Key drivers influencing the segment results included the following:
- A $7.2 million decrease in pre-tax gross margin. The decrease in gross margin is mainly due to higher fuel and purchased power expense at KCP&L’s Missouri jurisdiction where the company does not have a fuel recovery mechanism;
- A $5.8 million decrease in pre-tax other operating expenses primarily from lower plant operating and maintenance expenses due to planned plant outages in 2011 with longer durations than in 2012;
- A $4.3 million pre-tax impact from the 2011 organizational realignment and voluntary separation program that was deferred to a regulatory asset in 2012 for recovery in rates beginning January 1, 2013, as a result of the rate case order issued in December 2012 by the KCC;
- An $8 million increase in pre-tax non-operating expenses driven by the impact of accounting effects from GMO’s January 2013 rate case order and from non-regulated activities;
- A $4.3 million decrease in pre-tax interest expense driven by the maturity of $500 million of 11.875 percent senior notes in early July 2012; and
- A $1.9 million increase in income tax expense.
Overall retail MWh sales were down approximately 1 percent in the quarter compared to the fourth quarter 2011 with the decrease primarily driven by lower weather-normalized demand. On a weather-normalized basis, retail MWh sales decreased an estimated 0.9 percent due to decreases in the residential and industrial sectors partially offset by a modest increase in the commercial sector.
Compared to normal levels the negative pre-tax gross margin effect from weather in the 2012 quarter was approximately $5 million or about $0.02 per share.
Coal fleet and nuclear availability in the quarter were generally in-line with the same period in 2011.
|Three Months Ended December 31||2012||2011|
|Equivalent Availability - Coal Plants||82%||84%|
|Capacity Factor - Coal Plants||63%||63%|
|Equivalent Availability - Nuclear||100%||100%|
|Capacity Factor - Nuclear||100%||100%|
|Equivalent Availability - Coal and Nuclear||85%||86%|
|Capacity Factor - Coal and Nuclear||68%||69%|
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