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Great Plains Energy Incorporated (GXP)
Q2 2013 Earnings Call
August 09, 2013 9:00 am ET
Kevin E. Bryant - Vice President of Investor Relations & Strategic Planning and Treasurer
Terry D. Bassham - Chairman of the Board, Chief Executive Officer and President
James C. Shay - Chief Financial Officer and Senior Vice President of Finance & Strategic Development
Scott H. Heidtbrink - Chief Operating Officer of Kansas City Power & Light Company and Executive Vice President of Kansas City Power & Light Company
Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division
Charles J. Fishman - Morningstar Inc., Research Division
Paul T. Ridzon - KeyBanc Capital Markets Inc., Research Division
Michael Goldenberg - Luminus Management, LLC
Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division
Michael J. Lapides - Goldman Sachs Group Inc., Research Division
Previous Statements by GXP
» Great Plains Energy Incorporated Management Discusses Q1 2013 Results - Earnings Call Transcript
» Great Plains Energy Incorporated Management Discusses Q4 2012 Results - Earnings Call Transcript
» Great Plains Energy Incorporated Management Discusses Q3 2012 Results - Earnings Call Transcript
Kevin E. Bryant
Thank you, Burnell. Good morning, everyone, and thank you for joining us for our Second Quarter 2013 Earnings Conference Call. Let me begin by introducing the members of the Great Plains Energy management team who are here with me today. We have Terry Bassham, Chairman and Chief Executive Officer; and Jim Shay, Senior Vice President and Chief Financial Officer, who, in a few moments, will both provide an overview of our second quarter results. Scott Heidtbrink, Executive Vice President and Chief Operating Officer of KCP&L, is also with us this morning and will be available during the question-and-answer portion of today's call.
Before we begin, I must remind you of the uncertainties in any forward-looking statements in our discussion this morning. Slide 2 and the disclosure in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations.
I also want to remind everyone that we issued our earnings release and second quarter 10-Q after the market closed yesterday. These items are available, along with today's slides and supplemental financial information regarding the quarter, on the main page of our website.
With that, I'll now hand the call over to Terry.
Terry D. Bassham
Thanks, Kevin. Good morning, everyone. Appreciate you joining us.
Yesterday, we announced second quarter earnings of $63.2 million, or $0.41 per share, compared with earnings of $57.7 million, or $0.41 per share, last year. Favorable drivers for the quarter included new retail rates, which became effective in January this year, and lower interest expense.
Weather was unfavorable compared to the second quarter of 2012, with cooling degree days closer to normal this year versus last year's warmer-than-normal weather.
With the solid financial performance in the second quarter, we are reaffirming our 2013 earnings per share range of $1.44 to $1.64. Jim will provide more details on the quarter in his comments.
We continue to make regulatory and operational progress on Transource Energy, our joint venture with American Electric Power. Just this week, the Missouri Public Service Commission issued an order authorizing the transport of our 2 Southwest Power Pool regional projects to Transource Missouri, thus, allowing Transource Missouri to construct, own and operate the projects.
As a reminder, following this approval in Missouri, KCP&L and GMO must also obtain approval from the SPP to novate the projects to Transource. The SPP will then submit its approval of novation to FERC for final approval. We anticipate receiving the final regulatory approvals from the SPP and FERC in transferring the project to Transource in the next 6 months.
In June, after an extensive year-long information gathering process, the final route for the Sibley to Nebraska City line was announced. GMO's share of the final route is approximately 135 miles of the 180-mile project, and the line is expected to be in service in 2017. Construction on the 30-mile I10 to national project is underway and is expected to be in service in 2015.
Turning to our Wolf Creek nuclear unit, the RFP that we and our co-owners initiated last year for a formal review of options to manage the unit, was recently completed. After evaluating the results, the owners concluded that the assessment did not provide sufficient long-term benefits for our stakeholders to warrant a change. Wolf Creek is an important asset in our generation portfolio, and we will continue to work with our co-owners and with Wolf Creek to provide low-cost, reliable power for our customers.
In that regard, the Nuclear Regulatory Commission recently issued an inspection report on the loss of offset power to Wolf Creek that occurred in the first quarter of 2012. The NRC determined Wolf Creek's evaluation of the incident was comprehensive and the inspection objectives were met. The report also indicates improved performance, and that NRC's increased level of oversight at the plant, stemming from the loss of offset power, will be reduced. We're pleased with the progress, but we'll continue working with our co-owners to further improve Wolf Creek's operating performance.
Turning to Slide 5. In June, KCP&L and GMO filed annual update to their integrated resource plans that are included preferred plans to meet the electricity need of our customers in the years ahead. As a reminder, these are annual compliance filings required by the Missouri Public Service Commission, and as part of the reprocess, we will receive feedback from the commission staff and other stakeholders.