Westar to announce site of coal-fired power plant

Haines was speaking to the company's annual meeting of shareholders, held in Wichita for the first time since Kansas Gas & Electric and Kansas Power & Light merged in 1992 to form what is now Westar. About 120 people were in attendance at the Hyatt Regency Wichita.

Westar hired a consulting firm a year ago to help it evaluate potential sites within its service territory for new a power plant. The company anticipates needing additional capacity to meet its base load within the next decade. Haines said a new power plant could be online by 2015.

In October, Westar agreed to buy a gas-fired power plant in central Oklahoma from Oneok Inc. to generate additional power at times of peak demand. Haines said Westar acquired the plant at a substantial discount, about half the cost of building such a plant.

Looking back at 2005, Haines said Westar had a mixed year. It was able to lower its costs, largely by refinancing its debts, and won the ability from state regulators to pass along certain variable costs -- such as the cost of coal -- to ratepayers.

But it lost its bid to raise its base rates for power and its bid to increase its state-limited returns. That took a toll on the company's stock price, Haines said.

Still, Haines said, the company is committed to maintaining and improving its dividend.

The company raised its annual dividend this year to $1 per share, representing 61 percent to 65 percent of anticipated earnings. Haines acknowledged that the new dividend is at the low end of the company's target range of 60 percent to 75 percent of earnings.