[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