 0ne, Inc.
Floyd R. Pendleton, 52 centralized laboratory that markets ,
Marcus Jackson,44 Vice President Business clinical, substance abuse andinsurance Senior Vice President - Power Supply Development laboratory services 1989 1992 George E. Nettels, Jr.
Jeanie Sell Latz,44 Mark G. English,44 Chairman of the Board, Senior Vice President - Corporate Vice President and General Counsel Midwest Minerals. Inc.
Services, Corparate Secretary and 1995 construction mineralprocessing and Janse C. Rosenthal,34 quany operations g
Corporate Secretary and Treasurer President.
Turner White,47 1992 Yampa Resource Associates,Inc.
Senior Vice President - Retail Services minedlandreclamation operation 1990 wg .newes name, we ,,i <> r ar e name .i q7,nc ecy, Dr. Linda Hood Talbott Frank L. Branca,48 President.
Vice Fresident - Wholesale and Talbott & Associates Transmission Services c nsult nt in strategicplanning.
3999 Board of Directors philanthropic management and development to foundations Steve W. Cattron, 40 Drue Jennings***
Vice President - Marketing and Chairman of the Board and President Robert H. West ***
Regulatory Affairs Chairman of the Board and Chief
- gg4 Dr. David L. Bodde Executive Officer, Vice President. Butler Manufacturing Company Charles R. Cole,49 Midwest Research Institute suppl
- er ofnon-residential Vice President - Customer Services research laboratories with special building systems and Purchasing strengths in renewable energy and 1990 environmentaltechnologies ..wemi,e, Encawe comrwee Doug M. Morgan,53 President.
Vice President -Information Technology MRI-Ventures
- 994 for-profit subsidiary of Mdwest Research Institute Richard A. Spring,41 Vice President - Production William H. Clark ***
3994 President, Urban League of Greater Kansas City Bailus M. Tate Jr.,49 community service agency Vice President - Human Resources 1994 Robert J. Dineen ***
Chairman, Neil Roadman,50 Layne Inc.
Controller dnlling services company 1980 Arthur J. Doyle ***
Mark C. Sholander,50 Retired Chairman of the Board General Counsel 1986 um;aweur we a,wa,mm
.o othces 12
Kansas City Power & Light Compcny Management's Discussion and Analysis of financial Condition and Results of Operations Regulation and Competition regulated entities whose rates are designed to recover the costs of providing service. An endy's operations could stop meeting the As competition develops throughout the electric utility industy, we requirements of FASB 71 for various reasons, including a change are positioning Kansas City Power fr Light Company (KCPL) to excel n regulation or a change in the competitive environment for a in an open market.We're improving the efficiency of KCPL's core company's regulated services. For those operations no longer
. utility operations and creating growth through its unregulated meeting the requirements of regulatory accounting, regulatory subsidiary. As competition presents new opportunities, we may assets would be written off. See Note I to the Consolidated also consider various strategies including partnerships, acquisitions.
Financial Statements for a discussion of regulatory assets. In a combinations, additions to or dispositions of service territory, and competitive environment, asset recoverability would be determined restructuring of wholesale and retail businesses. See Note 11 to the using market based rates which could be lower than traditional cost-Consolidated Financial Statements regarding the Agreement and based rates. There has not been direct competition for retail electric Plan of Merger with UtiliCorp United inc.
service in our service territory although there has been competition Competition in the electric utility industry was accelerated with the in the bulk power market and between altemative fue's. KCPL's regulatory assets will be maintained as long as the FASB 71 National Energy Policy Act of 1992. This gave the Federal Energy requirements are met.
Regulatory Commission (FERC) the authority to require electric utilities to provide transmission line access to independent power producers (IPPs) and other utilities (wholesale wheeling). In bego ed Oppomnes response to FERC's new comparability standard, KCPL, already in 1992 we formed KLT Inc., a wholly owned subsidiary to pursue active in the wholesale wheeling market, was one of the first utilities nonregulated, primarily energy-related business ventures designed to obtain FERC's acceptance of an open-access, wholesale to supplement the growth from the electric utility operations. We ;
transmission tariff.
had a total equity investment in KLT of $41 million as of December 31,1995, and anticipate that investment to grow to about $165 Certain state commissions are also attempting to establish competition in the retail market (retail wheeling). However, this may million within the next five years. KLTs strategy capitalizes on new be preempted by provisions of the Federal Power Act or by state market opportunities by combining our expertise in energy-related laws. lf allowed, retail wheeling would provide growth opportunities fields with the knowledge of our joint venture partners.
for low-cost producers and risks for higher-cost producers, KLT was very active in 1995, growing from about $90 million in especially those with large industrial customers. The loss of major consolidated assets as of December 31,1994, to $164 mi ion by customers could result in under-utilized assets and place a costly December 31,1995. During 1995, KLT continued to develop burden on the remaining customer base or shareholders if an ventures in domestic and international nonregulated power adequate departure fee is not assessed to the lost customer.
production, energy services, oil and gas reserves, and affordable Although the Missouri and Kansas commissions have not permitted housing limited partnerships. Within the next five years, we retail wheeling, we believe KCPL is positioned well to compete in an anticipate total subsidiary assets will exceed $500 million, generated open triarket with its diverse customer mix and pricing strategies. through the $165 million of equity investment, subsidiary retained earnings and borrowings.
About 22% of KCPL's retail mwh sa!es are to industrial customers compared to the utility average of about 35%. KCPL has a flexible rate structure with industrial rates that are competitively priced Earnings Overview within our region. In addition, long-term contracts are in place or Eamings per share (EPS) for 1995 of $1.92 increased $0.28 from under negotiation for a significant portion of KCPL's industrial sales.
1994. This increase was due mostly to 1994's one-time $22.5 increased competition could also force utilities to change accounting million ($0.22 per share) charge for the voluntary early retirement methods. Financial Accounting Standards Board (FASB) Statement pr gram (see Note 2 to the Consolidated Financial Statements).
Other factors increasing 1995 EPS included load growth, warmer No. 71 - Accounting for Certain Types of Regulation, applies to f 13
_ _ _ - _ _ = _ _ _ _ _.
Kansas City Power & Ught Company e
st 92 ' summer temperatures, savings from While overall weather remained mild during the last three years, s $1 tisn 4 the 1994 early retirement program closer to normal temperatures and continued load growth increased gg and a net gain of $0.05 per share retail mwh sales and revenues during 1995. Twice during July and from the sale of railcars. Partially once during December, customer demand for power reached record offsetting these increases,1995 EPS one-hour seasonal peaks. Load growth and improved weather also reflected decreased bulk power pattems also contributed to 1994 increases in residentiai and sales, higher fuel and purchased commercial revenues despite the Missouri rate reduction.
c 2 power costs as a result of a forced
, j i' 5b outage at a coal plant, and KCPL's Industrial revenues for both 1995 and 1994 were reduced by the m 92 o ve e et of customized long term sales contracts with major industrial share of Wolf Creek Generating
- t. e sa 2 . ers. Station's (Wolf Creek) voluntary customers. These contracts were tailored to meet customers' needs N early retirement program costs. in exchange for their long term commitment to purchase energy.
Savings from Wolf Creek's early retirement program are expected to nge nu as are in saw oder negnann br a kge offset program costs in less than two years. portion of KCPL's industrial sales. In addition to these contracts, 1994 industrial revenues decreased from 1993 due to the Missouri Despite the voluntary early retirement charge recorded in 1994. EPS rate reduction and load management curtailment credits. The for 1994 decreased only $0.02 from 1993 to $1.64. Warmer summer contracts and curtailment credits were designed to enhance temperatures, record bulk power sales, lower delivered coal costs KCPL's competitive positicn, and lower average interest rates increased 1994 EPS improve overall power " g 20 generating efficiencies and "
I d f ctors while providing an om,, T 'S Megawatt hour (Mwh) Sales and Electric Operating Revenues s erm andong4erm sumr _ .
Sales and revenue data:
capacity savings. Indusmai- "O Increase (Decrease)from Prior Year 1
1995 1994 cnea%
Bulk power sales vary with {5 Mwh Revenues Mwh Revenues system requirements, ,,
(revenue change in mdlions) generating unit and purchased "***'"., do Retail: power availability, fuel costs and 91 92 93 94 %
Mwh Sales Residential 6% $ 17 2% $1 the requirements of other gnong Commercial 3% 9 3% 1 electric systems. During 1995, Industrial -% (1) 2% (5)
FERC issued a rate order requiring, among other items, the separation Other (6)% -
(4)% - of transmission service revenues from bulk power sales. Starting in September 1995, transmission service revenues have been reflected Total retail 3% 25 2% (3)
Sales for resale: s other electric revenues. A combination of conditions in 1994 Bulk power sales (15)% (11) 27 % 15 ,
Other (11)% -
(20)% (1) Total revenue per mwh sold varies with changes in the mix of mwh Total 14 11 sales among customer -
. si.oco Other revenues 4 -
classifications and the effect AH 0mer g Totalelectric of declining price per mwh as Bd Power- -- s 800 inausmai - ,
operating revenues $ 18 usage increases. An automatic
$ 11 ;,a fueladjustment provisionis Effective January 1,1994, Missouri retail rates were reduced 2.66%.
included in only sales for + 88 or about $12.5 million per year, resulting from the end of the Wolf resale tariffs, which apply to Creek rate phase-in amortization. About two-thirds of KCPL's retail less than 1% of revenues. nes, dental-sales are to Missoun customers. Other rate tariffs have not changed
, ,. . 2 o materially since 1988, however, the amortization of the Regulatory Future mwh sales and 91 92 93 94 95 Asset - Deferred Wolf Creek Costs ends in 1996 and may result in a revenues per mwh will be Revenues future rate adjustment.
14
Kansas City Power b l.ght Company affected by national and local economies, weather and customer period. This was mostly due to the reduction in 1994 coal costs, conservation efforts. Competition, including attemative sources of partially offset by the increasing cost of nuclear fuel and additional energy such as natural gas, cogeneration, IPPs and other electric capacity purchase contracts. Compared with the prior year, coal utilities, may a!so affect future sales and revenue. costs in 1994 benefited from lower freight rates and our ability to obtain coal on the spot market at prices below long-term contract r tes. Purchased power costs in 1994 also benefited from a $2 Fueland Purchased Power million reduction in replacement puwer expenses reflecting Wolf Combined fuel and purchased power expenses for 1995 increased Creek's 47 day refueling and maintenance outage versus the from 1994 despite a 2% decrease in total mwh sales (total of retail 73 day refueling outage in 1993.
and sales for resale) due to the factors discussed below.
While nuclear fuel costs remain substantially less than the price of Other Operation and Maintenance Expenses coal, the cost of nuclear fuelincreased 15% from 1994 and 20%
Combined other operation and maintenance expenses for 1994 were from 1993. Nuclear fuel costs averaged only 45% of the price of coal higher than either 1995 or 1993 mainly due to the costs of the during 1995, compared with 40% during 1994 and 35% during 1993.
voluntary early retirement program in that year. Total program costs We expect this relationship to steadily increase to around 55% t of $22.5 million ($0.22 per share) were expensed during 1994.
60% by 1998 and remain in that range through the year 2000. During Savings, after the June 1994 retirements are expected to recover 1995, coal represented about 70% of generation and nuclear fuel rogram costs in less than two years.
about 30%.
The decrease in 1995 expenses from 1994 was partially offset by Purchased power expenses included additional capacity purchase KCPL's $2 million share of Wolf Creek's voluntary early retirement contracts which provide a cost-effective alternative to constructing rogram recorded during 1995. Similar to KCPL's program, this new capacity. These purchases contributed to increasing purchased charge is expected to be recovered within two years through power expenses since 1993.
reduced salaries and benefits. Other cost increases in 1995 resulted During July 1995, a fire forced an outage at LaCygne I, a low-cost, from the timing of scheduled maintenance programs.
coal-fired generating unit. We replaced the power by increasing the "
We continue to emphasize new lDepnoahen ' l usage of higher-cost, coal-fired units and purchasing power on the wholesale market. Damaga to the unit was covered by insurance but technologies, improved methods and Nm Y I cost control. We are changing uninsuied, incremental fuel and purchased power costs were about rocesses to provide increased I J
- - st 20 efficiencies and improved operations.
A $3 million difference in coal Through the use of cellular technology, a
~" inventory adjustments caused a majority of customer meters will be read
_Sk ._gg 1995 increase in fuel costs from automatically by the end of 1996. These $ 33 both 1994 and 1993. types of changes have allowed us to
~
4 '5
- sa 60 assimilate work performed by those i The price of delivered coalin 1995 who elected to participate in the early retirement program.
-54 remained comparable with 1994
_N m prices which had decreased w- , : - s020 Income ioxes 91 92 93 94 95 about 8% from 1993. Our coal fuel Cost Per MMBTU procurement strategies continue During 1995, we reached a settlement with the Internal Revenue to provide coal costs well below Service (IRS) regarding issues arising from an audit of the 1985 the regional average. We expect to maintain coal costs at or below through 1988 tax returns. Based on this settlement, we transferred 1995 levels through the year 2000.
about $10 million from deferred income taxes and investment tax Although 1994 total mwh sales increased 8% frcm 1993, combined m acc d axes.
fuel and purchased power costs increased only 5% during the same s -
15
Kansas City Power & Ught Comptny GeneralTaxes Wolf Creek Components of generaltaxes:
Wolf Creek is one of KCPL's principal generating units representing 1995 1994 1993 about 18% of accredited generating cap 1 city. The plant's operating pousande performance has remained strong, contributing about 27% of the annual mwh generation while operating at an average capacity of Property $ 46,019 $ 46.895 $ 45,545 88% over the last three years. It has the lowest fuel cost of any Gross receipts 41,416 40,397 40,659 of KCPL's generating units. During 1994, Wolf Creek finished its seventh scheduled refueling and maintenance outage in 47 days, Other 9,386 9.070 9,455 a plant record. The plant's eighth refueling and maintenance outage Total $ 96,821 $ 96,362 $ 95,659 began February 3,1996.
Wolf Creek's assets and operating expenses represent about 45% and 20% of total assets and operating expenses, respectively.
Otlwr imema Currently, no major equipment replacements are expected, but an Miscellaneous expense - net during 1995 increased due to the extended shut-down of the unit could have a substantial adverse
$5 million gain on the sale of 505 steel railcars. We replaced the effect on KCPL's business, financial condition and results of steel cars with lighter weight aluminum cars which offer more coal operations Higher replacement power and other costs would be capacity contributing to lower delivered coal prices. This gain is incurred as a result. Although not expected, an unscheduled pl ant partially offset by increases in charitable contributions and fees shut-down could be caused by actions of the Nuclear Regulatory related to the sale of customer accounts receivable. Commission reacting to safety concerns at the plant or other similar nuclear units. If a long-term shut-down occurred, the state Nonoperating income taxes for 1995 and 1994 reflect $7 and regulatory commissions could consider reducing rates by excluding
$1 million, respectively, in tax reductions from affordable housing the Wolf Creek investment from rate base.
and rehabilitation credits, and interest deductions related to subsidiary obligations. Nontaxable increases in the cash surrender Ownership and operation of a nuclear generating unit exposes value of corporate owned life insurance contracts also affect the KCPL to potential retrospective assessments and property losses in relationship between miscellaneous income and income taxes. excess of insurance coverage. These risks are more fully discussed in Note 4 to the Consolidated Financial Statements - Commitments anmnMgendes Wear UaW a@nsurana Interest Cliorges Interest expense increased during 1995 reflecting higher average Environmental Metters levels of long-term debt outstanding and higher weighted-average interest rates. The higher average level of outstanding debt is Our policy is to act in an environmentally responsible manner and primarily due to subsidiary investments in affordable housing use the latest technology available to avoid and treat contamination.
partnerships. The tax benefits provided by these investments We continually conduct environmental audits designed to ensure -
essentially offset the related increase in interest expense. compliance with governmental regulations and detect contamination.
. However, these regulations are constantly evolving; govemmental Interest expense decreased in 1994 from 1993 reflecting lower bodies may impose additional or more rigid environmental averaga interest rates and the repayment or refinancing of debt.
regulations which could require subqantial changes to operations or facilities, The average interest rate on long-term debt, including current maturities, was 6.0% in 1995 compared to 5.4% in 1994 and The Clean Air Act Amendments of 1990 contain two programs 6.0% in 1993.
significantly affecting the utility industry. We have spent about
$5 million for the installation of continuous emission monitoring I
16
Kansas City Power & Light Company equipment to satisfy the requirements under the acid rain provision. Capital Requirements and Liquidity I Future acid rain program regulations may require further capital We expect to meet the utility construction budget with intemally-expenditures, which cannot be estimated at this time. The other l l
utility-related program calls for a study of certain air toxic substances. generated funds. The $291 million of maturing debt through the yea 2000 will be provided from operations, refinancings or short-term Based on the outcome of this study, regulation of these substances, including mercury, could be required. We cannot predict the likelihood debt. As of December 31,1995, KCPL had $98 million of registered but unissued medium-term notes and $139 million of unused bank of any such regulations or conipliance costs.
lines of credit. Uncertainties affecting our ability to meet these
, requirements with internally-generated funds include the effect of Prohtted Construction Expenditures inflation on operating expenses, the level of mwh sales, regulatory actions, compliance with future environmental regulations and the Total utility capital expenditures, excluding allowance for funds used availability of generating units. We might incur additional debt and/or during construction, were $134 million in 1995. The utility issue additional equity to finance growth or take advantage of new construction expenditures are projected for the next five years as opportunities.
follows:
We use an accelerated depreciation method for tax purposes. Use Construction Expenditures of this method on the Wolf Creek plant reduced tax payments by 1996 1997 1998 1999 2000 Total about $30 million per year, ending in 1:i34. We are implementing (millions) various tax planning strategies to minimize future tax payurits resulting from the loss of this depreciation deduction.
Generating facilities $ 38 $ 35 $ 32 $ 30 $ 25 $160 New Accounting Standard - Statement of Nuclear fuel 2 21 20 4 23 70 g
ggg Transmission facihties 13 8 8 15 12 56 in March 1995, the FASB issued Statement of Financial Accounting Standards No.121, Accounting for the impairment of Long-lived Distribution and Assets. This statement is effective for fiscal years beginning after generalfacilities 62 56 45 43 42 248 December 15,1995 and requires a write-down of assets that are Total $115 $120 $105 $ 92 $102 $534 no longer probable of recovery through future revenues. Adoption of this standard will not have a materialimpact on KCPL's financial We are fully exploring alternatives to new construction. During 1995, osition or results of operations. See the Regulation and Competition we entered into an operating lease for a new 142 mw combustion discussion of regulatory assets and FASB 71.
turbine, scheduled to be placed in service during 1997. We have
~
also contracted to purchase capacity through fixed-price s;reements (see Note 4 to the Consolidated Financial Statements - Capacity l Purchase Commitments). Compared to the long-term fixed costs of )
building new capacity, these contracts provide a cost-effective way !
of meeting uncertain levels of demand growth, even though there are risks associated with market price fluctuations. This construction expenditure plan is subject to continual review and change. The next plan will be filed with the Missouri commission in July 1997.
17
Kansas City Power 6 Ught Compcny C00S0lidated Statements Oll000me Year Ended Daemiwr 31 1995 1994 1993 (thousands) flutric Oproting Revcnoes $ 885,955 $ 868,272 $ 857.450 Opreting Expnses Operation F ;el 139,371 135.106 130,117 Purchased power 38,783 33.929 31.403 Other 178,599 202,304 184,633 -
Maintenance 78,439 72.468 78.550 Depreciation 97,225 94.361 91.110 Income taxes 77,062 70.949 69,502 General taxes 96,821 96.362 95.659 Amortization of:
MPSC rate phase-in plan - -
7.072 Deferred Wolf Creek costs 12,607 13,102 13.102 Total 718,907 718.581 701,148 Opwoting income 167,048 149,691 156,302 Other income Allowance for equity funds used during construction 2,279 2.087 2,846 Miscellaneous expense-net (2,478) (4,159) (2.486)
Income taxes 10,259 4.572 1.549 Total 10,060 1,909 2.500 Income Before Interest Chorges 177,108 152.191 158,211 Intwest Chorges long-term debt 52,184 43,962 50.118 Short-term debt 1,189 1,170 750 Miscellaneous 3,112 4,128 4,113 Allowance for borrowed funds used during construction (1,963) (1,844) (2,542)
Total 54,522 52,439 47.416 Net income 122,586 104.775 105.772 Prefwred Stuk Dividend Requirements 4,011 3.457 3,153 Earnings Avalable for Common Stock $ 118,575 $ 101,318 $ 102,619 Avwoge Numbw of Common Shores Outstonding 61,902 61,903 61,909 Earnings per Common Shcre $ 1.92 $ 1.64 $ 1.66 Cosh Dividends pr Common Shore $ 1.54 $ 1.50 $ 1.46 Cons 0lidated Statements Of Retained Earnings -
Year Ended Daembu 31 1995 1994 1993 (thousands)
Beginning Bolence $ 426,738 $ 418,201 $ 405.985 Net income 122,586 104,775 105,772 549,324 522,976 511,757 Dividends Declared Preferred stock-at required rates 4,029 3,384 3,169 Common stock 95,329 92.854 90,387 Ending Bolonce $ 449,966 $ 426,738 $ 418,201 The accompanying Notes to Consolidated Francel Statements are an integral part of these statements.
18
Kansas City Power & Light Company Consolidated Balance Sheets Daember 31 1995 1994 4h usands)
Assets Utility Plant, at Originol Cost Electric $ 3,388,538 $ 3,330,478 Less-accumulated depreciation 1,156,115 1.092.436 Net utility plantin service 2,232,423 2,238,042 Construction workin progress 72,365 57,294 Nuclear fuel, net of amortization of $81,452 and $66,773 54,673 40,806 Total 2,359,461 2,336,142 Regelotory Asset - Deferred Wolf Creek Costs 8,880 18,752 Regalotory Asset-Recoverable Toxes 123,000 120,000 investments and Nonstility Property 166,751 98,429 Current Assets Cash and cash equivalents 28,390 20,217 Customer acuunts receivable 32,830 24,513 Other receivables 31,838 22,604 Fuelinventories,at average cost 22,103 16,570 Materials and supplies, at average cost 47,175 44,953 Deferred income taxes 5,947 1,444 Other 5,179 5,138 Total 173,462 135,439 Deferred Charges Regulatory assets Settlement of fuelcontracts 13,007 16,625 KCC Wolf Creek carrying costs 4,104 6.639 Other 21,231 27,909 Other deferred charges 12,610 10.262 Total 50,952 61,635 Totril $ 2,882,506 $ 2,770,397 Capitalization and Liabilities Capitolirotion (see statements) $ 1,824,087 $ 1,763,765 Current Liabilities Notes payable to banks - 1,000 Commercial paper 19.000 31,000 Current maturities of long-term debt 73,803 33,419 Accounta payable 52,506 73,486 Accrued taxes 39,726 24,684 Accrued interest 16,906 12.209 Accrued payroll and vacations 22,764 19,594 Accrued refueling outage costs 13,563 2,120 Other 11,787 7,644 Total 250,055 205,156 Deferred Credits and Other Liabilitier, Deferred income taxes 648,374 644,139 Deferred investment tax credits 71,270 82,840 Other 88,720 74,497 Total 808,364 801,476 Commitments and Contingencies (note 41 Total $ 2,882,506 $ 2,770,397 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
19
Kansas C4 Power 6 Light Company i
Consolidated Statements of Cash flows Yeor Ended December 31 1995 1994 1993 (thousands)
Cash Flows from Operating Activities Net income $ 122,586 $ 104,775 $ 105,772 Adjustments to reconcile net income to net cash from operating activities:
Depreciation 97,225 94,361 91,110 Amortization of:
Nuclear fuel 14,679 10,136 -
8.705 Deferred Wolf Creek costs 12,607 13,102 13.102 MPSC rate phase-in plan - - 7,072 Other 8,152 9,608 8,234 Deferred income taxes (net) (3,268) 20,524 25,502 investment tax credit amortization and reversals (11,570) (4,345) (4,345)
Allowance for equity funds used during construction (2,279) (2,087) (2,846)
Cash flows affected by changes in:
Receivables (17,551) 1,543 (10,245)
Fuelinventories - (5,533) (2,020) 6,075 Materials and supplies (2,222) (796) 1,106 Accounts payable (20,980) 14,065 (17,741)
Accrued taxes 15,042 (3.116) 7,936 Accrued interest 4,697 (3,366) 2,626 Wolf Creek refueling outage accrual 11,443 (5,142) (5,338)
Pension and postretirement benefit obligations (4,176) 32,203 1,905 Other operating activities 4,325 (2,860! 4,514 Net cash from operating activities 223,177 276,585 243,144 Cash Flows from investing Activities Utility capital expenditures (134,070) (124,965) (129,199)
Allowance for borrowed funds used during construction (1,963) (1,844) (2,542)
Purchases ofinvestments (56,759) (67,560) (7,351)
Otherinvesting activities 9,046 5,624 7,657 Net cash used in investing activities (I83,746) (188,745) (131,435)
Cash Flows from Financing Activities issuance oflong-term debt 111,055 133,793 324,846 Repayment oflong-term debt (33,428) (170,170) (271,480)
Specialdeposits -
60,118 (60,118)
Premium on reacquiredlong term debt - -
(4,077)
Net changein short-term borrowings (13,000) 3,000 (4,000)
Dividends paid (99,358) (96,238) (93,556)
Other financing activities 3,473 335 (1,913)
Net cash used in financing activities (31,258) (69,162) (110,298)
Net Chonge in Cash and Cash Equivalents 8,173 18,678 1,411 Cash and Cosh Equivalents of Beginning of Year 20,217 1,539 128 Cash and Cosh Equivalents et End of Year $ 28,390 $ 20,217 $ 1,539 Cash Poid During the Year for:
Interest (net of amount capitalized) $ 48,200 $ 48,246 $ 47,361 income taxes S 67,053 $ 53,720 $ 40,141 The accompanying Notes to Consolidateo knancial Statements are an integral part of these statements.
20
_9
Kansas Dty Power & Light Company Consolidated Statements of Capitalization December 31 1995 1994 _
(tho; sands)
Common Stock Equity l Common stock - 150,000,000 shares authorized without par value l 61,908,726 shares issued, stated value $ 449,697 $ 449,697 l
i Retained earnings (seestatements/ 449,966 426.738
. Capital stock premium and expense (1,725) (1,736)
Total 897,938 874,699
. Cumulative Preferred Stock .
4
$100 Por Volve 3.80% - 100,000 shares issued 10,000 10,000 ;
4.50% - 100,000 shares issued 10,000 10,000 4.20% - 70.000 shares issued 7,000 7,000 435% - 120,000 shares issued 12,000 12,000 No Por Volve
, 4.39%*- 500,000 shees issued 50,000 50,000 l
$100 N: Volve - Reda*moble 4.00% - 14,35/ - 15,957 sharesissued 1,436 1,596 Total 90,436 90,596
! Long-tera Debt (excluding cuuent merunties) :
General Mortgage Bonds Medium-term Notes due 1997 2008,6.72% and 6.82% weighted-average rate at December 31 387,000 395,500 4.77%* EnvironmentalImprovement Revenue Refunding Bonds due 2012-23 158,768 158,768 Georonty of Pollution Control Bonds 4.24%* due 2015-17 196,500 196,500 Subsidiary Ob;igations Affordable Housing Notes due 2000-05,8.54% and 8.38% weighted-average rate at December 31 69,945 47,702 Bank Credit Agieement due 1998,7.66% weighted-average rate at December 31 23,500 -
Total 835,713 798,470 Total $ 1,763,765
$ 1,8Df_87 t
'Vanable rate secunties, weighted-average rate at December 31.1995 The accompanying Notes tv Consokdated % icial Statements are an integral part of these statements l
l h
i 4
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Kansas City Power 6 Ught Company Notes to Consolidated financial Statements l
I 1.Summory of Significant Auonnting Policies investments in Alfordoble Housing 1.imited Partnerships I
Through December 31,1995, a subsidiary of KLT had invested The Compohy
$95 million in affordable housing limited partnerships. About Kansas City Power & Light Company is a medium-sized electric
$80 million of these investments are recorded at cost; the equity ;
utility with mora than 430.000 stomers in western Missouri and method was used for the remainder. Tax credits are recognized in !
eastem Kansas. About 95% of our retail revenues are from the the year generated. A change in accounting principle relating to Kansas City metropolitan area, an agribusiness center and major nvestments made after May 19,1995, requires limitad partnership .
regional center for wholesale, retail and service companies. About investments of more than 5% to use the equity method. Of the two-thirds of our retail sales are to Missouri customers, the investments recorded at cost, $70 million exceeded this 5% level remainder to Kansas customers.
but were made prior to May 19,1995.
The consolidated financial statements include the accounts of pg Kansas City Power & Light Company and KLT inc., a wholly-owned, Utility plant is stated at historical costs of construction. Thse nonutility subsidiac. The consolidated entity is referred to as KCPL.
costs include taxes, an allowance for funds used during construction KLT was formed in 992 as a holding company for various non-(AFDC) and payroll-related costs including pensions and other fringe agulated business i entures. Currently, the electric utility accounts benefits. Additions of, and replacements and improvements to units for about 95% of consolidated assets and substantially all results of of property are capitalized. Repairs of property and replacements operations. Intercompany balances and transactions have been of tems not considered to be units of property are expensed as eliminated. KLT's revenues and expenses have been classified as incurred lexcept as discussed under Wolf Creek Refueling Outage Other income and Interest Charges in the income statement.
Costs). When property units are retired or otherwise disposed, the original cost, net of salvage and removal,is charged to The accounting records conform to the act enting standards accumulated depreciation.
prescribed by the Federal Energy Pwsury Commission (FET) and generally accepted accounting principles. These standards AFDC represents the cost of borrowed funds and a return on equity require the use of estimates and assumptions that affect amounts funds used to finance construction projects. It is capitalized as a cost reported in the financia! tatements and the disclosure of ,
of construction work in progress. AFDC on borrowed funds reduces I commitments and contingencies.
interest charges. AFDC on equity funds is shown as a noncash item Cash and Cash Equivalents
- " ' " " ' " * " E*I*
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the related AFDC, as well as other construction costs, is used to Cash and cash equivalents consists of highly liquid investments with establish rates under regulatory rate practices. The rates used to j original maturities of three months or less.
j compute gross AFDC are compounded semi-annually and averaged 8.7% for 1995, 7.8% for 1994 and 83% for 1993.
I Fair Valee of FinancialInstruments
! The stated values of financialinstruments as of December 31,1995 Depreciation is computed using the straight-line method over the
! and 1994 approximate fair market values. KCPL's incremental .
estimated lives of depreciable property based on rates approved by borrowing rate for similar debt was used to determine fair value if sta:e regulatory authonties. Average annual mmposite rates were quoted market pnces were not available.
about 2.9% for each of the last three years.
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Kansas City Power 6 Ught Company Wolf Creek Refueling Detege Cests As of December 31,1995 and 1994, the trust fund balance, including i Forecasted incremental costs to be incurred during scheduled Wolt reinvested eamings, was $26 and $19 million, respectively. These Creek Generating Station (Wolf Creek) refueling outages are accrued amounts are reflected in investments and Nonutility Property. The monthly over the unit's operating cycle, normally about 18 months. related liabilities for decommissioning are included in Deferred [
Estimated incremental costs, which include operating, maintenance Credits and Other liabilities - Other.
and replacement power expenses, are based on budgeted outage The Financial Accounting Standards Board (FAS8) is currently costs and the estimated outage duration. Changes to or variances
' reviewing the accoun6g for nuclear plant decommissioning from those estimates are recorded when known or probable.
obligations including the balance sheet presentation of estimated ,
- Nedear Plant Deceannissieseg Cests decommissioning costs.
Estimated decommissioning costs for Wolf Creek were revised in 1994 by the Missouri Public Service Commission (MPSC) and Nuclear fuelis amortized to fuel expense based on the quantity of the Kansas Corporation Commission (KCC). The estimates for heat pr duced for the generation of electricity. Under the Nuclear decontamination, dismantlement and site restoration costs {
Waste Policy Act of 1907, the Department of Energy (00E) is were based on the immediate dismantlement method. Plant j i?sp nsible for the perma 1ent disposal of spent nuclear fuel. We decommissioning is not expected to start before 2025. The pay the DOE a quarterly ree of one-tenth of a cent for each kilowatt-following tabie shows each commission's estimated costs and hour of net nuclear generation for future disposal of spent nuclear assumptions (in 1993 dollars):
fuel. These disposal costs are charged to fuel expense and i KCC MPSC recovered through rates.
Undiscour ted decommissioning costs:
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TotalStation $ 1.3 billion $ 1.8 billion A permanent disposal site may not be available for the industry until l
47% siare $ 595million $ 859 million 2010 or later, although an interim facility may be available earlier.
Discounted decommissioning costs: .
Under current DOE policy, once a permanent site .is available, the
- Total Station $ 370 million $ 370 million 47% share $ 174 million $ 174 million DOE will accept spent nuclear fuel on a priority basis; the owners of Annualescalation factur 3.45% 4.50% the oldest spent fuel will be given the highest priority. As a result, Annualretum on trust assets 6.48% 7.66%
disposal services for Wolf Creek may not be available prior to 2016.
Wolf Creek has an on-site, temporary storage facility for spent These estimated costs are higher than prior estimates mainly due to mdear fuel. Under current regulatory guidelines, this facility can large increases in assumed disposal costs for low-level radioactive .
provide storage space until about 2006. Management believes waste. Previously, total discounted dccommissioning costs were i emmge p M&ilMam estimated by the KCC in 1989 to be $206 million (in 1988 dollars) necessary. ;
and, by the MPSC in 1992 to be $347 million (in 1990 dollars). !
Updated estimates are filed with the commissions every three years. g ,,,l,,,,y g,,,,,
The next updated study will be filed during 1996.
We currently apply accounting standards that recognize the i
' economic effects of rate regulation. Hates are designed to recover i We contribute to a tax-qualified trust fund (about $3 million for each l the cost of providing service. As a result, certain items that would i of the last three years) to be used to decommission Wolf Creek.
- normally be reflected in the income stc. dement are de' erred on the These costs are charged to other operation expenses and recovered
- balance sheet. These items are then amortized as the related 4 in rates over the unit's expected hfe. ,. mlcontr?autions are amounts are recovered from customers through rates.
1 v.cted to increase slightly beginning b s 1
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Kansas City Fower 6 bght Company We recognize regulatory assets when allowed by a commission's rate locome Taxes order or when it is probable, based on regulatory precedent, that The balance sheet includes deferred inccme taxes for all temporary future rates will recover the amortization of the deferred costs. If differences between the tax basis of an asset or liability and that future recovery is no longer probable due to the effects of increased reported in the financial statements. These deferred tax assets and competition or other factors, the write-off of the unamortized balance, liabilities are determined using the tax rates scheduled by the tax net of the related tax benefit, would reduce net income.
law to be in effect when the differences reverse.
Deferred Wolf Creek Costs The R3gulatory Asset - Recoverable Taxes mainly reflects the The KCC and MPSC allowed continued construction accounting future revenue requirements necessary to recover the tax benefits for ratemaking purposes after Wolf Creek's 1985 commercial uf existing temporary differences previously passed through to in-service date. Certain other carrying costs were also deferred. customers. Operating income tax expense is recorded based on The deferrals are being amortized and recovered in rates ratemaking principles. However, if the metnui used for the balance througn 1996. sheet were reflected in the income statement, net income would remain the same.
Recoverable 1 axes See the following Income Taxes note. Investment tax credits are deferred when utilized and amortized to income over the remaining service lives of the related properties.
Settlement of FuelContracts We deferred the cost of terminating certain coal purchase En amental Mm contracts. These costs are being amortized over various periods Environmental costs are accrued when it is probable a liability has ending in 2002. been incurred and the amount of the liability can be reasonably estimated. We believe all appr'opriate costs related to environmental KCC Wolf Creek Carrying Costs matters have been recorded.
The KCC ordered certain Wolf Creek carrying costs to be deferred. These costs are being recovered and amortized over 2. Pension Plans and Otlier Employee Benefits six years endingin June 1997.
Early Retirement Proyom On June 30,1994,332 employees retired under a voluntary MPSC Rate Phase-in Plc l early retirement plan. We expensed estimated program costs of l Under the MPSC Wolf Creek rate phase-in plan, we deferred a
$14.0 million ($0.14 per share) during the first quarter of 1994 and cash recovery of a portion of the W::t of equit/ plus carrying
$10.2 million ($0.10 per share) during the second quarter. Based on costs on the deferral. The amortization and recovery were l a final actuarial valuation, a $1.7 million ($0.02 per share) reduction completed in December 1993, resulting in a 2.66% rate reduction
.in expcase was recorded during the fourth quarter of 1994. Th.is (about $12.5 million per year) effective January 1,1994.
al EPWiaWehemmW
$16.5 and $6.0 million, respectively ($0.22 per share).
Other Other regulatory assets include premium on redeemed debt-Pension Plans deferred costs to decommission and decontaminate federal KCPL has defined benefit pension pns for its employees, uranium enrichment facilities and other costs. These deferrals including officers. Benefits under the w :,:ans reflect the employee's i are amortized over various periods extending to 2023.
compensation, years of service and we t retirement. KCPL satisfies Revenue Recoydibn at least the minimum funding requirements under the Employee i We use cycle billing and accree an estimate for unbilled revenue at Retirement income Security Act of 1974.
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Kansas City Power & Light Company i Funded status of the plans: retirement benefit cost, subject to maximum deductible limits for December 31 1995 1994 income tax purposes.
(thousands)
Accumulated benefit obligation: Reconciliation of postretirement benefits to amounts recorded in the Vested $ 251,042 $ 219,111 balance sheets:
Nonvested 6,474 4.595 Total $ 257,516 $ 223.706 December 31 1995 1994 i Determination of plan assets less obligations: Accu riutated postretirement Fair value of plan assets (a) $ 339,236 $ 301,245 benefit obligation (APB0) tal: l Projected benefit obligation (b) 315,395 269,124 Retirees $ 22,515 $ 20,813 )
Fully eligible active plan participants 2,659 1,304 l Differ + ace $ 23,841 $ 32.121 Other active plan participants 9,315 7.159 Reconciliation of difference: Total APB0 34,489 29,276 l
Accrued trustliability $ (13,890) $ (18,401) Fair value of plan assets (b) (2,189) -
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Unrecognized transition obligation 12,612 14,684 Unrecognized transition obligation (19,965) (21.139) l Unrecognized net gain 29,293 39,570 Unrecognized net gain (loss) 892 5,220 l Unrecognized prior service cost (4,174) (3,732) Unrecognized prior service cost (786) (863) l Difference $ 23,841 $ 32,121 Accrued postretirement benefit obligation (included in (a) Plan assets are invested in insurance contracts. corporate bonds, equity Deferred Credits and )
secur U.S. Govemment secunties, notes, mortgages and short-term a) Basehn @adawaNscomuaes (,%n M ad%n R aM fut e sa a e e s of % to 5% in 1995 an 1994 increases in future salary levels of 4% in 1995 and 4% to 5% in 1994. i (b) Plan assets are invested in certificates of deposit.
l Components of provisions for pensions (excluding 1994 early retirement program costs): Net periodic postretirement benefit cost (excluding 1994 early l 1995 1994 1993 retirement program costs):
1 (thousands) 1995 1994 1993 Service cost $ 6,414 $ 8,193 $ 8,671 (thousands) l Interest cost Service cost $ 435 $ 'i45 $ 616 on projected 2,423 2,305 Interest cost on APB0 1'893 benefit obligation 22,593 20,759 19.521 Amortization of unrecognized l Actual return on transition obligation 1,175 1,175 1,175 plan assets (50,108) (1,143) (49,875) l
- Other 25,656 (22,297) 27,715 Other (60) 75 -
!, Net periodic Net periodic pension cost $ 4,555 $ 5,512 $ 6.032 postretirement l Long term rates of return on plan assets of 8 5% were used.
Postretirement Benefits Other Thon Pensions Actuarial assumptions include an increase in the annual health care in addition to providing pension benefits, certain postretirement cost trend rate for 1996 of 11%, decreasing gradually over a five-health care and life insurance benefits are provided for substantially year period to its ultimate level of 6%. The health care plan requires l
j all retired employees. retirees to share in the cost when premiums exceed a certain amount. Because of this provision, an increase in the assumed
- Although we accrue the cost of postretirement health care and life health care cost trend rate by 1% per year would only increase the j insurance benefits during an employee's years of service, the costs APB0 as of December 31,1995 by about $777,000 and the are currently recovered through rates as they are paid (pay-as-you-go). combined service and interest costs of the net periodic l
j in 1995 we began funding the year's overall net periodic post- postretirement benefit cost for 1995 by about $89,000.
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Kansas cny Pmer & Light Cornpany long-tera incentive Plan KCPL's effective income tax rates differed from the statutory federal KCPL has a long-term Incentive Plan for officers and key employees.
r tes mainly &e WoHowing:
Awards issued under the Plan cannot exceed 3 million cornmon 1995 1994 1993 Federal statutory stock shares.
income tax rate 35.0% 35.0 % 35.0 %
Differences between book Stock options granted under the Plan provide for recipients to and tax depreciation receive shares of stock and accumulated dividends (as though they not normalized 1.2 1.2 1.3 Amortization ofinvestment had been reinvested) if the market price at the time of exercise tax credits (2.5) (2.5) (2.5) equals or exceeds the grant price. The options expire 10 years after Income tax credits (2.3) (0.2) -
l State income taxes 4.1 4.2 3.3 the grant date. Because of the dividend provision, we expensed Other (0.2) 1.1 2.0
$1.0, $0.4 and $0.1 million for 1995,1994 and 1993, respectively Effectiveincome tax rate 35.3% 38.8% 39.1%
The expense includes accumulated and reinvested dividends plus the appreciation in stock price since the grant date. If the stock The tax effects of major temporary differences resulting in deferred price falls below the grant price, the cumulative expense related to tax assets and liaoilities in the balance sheets are as follows:
those options is reversed.
December 31 1995 1994 Stock options are summarized below:
Pant related $ 572,79 $ 580,964 Recoverable taxes 48,000 47,000 1995 1994 1993 Other 21,635 14,731 (shares under option)
Net deferred income taxliability $ 642,427 $ 642,695 Balance as of January 1 197,375 145.125 86,000 Granted 68,750 69,125 63,125 Exercised -
(6,000) -
The net deferred income tax liability consisted of the following:
Canceled -
(10,875) (4,000) l Balance as of December 31 266,125 197,375 145,125 December 31 1995 1994 Exercisable as of Decembu 31 162,813 102.125 41,000 (thousands)
Weighted-average Gross deferred income tax assets $ (61,181) $ (61,623) l grant price as of Gross deferred income tax liabilities 703,608 704,318 l December 31 $ 22.178 $ 21.870 $ 22.604 Net deferred income tax liability $ 642,427 $ 642,695 Option price of shares exercised $ -
$ 21.625 $ -
- 4. (0mmitments Ond (Onlingencies ;
hcome tax expense consisted of the following:
Nuclear Liability and Insurance 1995 1994 1993 (thousands) Ui!ityinsurance Current income taxes:
Federal $ 69,697 $ 42.736 $ 41,207 The Price-Anderson Act currently limits the combined public State 11,944 7,462 5,589 liability of nuclear reactor owners to $8.9 billion for claims that r
Total 81,641 50,198 46,796 .
i could arise from a single nuclear . incident. The owners of Wolf Deferred income taxes, net:
Federal (3,152) 17,t'05 22,274 Creek (the Owners) carry the maximum available commercial State (116) 3.519 3.228 insurance of $0.2 billion. The remaining $8.7 billion balance is Total (3,268) 20.524 25,502 Investment tax credrt amortization and reversals (11,570) (4,345) '5) assessment plan mandated by the Nuclear Regulatory ;
i Totalincome tax Commissian' expense $ 66,803 $ 66,377 $ 67,6 ze l
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Kansas City Power h Light Company Under SFP if there were a catastrophic nuclear incident Other involving any of the nation's licerised reactors, the Owners in the event of a catastrophic loss at Wolf Creek, the insurance would be subject to a maximum retrospective assessment per available may not be adequate to cover property damage and incident of up to $79 million ($37 million, KCPL's share). The extra expeases incurred Uninsured losses, to the extent not Owners are jointly and severally liable for these charges, recevered through rates, would be assumed by KCPL and could payable at a rate not to exceed $10 million ($5 million, KCPUs have a muerial, adverse effect on our financial condition and share) per incident per year, excluding applicable premium results of operations.
taxes. The assessment, most recently revised in i993, is subject te an inflation adjustment every fin years based on the Nuclear Fuel Commitments !
Consumer Price index. As of December 31,1995, KCPUs portion of Wolf Creek nuclear fuel commitments included $112 million for enrichment and Property, Oecontamination and Premature fabrication through 2025 and $15 milhon for uranium concentrates l through 2001.
DecommissioningInsuronce The Owners also carry $2.8 billion ($1.3 billion, KCPL's share) of property damage, decontamination and premature Environmental Matters KCPUs operations must comply with federal, state and local decommissioning insurance for loss resulting from damage to environmentallaws and regulations. The generation and the Wolf Creek facilities. Nuclear insurance pools provide $0.5 transmission of electricity uses, produces and requires disposal of billion of coverage, while Nuclear Electric Insurance Limited certain products and by-products, including polychlorinated bisheny!
(NEIL) provides $2.3 bilk.on.
(PCBs), asbestos and other potentially hazardous materials. The Federal Comprehensive Environmental Response Compensation and in the event of an accident, insurance proceeds must first be . . ..
Liability Act (the Superfund law) imposes stnct joint and severa!
used for reactor stabilization and site decontamination. KCPL's iability for those who generate, transport or deposit hazardous share of any remaining proceeds can be used for property waste. This liability extends to the current property owner as we!!
damage and premature decommissioning costs. Premature as prior owners since the time of contamination. We continua!iy decommissioning coverage applies only if an accident at Wolf conduct environmental audits designed to detect contamination Creek exceeds $500 million in property damage and and ensure compliance with govemmental regulations. However, decontamination expenses. compliance programs needed to meet future environmental laws and regulations goveming water and air quality, including carbon Extra Expense insurance -Including Replacement Power dioxide emissions, hazardous waste handling ad disposal, toxic The Owners also carry additional insurance from NEll to cover substances and the effects of electromagnetic fields, could require costs of replacement power and other extra expenses incurred substantial changes to operations or facilities.
in the event of a prolonged outage resulting from accidental property damage at Wolf Creek. Long-term Cool Contracts KCPUs share of coal purchased under long-term contracts was
$42, $21 and $17 million in 1995,1994 and 1993, respectively.
Retrospective Assessments Under these coal contracts, KCPUs remaining share of purchase l Under all NFil policies, KCPL is subject to retrospective assessments if NEIL losses, for each policy year, exceed the through 2000 total $36. $26, $10, $9 end $9 million, respectively.
accumulated funds available to the insurer under that policy.
The remainder of our coal requirements are fulfilled through spot The estimated maximut, amount of retrospective assessments market purchases.
to KCPL under the current policies could total about $11 million.
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Kansas City Power 6 Lght Company Luses 6. Short term Borrowings KCPL has a transmission line lease with another utility whereby, with Short-term borrowings consist of funds borrowed from banks or FERC approval, the rental payments can be increased by the lessor. through the sale of commercial paper as needed. The weighted-If this occurs, we can cancel the lease if we are able to secure an average interest rate on the short-term debt outstanding as of alternative transmission path. Commitments under this lease total December 31,1995 and 1994 was 5.9% and 6.2%, respectively.
$2 million per year and $56 million over the remaining life of the As of December 31,1995, under minimal fee arrangements, leaseifit is not canceled.
unused bank lines of credit totaled $139 million.
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! Rental 9xpense for other leases including railcars, computer !
l equipment, buildings, a transmission line and other items was 7. Common Stock Equity, Preferred Stock and ;
$18 to $20 million per year during the last three years. The J Redeemable Preferred Stock remaining rental commitments under these leases total $182 I
million. Obligations for the years 1996 through 2000 average
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$14 million per year. Capital leases are not material and are s shad comen stoWegMed wMe huses l
included in these amounts.
n nge Msdos a Mend knescent ann ;
l Purchase Plan (the Plan). The Plan alicws common shareholders, As the managing partner of three jointly-owned generating units, directors and employees to purchase shares of the common stock we have entered into leases for railcars to service those units. The by reinvesting dividends or making optional cash payments. We are j entire lease commitment is reflected in the above amounts although currently purchasing shares for the Plan on the open market.
! about $2 million per year {$31 million total) will be reimbursed tr/ i eneG, M, W& 6,W shams ns comen ;
the other owners.
stock to be used for future distribution. These shares are included in )
Investments and Nonutility Property. l Purchased Capacity Comnu,tments l j j We purchase capacity from other utilities and nonutility suppliers.
The Restated Articles of Consolidation contain a restriction relating -
Purchased capacity gives us the option to purchase energy if needed to the payment of dividends in the event common equity fal or when market prices are favorable. This provides a cost-effective 25% of totalcapitalization.
alternative to new construction. As of December 31,1995, contracts to purchase capacity total $288 million through 2016. If preferred stock dividends are not declared and paid when During 1995,1994 and 1993, capacity purchases were $17, $13 scheduled, KCPL could not declare or pay common stock dividends and $10 million, respectively. For the years 1996 through 2000, or purchase any common shares. If the unpaid preferred stock these commitments average $24 million per year. For each of the dividends equal four or more full quarterly dividends, the preferred next five years, net capacity purchases represent about 13% of shareholders, voting as a single class, could elect members to the KCPL's 1995 total available capacity. Board of Directors.
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! Preferred Sfock and Redeemable Preferred Sfock
- 5. Sole of Accounts Receivable Scheduled mandatory sinking fund requirements for the redeemable As of December 31,1995 and 1994, an undivided interest in
! 4% Cumulative Preferred Stock are $160,000 per year. We have the
$60 million of designated customer accounts receivable was sold ption to redeem the $90 million Cumulative Preferred Stock at with limited recourse. Related costs of $3.8, $2.8 and $2.2 million pnces approximating par or stated value.
for 1995,1994 and 1993, respectively, were included in Miscellaneous expense - net.
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Kansas City Power 6 Ught Company As of December 31,1995,0.4 million shares of $100 par 9, jointly-owned Electric Utility Plants Cumulative Preferred Stock.1.6 million shares of Cumulative No Par Joint ownership agreements with other utilities provide undivided Preferred Stock and 11 million shares of no par Preference Stock interests in utility plants as of December 31,1995 as follows (in were authorized. millions of dollars):
- 8. Long-term Delit wolf Creek taCygne latan Unit Units Unit l General Mortgoge Bonds KCPL's share 47% 50% 70 % i KCPL is authorized to issue mortgage bonds under the General s i a d a c rnu a ed Mortgage Indenture and Deed of Trust dated December 1,1986, depreciation (production as supplemented. The Indenture creates a mortgage lien on plant only) $ 323 $ 163 $ 122 Nuclear fuel, net $ 55 $ - $ - ,
substantially all utility plant. KCPL's accredited !
capacity- megawatts 548 672 469 As of December 31,1995, $711 million general mortgage bonds were pledged under the indenture to secure the outstanding $613 Each owner must fund its own portion of the plant's operating !
million of medium-term notes and revenue refunding bonds and the ex enses and capital expenditures. KCPL's share of direct expenses unissued $98 million of medium-term notes.
is included in the appropriate operating expense classifications in the income statement. l Interest Rote Swap and Cop Agreements l As of December 31,1995, we had entered into eight interest rate
< swap agreements and three cap agreements with financial 10. Quarterly Operating Results (Unaudited) !
- institutions to limit the interest rate on $150 million of long-term l
< debt. The swap agreements mature from 1996 through 1998 1st 2nd 3rd 4th 1995 l
} and effectively fix interest rates on $90 million of variable-rate (millions) debt to a weighted-average rate of 3.7% as of December 31, Operating revenues $199 $ 205 $ 278 $ 204 Operadng income 29 31 72 35 1995. The cap agreements limit the interest rate on $60 million of Netincome 23 19 58 23 variable-rate debt to 5.0% expiring through 1998 There would have I Eamings per common share $0.35 $0.29 $0.91 $0.37 been no material effect had the agreements been terminated at December 31,1995 or 1994.
Quarter 1994 1st 2nd 3rd 4th (millions)
Subsidiary Obligations Operating revenues $199 $ 223 $ 254 $192 During 1995, KLT entered into a long-term revolving line of credit Operatingincome 21 36 61 32 agreement for $65 million collateralized by the capital stock of KLT's Netincome 10 25 50 20 direct subsidiaries. The affordable housing notes are collateralized by Earnings per common share $0.15 $0.38 $0.80 $0.31 the affordable housing investments.
I The quarterly data is subject to seasonal fluctuations with peak Scheduled Maturities periods occurring during the summer months. Sec Note 2 - Pension Long-term debt maturities for the years 1996 through 2000 are Plans and Other Employee Benefits regarding the 1994 quarterly
$74. $25, $95, $43 and $54 million, respectively. costs telated to the early retirement program.
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Kansas Cat / Power 6 bght Company
- 11. Agreement and Plan of Merger with UtiliCorp United inc.
On January 19,1996, KCPL, Util; Corp United Inc. (UtiliCorp) and KC The Transaction is subject to approval by esch company's United Corp. (KCU) entered into an Agreement and Plan of Merger shareholders and a number of regulatory authorities. The regulatory (the Merger Agreement) which provides for a strate 0 ic business approval process is expected to take about 12 to 18 months. The combination of KCPL and UtiliCorp in a ' merger-of-equals' Merger Agreement includes termination provisions which may transaction (the Transaction). Pursuant to the Merger Agreement, require certain payments to the other party to the Transaction KCPL and UtiliCorp will merge with and into KCU (which may be under certain circumstances, including a payrnent of $58 million renamed at the discretion of KCPL and UtiliCorp), a corporation if the Transaction is terminated by a party and within two and one-formed for the purpose of the Transaction. Under the terms of the half years following such termination, the terminating party Merger Agreement, each share of KCPL common stock will be agrees to consummate or consummates certain business exchanged for one share of KCU common stock and each share of combination transactions.
UtiliCorp common stock will be exchanged for 1.096 shares of KCU common stock. Based on the number of shares of KCPL common stock and UtiliCorp common stock outstanding on the date of the Merger Agreement, KCPL's common shareholders will receive about 55% of the common equity of KCU and UtiliCorp's common shareholders will receive about 45%
The Transaction is designed to qualify as a pooling of interests for accounting and financial reporting purposes. Under this method, 1
the recorded assets and liabilities of KCPL and UtiliCorp would be '
carried forward to the consolidated balance sheet of KCU at their recorded amounts. The income of KCU would include the combined income of KCPL and UtiliCorp as though the Transaction occurred at the beginning of the accounting period. Prior period financial statements would be combined and presented as those.of KPU.
The Transaction will create a diversified energy company with total combined revenues of over $3.5 billion and over $6.5 billion in total assets, serving about 2.5 milFon customers in the United States, Canada, the United Kingdom, New Zealand, Australia, China and 1
Jamaica. The business of the combined companies will consist of l
electric utility operations, gas utility operations and various non-utility enterprises including independent power projects, and gas marketing, gathering and processing operations.
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Kansas City Power 6 Ught Company Report ofIndependent Accountants To the Shareholders and Board o/ Directors amounts and disclosures in the financial statements. An audit also i Kansas CityPbwer & Light Company:- includes assessing the accountir.g principles used and significant We have audited the accompanying consolidated balance sheets and estimates made by management, as well as evaluating the overall i statements of capita!ization of Kansas City Power & Light Company financial statement presentation. We believe that our audits provide l
l and Subsidiary as of December 31,1995 and 1994, and the related a reasonable basis for our opinion.
consolidated statements of income, retained eamings, and cash in ur pini n,thefinancialstatementsreferredtoabovepresent flows for each of the three years in the period ended December 31, fairly, in all material respects, the consolidated financial position 1995. These financial statements are the responsibility of the of Kansas City Power & Light Company and Subsidiary as of Company's management. Our responsibility is to express an opinion December 31,1995 and 1994, and the consolidated results of their on these financial statements based on our audits.
operations and their cash flows for each of the three years in the We conducted our audits in accordance with generally Eccepted period ended December 31,1995, in conformity with generally auditing standards. Those standards require that we plan and accepted accounting principles.
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 4 includes examining, on a test basis, evidence supporting the ,
1 l Kansas City, Missoun January 31,1996 l
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t Kansas City Power & Ught Company Summary of Operations and financial Data Summary of Earnings musaw Operating Revenues $ 885,955 $ 868,272 $ 857,450 $ 802,668 $ 825,101 $ 646,557 Operating Expenses 718,907 718.581 701,148 662,094 653,793 540,214 l
l Operating income 167,048 149,E91 156,302 140,574 171,308 106,343 Otherincome 10,060 2,500 1,909 3,163 (906) 104,683 Income Before Interest Charges 177,108 152,191 158,211 143,737 170,402 211.026 Interest Charges 54,522 47,416 52,439 57,403 66,509 55,905 Net income 122,586 104,775 105,772 86.334 103,893 155,121 l
i Preferred and Preference Stock l Dividend Requirements 4,011 3,457 3,153 3,062 6,023 21,867 Available for Common Stock $ 118,575 $ 101,318 $ 102,619 $ 83.272 $ 97,870 $ 133,254 Capitalization wusandse l Common Stock Equity $ 897,938 $ 874,699 $ 866,151 $ 853,924 $ 860,229 $ 838,394 Preferred Stock 89,000 89,000 89,000 89,000 52,000 112,000 l Redaemable Preferred Stock 1,436 1,596 1,756 1,916 2,076 65,836 Redeemable Preference Stock - - - - - 33,333
! Long-term Debt $ 909,516 $ 831,889 $ 868,152 $ 814,709 $ 822.680 $ 1.128,681 Common Stock Data Average Shares Outstanding (thousands) 61,902 61,903 61,909 61,909 61,909 60,393 l l t l Earnings per Common Shaie $ 1.92 $ 1.64 $ 1.66 $ 1.35 $ 1.58 $ 2.21 Return on Year-end Common Equity 13.2% 11.6 % 11.8 % 9.8% 11.4 % 15.9%
Cash Dividends per Share $ 1.54 $ 1.50 $ 1.46 $ 1.43 $ 1.37 $ 1.18 Book Value per Share $ 14.50 $ 14.13 $ 13.99 $ 13.79 $ 13.90 $ 13.55 Common Stock Equity Ratio 49.2% 49.6% 51.2 % 49.3% 49.9% 38.5%
Common Stock Price High $ 26 % $ 23 % $ 26 % $ 24h $ 23 % $ 12 %
l Low $ 21 % $ 18 % $ 21h $ 19 % $ 17 % $ 9 Other Data and Ratios Utility Capital Expenditures trhousanos) $ 134,070 $ 124,965 $ 129,199 $ 129.559 $ 122.447 $ 157,727
, Total Assets trhousands) $ 2,882,506 $ 2,770,397 $ 2,755,068 $ 2,646,923 $ 2.615.039 $ 2.654,058 Ratio of Eamirgs to Fixed Charges 3.94 4.07 3.80 3 12 3.22 3.08
' Includes amounts to be redeemed Dr Durchased and Gwrent matsities
}
32
Kansas City Power 6 Ught Company Electric Statistics Electric Sales Statistics Revenues It'ausando Residential $ 306,171 5 288.872 $ 287,862 $ 258.124 $ 291,579 $ 200,839 Commercial 370,467 361,254 360,219 351,024 355,750 254,535 Industrial 114,539 116,271 121,515 118,389 114,979 105,145 Other 14,303 14,223 14.514 14,316 14,193 12,223 Total retail 805,480 780,620 784,110 741,853 776,501 572,742 Bulk power 65,749 76,180 60,636 48,058 35,839 49,936 Other sales for resale 3,143 3,459 4,445 4,319 4.535 6,525 Total 874,372 860.259 849,191 794,230 816,875 629.203 Other electric revenues 11,583 8,013 8.259 8,438 8,226 3,846 Total $ 885,955 $ 868,272 $ 857,450 $ 802,668 $ 825,101 $ 633,049 hgowatt-Hour Sales l Residential 3,879,975 3,644,789 3,582,925 3,172,611 3,613,751 2.657,018 Commercial 5,422,077 5,283.884 5,141,169 4,984,285 5,072,586 3,757,144 Industrial 2,573,883 2,561,695 2,507,205 2,429,883 2,294,734 2,248,524 Other 65,492 69,612 72,556 72,129 71,198 70,749 Totalretait 11,941,427 11,559,980 11,303,855 10,658,908 11.052,269 8,733,435 Bulk power 4,045,225 4,733,951 3,725,115 2,940,905 1,945,182 2.748,645 Other sales for resale 78,127 87,334 108,581 102,971 109,327 160,174 Total 16,064,779 16,381,265 15.137,551 13,702,784 13,106.778 11,642,254 l Average Number of customers Residential 377,302 372,098 367,792 365.069 362,878 324,133 Commercial 49,797 49,763 49,004 48,522 48,042 41,947 Industrial 2,677 2,271 2,317 2,328 2,372 2,588 Other 131 130 131 133 134 134 Total retail 429,907 424,262 419.244 416,052 413.426 368,802 Bulk power 22 32 25 24 23 20 Other sales for resale 11 12 12 12 12 14 l
Total 429,940 424.306 419,281 416,080 413,461 368,836 l
Residential Sales Average mwh per customer 10.3 9.8 9.7 8.7 10.0 8.2 Average revenue per kwh 7.9c 7.9e 8.0c 8.1 c 8.le 7.6e Lood Statistics L Net generation-mwh 15,852,834 16.158,937 14,558,295 13,416,669 12,922,963 11,170,702 Purchased-mwh 969,525 980,306 1,206,514 924,107 880.545 1,172.034 Total-mwh 16,822,359 17,139.243 15,764,809 14.340,776 13,803,508 12.342,736 Maximum net hourly demand in megawatts-winter 1,864 1,810 1,713 1,687 1,674 1,446 l
megawatts-summer 2,909 2 714 2,819 2,624 2,7El 2.235 Net generating capabilityin megawatts (summer) 3,103 3.098 3,085 3,089 3.090 2,937 l
- Net capacity purchased summer (megawatts) 426 453 380 306 231 41 Btu per mwh generated 10.619 10 553 10.641 10.632 10.637 10.635 Number of Employees
- December 31 2,330 2,362 2,735 2,782 2.881 2.863 December 31 adjusted
- 2,643 2,738 3,130 3,181 3.276 3,069 i
- Exdudes employees anocated to other part cipating companies at LaCygne and latan stations and indudes employees allocated from Wott Creek 1, :
. 33 l
- - . - . _ ~ _ - . = - . - _. .
S1arelo der n~ormation Form 10 K Exchange Listing and Stock Symbol Copies of KCPL's 1995 annual report filed with the Securities Common stock is listed on the New York Stock Exchange (NYSE) and Exchange Commission on Form IN( will be provided at and the Chicago Stock Exchange.
no charge to any shareholder or beneficial owner of shares in Ticker Symbol: KLT KCPL's stock upon written request to:
Number of common shareholders: 29,657 on December 31,1995.
Kansas City Powerir Light Company All dividends paid by KCPL in 1995 were determined to be dividerd P.O. Box 418679 income and no portion was considered a retum of capital.
Kansas City, Missouri 641419679 Dividend Reinvestment and Stock Purchase Plan Common Stock Dividends Paid KCPL offers its shareholders the opportunity to increase their invest-Quarter 1996 1995 1994 ment through a Dividend Reinvestment and Stock Purchase Plan First $0.39 $023 $0.37 which is available to all common stock shareholders of record.
Qu rterly common stock dividends may be automatically reinvested 9 0 38 Fourth 0.39 0.38 to purchase common stock. Optional cash amounts, ranging from
$100 to $5,000, may also be invested monthly toward the purchase of additional shares. Shareholders may choose to surrender their Preferred Stock Dividends stock certificates to the transfer agent for deposit (safekeeping) in Quarterly dividends on preferred stock were declared in each their Dividend Reinvestment accounts. For more information or an i quarter of 1995 and 1994 as follows:
l authorization form, contact Investor Relations or UMB Bank, n.a.
Cumulative Preferred Stock Series Amount Direct Deposit of Dividends 3.80% $0.95 nwn n ep sWWendsavaWaMoshadoh
( 4.00% 1.00 4.20% 1.05 who wish to have dividends deposited directly to personal checking.
4.35% 1.0875 savings or other accounts. Electing direct deposit will change only 4.50% 1.125 the mailing of dividends. Annual reports and proxy materials will not be fect@r an enrollment form, please contact Investor Two-Year Common Stock History Relations or UMB Baok, n.a.
KCPL's common stock price range and dividends paid per share l were as follows:
1995 1904 l Quarter High Low High Low First $24% $22% $23% $20%
Second 24 % 22 % 23 18 %
Third 24 % 21 % 22 % 19 %
l Fourth 26 % 23W 23 % 21 %
4 i
}
j 34
r I
Shoreholder Inquiries Shoreho.6er Mailing List l
For account information or assistance, including change of Hight.ights, KCPL't wrterly newsletter for shareholders, is available address, stock transfers, dividend payments, duplicate accounts upon request to those interested. To be put on our mailing list, call or to report a lost certificate, please contact Investor Relations investor Relations at 800-245-5275.
at 800-245-5275 (out-of-state) or 816-556-2053.
Annual Meeting of Shoreholders f FinancialInquiries All shareholdera will receive in April proxy materials and information l Security analysts and investment professionals seeking financial about KCPL's annual shareholders' meeting. Any questions may be information about KCPL may contact Investor Relations directed to investor Relations at 800-245-5275.
l at 816-556 2312.
Transfer Agent and Stock Registrar UMB Bank, n.a.
Securities Transfer Division R0. Box 410064 Kansas City, Missouri 64141-0064 816-860-7786 i
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Corporate n~0rmation {
i Corporate Offices Kansas City Power & Light Company 1201 Walnut Kansas City, Missouri 64106-2124 Mailing Address P0. Box 418679 1 Kansas City, Missouri 64141-9679
-1 Generating Capacity and the M0KAN Pool KCPL's 1995 total available capacity was 3,529 megawatts, including 3,103 mw of installed generating capacity plus 426 mw of net capacity purchases. Its 1995 system peak load was 2.909 and resulted in a capacity margin of about 18%, the equivalent of a reserve margin of about 21%. In addition to being a member of the i Southwest Power Pool. a regional reliability council, KCPL is a I member of the M0KAN pool formed in 1962 to share reserve ,
capacity, coordinate planning for additional generating units and expand transmission lines. Transmission connections with numerous utilities in Missouri, Kansas Nebraska, Iowa and Minnesota enhance P
KCPL's system reliability. Kansas City is a key center in the V'
interconnected system which enables regional and inter-regional bulk power transactions aTiong electric utility systems.
'i 1'
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p f
w i O o KCPL is proud of its commitment to the environment. Only ecwonrnentally friendly recycled paper was used in the production of this annual report.
Front Section: 10% post-consumer waste and total recycled fiber content i not less than 50% .
Firocial Section: 60% total recovered fiber. including 20% post consurner waste 4 hos: Only soy-based inks were used which are not harmful to the enwonment. Ur fiscrgyik'hirist haut likas J
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Kansss City Powsr & Light Company First Class P.O. Box 418679 U.S. Postage 1 Kansas City, Missouri 64141-9679 Paid Kansas City, MO Permit No. 397
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