Westar Energy’s 2013 Annual Transmission Revenue Requirement Meeting

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Westar Energy’s 2013Annual Transmission Revenue Requirement

Meeting

October 30, 2012

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Today

• Status Report: Transmission Projects

• Quick Review of the Past

• The Results: 2013 ATRR

• What Do These Results Mean to Our Customers?

• Protocol Review

• Meter Cost Recovery Policy

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20072008200920102011201220132014

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Transmission Investment

Projected Projected

Mil

lion

s $

Projected

0

50

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014

70

150 160

200165

145

260

210

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Future Projects in the Southwest Power Pool

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Quick Review: The Formula

• Gross Revenue Requirement (GRR) includes:• Projected Transmission Plant In-Service• Projected Transmission O&M• Projected Transmission Depreciation Expense• Taxes• Return

• Net Revenue Requirement adjusts the GRR for:• Revenue Credits received for Point-to-Point Transmission

Service• “Rent” received (i.e. pole attachments)• True-Up for prior year’s difference between actual and

projected, including interest

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Quick Review: The Past

• 2009 was the first ATRR that included the forward-looking, revised formula

• History of true-up adjustments:• -$17.8 M was applied in the 2011 ATRR, for 2009 business• $4.5 M was applied in the 2012 ATRR, for 2010 business• -$9.8 M will be applied in the 2013 ATRR, for 2011 business

• Key aspect of true-up amounts: O&M• The TFR calculates a projected O&M based on the

percentage increase in Transmission Plant times the actual O&M from the previous actual year

• This function of projecting O&M is part of the FERC-approved TFR

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The Results: ATRR for 2013

Westar’s Gross Rev. Requirement $230,234,224

Revenue Credits ($ 22,198,015)

True-Up from 2011 ($ 9,786,991)

Westar’s Net Rev. Requirement $198,249,218

SPP’s BPF Rev. Requirement* ($ 64,795,034)

SPP Zonal Rev. Requirement** $133,454,184

* Funds collected under Schedule 11** Resulting rates go into effect with January 1, 2013, business

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The Results: What Does this Mean to You?

Example of a Customer’s Estimated Transmission Costs, 2012 vs. 2013

Customer’s 2011 Load Ratio Share .00475

2012 Westar Zonal Rev. Req., plus SPP Schedule 11* $182,198,978

Customer’s Annual Transmission Service Charge (before Ancillary Services and Fees)

$ 865,445

Customer’s 2012 Load Ratio Share .00475

2013 Westar Zonal Rev. Req., plus SPP Schedule 11* $183,038,901

Customer’s Estimated Annual Transmission Charge (before Ancillary Services and Fees)

$ 869,434

Estimated Difference + .46%

* Includes Westar’s respective Zonal ATRR plus the most recent information posted in Attachment H of SPP’s OATT; amounts in Attachment H vary throughout the year, depending on activities of other TOs in SPP

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Formula Protocols: Annual Update

• Today: October 30, 2012

• Comments and questions are preferred by November 20, 2012, so we can review and revise the ATRR if necessary

• If necessary, revised ATRR will be posted by November 30, 2012

• Send comments or questions via e-mail to:– Sheila Gropp at [email protected]– Please cc: [email protected] and

[email protected]

• SAVE THE DATE FOR THE 2012 TRUE-UP MEETING: June 25, 2013

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Meter Cost Recovery Policy

• Purpose: To assure fair, consistent treatment of all Transmission Customers for meter-related costs

• Key Aspects: – Outlines recoverable capital expenses:

• New meter points• Failed equipment• Upgrades (requested by TC)• Back-up meter points

– Outlines recoverable O&M expenses• Meter service fee• TBD and filed with FERC before charged

• Effective Date: September 1, 2012

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Questions?