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KEPCo - Westar Sign Contract

Westar Energy

Westar Media contact:

Gina Penzig, senior communications media representative
Phone: 785.575.8089

Kansas Electric Power Cooperative

Investor contact:
Bruce Burns, director, investor relations
Phone: 785.575.8227

KEPCo Media contact:
Phil Wages,
director, member services & external affairs
Phone:  785.273.7010

 

Westar Energy, KEPCo Enter 38-Year Energy Agreement

 

TOPEKA, Kan., Aug. 7 - Westar Energy, Inc. (NYSE:   WR) and Kansas Electric Power Cooperative (KEPCo) announced today that KEPCo will continue to purchase a significant amount of its electricity requirements from Westar during the next 38 years. The sales agreement was signed Monday, Aug. 6, 2007.

 

KEPCo generates and transmits power for its 19 rural electric cooperative members, which collectively provide electricity to more than 300,000 rural homes and businesses in the eastern two-thirds of Kansas. The individual co-ops depend upon KEPCo to provide a long-term, reliable and economical energy supply.

 

"We are pleased to continue our long-standing relationship with KEPCo," Doug Sterbenz, executive vice president and chief operating officer for Westar Energy, said. "Its members will benefit from Westar's reliable, low-cost generation and be shielded from the swings experienced buying energy on the open markets."

 

"KEPCo has long realized that using short-term purchase power agreements, relying on increasing amounts of natural gas-fired generation, and purchasing power in the spot market are not prudent business plans," said Stephen Parr, executive vice president and chief executive officer.

 

KEPCo will purchase electricity based on Westar Energy's cost to produce the power and combine it with KEPCo's own resources to meet all of its members' electrical needs. Westar will also assist KEPCo in managing its resources, a process that is beneficial to both KEPCo and Westar. The contract would become effective once reviewed by Federal Energy Regulatory Commission and the Rural Utilities Service.

 

"KEPCo's valuable relationship with Westar is a key component of the power supply for our members. This purchase exemplifies how KEPCo is looking out for the long-term interests of our members and the rural consumers we serve," Parr said.

 

Westar Energy serves about 670,000 Kansas retail customers within its service territory, which spans the eastern half of Kansas. Nearly 70 percent of the electricity it produces serves those customers directly. More than 80 percent of the electricity produced by Westar Energy is sold in Kansas. Profits from electricity produced at Westar's energy centers that is sold at wholesale are used to reduce the rates its retail customers pay.

 

"Our neighboring municipal and rural electric utilities can benefit from our reliable, low-cost generation, and our customers benefit as those sales help to offset our costs," Sterbenz said. "Four years ago, we shed our non-utility assets and reaffirmed that our focus was to be a Kansas electric utility. This commitment reaches beyond serving our retail customers."

 

Like many utilities, Westar Energy is entering a phase of construction to ensure electricity is available to meet customers' growing needs and to maintain required capacity margins that protect system reliability.

 

"The electric utility industry is on the cusp of unprecedented expansion in the next few years," Sterbenz said. "Electricity providers are wise to be looking at long-term solutions for their customers."

 

KEPCo members: Ark Valley Cooperative Association, Hutchinson; Bluestem Electric Cooperative, Inc., Wamego; Brown-Atchison Electric Cooperative Association, Inc., Horton; Butler Rural Electric Cooperative Association, Inc., El Dorado; Caney Valley Electric Cooperative Association, Inc., Cedar Vale; CMS Electric Cooperative, Inc., Meade; D.S. & O. Rural Electric Cooperative Association, Inc., Solomon; Flint Hills Rural Electric Cooperative Association, Inc., Council Grove; Heartland Rural Electric Cooperatives, Inc., Girard; Leavenworth-Jefferson Electric Cooperative, Inc., McLouth; Lyon-Coffey Electric Cooperative, Inc., Burlington; Ninnescah Rural Electric Cooperative Association, Inc., Pratt; Prairie Land Electric Cooperative, Inc., Norton; Radiant Electric Cooperative, Inc., Fredonia; Rolling Hills Electric Cooperative, Mankato; Sedgwick County Electric Cooperative Association, Inc., Cheney; Sumner-Cowley Electric Cooperative Association, Inc., Wellington; Twin Valley Electric Cooperative Association, Inc Altamont; Victory Electric Cooperative Association, Inc., Dodge City.

 

Westar Energy, Inc. (NYSE:   WR) is the largest electric utility in Kansas, providing electric service to about 669,000 customers in the state. Westar Energy has about 6,000 megawatts of electric generation capacity and operates and coordinates approximately 33,000 miles of electric distribution and transmission lines. For more information about Westar Energy, visit us on the Internet at http://www.WestarEnergy.com.

 

KEPCo, headquartered at Topeka, Kan., was incorporated in 1975 as a not-for-profit generation and transmission cooperative. It is KEPCo's responsibility to procure an adequate and reliable power supply for its 19 distribution rural electric cooperative members at an economical cost. For more information about KEPCo, visit us on the Internet at http://www.kepco.org

 

Forward-looking statements: Certain matters discussed in this news release are "forward-looking statements." The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like "believe," "anticipate," "target," "expect," "pro forma," "estimate," "intend," "guidance" or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although Westar Energy believes that its expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. Therefore, actual results could vary materially from what we expect. Please review our Form 10-K for the period ended Dec. 31, 2006 for important risk factors that could cause results to differ materially from those in any such forward-looking statements. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made except as required by applicable laws or regulations.

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