[Federal Register Volume 67, Number 212 (Friday, November 1, 2002)]
[Notices]
[Pages 66683-66685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27807]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27587]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
October 28, 2002.
Notice is hereby given that the following filing(s) has/have been
made with the Commission pursuant to provisions of the Act and rules
promulgated under the Act. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendment(s) is/are available for public
inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in
writing by November 22, 2002, to the Secretary, Securities and Exchange
Commission, Washington, DC 20549-0609, and serve a copy on the relevant
applicant(s) and/or declarant(s) at the address(es) specified below.
Proof of service (by affidavit or, in the case of an attorney at law,
by certificate) should be filed with the request. Any request for
hearing should identify specifically the issues of facts or law that
are disputed. A person who so requests will be notified of any hearing,
if ordered, and will receive a copy of any notice or order issued in
the matter. After November 22, 2002, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
Great Plains Energy Incorp., et al. (70-10064)
Great Plains Energy Incorporated (``GPE''), a registered holding
company;
[[Page 66684]]
Kansas City Power & Light Company (``KCPL''), an electric utility
company and a wholly-owned subsidiary of GPE; and Great Plains Energy
Services Incorporated (``GPES''), a to-be formed service company
subsidiary, all located at 1201 Walnut, Kansas City, Missouri 64106;
and Wolf Creek Nuclear Operating Corporation (``WCNOC''), 1550 Oxen
Lane N.E., Burlington, Kansas 66839, a nonutility subsidiary of KCPL,
which provides goods and services to the owners of Wolf Creek
Generating Station; (collectively, ``Applicants'') have filed an
application-declaration under sections 6(a), 7, 9(a), 10, 12(b), and
13(b) under the Act and rules 45, 88, 90 and 91 under the Act.
I. Prior Authorizations
By Commission order dated September 7, 2001 (HCAR No. 27436)
(``September Order'') GPE was authorized, among other things, to
effectuate a reorganization by GPE forming another Missouri subsidiary
and merging KCPL into the Missouri subsidiary that resulted in KCPL
becoming a wholly owned subsidiary of GPE. In addition, financing was
authorized for the new system. Specifically, related to the intrasystem
provision of services, KCPL and GPE were given until April 30, 2002 to
file an application-declaration seeking authority to create a service
company and implement the final support service structure for the new
GPE holding company system (``Service Company Application''). Until the
Service Company Application is made effective, KCPL and GPE requested
authority under section 13(b) and the rules for an interim period
(``Interim Period'') for KCPL and the nonutility subsidiaries to
provide support services and to sell goods to each other and to GPE.
Existing and future nonutility, intermediate subsidiaries of GPE were
also authorized during the Interim Period to provide management,
administrative, project development and operating services at fair
market prices to certain classes of nonutility subsidiaries.
II. Request to Form the Service Company and Provide Services
A. Summary of Requests
Applicants filed the Service Company Application by April 30, 2002,
as directed by the Commission in September Order. The Service Company
Application seeks the authorization and approval by the Commission of
the provision of intrasystem services and goods following the
expiration of the Interim Period, under section 13 of Act and the
rules. Applicants request that the Commission: (1) Approve the
designation of GPES as a subsidiary service company in accordance with
the provisions of rule 88 under the Act and find that GPES is so
organized and will conduct its operations so as to meet the
requirements of section 13 and the rules under the Act; (2) approve the
service agreement (as attached in S.E.C. File No. 70-10064, Exhibit B-1
filed April 19, 2002) (``Service Agreement''); (3) authorize to the
extent not exempt under rules 81 and 87, for GPE's subsidiaries to
provide certain services and goods to each other and to GPE; and (4)
authorize extensions of credit or guarantees under section 12(b) and
rule 45 for GPES or KCPL to assume responsibility to counterparties in
leases, licenses, or other arrangements for the associates' compliance
under those leases, licenses, or other arrangements.
B. Services provided by GPES
GPE requests authorizations with respect to the activities of GPES,
which will be incorporated in Missouri as a wholly-owned subsidiary of
GPE to serve as the service company for the GPE system. GPES will:
[sbull] Have a minimal equity capitalization of not more than 1,000
shares with total equity capitalization of not more than $10,000.
[sbull] Finance it business through the issuance of debt securities
exempted under rule 52(b) to associate companies or unaffiliated
parties or as otherwise authorized by the Act, rules, and Commission
orders.
[sbull] Provide companies \1\ in the GPE system with a variety of
administrative, management and support services.
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\1\ GPE currently has four direct subsidiaries: KCPL; Innovative
Energy Consultants, Inc.; KLT, Inc.; and Great Plains Power
Incorporated (``GPP''). KCPL is the only public utility company in
the GPE system, and provides electricity at retail in portions of
Kansas and Missouri and at wholesale.
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[sbull] Be staffed by a transfer of personnel from KCPL, and in
addition, KCPL will transfer personal property from KCPL to GPES.\2\
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\2\ The net book value of the property proposed to be
transferred to GPES is approximately $4.9 million. Of this amount,
approximately $815,000 is related to leasehold improvements in
leased office space which will be occupied by GPES. Approximately
$2.9 million of this amount is related to general office equipment
(such as chairs, desks, furniture, cubicle partitions and other
items) which will be used by GPES employees. The remainder is
related to the capitalized costs of software which will be used by
GPES in providing services to its Clients. GPES will pay to KCPL the
net book value of the property, under rule 90. The payment by GPES
to KCPL for the transferred property may be in the form of either
cash or a promissory note in the principal amount of the purchase
price, bearing interest at the effective cost of capital of KCPL.
Applicants represent that none of the property proposed to be
transferred constitutes ``utility assets'' as defined by section
2(18) of the Act, and to the extent the property constitutes
``goods'' of KCPL, the Applicants state the transfer is permitted by
rule 87(b)(4).
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[sbull] Be assigned certain leases and licenses currently held by
KCPL, or in the alternative the leases and licenses may continue to be
held by KCPL and a portion of the goods and services may be provided to
other system companies. (To the extent that current leases, licenses,
and other arrangements respecting goods and services used by KCPL and
one or more associate companies cannot be reasonably transferred to
GPES, or in situations in which KCPL is the predominant user of such
goods and services, or in the event Missouri Public Service Commission
approval of the proposed asset transfer is not obtained before the
establishment of GPES,\3\ KCPL may make available a portion of the
associated goods and services to associate companies through leases,
licenses or similar arrangements.)
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\3\ Section 393.190, RSMo.
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[sbull] Be responsible to counterparties of the underlying leases,
licenses, or other arrangements for the associates' compliance with the
terms and conditions of those agreements.
[sbull] Comply with the Commission's standards for cost allocation
methods and procedures for service companies in registered holding
company systems;
[sbull] Use the Commission's ``Uniform System of Accounts for
Mutual Service Companies and Subsidiary Service Companies'' for GPES's
billing system.
[sbull] Provide classes of services through departments and more
than one class of services. Both corporate services and shared services
may be offered. Corporate services are required, but shared services
will be a choice subject to the terms and conditions of the service
agreement.
[sbull] Provide all services by GPES to affiliated companies on an
``at cost'' basis as determined by rules 90 and 91 of the Act, except
as permitted by the Act or the Commission.
C. Services Provided by the Subsidiaries
1. KCPL
KCPL may provide to associate companies services incidental to its
utility business, including but not limited to leases \4\ or subleases
of office or other space with associate companies, services of
personnel with specialized expertise and usage of KCPL's integrated
voice and data communications system. In addition, to
[[Page 66685]]
the extent that current leases, licenses and other arrangements
respecting goods and services used by KCPL and one or more associate
companies cannot be reasonably transferred to GPES, or in situations in
which KCPL is the predominant user of such goods and services, or in
the event Missouri Public Service Commission approval of the proposed
asset transfer is not obtained before the establishment of GPES, KCPL
may make available a portion of the associated goods and services to
associate companies through leases, licenses or similar arrangements.
All such goods and services will be provided to associate companies in
accordance with rules 87, 90 and 91. To the extent such matters do not
fall within the exception provided in rule 87(a)(3), Applicants request
authorization for KCPL to engage in such activities.
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\4\ KCPL leases transmission facilities and railcars, and has
entered into lease arrangements for five combustion turbines.
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KCPL may have responsibility for GPES's compliance under assigned
leases, licenses, and other arrangements. In situations where KCPL
makes available goods and services to associate companies under leases,
licenses, or other arrangements between KCPL and third parties, KCPL
may have responsibility for those associate companies' compliance with
such leases, licenses, or other arrangements. To the extent such
responsibility is deemed to be an extension of credit or guaranty by
KCPL under section 12(b) of the Act, Applicants request authority for
KCPL to incur such responsibility.
2. WCNOC
Applicants request authorization for WCNOC, as a nonutility
subsidiary of KCPL, to provide services and goods to the owners of Wolf
Creek Generating Station at cost under existing agreements (as attached
in S.E.C. File No. 70-10064, Exhibit B-3) (``WCNOC Existing
Agreements''). Applicants also request authorization for KCPL to
provide goods and services to WCNOC at cost under WCNOC Existing
Agreements. WCNOC, KCPL, and Kansas Gas and Electric Company (an owner
of Wolf Creek Generating Station) also have entered into a service
reciprocity agreement dated June 20, 1986 (as attached in S.E.C. File
No. 70-10064, Exhibit B-6) (``Service Reciprocity Agreement''),
providing for the recognition of pension service credits earned by
employees who transfer to or from WCNOC. To the extent the Service
Reciprocity Agreement may be deemed jurisdictional, Applicants request
authorization for KCPL and WCNOC to continue with such agreement.
D. Request for an Exemption From At Cost
Applicants request that GPES and all other nonutility subsidiaries
of GPE be authorized to enter into agreements to provide construction,
goods or services to certain associate companies enumerated below at
fair market prices determined without regard to cost, and request an
exemption (to the extent that rule 90(d) of the Act does not apply)
under section 13(b) from the cost standards of rules 90 and 91:
[sbull] A foreign utility company (``FUCO'') or foreign exempt
wholesale generator that derives no part of its income, directly or
indirectly, from the generation, transmission or distribution of
electric energy for sale within the United States;
[sbull] An exempt wholesale generator (EWG) that sells electricity
at market-based rates which have been approved by the Federal Energy
Regulatory Commission (``FERC''), provided that the purchaser is not
KCPL;
[sbull] A ``qualifying facility'' (``QF'') within the meaning of
the Public Utility Regulatory Policies Act of 1978, as amended
(``PURPA'') that sells electricity exclusively (i) at rates negotiated
at arms' length to one or more industrial or commercial customers
purchasing the electricity for their own use and not for resale, and/or
(ii) to an electric utility company at the purchaser's ``avoided cost''
as determined in accordance with the regulations under PURPA;
[sbull] A domestic EWG or QF that sells electricity at rates based
upon its cost of service, as approved by FERC or any state public
utility commission having jurisdiction, provided that the purchaser is
not KCPL; or
[sbull] A rule 58 subsidiary or any other nonutility subsidiary
that (i) is partially-owned, directly or indirectly, by GPE, provided
that the ultimate purchaser of such goods or services is not KCPL (or
any other entity that GPE may form whose activities and operations are
primarily related to the provision of goods and services to KCPL), (ii)
is engaged solely in the business of developing, owning, operating and/
or providing services or goods to nonutility subsidiaries described in
clauses (a) through (e) immediately above, or (iii) does not derive,
directly or indirectly, any material part of its income from sources
within the United States and is not a public utility company operating
within the United States.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-27807 Filed 10-31-02; 8:45 am]
BILLING CODE 8010-01-P