Westar Energy Inc was incorporated in the state of Kansas in 1924. It is an electric utility company, which produces, transmits and sells electricity at retail in Kansas and at wholesale in a multi-state region in the central United States under the regulation of the KCC and FERC. The Company provides electric generation, transmission and distribution services to approximately 693,000 customers in Kansas. It provides those services in central and northeastern Kansas, including the cities of Topeka, Lawrence, Manhattan, Salina and Hutchinson. Kansas Gas and Electric Company (KGE), the Company's wholly owned subsidiary, provides these services in south-central and southeastern Kansas, including the city of Wichita. The Company has other contracts for the sale, purchase or exchange of wholesale electricity with other utilities. In addition, it engages in energy marketing and purchase and sells electricity in areas outside its retail service territory. The Company has a retail energy cost adjustment (RECA) that allows it to recover the cost of fuel consumed in generating electricity and purchased power needed to serve its retail customers. The Company engages in both financial and physical trading with the objective of increasing profits, managing commodity price risk and enhancing system reliability. It trades electricity and other energy-related products using a number of financial instruments, including future contracts, options and swaps, and it trades energy commodity contracts. The Company uses natural gas as a primary fuel at its Gordon Evans, Murray Gill, Neosho, Abilene, Hutchinson, Spring Creek and Emporia Energy Centers, at the State Line facility and in the gas turbine units at Tecumseh Energy Center. The Company is subject to a number of federal, state and local environmental laws and regulations. Environmental laws and regulations affecting power plants are overlapping, complex, subject to changes in interpretation and implementation. These laws and regulations relate mainly to discharges into the air, air quality, discharges of effluents into water, the use of water, and the handling, disposal and clean-up of hazardous substances and wastes.
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