[Federal Register Volume 66, Number 97 (Friday, May 18, 2001)]
[Notices]
[Pages 27704-27711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12507]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27397]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

May 11, 2001.
    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 June 5, 2001, 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 June 5, 2001, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

National Grid USA, et al. (70-9089)

    National Grid USA (``Grid''), a registered public utility holding 
company, and its electric public utility subsidiary companies, 
Massachusetts Electric Company), (The Narragansett Electric Company, 
New England Electric Transmission Corporation, New England Hydro-
Transmission Electric Company, Inc., New England Hydro-Transmission 
Corporation, New England Power Company, New England Energy 
Incorporated, and National Grid USA Service Company, Inc. (``Service 
Company''), all located at 25 Research Drive, Westborough, 
Massachusetts 01582, and Granite State Electric Company, 407 Miracle 
Mile, Suite 1, Lebanon, New Hampshire 03766, Nantucket Electric 
Company, 25 Fairgrounds Road, Nantucket, Massachusetts 02554, and the 
Narragansett Electric Company, 280 Melrose Street, Providence, Rhode 
Island 02901 (collectively, ``Applicants'') have filed a post-effective 
amendment to their application-declaration under sections 6(a), 7, 
9(a), 10 and 12 of the Act and rule 43, 45 and 54 under the Act. The 
Commission issued a notice describing various proposed financing 
transactions on January 26, 2001 (Holding Co. Act Release No. 27340), 
and a supplemental order authorizing those transactions was issued on 
April 19, 2001 (Holding Co. Act Release No. 27381) (``April Order''). 
This supplemental notice describes Applicants' proposal to engage in

[[Page 27705]]

certain additional internal financing transactions as described below.
    In late April Order, the Commission, among other things, approved 
Service Company's request for authority to borrow up to $60 million 
(``Service Company Borrowing Limit'') through May 31, 2003 
(``Authorization Period''), either by issuing notes or commercial 
paper, or by borrowing from Grid's intrasystem money pool. As described 
in this supplemental notice, Applicants also request authority to meet 
Service Company's borrowing requirements, up to the Service Company 
Borrowing Limit, by direct loans from Grid to Service Company through 
the Authorization Period.
    These loans would be at the rate equal to the prime rate for Fleet/
Boston less 1%. Based on the 7.5% prime rate existing as of April 19, 
2001, the effective interest costs of these borrowings would be 6.5%. 
The loans would have no stated maturities, but the borrowings may be 
prepaid by the Service Company without penalty.

Conectiv, et al. (70-9095)

    Conectiv, a registered holding company, Conectiv's public-utility 
subsidiaries: Atlantic City Electric Company (``ACE''); Delmarva Power 
& Light Company (``Delmarva''); Conectiv Atlantic Generation, L.L.C. 
(``CAG''); and Conectiv Delmarva Generation, L.L.C. (``CDG'') \1\ 
(collectively, ``Utility Subsidiaries''); and Conectiv's nonutility 
subsidiaries (``Nonutility Subsidiaries''): ACE REIT, Inc. (``ACE 
REIT''); ATE Investment, Inc.; ATS Operating Services, Inc.; Atlantic 
Generation, Inc.; Atlantic Jersey Thermal Systems, Inc.; Atlantic 
Southern Properties, Inc.; Binghamton General, Inc., Binghamton 
Limited, Inc.; Conectiv Communications, Inc.; Conectiv Energy Holding 
Company (``CEH''); Conectiv Energy Supply, Inc.; Conectiv Mid-Merit, 
Inc.; Conectiv Operating Services Company; Conectiv Resource Partners, 
Inc.; Conectiv Services, Inc.; Conectiv Solutions, LLC; Conectiv 
Thermal Systems, Inc.; DCI I, Inc.; DCI II, Inc.; DCTC-Burney, Inc.; 
Delmarva Capital Investments, Inc.; Delmarva Services Company; King 
Street Assurance, Ltd. (``KSA''); Pedrick Gen., Inc.; Vineland Limited, 
Inc.; and Vineland General, Inc., all located at 800 King Street, 
Wilmington, Delaware 19899; and Conectiv Plumbing, L.L.C., located at 
621 Chapel Avenue, Cherry Hill, New Jersey 08034 (collectively, 
``Applicants''), have filed a post-effective amendment (``Post-
Effective Amendment'') under sections 6(a), 7, 9(a), 10, and 12(b) of 
the Act and rules 45, 53 and 54 under the Act, to its application-
declaration previously filed under the Act. Utility Subsidiaries and 
Nonutility Subsidiaries are referred to collectively as 
``Subsidiaries.''
---------------------------------------------------------------------------

    \1\ The Commission authorized the acquisition of CDG and CAG by 
order dated June 29, 2000 (Holding Co. Act Release No. 27192) 
(``GENCO Order'').
---------------------------------------------------------------------------

I. Background

    By order dated February 26, 1998 (Holding Co. Act Release No. 
26833), and by various supplemental orders\2\ (collectively, 
``Financing Orders''), the Commission authorized Conectiv and its 
subsidiaries to effect certain financing transactions through March 31, 
2002. These included: (1) The issuance by Conectiv of short-term debt 
in an aggregate amount not to exceed $1.3 billion less any amount of 
short-term debt issued by Delmarva under its authorization to issue up 
to $275 million of short-term debt; (2) the issuance by Conectiv of up 
to $250 million of long-term debt with the reservation of jurisdiction 
over an additional $750 million of long-term debt; \3\ (3) the issuance 
by Conectiv of common stock which, when combined with any long-term 
debt issued, does not exceed $500 million in the aggregate; \4\ and (4) 
the issuance by Conectiv of guaranties, letters of credit, expense 
agreements or other forms of credit support for the obligations of 
Subsidiaries in an aggregate amount not to exceed $350 million.
---------------------------------------------------------------------------

    \2\ These orders were issued on August 21, 1998 (Holding Co. Act 
Release No. 26907); September 28, 1998 (Holding Co. Act Release No. 
26921); October 21, 1998 (Holding Co. Act Release No. 26930); 
November 13, 1998 (Holding Co. Act Release No. 26941); December 14, 
1999 (Holding Co. Act Release No. 27111); and August 17, 2000 
(Holding Co. Act Release No. 27213).
    \3\ If this reservation of jurisdiction is released, the 
proceeds of any new issuance of long-term debt exceeding $250 
million must be used to reduce short-term debt.
    \4\ Conectiv has issued $250 million of long-term debt under the 
Financing Orders. Therefore, Conectiv may issue up to an additional 
$250 million of common stock and long-term debt.
---------------------------------------------------------------------------

    Financings authorized in the Financing Orders are subject to the 
following limitations (``Financing Parameters''): (1) Conectiv's 
consolidated common equity will be at least 20% of its total 
consolidated capitalization (``Common Equity Ratio''), as adjusted to 
reflect subsequent events that affect capitalization; (2) the effective 
cost of money on long-term debt securities will not exceed 300 basis 
points over comparable term U.S. Treasury securities and the effective 
cost of money on short-term debt securities will not exceed 300 basis 
points over the comparable term London Interbank Offered Rate 
(``LIBOR''); (3) maturity of indebtedness will not exceed 50 years; and 
(4) the underwriting fees, commissions, or similar remuneration paid in 
connection with the issue, sale or distribution of a security will not 
exceed 5% of the principal amount of the financing. Conectiv proposes 
that these Financing Parameters also apply to all transactions proposed 
by this Post-Effective Amendment.

II. Description of Proposed Transactions

A. Summary of Requests

    By this Post-Effective Amendment, Applicants request the following: 
(1) An extension of the effective period for all authorizations 
contained in the Financing Orders through September 30, 2003 
(``Authorization Period''); (2) an increase in the amount of short-term 
debt that Conectiv is authorized to have outstanding during the 
Authorization Period from $1.3 billion to $2.0 billion, with Conectiv 
permitted to issue securities during the Authorization Period so long 
as the Common Equity Ratio is at least 20% \5\ (3) an increase in the 
amount of guaranties, letters of credit and other forms of credit 
support that Conectiv can offer to third parties on behalf of the 
obligations of Subsidiaries from $350 million to $1.5 billion and the 
addition of obligations of certain nonaffiliated third parties to the 
obligations that may be guaranteed; (4) the establishment of special 
purpose direct or indirect subsidiaries of CEH (``New Utility 
Subsidiaries'') and the acquisition of utility property by CDG, CAG and 
the New Utility Subsidiaries in an amount not to exceed $1 billion in 
the aggregate; (5) the issuance of up to $1 billion of debt and equity 
securities in the aggregate by CDG, CAG and the New Utility 
Subsidiaries to their respective parent companies (``GENCO 
Securities''), and the acquisition of the GENCO Securities by each of 
these parent companies; (6) the issuance of up to $1 billion of debt 
and equity securities in the aggregate by CDG and CAG's parent company, 
CEH, to Conectiv in order to fund CEH's acquisition of the securities 
issued by its subsidiaries; and (7) participation in the Conectiv 
System Money Pool (``Money Pool'') by the New Utility Subsidiaries, 
with aggregate Money Pool borrowings by CDG, CAG and the New Utility 
Subsidiaries limited to $1 billion, less

[[Page 27706]]

the amount of any GENCO Securities issued to their respective parents.
---------------------------------------------------------------------------

    \5\ Conectiv's proposed short-term debt authorization would be 
exclusive of any short-term debt issued by Delmarva.
---------------------------------------------------------------------------

B. Proposed Increase in Short-term Debt Authorization

    Conectiv requests an increase in the aggregate amount of short-term 
debt it may issue at any one time outstanding during the Authorization 
Period to no more than $2 billion, exclusive of any short-term debt 
issued by Delmarva.\6\ Applicants state that the continued uncertainty 
of the timing of the receipt of certain funds, as described below, 
combined with the need to fund the ongoing operations of Conectiv and 
the Subsidiaries, require this increased short-term debt authorization.
---------------------------------------------------------------------------

    \6\ Delmarva would retain its authorization under the Financing 
Orders to issue up to $275 million of short-term debt.
---------------------------------------------------------------------------

    Applicants note that Delmarva and ACE entered into agreements to 
sell substantially all of Delmarva's generation assets and all of ACE's 
generation assets to third parties.\7\ However, these sales have not 
yet closed, and applicants state that they may be further delayed or 
modified. After ACE closes on the sales of its generation assets, it is 
expected that debt will be issued by a special purpose subsidiary of 
ACE and secured by regulatory assets created under the New Jersey 
Electric Discount and Energy Competition Act (``Securitized Debt'').\8\
---------------------------------------------------------------------------

    \7\ Applicants state that, under the Delaware, Maryland, 
Virginia and New Jersey electric industry restructuring legislation 
and the implementing rules, Delmarva and ACE are required to exit 
the business of generating electricity.
    \8\ The Securitized Debt will be issued under an order of the 
New Jersey Board of Public Utilities and an order of this Commission 
under an application to be filed later.
---------------------------------------------------------------------------

    The primary use of the funds from the sales of the generation 
facilities and the issuance of the Securitized Debt is planned to be 
short-term and long-term debt reduction, ACE and Delmarva equity 
repurchase and new investments. The additional short-term debt proposed 
in this Post-Effective Amendment will be used to bridge any further 
delays in these sales, to finance Conectiv's capital program, including 
the construction of mid-merit generation facilities, and for other 
general corporate purposes.\9\
---------------------------------------------------------------------------

    \9\ In addition, Conectiv states that it needs to maintain a 
liquidity facility for certain subsidiary variable rate demand 
bonds, and capacity to handle margin calls for energy trading 
operations and the requirement to be the provider of last resort in 
deregulated electricity markets.
---------------------------------------------------------------------------

    Applicants state that the types of short-term debt securities will 
include, but not be limited to, borrowings under one or more revolving 
credit facilities, commercial paper, short-term notes and bid notes. 
Interest rates on short-term debt will be comparable to interest rates 
on debt with like terms and maturities issued by companies with similar 
credit ratings, and in any case will not exceed 300 basis points over 
the comparable term LIBOR rate. The maturity of any short-term debt 
issued will not exceed 364 days or, if the notional maturity is greater 
than 364 days, the debt security will include put options at 
appropriate points to cause the security to be accounted for as a 
current liability under United States generally accepted accounting 
principles (``GAAP''). All short-term debt will be unsecured, ranking 
pari passu with other unsecured debt of Conectiv. Applicants state that 
it is highly unlikely that the increased level of short-term debt 
requested in this Post-Effective Amendment would reduce the common 
stock equity positions on a consolidated basis of Conectiv, ACE and 
Delmarva as detailed in exhibit H-3 to this Post-Effective Amendment 
through the Authorization Period.

C. Proposed Increase in Conectiv Guaranties

    Authorization is requested for Conectiv to enter into guaranties, 
obtain letters of credit, enter into support or expense agreements or 
otherwise provide credit support to third parties during the 
Authorization Period in an aggregate amount up to $1.5 billion 
(``Guaranty Limit'') with respect to: (1) The obligations of the 
Subsidiaries as may be appropriate to carry on their respective 
businesses; and (2) the obligations of certain nonaffiliated third 
parties in connection with certain lease transactions, as described 
below. Applicants state that the increased level will permit Conectiv 
to provide guaranties to vendors involved in the construction of mid-
merit generation plants, to lenders for potential financing 
transactions related to mid-merit plants and to counterparties for a 
higher level of energy trading activity.\10\ Conectiv also may issue a 
portion of the proposed guaranties in connection with the business of 
Conectiv's subsidiary, Conectiv Energy Supply, Inc. (``CESI''), which 
conducts the power marketing and trading operations of the Conectiv 
System.\11\ To the extent that any guaranties appear as short-term debt 
on Conectiv's balance sheet, that debt also would be included in the 
short-term debt limitation.
---------------------------------------------------------------------------

    \10\ Applicants state that obligations exempt under rule 45 are 
excluded from the Guaranty Limit. The issuance of guarantees will be 
subject to the limitations of the financing Order issued under rule 
53(c) authorizing Conectiv to invest up to $350 million in exempt 
wholesale generators, or rule 58(a)(1), as applicable. See Holding 
Co. Act Release No. 27213 (August 17, 2000).
    \11\ Conectiv states that it may wish to provide credit support 
in connection with the trading positions of CESI entered into in the 
ordinary course of CESI's energy marking and trading businesses. 
Applicants assert that the provision of parent guaranties by holding 
companies to affiliates in the generation and power marketing 
business is standard business practice.
---------------------------------------------------------------------------

    Conectiv proposes to guarantee certain obligations of non-
affiliated third parties in connection with a financial transaction 
known as a ``synthetic lease.'' Applicants state that the synthetic 
lease affords off-balance sheet accounting treatment but permits 
Conectiv to retain the tax benefits of ownership. Specifically, under 
such an arrangement, Conectiv would receive the tax benefits of 
depreciation but would not have to recognize such depreciation in its 
income statement. To implement a synthetic lease, Conectiv would lease 
certain mid-merit generation facilities, which may be either exempt 
wholesale generators (``EWGs'') or utility property, from a non-
affiliated third-party special purpose entity (``SPE'') established to 
finance construction of the generation facilities. The SPE would borrow 
on a short-term basis from a group of lenders to fund construction and 
Conectiv would guarantee a portion of the short-term debt of the SPE. 
These guarantees would be included under the Guaranty Limit.\12\
---------------------------------------------------------------------------

    \12\ Applicants state that the leased assets are not utility 
property for purposes; of state regulation. Therefore, the synthetic 
lease arrangement would not require the approval of any state public 
utility commission.
---------------------------------------------------------------------------

D. Proposed Formation of New Subsidiaries and Related Transactions

    Conectiv requests authorization to establish the New Utility 
Subsidiaries and for CDG, CAG, or the New Utility Subsidiaries to 
acquire up to an aggregate amount of $1 billion of utility property 
during the Authorization Period.\13\ Applicants assert that use of the 
New Utility Subsidiaries is necessary to provide operating and tax 
planning flexibility, and that the New Utility Subsidiaries may be 
corporations or limited liability companies wholly owned directly or 
indirectly by CEH.
---------------------------------------------------------------------------

    \13\ Conectiv's proposed acquisition of utility property is in 
addition to CDG's previously authorized reacquisition of certain 
utility assets by means of a like-kind exchange. See GENCO Order. 
This proposed acquisition also is in addition to Conectiv's 
authority under the Financing Orders to invest up to $350 million in 
EWGs.
---------------------------------------------------------------------------

    Conectiv intends to retain and develop additional flexible, low-
cost mid-merit generation to address competitive opportunities in the 
Mid-Atlantic region. As part of this business strategy, Conectiv has 
transferred certain net generating capacity to CDG

[[Page 27707]]

and CAG,\14\ and will pursue acquisition and development opportunities 
for additional CDG and CAG generation. This generation will be located 
within the region where Conectiv currently operates and participates in 
the power supply business.
---------------------------------------------------------------------------

    \14\ In the GENCO Order, the Commission authorized Conectiv, 
Delmarva and ACE to form CDG and CAG in order to hold certain net 
generating and related assets of Delmarva and ACE.
---------------------------------------------------------------------------

E. Proposed Financing of Utility Property; Participation by New Utility 
Subsidiaries in Conectiv System Money Pool (``Money Pool'')

    Conectiv expects to fund the construction of these mid-merit 
generating facilities using internally generated funds and short-term 
debt until such time as long-term debt may be issued. Applicants 
request authority: (1) For Conectiv to fund CEH, the subsidiary formed 
to hold CDG, CAG, and ACE REIT, an intermediate holding company parent 
of CAG; (2) for CEH in turn to fund CDG and ACE REIT; (3) for ACE REIT 
to fund CAG; and (4) for CDG and CAG to fund any New Utility Subsidiary 
formed by each through the issuance of debt or equity securities to, 
and the acquisition of those securities by, CDG's and CAG's respective 
parent company.
    The aggregate amount of securities issued by CDG, CAG or the New 
Utility Subsidiaries will not exceed $1 billion during the 
Authorization Period.\15\ Any debt issued by CDG, CAG or the New 
Utility Subsidiaries will mature in thirty years or less and will bear 
interest at a rate designed to approximate the lender's cost of money. 
This interest rate will not exceed 300 basis points over comparable 
term United States Treasury securities for long-term debt and the 
effective cost of money on short-term debt securities will not exceed 
300 basis points over the comparable term LIBOR rate.
---------------------------------------------------------------------------

    \15\ Under the GENCO Order, CEH is authorized to issue up to 
$750 million of equity or debt securities less any amount of debt 
issued by a CEH subsidiary directly to Conectiv, CDG is authorized 
to issue up to $150 million of equity or debt securities and ACE 
REIT and CAG each are authorized to issue up to $100 million of 
equity or debt securities. To consolidate all authorizations related 
to financing of or by subsidiaries under one file, Conectiv requests 
that increased authorizations be approved in this file and that the 
CEH, CDG, ACE REIT and CAG financing portion of the GENCO Order and 
the authorization for CEH, CDG, ACE REIT and CAG to participate in 
the Money Pool be deemed replaced by the order issued in this file.
---------------------------------------------------------------------------

    Applicants state that CDG, CAG and the New Utility Subsidiaries may 
finance all or part of the construction using borrowings from the Money 
Pool. To facilitate these borrowings, Applicants request authorization 
for the New Utility Subsidiaries to participate in the Money Pool.\16\ 
Aggregate Money Pool borrowings by CDG, CAG and the New Utility 
Subsidiaries, in combination with any debt or equity securities issued 
to their respective parents as described above, will not exceed $1 
billion during the Authorization Period. Applicants further state that 
the Money Pool borrowings will be made under the same terms and 
conditions as borrowings by existing Money Pool participants.
---------------------------------------------------------------------------

    \16\ The Commission approved the participation in the Money Pool 
of CEH, ACE REIT, CDG and CAG in the GENCO Order.
---------------------------------------------------------------------------

Kansas City Power & Light Company, et al. (70-9861)

    Great Plains Energy Incorporated (``GPE''), a newly formed Missouri 
holding company; Kansas City Power & Light Company (``KCPL''), an 
electric public utility company; Great Plains Power, Inc. (``GP 
Power''), KCPL's wholly owned nonutility subsidiary; KCPL Receivable 
Corporation (``KCPL Receivable''), KCPL's wholly owned special purpose 
entity all located at 1201 Walnut Street, Kansas City, Missouri 64106 
and KLT Inc. (``KLT''), 10740 Nall Street, Suite 230, Overland Park, 
Kansas 66211, KCPL's wholly owned intermediate holding company 
(collectively, ``Applicants'') have filed an application-declaration 
under sections 6(a), 7, 9(a)(1), 10, 11(b)(1), 12(b), 12(c), 13(b), 32, 
and 33 of the Act and rules 45(b), 46, 52, 53, 54, and 80-92 under the 
Act.
    Under a corporate reorganization (``Reorganization''), KCPL 
proposes to adopt a new corporate structure in which KCPL will become a 
wholly owned subsidiary of the newly formed Missouri holding company, 
GPE. Applicants state they are undertaking the Reorganization in 
response to the dramatic changes in the wholesale electric power 
market, the emergence of unregulated competitive generators, open 
access to the nation's transmission grid, and the appearance of 
competitive retail electricity markets in a significant percentage of 
the country. Upon completion of the Reorganization, GPE will register. 
In addition to the Reorganization, Applicants request post-
Reorganization financing authority and request approval for other 
intrasystem transactions.

I. Description of the Applicants

A. KCPL

    KCPL is an electric utility company engaged in the generation, 
transmission, distribution, and sale of electric energy in Missouri and 
Kansas. KCPL owns approximately 3,700 MW of generation and provides 
retail electric service to approximately 467,000 customers in Kansas 
and Missouri, serving retail customers in the region in and around the 
Kansas City metropolitan area. KCPL also engages in limited gas 
brokering activities.
    KCPL is subject to the regulatory jurisdiction of the Missouri 
Public Service Commission (``MPSC'') and the Corporation Commission of 
the State of Kansas (``KCC'') with respect to its retail operations. 
KCPL also is subject to regulation of the Federal Energy Regulatory 
Commission (``FERC'') with respect to its wholesale and transmission-
related operations and the Nuclear Regulatory Commission (``NRC'') with 
respect to licensing and operation of its nuclear generating units.

B. Nonutility Subsidiaries

    KCPL wholly owns the following nonutility subsidiaries 
(``Nonutility Subsidiaries''): WYMO Fuels, Inc. (``WYMO''), a Missouri 
corporation that was established to acquire and develop coal properties 
in Wyoming, but is in the process of divesting its assets and will 
dissolve; Home Service Solutions, Inc. (``Home Services''), a Missouri 
corporation that is an intermediate holding company that owns a 100 
percent interest in Worry Free Services, Inc. and a 49.4 percent 
interest in R.S. Andrews Enterprise, Inc.; KCPL Receivable, a Delaware 
corporation, that is a special purpose entity established to purchase 
customer accounts receivable from KCPL; GP Power, a recently created 
Missouri corporation which will hold interests in exempt wholesale 
generators (``EWGs''); and KLT, a Missouri corporation that is an 
intermediate holding company with the following subsidiaries: KLT 
Investments Inc.; invests, as a limited partner, in affordable housing 
partnerships; KLT Investments Inc. II, pursues passive investment in 
community, economic development and energy-related opportunities, KLT 
Energy Services, Inc., and its subsidiaries, which invest in companies 
that provide products and services to customers to control the amount, 
cost and quality of electricity to commercial and industrial customers, 
provide demand-side management services, power supply coordination 
(including purchasing electricity at wholesale for resale to end 
users), gas management, energy consulting, and generation optimization 
(such as scheduling and dispatching generation and wholesale marketing 
services); KLT Gas Inc., owns and operates interests in oil and gas 
producing properties; and

[[Page 27708]]

KLT Telecom Inc., pursues investment opportunities in 
telecommunications and wireless technology and will qualify as an 
exempt telecommunications company (``ETC'') under section 34 of the 
Act. KLT also wholly-owns Energetechs, Inc., which is currently 
inactive.
    Applicants request that the Commission find that the KCPL system 
constitutes an ``integrated'' electric utility system within the 
meaning of section 2(a)(29)(A) and that all of the direct and indirect 
Nonutility Subsidiaries are retainable under the standards of section 
11(b)(1) of the Act. Applicants also request that investments in 
Nonutility Subsidiaries prior to the date of the Reorganization be 
disregarded for purposes of calculating the dollar limitation placed on 
GPE for investments under rule 58.
    For the year ended December 31, 2000, KCPL had consolidated 
operating revenues of approximately $1.1 billion,\17\ resulting in a 
net income of approximately $159 million. At December 31, 2000, KCPL 
had consolidated total assets of approximately $3.3 billion, including 
approximately 1,700 miles of transmission lines, approximately 8,900 
miles of overhead distribution lines, and approximately 3,400 miles of 
underground distribution lines.
---------------------------------------------------------------------------

    \17\ Approximately $952 million or 85% is derived from regulated 
sales of electricity and electric transmission service and $164 
million or 15% is derived from activities of the Nonutility 
Subsidiaries.
---------------------------------------------------------------------------

II. The Reorganization

    GPE, the newly formed holding company, is authorized under its 
Articles of Incorporation to issue 150,000,000 shares of common stock, 
without par value (``Common Stock'') and 390,000 shares of cumulative 
preferred stock, $100 par value (``Preferred Stock''). Also, under the 
Articles of Incorporation, GPE is authorized to issue 1,572,000 shares 
of cumulative no par preferred stock without par value and 11,000,000 
shares of preference stock without par value.
    GPE will form another new Missouri subsidiary, KC Merger Sub 
Incorporated, (``NewCo''). KCPL will merge with and into NewCo, with 
KCPL as the surviving corporation, resulting in KCPL becoming a wholly 
owned subsidiary of GPE. KCPL will dividend to GPE two of KCPL's 
nonutility subsidiaries, KLT and GP Power, making both wholly owned 
subsidiaries of GPE. KCPL Receivable, WYMO, and Home Service will 
remain wholly owned subsidiaries of KCPL or become direct or indirect 
subsidiaries of GPE, unless they are disposed of or dissolved. 
Following the completion of the Reorganization, GPE will register as a 
public utility holding company under section 5 of the Act.
    To effect the Reorganization approximately 62 million shares of GPE 
common stock and approximately 390,000 shares of GPE Preferred Stock 
will be issued in a one-to-one exchange of shares. As of December 31, 
2000, no shares of cumulative no par preferred stock or preference 
stock were issued or outstanding. To the extent KCPL may issue these 
types of shares prior to the Reorganization, GPE requests authority to 
issue corresponding shares of no par preferred stock and preference 
stock as necessary to consummate the one-to-one exchange of shares.
    Upon consummation of the share exchange, (A) all of KCPL's common 
shares will be held by GPE, (B) KCPL will have no preferred shares 
outstanding, (C) all of GPE's common shares will be held by the former 
KCPL common shareholders, and (D) all of GPE's preferred shares will be 
held by the former KCPL preferred shareholders (with the exception of 
the 4.00% cumulative preferred stock to be redeemed).

III. Post-Reorganization Financing

    Applicants request authority to establish: (A) A program of 
external financing; (B) intrasystem credit support arrangements; (C) 
interest rate hedging measures; (D) and other intrasystem transactions. 
Applicants are requesting approval for each of the proposals through 
December 31, 2004 (the ``Authorization Period'').

A. External Financing

    GPE proposes to issue and sell from time Common Stock and, directly 
or indirectly, short-term and long-term debt securities and other forms 
of preferred or equity-linked securities. In addition, as part of the 
one-to-one share exchange for the Reorganization, GPE also proposes to 
issue a limited amount of Preferred Stock upon consummation of the 
Reorganization. The aggregate amount of all securities issued by GPE 
during the Authorization Period will not exceed $450 million.
1. GPE's Issuance of Common Stock
    GPE requests authority to issue Common Stock, either: (a) Through 
negotiation with underwriters, dealers, or agents; (b) effected through 
competitive bidding among underwriters; (c) through private placements 
or other non-public offerings to one or more persons; and (d) through 
its employee and director compensation plans.\18\ If Common Stock is 
sold in an underwritten offering, GPE may grant the underwriters a 
``green shoe'' option permitting the purchase from GPE, at the same 
price, additional shares offered solely for the purpose of covering 
over-allotments.
---------------------------------------------------------------------------

    \18\ KCPL maintains the following employee and director stock 
plans (the ``Stock Plans''): The Dividend Reinvestment and Direct 
Stock Purchase Plan; The Employee Savings Plus Plan; and The Long-
Term Incentive Plan.
---------------------------------------------------------------------------

    Also, as consideration for the purchase of equity securities or 
assets of other existing companies, GPE proposes to issue stock 
options, performance shares, stock appreciation rights (``SARs''), 
warrants, or other stock purchase rights that are exercisable for 
Common Stock and to issue Common Stock upon the exercise of options, 
SARs, warrants, or other stock purchase rights. Applicants further 
state that the acquisition of any equity securities or assets would be 
authorized in a separate proceeding or would be exempt under the Act or 
the rules. If this type of consideration is used, the market value of 
the Common Stock on the day before closing, as negotiated by the 
parties, will be counted against the proposed $450 million limitation 
on financing.
2. GPE's Issuance of Preferred Stock
    GPE requests authorization to issue Preferred Stock, as necessary 
to accomplish the one-to-one exchange of shares for the Reorganization. 
The dividend rate on only series of Preferred Stock will not exceed at 
the time of issuance 500 basis points over the yield to maturity of a 
U.S. Treasury security having a remaining term equal to the term of 
such securities. Dividends or distributions on such Preferred Stock 
will be made periodically and to the extent funds are legally available 
for this purpose, but may be made subject to terms which allow the 
issuer to defer dividend payments for specified periods. Preferred 
Stock may be convertible or exchangeable into share of Common Stock.
3. GPE's and the Financing Subsidiaries' Issuance of Long-term Debt and 
Other Preferred or Equity-Linked Securities
    GPE requests authorization to issue long-term debt, directly or 
indirectly, through one or more financing subsidiaries (``Financing 
Subsidiary'') and to issue indirectly, through one or more Financing 
Subsidiaries, other types of preferred or equity-linked securities 
(including, specifically, trust preferred securities).
    Long-term debt of GPE may be in the form of unsecured notes 
(``Debentures'') issued in one or more series. The

[[Page 27709]]

Debentures of any series (a) may be convertible into any other 
securities of GPE, (b) will have a maturity ranging from one to 50 
years, (c) will bear interest at a rate not to exceed 500 basis points 
over the yield to maturity of a U.S. Treasury security having a 
remaining term approximately equal to the term of these series of 
Debentures, (d) may be subject to optional and/or mandatory redemption, 
in whole or in part, at par or at various premiums above or discounts 
below the principal amount, (e) may be entitled to mandatory or 
optional sinking fund provisions, (f) may provide for reset of the 
coupon under a remarketing arrangement, and (g) may be called from 
existing investors or put to the company, or both. the Debentures will 
be issued under an indenture (``Indenture'') to be entered into between 
GPE and a national bank, as trustee. Also, GPE's long-term debt may be 
in the form of bank lines of credit. Loans under these bank lines will 
have maturities of not more than five years from the date of each 
borrowing and the effective cost of the loans will not exceed at the 
time of issuance 500 basis points above London Interbank Offered Rate 
(``LIBOR'').
    GPE contemplates that the Debentures would be issued and sold 
directly to: (a) One or more purchasers in privately negotiated 
transactions; (b) one or more investment banking or underwriting firms 
or other entities that would resell the Debentures without registration 
under the 1933 Act, in reliance upon one or more applicable exemptions 
from registration; or (c) the public through underwriters. The maturity 
dates, interest rates, call and/or put options, redemption and sinking 
fund provisions and conversion features, if any, will be established by 
negotiation or competitive bidding and reflected in the applicable 
supplemental indenture, officer's certificate and purchase agreement, 
or underwriting agreement.
    Preferred or equity-linked securities may be issued by one or more 
Financing Subsidiaries, in one or more series, and with rights, 
preferences, and priorities as may be designated in the instrument 
creating each series as determined by GPE's board of directors. The 
dividend rate on any series of preferred or equity-linked securities 
will not exceed at the time of issuance 500 basis points over the yield 
of maturity of a U.S. Treasury security having a remaining term equal 
to the term of these securities. Dividends of distribution on preferred 
or equity-linked securities will be made periodically and to the extent 
funds are legally available, but may be made subject to terms which 
allow the issuer to defer dividend payments for specified periods. 
Preferred or equity-linked securities may be convertible or 
exchangeable into shares of Common Stock.
    GPE states that without further Commission authorization it will 
not issue any preferred or equity-linked securities or any Debentures 
that are not at the time of original issuance rated at least investment 
grade by a nationally recognized statistical rating organization.
4. GPE's, KCPL's, and the Nonutility Subsidiaries' Issuance of Short-
term Debt
    GPE may sell, directly or indirectly through one or more Financing 
Subsidiaries, commercial paper or establish bank lines of credit 
(``Short-term Debt'') to provide financing for general corporate 
purposes, other working capital requirements, and investments in new 
enterprises until long-term financing can be obtained. The effective 
cost of money on Short-term Debt authorized in this proceeding will not 
exceed at the time of issuance 500 basis points above LIBOR for 
maturities of one year or less.
    GPE also proposes to establish, directly or indirectly, bank lines 
in an aggregate principal amount sufficient to support projected levels 
of short-term borrowings and to provide an alternative source of 
liquidity. Loans under these lines will have maturities not more than 
one year from the date of each borrowing. GPE also may engage, directly 
or indirectly, in other types of short-term financing generally 
available to borrowers with comparable credit ratings.
    KCPL requests authorization to issue and sell from time to time 
during the Authorization Period notes and other evidence of 
indebtedness having a maturity of one year or less in an aggregate 
principal amount outstanding at any one time not to exceed $500 
million. Short-term financing could include, without limitation, 
commercial paper sold in established domestic or European commercial 
paper markets in a manner similar to GPE, bank lines of credit, and 
other debt securities. The effective cost of money on short-term debt 
of KCPL authorized in this proceeding will not exceed at the time of 
issuance 500 basis points over LIBOR for maturities of one year or 
less.
    Nonutility Subsidiaries will engage in financing transactions that 
are in almost all cases exempt from prior Commission authorization 
under rule 52(b), which requires that any loan by GPE to a Nonutility 
Subsidiary or by one Nonutility Subsidiary to another must have 
interest rates and maturities that are designed to parallel the lending 
company's effective cost of capital. Applicants also request authority 
to make loans to any associate company at interest rates and maturities 
designed to provide a return to the lending company of not less than 
its effective cost of capital, if the Nonutility Subsidiary making a 
borrowing is not wholly owned by GPE, directly or indirectly, and does 
not sell goods or services to KCPL.

B. GPE's and the Nonutility Subsidiaries' Guarantees and Other Forms of 
Credit Support

    GPE proposes to enter into guarantees and other forms of credit 
support agreements on behalf of KCPL and the Nonutility Subsidiaries 
(collectively, ``Subsidiaries'') during the Authorization Period in an 
aggregate principal amount not to exceed $600 million outstanding at 
any one time. GPE requests authorization to enter into guarantees and 
capital maintenance agreements, obtain letters of credit, enter into 
expense agreements or otherwise provide credit support (collectively, 
``GPE Guarantees'') on behalf or for the benefit of any Subsidiary in 
an aggregate principal amount not to exceed $600 million outstanding at 
any one time. GPE may guarantee both securities issued by and other 
contractual or legal obligations of any Subsidiary. GPE proposes to 
charge each Subsidiary a fee for each guarantee provided on its behalf 
that is determined by multiplying the amount of the GPE Guarantee 
provided by the cost of obtaining the liquidity necessary to perform 
the guarantee (i.e., bank line commitment fees or letter of credit 
fees, plus other transactional expenses) for the period of time the 
guarantee remains outstanding.
    Applicants request authority for Nonutility Subsidiaries to provide 
guarantees and other forms of credit support (``Nonutility Subsidiary 
Guarantees'') on behalf or for the benefit of other Nonutility 
Subsidiaries in an aggregate principal amount not to exceed $300 
million outstanding at any one time. The Nonutility Subsidiary, which 
provides any credit support, may charge its associate company a fee for 
each guarantee provided on its behalf, to be determined by the same 
method used for GPE's Guarantees.

C. GPE and Subsidiary Hedging Transactions

    GPE and the Subsidiaries request authorization to enter into 
interest rate hedging transactions with respect to existing 
indebtedness (``Interest Rate

[[Page 27710]]

Hedges''), subject to certain limitations and restrictions, in order to 
reduce or manage interest rate cost. Interest Rate Hedges will involve 
the use of financial instruments commonly used in today's capital 
markets, such as interest rate swaps, caps, collars, floors, and 
structured notes (i.e., a debt instrument in which the principal and/or 
interest payments are indirectly linked to the value of an underlying 
asset or index), or transactions involving the purchase or sale, 
including short sales, of U.S. Treasury obligations.

D. Other Intrasystem Transactions and Organizational Changes

1. Changes in Capital Stock of Subsidiaries
    Applicants state that the proposed sale of capital securities may 
in some cases exceed the then-authorized capital stock of a Subsidiary. 
A Subsidiary may choose to use capital stock with no par value or 
receive a capital contribution without issuing capital stock. Also, a 
wholly owned Subsidiary may engage in a reverse stock split to reduce 
franchise taxes. To accommodate the proposed transactions and to 
provide for future issues, Applicants request authority to change the 
terms of any wholly owned Subsidiary's authorized capital stock 
capitalization by an amount deemed appropriate by GPE or other 
intermediate parent company. A Subsidiary would be able to change the 
par value, or change between par value and no-par stock, without 
additional Commission approval. Applicants state that such action by a 
utility subsidiary would be subject to and would only be taken upon the 
receipt of any necessary approvals by the state commissions in the 
state or states in which the utility subsidiary is incorporated and 
doing business.
2. Financing Subsidiaries
    GPE and the Subsidiaries request authority to acquire, directly or 
indirectly, the equity securities of one or more Financing Subsidiaries 
organized as corporations, trusts, partnerships or other entities 
created specifically for the purpose of facilitating the financing of 
the authorized and exempt activities (including exempt and authorized 
acquisitions) of GPE and the Subsidiaries through the issuance of long-
term debt or equity securities, including but not limited to company-
obligated mandatorily redeemable trust preferred securities, to third 
parties. Financing Subsidiaries would loan, dividend or otherwise 
transfer the proceeds of any financing to its parent or to other 
Subsidiaries provided, however, that a Financing Subsidiary of KCPL 
will dividend, loan or transfer proceeds of financing only to KCPL. The 
terms of any loan of the proceeds of any securities issued by a 
Financing Subsidiary to GPE would mirror the terms of those securities. 
GPE may, if required, guarantee or enter into expense agreements in 
respect to the obligations of any Financing Subsidiary that it 
organizes. The Subsidiaries also may provide guarantees and enter into 
expense agreements. If the direct parent company of a Financing 
Subsidiary is authorized in this proceeding or any subsequent 
proceeding to issue long-term debt or similar types of equity 
securities, then the amount of the securities issued by that Financing 
Subsidiary would count against the limitation applicable to its parent 
for those securities. However, the guaranty by the parent of that 
security issued by its Financing Subsidiary would not be counted 
against the limitations on GPE Guarantees or Subsidiary Guarantees. In 
other cases, in which the parent company is not authorized to issue 
similar types of securities, the amount of any guarantee not exempt 
that is entered into by the parent company with respect to securities 
issued by its Financing Subsidiary will be counted against the 
limitation on GPE Guarantees or Subsidiary Guarantees.
3. Intermediate Subsidiaries
    GPE proposes to acquire, directly or indirectly through a 
Nonutility Subsidiary, the securities of one or more new subsidiary 
companies (``Intermediate Subsidiaries'') which may be organized 
exclusively for the purpose of acquiring, holding and/or financing the 
acquisition of the securities of or other interest in one or more EWGs, 
foreign utility companies (``FUCOs''), ETCs, rule 58 companies or other 
non-exempt Nonutility Subsidiaries.
    An Intermediate Subsidiary may be organized: (a) To facilitate the 
making of bids or proposals to develop or acquire an interest in any 
exempt company, rule 58 company, or other non-exempt Nonutility 
Subsidiary; (b) to facilitate closing on the purpose or financing of 
the acquired company; (c) to effect an adjustment in the respective 
ownership interests in the business held by GPE and unaffiliated 
investors; (d) to facilitate the sale of ownership interest in one or 
more acquired nonutility companies; (e) to comply with applicable laws 
of foreign jurisdictions limiting or otherwise relating to the 
ownership of domestic companies by foreign nationals; (f) to limit 
GPE's exposure to U.S. and foreign taxes; (g) to further insulate GPE 
and KCPL from operational or other business risks that may be 
associated with investments in non-utility companies; or (h) for other 
lawful business purposes.
    Investments in Intermediate Subsidiaries may take the form of any 
combination of the following: purchases of capital shares, partnership 
interests, member interests in limited liability companies, trust 
certificates or other forms of equity interests; capital contributions; 
open account advances with or without interest; loans; and guarantees 
issued, provided or arranged in respect of the securities or other 
obligations of any Intermediate Subsidiaries. Funds for any direct or 
indirect investment in any Intermediate Subsidiary will be derived 
from: (a) Financings authorized in this proceeding; (b) any appropriate 
future debt or equity securities issuance authorization obtained by GPE 
from the Commission; and (c) other available cash resources, including 
proceeds of securities sales by a Nonutility Subsidiary. To effect any 
consolidation or other reorganization, GPE seeks to either contribute 
the equity securities of one Nonutility Subsidiary to another 
Nonutility Subsidiary or sell (or cause a Nonutility Subsidiary to 
sell) the equity securities of one Nonutility Subsidiary to another 
Nonutility Subsidiary. These transactions may take the form of a 
Nonutility Subsidiary selling, contributing or transferring the equity 
securities of a subsidiary as a dividend to an Intermediate Subsidiary 
or the acquisition by Intermediate Subsidiaries, directly or 
indirectly, of the equity securities of companies, either by purchase 
or by receipt of a dividend. The purchasing Nonutility Subsidiary in 
any transaction structured as an intrasystem sale of equity securities 
may execute and deliver its promissory note evidencing all or a portion 
of the consideration given. Any transaction structured as a sale will 
be carried out for a consideration equal to the book value of the 
equity securities being sold.
    GPE also requests authority for Intermediate Subsidiaries to 
provide management, administrative, project development and operating 
services to entities at fair market prices and requests an exemption 
(to the extent that Rule 90(d) does not apply) from the cost standards 
of section 13(b) and rules 90 and 91 under the Act in any case in which 
the Non-Utility Subsidiary purchasing such goods or services is:

    (a) A FUCO and foreign EWG that derives no part of its income, 
directly or indirectly from the generation, transmission, or

[[Page 27711]]

distribution of electric energy for sale within the United States;
    (b) An EWG that sells electricity at market-based rates which 
have been approved by the FERC, provided that the purchaser is not 
KCPL;
    (c) 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, 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;
    (d) 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
    (e) A rule 58 subsidiary or any other Nonutility Subsidiary that 
(i) is partially-owned 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.
4. Payment of Dividends out of Capital and Unearned Surplus
    GPE proposes, on behalf of each of its current and future non-
exempt Nonutility Subsidiaries, that the companies be permitted to pay 
dividends with respect to the securities of these companies, from time 
to time through the Authorization Period, out of capital and unearned 
surplus (including revaluation reserve), to the extent permitted under 
applicable corporate law. However, without further approval of the 
Commission, no non-exempt Nonutility Subsidiary will declare or pay any 
dividend out of capital or unearned surplus if the Nonutility 
Subsidiary derives any material part of its revenues from the sale of 
goods, services, electricity or natural gas to KCPL. GPE requests that 
the Commission reserve jurisdiction over dividends paid by any non-
exempt Nonutility Subsidiary.

IV. Use of Proceeds

    The proceeds from the post-Reorganization financings will be used 
for general corporate purposes, including: financing investments by and 
capital expenditures of GPE and its subsidiaries; funding of future 
investments in any EWG, FUCO, ETC, or energy-related or gas-related 
company within the meaning of rule 58; the repayment, redemption, 
refunding or purchase by GPE or any subsidiary of its own securities; 
financing working capital requirements of GPE and its subsidiaries; and 
for any other lawful corporate purposes. More specifically, the 
proceeds of the long-term debt or other preferred or equity-linked 
securities will enable GPE to reduce short-term debt with permanent 
capital and provide an important source of future financing for the 
operations of and investments in nonutility businesses exempt under the 
Act. Applicants represent that no financing proceeds will be used to 
acquire the securities of or other interest in any company unless the 
acquisition has been approved by the Commission in this proceeding, in 
a separate proceeding, or in accordance with an available exemption 
under the Act or rules, including sections 32 and 33 and rule 58. Also, 
proceeds of financings and guarantees utilized to fund investments in 
rule 58 companies will be subject to the limitations of that rule.

V. Leases and Service Arrangements

    Finally, GPE requests authorization under section 9(a)(1) for KCPL 
and GPE to engage in certain leasing transactions and authorization 
under sections 12 and 13 for certain intrasystem transactions. KCPL 
currently leases certain utility assets for use in providing electric 
service within its service territory. Two of these leases are for 
transmission assets,\19\ and one lease is for a combustion turbine.\20\ 
KCPL also leases from nonaffiliates a number of railcars for the 
purpose of delivering fuel to KCPL's electric generating plants.
    Also, KCPL holds contracts for delivery of five combustion 
turbines. Following the Reorganization, KCPL may transfer these 
contracts to GP Power, an EWG affiliate. In the alternative, KCPL may 
transfer these contracts to nonaffiliated parties that, in turn, would 
lease the delivered turbines to KCPL or GP Power for use in GP Power's 
EWGs.
---------------------------------------------------------------------------

    \19\ The first transmission line lease is with Kansas Gas and 
Electric Company, a wholly owned subsidiary of Western Resources, 
Inc., for the Wolf Creek/LaCygne transmission line under a tariff on 
file with the FERC. The second transmission line lease is with 
Associated Electric Cooperative, Inc. for KCPL's share of certain 
Joint Facilities, as defined in the Coordinating Agreement by and 
among Associated Electric Cooperative, Inc., Kansas City Power & 
Light Company, St. Joseph Light & Power Company, Nebraska Public 
Power District, Omaha Public Power District, City of Lincoln and 
Iowa Power Inc. for the Cooper-Fairport-St. Joseph 345 Kilovolt 
Interconnection.
    \20\ The combustion turbine lease is with First Security Bank, 
N.A. as Owner Trustee, which expires October 2001, unless extended 
by mutual agreement of KCPL and the lessor.
---------------------------------------------------------------------------

    KCPL has been providing administrative, management, technical, 
legal and other support services to its subsidiaries for some years, 
subject to regulation by the MPSC and KCC. KCPL intends to file with 
the Commission not later than October 1, 2001, an application/
declaration seeking authority to create a service company and to 
implement the final support service structure for the GPE holding 
company system (``GPE System''). Until the application/declaration is 
made effective, Applicants request authorization under section 13(b) of 
the Act and rules for KCPL and the Nonutility Subsidiaries, after 
consummation of the Reorganization, to provide services on an interim 
basis, as well as sell goods, to each other and to GPE (as well as 
services and goods of a substantially similar nature). Applicants 
request that the provision of services of sale of goods may be on a 
basis other than ``cost,'' provided the pricing arrangements are 
consistent with applicable Missouri and Kansas statutes and 
regulations. KCPL request that the interim authority extend until 
December 31, 2001, at which time, KCPL intends to implement the final 
service company structure for the GPE System.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 01-12507 Filed 5-17-01; 8:45 am]
BILLING CODE 8010-01-M