A joint statement by Charles Q Chandler, Chairman; and William B Moore, President and Chief Executive Officer of Westar Energy is given below.The statement has been taken from the company’s 2007 annual report.
2007 was a watershed year for Westar Energy. In 2007 our focus shifted from planning to doing. For the past few years we have been planning for the growth of your company and your investment, working with regulators and public officials to improve the clarity and timeliness of how we recover our investments in the prices we charge and firming up our investment plans to meet our customers’ growing need for electricity. In the years ahead, we will focus both on refining and executing plans to grow your company.
Throughout this annual report we share with you the various ways your company is growing for the future and how your management team here is executing our plans for making good utility investments.
Specifically, you will see that our investment strategy is large and diverse. Our investment strategy is large because of the growing energy demands of our customers and the requirements of developing environmental regulations. It is not a stretch to say an environmental overlay now affects almost everything we do. It is diverse, certainly not in the sense that we are venturing off into some non-utility businesses, but rather in the sense that we are investing in nearly every facet of electric utility operations. A diversified investment strategy is critical because the future of the energy business is harder than ever to predict. Our strategy increases the probability that Westar will continue to succeed in uncertain times and reduces the probability that we will risk too much capital in just one area of our integrated business. Examples of this are our decision to defer construction of a new base load coal plant and our commitment to additional, more flexible, natural gas fired generation paired with wind energy and energy efficiency.
Over the next few years we expect to double our investment in utility plants. Our expansion plan includes investments across asset types: replacing equipment as it wears out; enhancing the environmental controls of our coal plants; building new gas peaking generators and new high capacity transmission lines; and making significant investments in renewable, wind energy and energy efficiency programs. We hope you will take a few moments to review these projects in more detail as we have highlighted them in the next few pages.
We are pleased to report that all this planning and managing of major construction projects did not cause us to lose sight of current performance. We have maintained safety, reliability and strong financial performance as we implemented strategies for the future. 2007 was another solid year for earnings and dividend growth, with dividends up 8 percent from their 2006 level.Your board of directors also just recently announced another increase in the quarterly dividend of 7.4 percent, which on an indicated annual basis now reflects a dividend of $1.16 per share.
Westar is proud to remain a basic utility. And our employees remain focused on the fundamentals of reliable electric service and on making our service area a great place to work and live.
- Our power plants continued to operate safely and reliably. By way of example, in 2007, Wolf Creek operated at full output the whole year, and our largest coal units were available 86.9 percent of the time.
- We continued our quest toward ever improving service reliability and customer satisfaction. As measured by both frequency and duration of outages, our service levels improved.
- We improved the effectiveness of responding to customers, and expanded ways in which customers can get their needs met, whether through traditional conversations, automated call handling or via Internet.
- Employees from all across Westar continue to volunteer, contribute and improve the quality of life in the communities we serve, large and small.
Part of managing for the future is developing upcoming leaders. Evidence of that is the smooth transition in the office of our CEO. In June we said good-bye and thank you to Jim Haines for having led Westar well for over four years and promoted one of our own. During the transition, we were also able to retain our entire senior management team, and seize opportunities to cross train, expand and develop the talents of our senior leadership team.
Finally, nature dealt us quite a blow in December 2007. An ice storm caused the most widespread damage to our lines that we have ever experienced. At its worst, about 30 percent of our customers were without power, and many customers saw their power restored only to be disappointed by yet another outage caused when another tree fell into one of our lines. In total, we made more than 400,000 customer restorations.
We proudly thank our linemen and support team, which included the assistance of nearly 2,000 dedicated craftspersons from across the country, who came to help with the most rapid and safe storm restoration efforts of this magnitude in our history. We were also pleased that the Edison Electric Institute recognized Westar Energy with its Emergency Assistance Award for times we lent a hand to other utilities in the wake of six winter storms in 2007.
2008 will be another active year for your company as we file for a significant increase in our rates to reflect the expenditures made since 2004. Thank you for your ownership in Westar Energy.