1

Westar Energy’s 2012Annual Transmission Revenue Requirement

Meeting

October 25, 2011

2

Today

• Status Report: Transmission Projects

• Quick Review of the Past

• The Results: 2012 ATRR

• What Do These Results Mean to Our Customers?

• Protocol Review

3

20072008200920102011201220132014

4

Transmission Investment

Projected Projected

Mil

lion

s $

Projected

0

50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013

70

150 160

200 195 195180

5

Future Projects in the Southwest Power Pool

6

Quick Review: The Formula

• Gross Revenue Requirement (GRR) includes:• Projected Transmission Plant• 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

7

Quick Review: The Past

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

• The first substantial true-up adjustment of -$17.8 M was applied in the 2011 ATRR, for 2009 business:• Actual O&M expenditures in 2009 were lower than projected• Actual revenue credits received for PTP service in 2009

were higher than projected

• Therefore, the net ATRR increase from 2010 to 2011 was 12% (it would have been 25% without the -$17.8 M adjustment)

8

The Results: ATRR for 2012

Westar’s Gross Rev. Requirement $203,102,936

Revenue Credits ($ 21,496,752)

True-Up from 2010 $ 4,453,094

Westar’s Net Rev. Requirement $186,059,278

SPP’s BPF Rev. Requirement* ($ 38,125,719)

Westar’s Zonal Rev. Requirement** $147,933,559

* Funds collected under Schedule 11** Resulting rates go into effect with January 1, 2012, business

9

The Results: What Does this Mean to You?

Example of a City’s Estimated Transmission Costs, 2011 vs. 2012

City’s 2010 Load Ratio Share .00475

2011 Westar Zonal Rev. Req., plus SPP Schedule 11* $143,996,748

City’s Annual Transmission Service Charge (before Ancillary Services)

$ 683,787

City’s 2011 Load Ratio Share .00475

2012 Westar Zonal Rev. Req., plus SPP Schedule 11* $169,907,954

City’s Estimated Annual Transmission Charge (before Ancillary Services)

$ 806,830

Estimated Difference + 18.0%

* 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

10

Formula Protocols: Annual Update

• Today: October 25, 2011

• Comments are accepted through November 30, 2011

• If necessary, revised ATRR will be posted on November 30, 2011

• Send comments or questions via e-mail to:– Sheila Gropp at sheila.gropp@westarenergy.com– Please cc: leslie.wines@westarenergy.com

11

Summary

• Thank you very much for participating in today’s meeting!

• We are here to assist in any way possible.

• Please let us know if you have any questions.

• Safe travels home!

• SAVE THE DATE FOR THE 2011 TRUE-UP MEETING:

June 26, 2012