Great Plains Energy Incorporated's CEO Discusses Q3 2011 Results - Earnings Call Transcript

| About: Great Plains (GXP)

Great Plains Energy Incorporated (NYSE:GXP)

Q3 2011 Earnings Call

November 04, 2011 9:00 am ET


M. J. Chesser - Chairman, Chief Executive Officer, Chairman of Executive Committee, Chairman of Kansas City Power & Light, Chairman of GMO, Chief Executive Officer of GMO and Chief Executive Officer of Kansas City Power & Light

Kevin E. Bryant - Vice President of Investor Relations and Treasurer

James C. Shay - Chief Financial Officer and Senior Vice President of Finance & Strategic Development

Terry Bassham - President, Chief Operating officer, Director, President of Kcp&L and Chief Operating officer of Kcp&L


Erica Piserchia - Wunderlich Securities Inc., Research Division

Andrew Levi - Caris & Company, Inc., Research Division

Unknown Analyst -


Good morning. My name is Darla and I will be your conference operator today. At this time, I would like to welcome everyone to the third quarter 2011 earnings conference call. [Operator Instructions] After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] It is my pleasure to turn the call over to Kevin Bryant, Vice President of Investor Relations and Treasurer. Please go ahead, sir

Kevin E. Bryant

Thank you, and good morning. Welcome to Great Plains Energy's Third Quarter 2011 Earnings Conference Call. Joining me this morning to present this quarter's results are Mike Chesser, Chairman and Chief Executive Officer; Terry Bassham, President and Chief Operating Officer; and Jim Shay, Senior Vice President and Chief Financial Officer.

As we get today's call started, I must remind you of the inherent uncertainties of any forward-looking statements in our discussion this morning. Slide 2 and the disclosure on our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations.

I want to remind everyone that we issued our earnings release and third quarter 2011 10-Q after the market closed yesterday. I would also mention that we filed an 8-K describing our pursuit of additional wind generation earlier this morning. These items are available along with today's webcast slides and supplemental financial information regarding the quarter on the main page of our website at

With that, I'll now hand the call to Mike Chesser.

M. J. Chesser

Thanks very much, Kevin, and good morning, everyone. I know there's a great deal of earnings-related activity in the industry this week. So as we approach the annual conference, we appreciate you joining us for our morning call this morning.

During our August Analyst Day presentation, we discussed a number of key drivers for long-term success. As summarized on this slide, our business plan is centered around the ability to deliver safe, reliable, low-cost electricity to our customers, while providing competitive shareholder returns.

Our focus on delivery of improved total shareholder returns will be through earnings growth and a competitive dividend. We're executing the strategy outlined in August and are excited to share with you the progress today.

Now I'd like to start with the 2011 earnings. Jim will provide the details in his comments, but I want to highlight our improved earnings outlook for 2011. As a result of warmer-than-normal weather and favorable commercial sector demand during the quarter, we are increasing and narrowing our 2011 guidance range to $1.22 to $1.32 per share from the previous $1.10 to $1.25. We will continue to monitor local and national economic conditions and plan our business conservatively.

We're also pleased to announce that our Board of Directors approved an increase in our quarterly dividend -- quarterly common stock dividend, raising it from $20.75 to $21.25 per share on a quarterly basis or from $0.83 to $0.85 per share on an annual basis.

The completion of the Comprehensive Energy Plan and solid execution for the first 9 months of 2011 has positioned the company for this dividend action. Some key year-to-date accomplishments include the achievement of fair regulatory returns, strong cash management that allowed us to offset the impacts of the Missouri River flooding and successful financing activities that reinforced a stable credit profile.

We've established a platform for growth that makes this dividend increase possible. And we're excited about this dividend action and continue to view a competitive, sustainable and increasing dividend to be an important driver for shareholder returns.

In our Analyst Day presentation, we also provided an overview of our strategy with respect to renewables including wind generation. We communicated that we had in service or contracted for 280 megawatts of wind. And we also indicated we had an RFP out for another 220 megawatts of wind that could be of service by the end of 2012.

The RFP process yielded very attractive prices for new wind projects, and we are pleased to announce that we have entered into 2 power purchase agreements for a total of 200 megawatts of wind. Up to 100 megawatts of this wind may be converted to company ownership. Jim is going to discuss the potential financial implications of these options in more detail, but we will only pursue wind ownership consistent with the parameters that we outlined during our Analyst Day presentation. We believe the positive conditions for wind development may provide a unique opportunity for rate based growth that is in the best interest of both our customers and our shareholders.

In addition to these new wind opportunities, we've entered into a hydroelectric PPA with Central Nebraska Public Power and Irrigation District. The 10-year agreement commences in 2014 and will provide up to 63 megawatts of power towards our Kansas renewable energy standards. So in total, these additions would increase our portfolio to approximately 600 megawatts of clean, renewable generation, all added in just the last 6 years.

There's also a great deal of discussion in the industry over the Cross-State Air Pollution Rule or CSAPR. The rule will require substantial near-term emission reductions in Missouri and Kansas to address air quality standards. While we support the goal of improving air quality, we advocate a sensible approach to achieving this goal. Due to the short timeline for CSAPR implementation, the industry has expressed concern about the timing for meeting the requirements.

So in response, we have joined a coalition of Kansas utilities, who jointly submitted a request for a stay and a request for reconsideration of the federal implementation plans for CSAPR. As you are aware, many other utilities, states and interested organizations have submitted similar requests.

Regardless of the outcome of the challenges, KCP&L is well positioned to meet the requirements of the new rules without having to involuntary shut down any units. Any shortfall in allocated allowances is anticipated to be addressed through a combination of permissible allowance trading, installation of nominal emission control equipment, changes in plant processes or purchases of additional power in the wholesale market. Any compliance cost would also be covered in the $1 billion estimate that we provided during our Analyst Day presentation.

As you can see, we continue to make progress on the key elements of our strategic plan. The actions that we have taken position us well to deliver safe, reliable and low-cost electricity to customers, while providing competitive shareholder returns. We'll continue this precise focus on execution, while also maximizing opportunities as they arise.

With that, I'd like to turn the call over to Terry, who will provide a more comprehensive operations and regulatory update.

Terry Bassham

Thanks, Mike, and good morning, everyone. I have several operational regulatory topics to cover with you this morning. Those are listed on Page 9, Slide 9.

Beginning with LaCygne on Slide 10. In August, we received an order from the Kansas Commission on our request for predetermination. The KCC deemed the cost estimate of $1.23 billion, excluding AFUDC and property tax, to be reasonable. KCP&L and Westar are each 50% owners of LaCygne, as result KCP&L's estimated share is $615 million and the Kansas jurisdictional portion is about $281 million.

As a result of receiving the favorable ruling, we are proceeding with the environmental upgrades at LaCygne, which need to be in place to comply with the Kansas Department of Health and Environment's consent decree to achieve BART compliance by June of 2015.

On Slide 11 is an artist's rendering of the environmental control equipment we plan to install at LaCygne. The project includes a wet scrubber and baghouse for LaCygne 1 and what we call a full back end at LaCygne 2, consisting of a Selective Catalytic Reduction system or SCR wet scrubber, baghouse and low NOx burners. We've entered into an engineering, procurement and construction or EPC firm fixed price contract with LaCygne environmental partners, a joint venture of CWIP power contractors company, Sargent & Lundy, and have received all required air permits for initial construction. We've broken ground on the project and construction is underway. Last month, we began preparing the foundation and expect to be in construction of the new dual-flue chimney in early 2012. As always, we'll keep you posted as construction progresses.

Moving on to plant performance on Slide 12. Our combined fleet's overall equivalent availability factor improved 2% for the quarter compared to last year, led by our coal fleet, which was 3% points above the 2010 comparable period. The capacity factor for our coal units declined during the period primarily due to coal conservation efforts undertaken during the quarter. As indicated in an 8-K filed in July, several of our coal units were impacted by Missouri River flooding. We took actions to conserve coal given delays in deliveries at Hawthorn and LaCygne, and a suspension of deliveries at Iatan due to the flooding. Specifically, we ran the impacted units at lower capacity levels. I'm proud of the way how our employees diligently managed the impact of the flood and our coal conservation efforts during the peak summer months.

In October, we ended our coal conservation efforts and the plants have resume normal operations and we're working to build coal inventories to normal levels, which we anticipate will happen sometime in 2012.

Wolf Creek delivered a third quarter 2011 EAF of 96%, a 4% decline from the same period in 2010. The unit came back online July 8, after the completion of an extended refueling outage. Wolf Creek's next refueling outage is scheduled to begin in the third quarter of 2012.

In October, LaCygne 2 concluded a 28-day planned plant outage for maintenance inspection, and Iatan 2 is currently in a planned outage that began in mid-October and expected to conclude around the middle of November.

Moving onto customer consumption for the quarter. On Slide 13, we provide detail on retail demand. For the quarter, total retail megawatt hour sales were flat but weather-normalized sales increased 0.9% from the back of a 3.4% increase in the commercial sector, which is the best result we've seen for this customer group in several quarters. Cooling degree days for the quarter were 11% above normal but 7% below the comparable 2010 period. Compared to normal, the positive impact of the warm weather in 2011 quarter was about $0.06 per share.

Year-to-date, total retail megawatt hour sales have decreased 1.5% but weather-normalized sales have declined 0.9% compared to last year. However, weather has been favorable year-to-date compared to normal, resulting in a positive impact of approximately $0.14 per share.

On Slide 14, you can see a little more detail broken down by customer sector. While we are encouraged by the weather-normalized demand for the quarter, we see signs of a still unsettled economy and reasons for caution. There continues to be a somewhat mixed story across our 3 key customer sectors, which supports our continued view of the economy in our regions stabilizing and slowly improving.

Turning now to regulatory. As we've previously indicated, our plan is to focus on reducing regulatory lag through diligent cost management by pursuing cost recovery mechanisms when possible. As a result, we plan to file for a property tax rider in Kansas by year end, with an effective date in February 2012. The property tax rider, if approved, will improve the recovery of incremental property tax cost over the next 12-month period.

Also this quarter, we expect to make filings in Missouri under the Missouri Energy Efficiency Investment Act or MEEIA. Our proposal would expand our energy efficiency efforts, while providing a mechanism for fair recovery and the opportunity to earn a return on our investments. This is the next step in stabilizing and advancing energy efficiency in the state.

We continue to elevate -- or evaluate the best time to file our general rate cases and the decision we made independently for each jurisdiction. As we outlined in our Analyst Day presentation, there are several factors to consider when filing a case. But our current view is we expect to file in early 2012 as needed to support our Analyst Day discussion of reducing lag to 50 basis points in 2013.

Recent actions taken by the Missouri Commission signals desire to continue working collaboratively with the state electric utilities. Earlier this year, the commission opened the docket to look into lag created by differences and how certain elements of our business are treated in Missouri and Kansas. Also in late August, the commission issued an order opening a case to investigate the cost of complying with federal environmental regulations. The commission's focus is on the potential impact of current and future EPA rules on Missouri's electric utilities and specifically want to determine the potential impact on reliability and cost. They directed the commission’s staff to lead a working group that will include the Office of Public Counsel, the state's Board of Utilities, investor-owned electric utilities to investigate these impacts. The report is due no later than May 1, 2012.

Finally, before I hand the call over to Jim, I would like to briefly address transmission. We received questions recently regarding the impact of FERC Order 1000 on 2 major transmission projects in our service territory. FERC Order 1000 removes an incumbent first right of refusal provision and transmission tariffs. While this will affect future transmission opportunities, the order does not apply to our previously approved projects. Our plan is to continue the development of our current projects, while evaluating all other options. We will evaluate additional opportunities but we'll only act if other options produce greater opportunity for our shareholders.

With that, I'll now turn the call over to Jim, who will provide an update on our financials.

James C. Shay

Thank you, Terry, and good morning, everyone. I'll begin with Slide 17, which provides current year comparisons to prior year. For the quarter Great Plains Energy's consolidated earnings were $0.91 per share compared with $0.96 per share in the prior year. The $0.05 per share decline is due to: First, a negative impact of about $0.09 per share from special factors, representing costs associated with Missouri River flooding; second, a $0.05 per share benefit resulting from favorable weather-normalized demand led by the commercial sector; third, an unfavorable variance of $0.03 per share due to weather compared to last year; fourth, a negative impact of $0.03 per share from regulatory lag relating to higher general taxes driven by property taxes; and finally, a net favorable $0.05 per share from other items due to new retail rates, which became effective in Kansas in December 2010 and Missouri during May and June 2011, and reduced depreciation and amortization. These factors are partially offset by increased O&M expense and interest expense plus the resolution of certain general tax-related matters.

Year-to-date earnings per share are $1.24 compared to $1.57 per share in the prior year. The $0.33 year-over-year decline includes $0.22 in special factors comprised of $0.09 related to Missouri River flooding in the third quarter; $0.13 in the first 6 months of the year including an extended Wolf Creek outage; severance related to the organizational realignment and voluntary separation program; and costs associated with rate case outcomes. The $0.22 per share and special factors are outlined in more detail in the appendix.

Slide 18 provides an income statement view of our third quarter results including $126.1 million in net income or $0.91 per share compared to $131.6 million or $0.96 per share just discussed.

You can see that for the quarter, the Electric Utility segment earned $0.97 per share compared to $0.99 per share on the prior year. The $0.02 decline is the net income impact of the key drivers that are listed on the next slide. For the quarter, the other category had a loss of $0.06 per share compared to a $0.03 per share loss last year. The primary contributor to the $0.03 increase loss was a resolution of certain general tax-related matters.

As just discussed, quarterly earnings for the Electric Utility segment were approximately $2.3 million or about $0.02 per share lower than the prior year. I've provided an overview of the main drivers impacting this segment in my earlier comments, when detailing the overall $0.05 per share decline in consolidated earnings.

As shown on Slide 20, for the first 9 months of 2011, Great Plains Energy's consolidated earnings were roughly $171 million or $1.24 per share. This compares with the earnings of about $250 million or $1.57 per share for the same period in 2010. The decline of $0.33 in earnings per share for Great Plains Energy is in line with the decline for the Electric Utility segment from $1.70 to $1.37 also shown on this slide.

Slide 21 provides more details on the $43 million or $0.33 per share decline in current year net earnings including: First, a negative impact of about $0.22 from special factors as previously discussed and outlined in the appendix; second, an estimated negative variance of $0.04 per share from less favorable weather; third, roughly $0.09 of regulatory lag from new KCP&L coal transportation contract and higher property taxes. These items were partially offset by about $0.01 per share from favorable weather-normalized demand and $0.01 per share from other items, which includes new retail rates, reduced depreciation and amortization, which was offset in part by lower AFUDC equity, higher O&M expense and higher interest expense.

Turning now to Slide 22. We ended the quarter with a strong liquidity position, including approximately $1.2 billion of available capacity on our credit lines. This compares favorably with approximately $600 million of available capacity at the end of the third quarter. We continue to make progress in refinancing our near-term maturities and lengthening the overall duration of our long-term debt portfolio.

In September, KCP&L [indiscernible] $400 million of 30 year senior notes at a coupon rate of 5.3%. Proceeds were used to repay outstanding commercial paper and will be used in part to satisfy a $150 million maturity for 6.5% senior notes due this month. As the maturity profile at the bottom of the chart shows, we have extensive debt refinancing requirements at GMO in 2012, which is comprised of $500 million GMO senior notes with a coupon of 11.875% that mature in July 2012. The notes are expected to be refinanced through the remarketing of $287.5 million in equity units and an estimated $250 million long-term debt issuance by GMO or GPE.

Slide 23 contains a historical perspective of 3 key credit ratios, including the trailing 12 months ending September 30, 2011. The special factors previously discussed have impacted our earnings per share. They've also impacted our credit metrics, including FFO to adjusted debt, which is 13.3% for the last 12 months ended September 30. Although below our internal targets, it does represent a sequential improvement compared to the 12.7% reported last quarter.

We are pleased to report that we met with the rating agencies in the third quarter, and gave them an update on our short- and long-term outlook. While we can't comment on specifics, the overall tone of the meetings was constructive and the agencies recognized our continued focus on credit quality.

As Mike discussed, we have entered into PPAs for 200 megawatts of wind generation to be in service by the end of 2012. This compares to the 220 megawatts we discussed in August. Mike also indicated a potential exist to convert up to 100 megawatts to company ownership. In evaluating and negotiating wind alternatives, we have maintained flexibility to allow for some level of ownership, if it could be completed on attractive terms. Any conversion to wind ownership would not change our 2012 earnings guidance range nor our 2013 target of 50 basis points of lag from regulated operations. Any equity financing would be undertaken only if it's expected to be accretive within 12 to 24 months, consistent with our Analyst Day discussion. Conversion to wind ownership may provide an opportunity to increase assets and rate base for the benefit of our customers to support our renewable energy initiatives.

And finally, I wanted to wrap up with a few comments on the increase in our 2011 guidance and the reaffirmation of our 2012 guidance and 2013 drivers. As discussed earlier, we announced year-to-date earnings that is near the top end of $1.10 to $1.25 earnings guidance range we provided in August. The new range is $1.22 to $1.32 per share with the main drivers of the increase being third quarter weather that was warmer than normal or about $0.06 per share, and an increase in weather-normalized demand of about $0.05 per share.

As you recall, we experienced a 2% decline in weather-normalized demand through the first 6 months of 2011. Our previous guidance assumed no load growth the last 6 months that we were forecasting an overall decline of 1% for the year. With the 0.9% growth we saw for the third quarter, we are now forecasting a decline in weather-normalized demand for the year of 50 to 75 basis points.

One additional item regarding 2011. We estimate our 2011 actual capital expenditures will be approximately $50 million less than the $503 million included in our 2012 10-K. We targeted these savings to offset the cash impacts of the extended Wolf Creek outage and Missouri River flooding. We have not changed our views about 2012 and are affirming guidance of $1.35 to $1.55 per share. This guidance range assumes an early view of 50 to 100 basis points of growth in weather-normalized demand for 2012. We also remain focused on our 2013 target of 50 basis points of lag in regulated operations.

That concludes my comments. Thank you for your participation this morning, and I will now hand the call back to Mike.

M. J. Chesser

Thanks, Jim. So to conclude, we hope that you can see that we've established a strong platform for delivering value to customers and shareholders. We view a competitive, sustainable and increasing dividend as a key driver of improved shareholder returns. We have attractive investment opportunities within our service territory and are well positioned for growth. And finally, we have achieved constructive outcomes and have confidence in our regulatory approach moving forward.

So thank you for your attention this morning. And Terry, Jim and I at this point will be happy to answer any questions that you may have.

Question-and-Answer Session



[Operator Instructions] Your first question comes from the line of Erica Piserchia with Wunderlich Securities.

Erica Piserchia - Wunderlich Securities Inc., Research Division

A couple of questions. I just want to make sure I'm clear on what you've said with regard to your 2012 guidance, which I understand you're reiterating. So I'm trying to put that together with the comments that you mentioned on some of the wind potentially. And I think what I heard was that if you decide to go ahead with actual ownership of these 100 -- up to 100 megawatts that, that would not change that guidance. Is that to say that you had something in the guidance previously for wind ownership or?

James C. Shay

Yes, we didn't have anything in but it really has a de minimis impact on 2012.

Erica Piserchia - Wunderlich Securities Inc., Research Division

Okay. So most of the -- okay. All right. And then with regard to your sales expectations I guess for '12, it seems like you're still kind of taking the 50 to 150 basis points. What is that -- can you just remind you what that equates to in terms of the percentage, volume increase?

James C. Shay

Just kind of to reset, we went into Analyst Day with -- we were down 2%, and so we've forecasted we'd be flat for the rest of the year and we would be down 1%. So in establishing our initial guidance range, we said, we thought we might get that 1% growth back. So we've seen a little bit of growth to improve our current year estimates. So we're kind of still in that same view for 2013. And we'll work through our planning process obviously during the quarter and tighten up the range for next year. But 1% on our retail revenue would be about $20 million. So 50 basis points would be about $10 million in volume.

M. J. Chesser

To give you a little bit of color, Erica, there has been some pickup in commercial activity in the region. I mean, we were really excited to see that Ford has agree -- has decided to add a second line to their automotive plant. Cerner is a big customer that has continued to expand in the medical records area. There's increasing activity in the animal health and life sciences area. Honeywell has a nuclear manufacturing plant south of the city that is expanding. So -- and these kinds of things we expect will ultimately lead to job growth and as you know, residential growth typically trails commercial growth.

Erica Piserchia - Wunderlich Securities Inc., Research Division

Sure, yes. So just to understand that. You had down 1% at Analyst Day and now you're expecting some growth in that numbers. Is that right?

James C. Shay

Well, 1% in Analyst Day is now 50 to 100 basis points of growth. So basically, the same range of growth. We picked up a little bit the second half of this year. And so you might -- we're basically kind of holding to the view we had at Analyst Day in terms of '12.

Erica Piserchia - Wunderlich Securities Inc., Research Division

In terms of '12. Okay. So there's no offset. It's not like you're expecting a little bit better growth in sales in '12, and that there's some offset somewhere to that?

James C. Shay

Not at this point.

M. J. Chesser

We're maintaining a fairly conservative outlook.

Erica Piserchia - Wunderlich Securities Inc., Research Division

Okay. Got it. Second question, just quickly on the LaCygne order that you received in Kansas. Can you just talk us a little bit through -- I mean, I know you mentioned it's $281 million of jurisdictional allocation there. Do you feel as though you're booking, I think, CWIP there, but there's a cash impact. Are you comfortable with that cash impact relative to your expectations at Analyst Day in terms of financing and coverage ratios and all of that going forward?

Terry Bassham

Absolutely, Erica. This is Terry. We had certainly been hopeful to get the rider but are comfortable with the CWIP process. We see a little more lag in recovery, we have to file on cases to get the CWIP treatment. But we've baked all that in and we're confident with our metrics even without the rider.

Erica Piserchia - Wunderlich Securities Inc., Research Division

Okay. And just a last question on the corporate and other, you mentioned this general tax issue. Can we just get a little bit more detail on what that was?

James C. Shay

Yes. That was a tax receivable on the books at the time of the Aquila acquisition, which has been essentially resolved or written off. So it's a nonrecurring item.


[Operator Instructions] Your next question comes from the line of Andy Levi with Caris.

Andrew Levi - Caris & Company, Inc., Research Division

On the wind generation, when do you think we'll hear a decision on that?

M. J. Chesser

Well, we hope to have that fairly soon. We're actively pursuing that. It's just not finalized at this point in time.

Andrew Levi - Caris & Company, Inc., Research Division

Okay. Can you give us some type of range as far as what the capital investment would be?

Terry Bassham

Well, we'd rather not. I mean, In general, we're going to be -- we're coming out with a press release around terms as soon as we complete the negotiations. So I could give a range but it's market, is what I would say. And we need to finalize our negotiations with them before we make a formal announcement about our vendors in our project and the final costs. So we'll be doing that quickly though as Mike said.

Andrew Levi - Caris & Company, Inc., Research Division

And that would be financed, 50% equity, 50% debt. Is that kind of how to look at it? Or would it be a little bit different ratios?

James C. Shay

We really just need kind of talk in terms of kind of consistent with our current capital structure. But yes, I think the number should make sense.


Your next question comes from the line of John Ally [ph] with Decade Capital.

Unknown Analyst -

I apologize if I missed this, there's quite a bit going on this morning. But just to be clear, the load for 2012, what's your expectation now in terms of growth?

James C. Shay

0.5% to 1% for next year.

Unknown Analyst -

Positive. And what about '13, same?

James C. Shay

No additional comments on '13 at this point. We really don't have a range out there. As we indicated in Analyst Day, we're going to try and manage cost of service to expected volumes and still targeting 50 basis points of regulatory lag. So we don't really have a '13 number out there yet.

Unknown Analyst -

Got you. Residential looks to be down quite a bit on a weather-normalized basis for the year. What are some of the trends that you're seeing there? Is that just energy efficiency? Or is there something else?

M. J. Chesser

Well, there's 2 things. It was down significantly in the first quarter because of raise in the electric heat rate that was required by the Kansas Commission, where we have a lot of electric heat customers. So we thought that was an aberrant quarter. The rest of the quarters have been down, I guess, somewhere around 1%, 1.5%, something like that. But as I indicated, the rise in the commercial activity that we're seeing, it typically precedes any rise in residential growth. So I think the numbers we have are conservative. There is some potential upside to them.

Unknown Analyst -

Okay. Excellent. And as far as the wind PPA goes, you would get a purchase preapproved by the commission, correct?

Terry Bassham

No. In this instance we wouldn't necessarily go through a pre-approval process. We're executing at market terms consistent with RPS requirements, renewable requirements in those states. And so I think we're confident moving forward without pre-approval.


Your next question is a follow-up from the line of Andy Levi with Caris.

Andrew Levi - Caris & Company, Inc., Research Division

Yes, I did actually have one more question. On the property tax rider that you plan to file, I guess, fairly shortly. How long is the regulatory process on that?

Terry Bassham

A few months. It's a pretty straightforward process. As we've said before, we're looking at riders which were already preapproved in form of the state. So it takes a few months to get it processed and should be effective, I don't know, probably February of 2012.

Andrew Levi - Caris & Company, Inc., Research Division

And how much you think the benefit of something like that would be to earnings?

Terry Bassham

I think the delta there is a little over $4 million.

Andrew Levi - Caris & Company, Inc., Research Division

$4 million. And that's I guess, after-tax, right? Okay, great.


At this time, there are no further questions and I would like to hand the call back over to Mike Chesser for any closing remarks.

M. J. Chesser

Okay. Once again, thanks for your time this morning. We look forward to visiting with many of you at the EI Conference next week. I hope you have a good weekend and go Chiefs.


This concludes today's Great Plains Energy Third Quarter 2011 Earnings Call. You may now disconnect.

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