Kansas Gas&Electric Co.

S&P Global Ratings' stable outlook on KG&E reflects that of ultimate parent Evergy Inc. This reflects our base-case scenario that Evergy's regulated utility operations will continue to generate sufficient cash flow to maintain financial measures that support adjusted funds from operations (FFO) to debt of 16%-17% from 2019 through 2021. This range places the company just below the midpoint of our significant financial risk profile assessment. The outlook also reflects our expectation of a stronger business risk profile and a clear path to realizing proposed synergies that result in operational improvements and cost savings. Further enhancing the business risk profile will be the almost full ownership of the Wolf Creek nuclear plant, strengthening control and leading to additional operating efficiencies.

...S&P Global Ratings expects Kansas Gas & Electric Co.'s cash flow to remain stable over the forecast period. We expect Kansas Gas & Electric Co. (KG&E) to maintain stable margins over the coming years given minimal but stable revenue growth. Kansas' regulatory environment has at times been mixed.Although Kansas regulators provide KG&E with a variety of mechanisms to recover invested costs, at times the authority can be restrictive from a credit standpoint. In KG&E's late September 2018 electric rate case, regulators approved a 9.3% return on equity (ROE), below prevailing industry averages, and as part of the merger of Great Plains Energy Inc. and Westar Energy Inc. (Westar), the Kansas Corp. Commission (KCC) ordered a rate case moratorium for up to five years. Strong financial measures bolster the intermediate financial risk profile during the rate case moratorium.KG&E's financial measures are expected to sit comfortably in the middle of the intermediate financial risk profile category...

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