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Great Plains will not play 'victim card' to address regulatory lag


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Great Plains will not play 'victim card' to address regulatory lag

will not"play a victim card" in its effort to address regulatory lag, particularlyin Missouri.

"We'regoing to be aggressive. And we have a plan. We're confident in it," companyCEO Terry Bassham said during the May 6 earningscall. "But obviously, if we continue to see regulatory responses less thancomplete in our recovery, we'll have to look at other ways to reduce cost, bothcapital and O&M as we go."

Whilea legislative path is more sensible in the longer term, Great Plains CFO and SeniorVice President of finance and strategy Kevin Bryant pointed out that in the interim,rate case filing is the available tool that the company can use to reduce lag.

In aMay 6 investor note, Guggenheim Securities analysts said the "buy"-ratedcompany is likely to focus on rapid rate case filing and that Kansas City Power & Light Co.'s abbreviated rate casein Kansas is expected by November and the anticipated more material KCP&L ratefiling in Missouri in the third or fourth quarter of 2016.

"Rapidrate case cycles are typically never well received by investors, given the obviousnoise that surrounds the procedural processes – that said, we do expect [Great PlainsEnergy] filings to be smaller, more routine and less headline popping," Guggenheimanalysts said.

GreatPlains Energy, through its KCP&LGreater Missouri Operations Co. subsidiary, currently has two electricbase rate increase requests pending before the Missouri Public Service Commission.The PSC shortened the rate case calendar to 10 months from 11, which will most likelyallow the new retail rates to be effective late December. (Case Nos. ER 2016-0156and ER-2016-0156)

A driver in Great Plains Energy's rapid rate case filing strategyis the likely failure to pass in Missouri of a comprehensive legislation that willmodernize the regulatory process for electrical corporations. House Bill 2689 willadd new sections relating to Missouri's energy policies, including "providinga meaningful opportunity for electrical corporations to recover on a timely basisthe actual, prudently incurred costs of providing reliable electric service."

Bassham said the bill has enough support to pass, but it hasbeen stalled at the Senate after a small group of senators organized a filibusterto block it. This will most likely prevent the passing of the bill before the legislationsession ends May 13.

"[If] the bill fails in this session, we remain committedto work towards comprehensive regulatory reform in Missouri and expect to file legislationagain next year," Bassham added.