[Federal Register Volume 66, Number 80 (Wednesday, April 25, 2001)]
[Notices]
[Pages 20842-20843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10231]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27380]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

April 18, 2001.
    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 May 14, 2001, to the Secretary,

[[Page 20843]]

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 May 14, 2001, the 
application(s) and/or declaration(s), as filed or as amended, may be 
granted and/or permitted to become effective.

Western Resources, Inc. (70-9867)

    Western Resources, Inc. (``WRI'' or ``Applicant''), 818 South 
Kansas Avenue, Topeka, Kansas 66612, a Kansas public utility holding 
company claiming an exemption from registration under section 3(a) of 
the Act by rule 2, has filed an application under sections 9(a)(2) and 
10 of the Act.
    WRI is engaged in the production, purchase, transmission, 
distribution and sale of electric energy in the State of Kansas. WRI's 
utility operations, conducted through KPL, a division of the 
company,\1\ and Kansas Gas and Electric Company (``KGE''), a wholly 
owned electric public utility subsidiary of WRI, provide electric 
service to approximately 636,000 customers in 432 communities in the 
State of Kansas. KGE owns a 47% interest in Wolf Creek Nuclear 
Operating Corporation (``WC''), which operates the Wolf Creek 
Generating Station on behalf of its owners.\2\ Through its ownership 
interest in ONEOK Inc.,\3\ WRI has an approximately 45% economic 
interest in a natural gas distribution company that has 1.4 million 
customers.
---------------------------------------------------------------------------

    \1\ KPL is the trade name for WRI's electric business.
    \2\ Applicant states that WC relies on a no-action letter issued 
by the Commission's staff in 1997 for the proposition that WC should 
not be classified as a utility. See Wolf Creek Operating 
Corporation, SEC No-Action Letter (November 24, 1997).
    \3\ WRI's ownership is comprised solely of up to 9.9% of the 
voting stock and shares of nonvoting convertible preferred stock of 
ONEOK. WRI states that it has relied on a no-action letter issued by 
the Commission's staff in 1997 for the proposition that ONEOK is not 
a subsidiary of WRI and that WRI does not control ONEOK. See Western 
Resources, Inc., SEC No-Action Letter (Nov. 24, 1997).
---------------------------------------------------------------------------

    Westar Generating, Inc. (``Westar Generating''), a wholly owned 
subsidiary of WRI, is a Kansas corporation that will hold an undivided 
40% ownership interest in a 2X1 F class combined cycle generation 
facility that is under construction at The Empire District Electric 
Company State Line station (``State Line''), which is located on the 
Missouri side of the Kansas-Missouri state line just west of Joplin, 
Missouri. Westar Generating will hold this interest directly in the 
real property and assets that make up the generating station. The 
Empire District Electric Company (``Empire''), a nonaffiliate of WRI, 
holds the remaining undivided 60% ownership interest and operates the 
facility under the Agreement for the Construction, Ownership and 
Operation of State Line Combined Cycle Generating Facility (``Operating 
Agreement''). Westar Generating and Empire (collectively, ``Owners'') 
hold their interests as tenants in common.
    WRI entered into the Operating Agreement on July 26, 1999 as a 
means of acquiring a generation source to meet the generation needs of 
KPL. Empire is constructing State Line under the Operating Agreement. 
State Line is not currently operational, and is being upgraded from its 
original configuration of a single Westinghouse 501-F.C. turbine 
installed in 1997 to a Westinghouse 501-F.D1. Empire is adding another 
501-F.D2, two heat recovery steam generators, a steam turbine, a 
cooling tower, and associated equipment to create the 2X1 F facility. 
The new combined cycle facility will have a nominal rating of 500 MW. 
State Line began operations in June 1997 and was removed from service 
on September 11, 2000 to facilitate the conversion.
    Westar Generating will acquire its interest in State Line in two 
phases. In the first phase, which has already occurred, Westar 
Generating acquired a 40% interest in the portion of State Line's 
assets under construction. The second phase, Westar Generating's 
acquisition of a 40% interest in the portion of the State Line assets 
that existed prior to the start of construction, will occur sometimes 
prior to State Line's resumption of commercial operation. Westar 
Generating will acquire its 40% interest in the already existing assets 
in the immediate future and before State Line resumes commercial 
operation.
    WRI is seeking authority to retain its 40% indirect interest in 
State Line when the plant resumes commercial operation. WRI states that 
while State Line is under construction, Westar Generating is not an 
electric utility company, as defined by section 2(a)(3) of the Act. WRI 
also states that Westar Generating will become an electric utility 
company upon State Line's resumption of commercial operations. 
Therefore, Westar Generating will become a wholly owned subsidiary 
electric public utility company of WRI. The Owners began testing of the 
combined cycle facility in March 2001 and depending on the success of 
the trials, anticipate resuming commercial operation as early as May 
15, 2001.
    WRI and Westar Generating have entered into a power purchase 
agreement under which Westar Generating will sell its entire 40% 
entitlement to the output of State Line to WRI under a cost-based 
tariff which has been submitted for approval to the Federal Energy 
Regulatory Commission. In turn, WRI will sell State Line's output to 
KPL's retail customers and other customers. WRI will receive State 
Line's output at the high voltage side of State Line's step-up 
transformer and, via a thirty mile 200 MW point-to-point firm ten-year 
contract path with the Southwest Power Pool, transmit it to WRI's 
electric grid. WRI states that it will dispatch State Line using the 
same mechanisms and same system operator as it does to operate its 
existing generation. WRI will also purchase power generated during the 
testing of State Line.
    Westar Generating also owns a 34% share in nonutility facilities 
such as offices, maintenance buildings and fire protection equipment.
    Westar Generating's cost associated with acquiring its interest in 
State Line, including its 34% interest in the nonutility assets, will 
be equal to its share of the costs of constructing State Line. These 
costs will be approximately $104,292,841.
    For the year ended December 31, 2000, WRI reported consolidated 
revenues of approximately $2,368,476,000 and consolidated utility 
revenues of $1,829,132,000. WRI's net income reported for the same 
period was $136,481,000 and WRI's utility operating income was 
$262,435,000. Consolidated assets and consolidated utility assets of 
WRI at December 31, 2000 were $7,767,208,000 and $4,632,479,000, 
respectively.
    After State Line commences commercial operation. WRI states that it 
will continue to claim an exemption under section 3(a) by rule 2.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-10231 Filed 4-24-01; 8:45 am]
BILLING CODE 8010-01-M