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FLINT HILLS TALLGRASS PRAIRIE HERITAGE FOUNDATION, INC., by their attorneys Martin, Pringle, Oliver, Wallace & Bauer, LLP and Victor John Yannacone, jr., set forth and allege the following as their complaint against the Corporate Defendants, jointly and/or severally, individually and/or collectively.
1. Jurisdiction of this Court is invoked under Title 28, United States Code, §1331(a).
1.1 This action arises under Article VI, section 2 of the Constitution of the United States. “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every state shall be bound thereby; any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
1.2 This action involves the declaration and interpretation of the Plaintiffs′ rights guaranteed by the Ninth Amendment of the Constitution of the United States, “The enumeration in the Constitution of certain rights, shall not be construed to deny or disparage others retained by the people.”
1.3 These rights are protected under the due process clause of the Fifth Amendment of the Constitution of the United States. “… nor shall any person . . . be deprived of life, liberty, or property, without due process of law ….”
1.4 This action seeks a judgment declaring that tax relief and direct subsidies for industrial wind turbine commercial electric power generation facilities that will cause serious, permanent and irreparable damage to the unique national and international resource treasure, the Flint Hills Tallgrass Prairie Ecosystem, violates the provisions of the Constitution of the United States.
1.5 This action requires the declaration of the rights of the Plaintiffs under the Treaty with Great Britain for the Protection of Migratory Birds concluded August 16, 1916, and the Treaty with the United Mexican States for the Protection of Migratory Birds and Game Mammals, concluded February 7, 1936.
The matter in controversy, exclusive of interest and costs, exceeds the value of several million dollars.
2. The federal statutes relevant to this proceeding are, among others, The Migratory Bird Act, Title 16, United States Code, §§ 701 et seq. which is based on a treaty of December 8, 1916, between the United States and Great Britain. The two nations agreed in the Treaty to take the proper steps for carrying out the expressed purpose and object of the treaty which is to save such birds from indiscriminate slaughter and to insure their preservation on account of their great value as a source of food and in destroying insects which are injurious to forests and forage plants on the public domain, as well as to agricultural crops in both the United States and Canada, by providing adequate protection during the nesting season or while on their way to and from their breeding grounds. (Shouse v Moore, 11 FSupp 784, 785)
3. This action is properly brought in equity before this court because the subject matter of the dispute is equitable in nature. This action is brought for the purpose of restraining the Corporate Defendants individually, and their successors in interest, from damaging or degrading the unique national and international resource treasure that is the Flint Hills Tallgrass Prairie Ecosystem.
3.1 The injury which may be inflicted by the Corporate Defendants individually or their successors in interest, if they are permitted to develop the area with industrial wind turbine commercial electric power generation facilities without regard for the unique national and international resource treasures of the Flint Hills Tallgrass Prairie Ecosystem will be serious, permanent and irreparable, in that those damages cannot be adequately and justly compensated within the lifetimes of many generations.
The declaratory judgment demanded by the Plaintiffs, together with the equitable relief related thereto, are equitable remedies in the substance and character of the rights sought to be enforced, historically, in the province of the Court of Chancery.
4. There is no adequate remedy at law.
4.1 The law does not afford any remedy for the contemplated wrong to the American people of this generation and generations yet unborn which will result from the serious, permanent and irreparable damage and degradation of the unique national and international resource treasures that is the Flint Hills Tallgrass Prairie Ecosystem from the development and operation of industrial wind turbine commercial electric power generation facilities by the Corporate Defendants and/or their successors in interest.
4.2 There is no plain, adequate and complete remedy at law as practicable and efficient as the equitable relief sought herein. Nor would the damages sustained by the sovereign people of the United States as a result of the development of industrial wind turbine commercial electric power generation facilities proposed by the Corporate Defendants or their Successors in Interest, be capable of measurement and determination in any action at law.
5. That the Corporate Defendants individually, and their successors in interest, to the extent that they have any legal interest in the land and landscape of that unique national and international resource treasures, the Flint Hills Tallgrass Prairie Ecosystem, hold their legal interest in trust for the full benefit, use and enjoyment of all the sovereign people of this generation and those generations yet unborn, and may not cause serious, permanent and irreparable damage to the intrinsic values of the Flint Hills Regional Environmental System.
5.1 That the maintenance of this public trust is compatible with the proper efficient development of the resource represented by the area of the Flint Hills Tallgrass Prairie Ecosystem and that the maintenance of the public trust is consistent with private ownership of the property and does not constitute any taking of property.
5.2 That the administrative agencies of the Federal, State, and County governments are presently taking no action to prevent the serious, permanent and irreparable damage which will result from the improper development of industrial wind turbine commercial electric power generation facilities in the Flint Hills Tallgrass Prairie Ecosystem by the Corporate Defendants or their successors in interest without regard for unique national and international resource treasure which the Flint Hills Tallgrass Prairie Ecosystem represents.
6. Venue is proper in this judicial district pursuant to 15 USC §22 and 28 USC §1391(b) because Corporate Defendants transact business, are found and/or have agents in this district and because the equitable relief sought involves a unique national and international resource treasure, the Flint Hills Tallgrass Prairie Ecosystem which is located largely in the State of Kansas.
Class Action Allegations
7. The Representative Plaintiff organization brings this action on behalf of all those entitled to the full benefit, use, and enjoyment of that unique national and international resource treasure, the Flint Hills Regional Environmental System, and so unfortunate as to be similarly adversely affected and afflicted by the industrial wind turbine commercial electric power generation facilities proposed to be sited in the Flint Hills Tallgrass Prairie Ecosystem.
8. The Representative Plaintiff organization seeks class certification pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure as to the declaratory and equitable relief sought herein.
8.1 Members of the Class are numerous and joinder is impracticable because, upon information and belief, tens of thousands of citizens of the State of Kansas and the United States of America each year are entitled to the full benefit, use and enjoyment of that unique national and international resource treasure, the Flint Hills Regional Environmental System, and so unfortunate as to be similarly adversely affected and afflicted by the industrial wind turbine commercial electric power generation facilities proposed to be sited in the Flint Hills Tallgrass Prairie Ecosystem.
Common questions of law and fact
8.2 Questions of law and fact common to the members of the Class predominate over questions, if any, that may affect only individual members, thereby making appropriate equitable, injunctive and declaratory relief with respect to the Class as a whole.
Certain specific conduct of the Corporate Defendants including, but not limited to misleading elected representatives and appointed officials and members of administrative agencies by misrepresenting the deleterious and damaging effects of industrial wind turbine commercial electric power generation facilities proposed to be sited in the Flint Hills Tallgrass Prairie Ecosystem is a question of law and fact common to the entire Class.
8.4 Whether certain subsidies and tax benefits for industrial wind turbine commercial electric power generation facilities violate the rights of the vast majority of the taxpayers of Kansas and the United States secured for them in perpetuity by the Constitution of the United States are questions of law and fact common to the entire Class.
8.5 Whether the actions by the Corporate Defendants jointly and/or severally, individually and/or collectively, in seeking to site industrial wind turbine commercial electric power generation facilities in the Flint Hills Tallgrass Prairie Ecosystem by taking advantage of unconscionable manipulation of the federal and state system of voluntary taxation is an effort to limit competition from more economically rational systems for electric power generation in Kansas and the surrounding Regional Economic System is a question of law and fact common to the entire Class.
8.6 Whether the Representative Plaintiff organization and members of the Class are entitled to declaratory, equitable and/or injunctive relief is a question of law and fact common to the entire Class.
8.7 The claims of the Representative Plaintiff organization are typical of the members of the Class, in that the members of this organization are all affected by and will suffer serious, permanent and irreparable damage from the industrial wind turbine commercial electric power generation facilities proposed to be sited in the Flint Hills Tallgrass Prairie Ecosystem.
8.8 The Representative Plaintiff organization can and will fairly and adequately protect and represent the interests of all those entitled to the full benefit, use, and enjoyment of that unique national and international resource treasure, the Flint Hills Regional Ecosystem, and so unfortunate as to be similarly adversely affected and afflicted by the industrial wind turbine commercial electric power generation facilities proposed to be sited in the Flint Hills Tallgrass Prairie Ecosystem.
9. The interests of the Representative Plaintiff organization are not in any way antagonistic to or in conflict with the interests of the entire class or any member of the Class as defined herein.
1o. The Representative Plaintiff organization is represented by counsel who is experienced and competent in the prosecution of complex class action litigation.
The Representative Plaintiff, Flint Hills Tallgrass Prairie Heritage Foundation, Inc.
11. The Representative Plaintiff organization, Flint Hills Tallgrass Prairie Heritage Foundation, Inc., is a not-for-profit public benefit corporation organized under and by virtue of the laws of the State of Kansas for the purpose of
11.1protecting the intrinsic values of that unique national and international resource treasure, the Flint Hills Tallgrass Prairie Regional Ecosystem;
11.1 to build awareness of the fact that more than 95 percent of the original acreage of Tallgrass Prairie on the North American continent has been lost, and only 4 percent remains in any form, with nearly two thirds of that remaining in the Flint Hills Ecoregion of Kansas and Oklahoma;
11.2 to promote by means of education and other initiatives the stewardship, conservation and protection of native Tallgrass Prairie grasslands, intact prairie landscapes, and associated natural resources in the Flint Hills Tallgrass Prairie Ecosystem of Kansas and Oklahoma;
11.3 to promote public awareness and understanding of the importance of preserving intact prairie landscapes that function to maintain native flora and fauna in ecological communities, biodiversity and the Tallgrass Prairie ecosystem;
11.4 to promote public awareness and understanding of the importance of prairie landscapes and habitat for declining grassland birds, including Greater Prairie-chickens and other resident species, migratory neotropical and neoarctic species that depend on the area for summer nesting and brood rearing, migratory or wintering habitat;
11.5 to promote understanding and appreciation of the historical contribution of ranching as an instrument of conservation and management of native prairie rangelands and hay meadows;
11.6 to promote understanding and appreciation of contemporary ranching as a strategy for preserving existing prairie resources on a landscape scale, as a foundation for building a culture of conservation and wise use, an environmental ethic, and continuing a rural way of life;
11.7 to promote understanding and appreciation of the legacy of Native Americans within the Flint Hills, their culture and their association with the land, wildlife and other resources;
to promote public support for governmental, organizational and private individual initiatives designed to facilitate conservation, stewardship and preservation of natural, cultural, historical, scenic, recreational and agricultural values of the Flint Hills Tallgrass Prairie Ecosystem;
11.8 to promote appreciation and enjoyment of the natural and pastoral elements of the Flint Hills Regional Environmental System and support nature-based and agri-tourism and other initiatives designed to complement the economies of local communities, landowners and operators in a manner that is ecologically sophisticated, environmentally responsible, socially relevant, and economically rational;
to work with other organizations including the Tallgrass Legacy Alliance, Tallgrass Ranchers, Protect the Flint Hills, Audubon of Kansas, The Nature Conservancy, Kansas Wildlife Federation, Kansas Livestock Association, North America Grouse Association, Quail Unlimited, and/or others, and public agencies including the
U.S. Fish and Wildlife Service, National Park Service, Natural Resources Conservation Service, Kansas Department of Wildlife and Parks, Kansas Biological Survey, Kansas Conservation Commission and/or others to develop comprehensive strategies for protection and preservation of unique natural and cultural resources which are integral elements of the Flint Hills Tallgrass Prairie Ecosystem;
11.12 to work with ranchers, farmers and other landowners, business leaders, and local community leaders and other residents to assist and support individuals who are striving to preserve the natural, cultural, historical, scenic, recreational, agricultural and other resource values associated with their land and the rural communities of the Flint Hills Regional Environmental System;
11.13 to take whatever action is appropriate to oppose unwarranted actions that have the effect of undermining conservation, stewardship and preservation goals for the Flint Hills Tallgrass Prairie Ecosystem that are and have been supported by those striving to maintain, in the public interest, the unique national and international resource treasure that is the Flint Hills Regional Environmental System;
11.14 to promote ecologically sophisticated, environmentally responsible, socially relevant, and economically rational siting standards for industrial wind turbine commercial electric power generation facilities which will not impose upon the unique national and international resource treasure that is the Flint Hills Tallgrass Prairie Ecosystem or cause serious, permanent and irreparable damage to that Ecosystem and the Regional Environmental System of which it is a part and upon which it depends for continued existence and sustainability.
Individual Incorporators and Members
11.15 The individual incorporators and members of the Representative Plaintiff, organization, Flint Hills Tallgrass Prairie Heritage Foundation, Inc., are persons who collectively have stewardship responsibilities for, and own and/or manage tens of thousands of acres of native tallgrass prairie rangelands, pastures, hay meadows and lands devoted to conservation of native flora and fauna, livestock husbandry and agricultural production, recreation and other activities consistent with maintaining the Flint Hills Tallgrass Prairie Regional Ecosystem as the unique national and international natural resource treasure it still is and may yet remain.
11.16 The economic livelihood, way-of-life and quality of life of the individual incorporators and members of the Representative Plaintiff, organization, Flint Hills Tallgrass Prairie Heritage Foundation, Inc., depend upon maintaining the Flint Hills Tallgrass Prairie Regional Ecosystem as the unique national and international natural resource treasure it still is and may yet remain.
11.17 Certain of the individual incorporators and members of the Representative Plaintiff, organization, Flint Hills Tallgrass Prairie Heritage Foundation, Inc., own and operate business enterprises including those related to tourism in the region and depend, to varying extents upon or derive economic benefit to various extents from continuing existence of the Flint Hills Tallgrass Prairie Regional Ecosystem as the unique national and international natural resource treasure it still is and should yet remain.
11.18 Among the members of the Representative Plaintiff organization, Flint Hills Tallgrass Prairie Heritage Foundation, Inc., are individuals such as Steven Trent who owns property in the area and earns his livelihood training raptors and is now subject to serious, permanent and irreparable damage as a result of the industrial wind turbine commercial electric power generation facilities proposed to be constructed in the Flint Hills Tallgrass Prairie Ecosystem.
Audubon of Kansas
12. Among the organization members of the Representative Plaintiff organization is Audubon of Kansas, Inc. a statewide, not-for-profit organization established to promote appreciation and stewardship of Kansas′ natural ecosystems, with special emphasis on conservation of prairies, birds, other wildlife and their habitat.
12.1 Audubon of Kansas is a grassroots organization made up of more than 5,000 members. It is governed by a Board of Trustees consisting of leaders from each of the Audubon chapters in Kansas and other dedicated conservation leaders who share a common interest in implementing Audubon′s goals and mission statement.
12.2 The miss10n of Audubon of Kansas includes promoting the enjoyment, understanding, protection and restoration of natural ecosystems and seeking to establish a culture of conservation and an environmental ethic.
12.3 Audubon of Kansas implements its goals by working cooperatively with individuals and groups representing a wide variety of interests including landowners, businesses, communities, policy makers and other conservation organizations.
12.4 Audubon of Kansas favors the development of renewable energy sources including the wind in appropriate areas and by appropriate means so that the natural and cultural integrity of the landscape and other important economic and ecological resources and values will not be substantially diminished.
Defendant ScottishPower plc
13. ScottishPower plc is an international energy company operating across the United Kingdom and in the United States, based in Glasgow, Scotland and is listed on the New York Stock Exchange under the symbol SPI and on the London Stock Exchange under the symbol SPW.
13.1 In both the United States and the United Kingdom, ScottishPower plc provides electricity generation, transmission, distribution and supply services.
13.2 In the United States, ScottishPower plc activities extend to coal mining and gas storage/hub services and, in the United Kingdom, the supply of gas to its customers.
13.3 ScottishPower plc generates electricity, operates and maintains large power delivery networks and provides retail services including metering, billing and call centre support.
13.4 ScottishPower plc claims to employ 15,000 employees to serve almost six million retail and wholesale customers, providing energy through 200,000 km of transmission and distribution networks from over 100 power plants.
13.5 The origins of ScottishPower plc lie in the state-owned United Kingdom utility sector. After privatisation in 1991, the business developed both through organic growth and through acquisitions in the electricity, gas, water and telecommunications industries, most notably the merger with PacifiCorp in the United States in November, 1999.
13.6 According to ScottishPower plc, since 2001/02, its long-term objective has been clear and consistent: to become a leading international energy company.
13.7 According to promotional materials distributed by ScottishPower plc, the company aims to increase its renewable energy capacity, mainly through windfarm development, to 1,000 MW in the United Kingdom by 2010 and to secure at least 2,000 MW of new renewable capacity in the United States over the same period.
13.8 ScottishPower has a corporate centre in Scotland and is organised into four divisions: PacifiCorp and PPM Energy in the United States and Infrastructure Division and UK Division in the United Kingdom.
13.9 Both PacifiCorp and Infrastructure Division are regulated, while PPM and UK Division operate in competitive energy markets.
13.10 According to ScottishPower plc, its regulated divisions provide a base for steady growth, while its competitive divisions seek market share growth and the enhancement of profit margins through the integration of generation, energy management and customer services.
13.11 ScottishPower plc has a number of joint ventures in the United Kingdom and United States principally connected with electricity generation.
13.12 ScottishPower′s Infrastructure Division is a regulated asset-owner, holding the Group′s United Kingdom transmission and distribution licences. The Division is divided into three main wholly owned subsidiaries: SP Transmission Ltd owns 4,000 km of transmission network in south and central Scotland (132 kV and above); SP Distribution Ltd owns the 66,000 km distribution network (from 33 kV downwards) in south and central Scotland; SP Manweb plc owns the 46,000 km distribution system in Merseyside, Cheshire and North Wales.
13.13 According to ScottishPower plc, these asset-owner companies also operate SP Transmission & Distribution (SPT&D) as an integrated business to concentrate expertise on regulatory issues. In addition to these three subsidiaries, a fourth subsidiary, SP Power Systems Ltd. is responsible for managing and maintaining the network on behalf of the asset owners.
13.14 ScottishPower′s competitive business in the United Kingdom, the UK Division, consists of five wholly owned subsidiaries: ScottishPower Generation Ltd, ScottishPower Energy Management Ltd and ScottishPower Energy Management (Agency) Ltd, ScottishPower Energy Retail Ltd and SP Dataserve Ltd.
13.15 ScottishPower Generation Ltd owns and operates its United Kingdom power stations and generation assets of some 5,400 MW of generating capacity comprised of coal, gas, hydroelectric and wind power.
13.16 ScottishPower Energy Management Ltd and ScottishPower Energy Management (Agency) Ltd deal in gas and electricity at the wholesale level and in the commercial instruments and agreements which constitute the market balancing mechanisms for the competitive energy market in the United Kingdom.
13.17 ScottishPower Energy Retail Ltd holds the Group′s electricity and gas supply licences and is the link to 4.25 million retail customers, both business and domestic managing sales and marketing, billing and processing of payments and handles customer enquiries at three call centers.
13.18 SP Dataserve Ltd manages ScottishPower′s data and metering, which underpin customer registration, billing and settlement.
13.19 At present, just under two thirds of UK Division′s generating capacity comes from coal-fired power stations, but ScottishPower plc is the largest United Kingdom wind developer.
ScottishPower plc Executive Management Team
14. Upon information and belief, the ScottishPower plc Board of Directors is comprised of five Executive Directors and eight Non-executive Directors from a variety of business backgrounds and disciplines in the United Kingdom and the United States. The five Executive Directors are Ian Russell, Chief Executive; David Nish, Finance Director; Charles Berry, Executive Director UK; Judi Johansen, President and Chief Executive Officer of PacifiCorp; Simon Lowth, Director, Corporate Strategy and Development.
14.1 Ian Russell is Chief Executive, having been appointed to this position in April 2001. He joined ScottishPower as Finance Director in April 1994 and became Deputy Chief Executive in November 1998. He is a member of the Institute of Chartered Accountants of Scotland, having trained with Thomson McLintock and has held senior finance positions with HSBC. He serves on the Council of Edinburgh International Festival and the Scottish Council of the Prince′s Trust and is leading a UK Government Commission investigating the development of a National Youth Volunteering Strategy
14.2 David Nish is Finance Director, having joined ScottishPower in September 1997 as Deputy Finance Director and then being appointed to the Board as Finance Director in December 1999. In this capacity, he also has responsibility at Board level for performance and risk management. He is a member of the Institute of Chartered Accountants of Scotland, the Scottish Council of the CBI, the UK Government′s Employer Task Force on Pensions and the Accounting Standards Board′s Urgent Issues Task Force and is a non-executive director of The Royal Scottish National Orchestra. Prior to joining ScottishPower, he was a partner with Price Waterhouse. He has a BAcc from the University of Glasgow.
Charles Berry is Executive Director UK, responsible in this capacity for the UK energy businesses of Generation, Energy Management and Supply. He joined ScottishPower in November 1991 and was appointed to the Board in April 1999. He is a member of the Board of the Energy Saving Trust. Prior to joining ScottishPower, he was Group Development Director of Norwest Holst, a subsidiary of Compagnie Generale des Eaux and prior to that held management positions within subsidiaries of Pilkington plc. He holds a BSc (First Class Honors) in Electrical Engineering from the University of Glasgow an ?? Masters degree in Management-from the Massachusetts Institute of Technology.
14.3 Judi Johansen is President and Chief Executive Officer of PacifiCorp; she was appointed to this position in June 2001 and joined the Board on 1st October 2003. She joined PacifiCorp as Executive Vice President of Regulation and External Affairs in December 2000, having held senior positions with the Bonneville Power Administration and Washington Water Power. She is a member of the Boards of the Portland Branch of the US Federal Reserve Bank of San Francisco, the Port of Portland, The Haven Project for Disadvantaged Youth, the Oregon Business Council and Northwestern School of Law at Lewis & Clark College. She has a bachelors degree in political science from Colorado State University and a law degree from Northwestern School of Law at Lewis & Clark College in Portland, Oregon and is a member of the Oregon and Washington State Bar Associations.
14.4 Simon Lowth is Director, Corporate Strategy and Development, having been appointed to the Board in this position on 1 September 2003. He is responsible in this role for leading the formulation, presentation and delivery of corporate strategy. He was formerly a Director with McKinsey & Company, leading its UK Industrial Practice serving clients in the energy and utilities, manufacturing and transport sectors. He holds an MA in Engineering from Cambridge University and an MBA from London Business School.
15. The eight non-executive Directors of ScottishPower plc are Chairman Charles Miller Smith, Vicky Bailey, Euan Baird, Donald Brydon, Philip Carroll, Nolan Karras, Nick Rose and Nancy Wilgenbusch
15.1 Charles Miller Smith joined the Board as Deputy Chairman in August 1999 and was appointed Chairman in April 2000. Following a career with Unilever for some 30 years, during the last five of which he was Director of Finance and latterly of the Food Executive, he was appointed Chief Executive of ICI in 1995 and then served as Chairman from 1999 to 2001. He is an international adviser to Goldman Sachs, a member of the Board of the Indian company, ICICI One Source plc and a member of the Ministry of Defence Management Board . He is also a governor of the Menley Management College. During the year, he served on the committee chaired by Professor Laura Tyson of London Business School which considered, in the light of the recommendations of the Higgs Review, ways of broadening the pool of non-executive directors.
15.2 Vicky Bailey, who is based in Washington DC, is a former Assistant Secretary for Policy and International Affairs at the US Department of Energy and ex-member of the Federal Energy Regulatory Commission (FERC). She has also served as an Indiana state regulator.
Evan Baird joined the Board in January 2001. He served as Chairman and Chief Executive Officer of Schlumberger Limited from 1986 to 2003. He is now non-executive Chairman of Rolls¬ Royce plc and a non-executive director of Societe Generale, Areva and the New York Stock Exchange. He is a trustee of Tocqueville Alexis Trust and Carnegie Institution of Washington and a member of the Advisory Committee of Banque de France. His current term of office, subject to his re-election in 2004, will expire at the AGM in 2007.
15.3 Donald Brydon Joined the Board on 30 May 2003. Following a 20- year career with Barclays Group plc, he joined AXA Group in 1997 and is now Chairman of AXA Investment Managers.
15.4 Philip Carroll first joined the Board in January 2002. He resigned his position on 15 May 2003 following his appointment, in connection with the reconstruction of post-war Iraq, as Chairman of the Advisory Board with oversight of the Iraqi Oil Ministry. Following completion of this assignment, he was re-appointed to the Board on 20 October 2003. He was formerly Chairman and Chief Executive Officer of Fluor Corporation, a California-based international engineering, construction and services company, until his retirement in February 2002. Previously, he was with Shell Oil for over 35 years, serving as President and Chief Executive Officer from 1993 to 1998. He is an honorary life member of the Board of the American Petroleum Institute and holds various posts with the James A Baker III Institute for Public Policy of Rice University and the University of Houston. His current term of office, subject to his election in 2004, will expire at the AGM in 2005.
15.5 Nolan Karras joined the Board in November 1999. He continues as a non-executive director of PacifiCorp, where, until the merger in November 1999, he served as Chairman of the PacifiCorp Personnel Committee. He is President of The Karras Company, Inc. and a Registered Principal for Raymond James Financial Services. He is Chief Executive Officer of Western Hay Company, Inc. and a non-executive director of Beneficial Life Insurance Company. He is Chairman of the Utah State Higher Education Board of Regents and a member of the board of Ogden-Weber Applied Technology College. He also served as a member of the Utah House of Representatives from 1981 to 1990 and as Speaker of the Utah House of Representatives from 1989 to 1990. His current term of office will expire at the AGM in 2006.
15.6 Nick Rose joined the Board in February 2003; he is the Chairman of the Audit Committee and is the Committee′s “financial expert”. He is Finance Director of Diageo plc, having been appointed to this position in July 1999. Previously, he held senior finance positions with GrandMet and was latterly Finance Director of International Distillers & Vintners in 1996 and then of United Distillers & Vintners in 1997. He is also a director of Moet Hennessy. His current term of office, subject to his election in 2003, will expire at the AGM in 2006.
15.7 Nancy Wilgenbusch is a distinguished community administrator and President of Marylhurst University in Portland, Oregon. She also serves on the Regional Advisory Board of PacifiCorp.
16. The remaining members of the ScottishPower plc Executive Management Group are Dominic Fry, Group Director, Corporate Communications; Terry Hudgens, Chief Executive Officer of PPM Energy, Inc.; Ronnie Mercer, Group Director, Infrastructure; Andrew Mitchell, Group Company Secretary; Michael Pittman, Group Director, Human Resources; and James Stanley, Group Director, Commercial and Legal.
16.1 Dominic Fry joined ScottishPower in September 2000 as Group Director, Co orate Communications. He is responsible for investor and media relations, communications with employees, corporate social responsibility and management of the group′s overall reputation. He has held appointments as Communications Director with J Sainsbury plc and Eurotunnel plc. He chairs the Trading Board of the Glasgow Science Centre and is a communications adviser to the Royal Shakespeare Company and Business in the Community. He is also a director of Scottish Business in the Community. He was educated at the Universite Paul Valery III in Montpellier and the University of North Carolina.
16.2 Terry Hudgens was appointed Chief Executive Officer of ScottishPower′s competitive US energy business, PPM, in May 2001 and joined the Executive Team in December 2001. He joined PacifiCorp as Senior Vice President of Power Supply in April 2000, having previously spent 25 years with Texaco, Inc. He was formerly President of Texaco Natural Gas and served as Texaco′s senior representative and elected officer in the Natural Gas Supply Association. He is a member of the Board of Trustees of The Nature Conservancy in Oregon. He has a bachelor′s degree in civil engineering from the University of Houston.
16.3 Ronnie Mercer was appointed Group Director, Infrastructure in April 2001 and is responsible in this role for the UK Wires Businesses. He joined the ScottishPower Generation Business in 1994 and was appointed Generation Director in 1996 and then Managing Director of Southern Water in 1998. Previous career positions include Scottish Director and Managing Director roles in British Steel. He was educated at Paisley College of Technology.
16.4 Andrew Mitchell was appointed Group Company Secretary in July 1993 and is responsible in this role for Board and shareholder services, corporate governance and compliance and group security. He also serves as Chairman of the trustees of the group′s UK pension schemes and as the company′s e7 representative. Prior to joining ScottishPower, he held a number of company secretarial appointments, latterly as Company Secretary of The Laird Group plc and then Stakis plc, now part of the Hilton Group. He is a graduate in law from the University of Edinburgh (LLB Hons) and the London School of Economics (:LLM) and is a member of the Institute of Chartered Secretaries and Administrators.
16.5 Michael Pittman was appointed Group Director, Human Resources in November 2001. He has groupwide responsibility for human resources, leading the focus on talent management, one of the group′s main strategic thrusts. He joined PacifiCorp in December 1979 and was appointed to the PacifiCorp Board in May 2000. He chairs the PacifiCorp Foundation for Learning Board and is involved in numerous civic activities, including chairing the Board of Directors for the Oregon Public Employees Retirement System. He has held several positions within PacifiCorp, including safety and health, risk management and operations. He holds an advanced degree in environmental health from the University of Washington.
16.6 James Stanley was appointed Group Director, Commercial and Legal in March 1996. He is responsible in this role for legal compliance and reporting together with the provision of all legal, commercial and associated services throughout the group and particularly the negotiation, structuring and delivery of M&A and similar projects. In his early career he specialised in commercial litigation in private practice. In 1986 he moved to the Trafalgar House Group and subsequently became both Commercial Director of John Brown plc and General Counsel to the Global Engineering Division of the Group. He is a graduate in law from Nottingham University and the College of Law in Chester where he qualified as a solicitor in 1980.
17. PacifiCorp is a regulated electricity company operating in six western United States states with an exclusive monopoly certificated service territory in all states except Washington, which is regulated by local energy commissions which determine its prices and many other aspects of its business.
17.1 PacifiCorp officially merged with ScottishPower in November 1999 and is listed in the electricity sector on the London Stock Exchange and the electric utilities sector on the New York Stock Exchange.
17.2 PacifiCorp generates electricity, operates the power delivery network and undertakes wholesale trading in the western United States. It also manages the ScottishPower plc coal-mining interests.
17.3 PacifiCorp′s retail electricity supply operations are conducted by Pacific Power, based in Portland, Oregon, and Utah Power, based in Salt Lake City.
17.4 PacifiCorp generates and provides energy for 1.6 million retail customers, covering an area of more than 136,000 square miles.
17.5 PacifiCorp owns 8,420 MW of generation capacity.
17.6 PacifiCorp owns fuel sources, including coalmines, and uses these sources along with natural gas, wind, geothermal and hydroelectric resources to generate electricity at its 71 power plants. The electricity generated from these plants, as well as electricity bought wholesale, is then transmitted over a grid of transmission lines before being transformed to lower voltages and delivered to customers through the company′s distribution system.
17.7 PacifiCorp meets around 78% of customer demand from its own low-cost generation, the remainder being obtained under long-term purchase contracts and other arrangements.
17.8 The retail business of PacifiCorp operates under the names of Pacific Power in Oregon, Wyoming, Washington and California; and Utah Power in Utah and Idaho.
17.9 According to ScottishPower plc, PacifiCorp has 220 million tons of coal reserves in three mines, owns 16,000 miles of overhead transmission lines, 44,000 miles of overhead distribution lines and 14,000 miles of underground distribution lines.
17.10 According to ScottishPower plc, PacifiCorp employs 6,507 employees to service its 1.6 million customers and in its last year report claimed 69,875 GWh in electricity sales from 71 generating facilities, including 54 hydroelectric plants, 16 thermal electric plants and one jointly owned windfarm, earning a £619 .3 million operating profit.
18. The history of PacifiCorp begins in 1910 when a utility holding company, Electric Bond and Share, bought several small West Coast utilities and formed Pacific Power & Light (PP&L), then expanded its service area through acquisitions and by building transmission lines.
18.1 The Public Utility Holding Company Act of 1935 forced Electric Bond and Share to unload PP&L in 1950. Uncertainty over government power contracts spurred PP&L to build its own hydroelectric dams.
18.2 In 1953 PP&L merged with Mountain States Power which had two small phone companies, expanding into Idaho, Montana and Wyoming.
18.3 In 1961, PP&L merged with California Oregon Power and began operating coal-fired plants and acquiring some 1.5 billion tons of Montana and Wyoming coal reserves.
18.4 In the 1970s, PP&L acquired Telephone Utilities in Washington and long-distance company Alascorn in Alaska and formed the Northern Energy Resources Company (NERCO) to manage its coal-mining units.
18.5 In 1982 the firm reorganized, becoming PacifiCorp. PP&L became a subsidiary and the phone services were renamed Pacific Telecom.
18.6 In the mid-1980s PacifiCorp bought a financial service firm and explored for oil and gas through NERCO.
18.7 In 1987 PacifiCorp merged with Utah Power and opened its grid to independent power producers.
18.8 In 1994 PacifiCorp entered wholesale power marketing as Fred Buckman became CEO.
18.9 In 1995 PacifiCorp bought Australian utility company Powercorp, split Pacific Telecom into a separate subsidiary, sold Alascorn to AT&T and split its utility operations into generation, transmission and retail sales units.
18.10 In 1997 PacifiCorp bought natural gas marketer TPC but sold TPC′s gas pipeline to El Paso Natural Gas, now El Paso Energy. That year PacifiCorp agreed to buy the UK Energy Group for about $9.6 billion, including debt and sold Pacific Telecom to Century Telephone, now CenturyTel and Pacific Generation, an independent power producer developer, to NRG Energy.
18.11 In 1998 PacifiCorp′s power trading arm lost $151 million when its suppliers couldn′t meet the energy demands of a sweltering hot summer in the western United States. Buckman resigned, replaced by CEO Keith McKennon and PacifiCorp was forced to reorganize.
18.12 In 1999 PacifiCorp sold TPC to NIPSCO. now called NiSource, for
$132.5 million. It also sold its Montana service area to Flathead Electric Cooperative and exited most of its power trading operations.
18.13 In 1999 ScottishPower completed its purchase of PacifiCorp and Alan Richardson replaced McKennon as CEO.
18.14 In 2000 PacifiCorp sold its Centralia, Washington, coal-fired power plant and an adjacent coal mine to Canada′s TransAlta for $554 million and it sold Powercor for $2.14 billion to Cheung Kong Infrastructure.
18.15 For about six months in 2000 and 2001, PacifiCorp experienced an unscheduled outage at one of its Utah power plants which, coupled with unusually high-priced wholesale electricity in the region, caused losses for the company and led it to request rate increases for its service territories in 2001.
18.16 In 2001 PacifiCorp transferred its interest in PacifiCorp Power Marketing, now PPM Energy, its remaining energy trading unit, to another ScottishPower plc unit.
PPM Energy, Inc.
PPM structural relationships
19. PPM Energy, Inc., formerly PacifiCorp Power Marketing, holds the non¬ regulated North American operations of parent company ScottishPower plc and is engaged in wholesale energy marketing and providing services to municipal agencies, public utility districts, investor-owned utilities, producers, marketer I traders and others operating in eight states in the United States and in Canada, with a generating capacity of a little over 1,600MW in the Midwest and Western United States.
19.1 PPM Energy, Inc. balances its supply portfolio with sales to wholesale customers, placing almost all of its output in long-term contracts. Major customers include the federal Bonneville Power Administration, the cities of Seattle, Sacramento, Pasadena, Anaheim, investor-owned utilities such as Alliant Energy and Xcel Energy and cooperatives such as Minnesota′s Great River Energy.
19.2 PPM Energy, Inc. primarily develops and operates cogeneration power plants and wind farms.
19.3 PPM Energy, Inc. also markets and trades wholesale energy and offers risk and asset management services.
19.4 PPM Energy, Inc. was the second-largest provider of United States wind energy in 2003 and accounted for almost a third of new wind development in the United States in 2003.
19.5 According to ScottishPower plc, PPM owns 3 gas turbines, 9 windfarms and 2 gas storage facilities; employs 194 employees and has 18 large power customers, 37 large gas customers and in its last fiscal year generated a £36.7 million operating profit.
19.6 In early 2001 PPM Energy, Inc. extended its operations to include gas storage, operating natural gas storage and hub operations through its ENSTOR affiliate.
The PPM Energy, Inc. Management Team
20. Upon information and belief, PPM Energy, Inc. is operated by a management team made up of Terry Hudgens, president and chief executive officer; Merrick Kerr, chief financial officer; Matt Morrow, senior vice president of gas storage and hub services, who is also president of ENSTOR, a ScottishPower Company; Peter van Alderwerelt, senior vice president of business development and origination; Ralph Currey, who oversees the management of PPM′s energy trading; Allan Query, vice president of construction and operations for PPM Energy and vice president of engineering and operations for Pacific Klamath Energy; Julian Brown, vice president of new business initiatives; Don Winslow, vice president of policy and regulatory affairs; J.J. DiNorscia, vice president of pricing, structuring and market analysis; Patrick Haye, who is responsible for risk management and control, information technology, back office, contract administration and compliance; Vera Johnson, vice president of organizational effectiveness; Jean Wilson, Vice President, Renewable Business Development; and Paul Kaufman, lead counsel.
20.1 Upon information and belief, Terry Hudgens is president and chief executive officer of PPM Energy. Prior to being named CEO, Mr. Hudgens was senior vice president of power supply at PacifiCorp, responsible for the utility′s power generation, wholesale sales and mining businesses. Mr. Hudgens spent 25 years with Texaco, Inc. working in operations and management positions, including vice president of business development for Texaco Trading and Transportation, Inc. Prior to joining PacifiCorp, he was president of Texaco Natural Gas-North America. In that role, he was responsible for all aspects of Texaco′s $5 billion North American natural gas and worldwide natural gas liquids business. He also served as Texaco′s senior representative in the Natural Gas Supply Association . Mr. Hudgens has a bachelor′s degree in civil engineering from the University of Houston.
20.2 Upon information and belief, Merrick Kerr is PPM′s chief financial officer and is responsible for PPM′s accounting and financial reporting functions, as well as for delivering the company′s financial targets for value growth and profitability. Prior to joining PPM, Mr. Kerr served as PacifiCorp′s financial controller for power supply, ensuring tight control during a period of extreme price volatility. Prior to his international assignment, Mr. Kerr had extensive management experience across ScottishPower′s business units and was a key member of the transition team during the ScottishPower–PacifiCorp merger. Before joining ScottishPower, Mr. Kerr worked for Coopers & Lybrand in Glasgow, Scotland. He is a member of the Institute of Chartered Accountants of Scotland. Mr. Kerr received a bachelor′s degree in accountancy and economics from the University of Edinburgh in Scotland and recently completed Stanford′s Executive Program.
20.3 Upon information and belief, Matt Morrow is senior vice president of gas storage and hub services and also president of ENSTOR, a ScottishPower company. He has thirteen years of experience in the gas storage and hub services industry and was instrumental in the development of hub services within the gas industry at the Henry Hub. Previous positions include COO, TradeCapture.com; director of e-commerce, Texaco Natural Gas; and president, Sabine Hub services, where he was responsible for all aspects of Texaco’s storage and hub services business in North American natural gas. A native Texan, Mr. Morrow has a bachelor′s degree in civil engineering and an MBA from Texas A&M.
20.4 Upon information and belief, Peter van Alderwerelt is senior vice president of business development and origination at PPM Energy. He is responsible for the development and acquisition of wind and gas-fired power projects and the marketing of power, gas and renewable products. Over the last three years his team of developers and originators has been responsible for adding 830 MW of wind generation and 800 MW of high-efficiency gas-fired generation to PPM′s portfolio and for arranging the sale of output from these facilities under long-term bilateral contracts to load-serving entities. Mr. van Alderwerelt′s group of 25 professionals is focused on new wind power opportunities and providing an expanded range of wholesale products and services across the West and into the Midwest, Gulf Coast and Northeast as PPM′s business expands. Prior to joining PPM, Mr. van Alderwerelt was director of project development for PacifiCorp′s Pacific Generation Company, where he was responsible for developing and financing the 500 MW Klamath Cogeneration Plant. His 23 years of experience in the energy industry includes developing regional and international cogeneration and power project opportunities on behalf of ABB, Combustion Engineering and private developers and management consulting at Navigant and CH2M Hill on business strategy and development initiatives. Mr. van Alderwerelt has a bachelor′s degree in mechanical engineering from the University of California at Davis and recently completed ScottishPower′s year-long Business Leadership Program.
20.5 Upon information and belief, Ralph Currey oversees the management of PPM′s energy trading throughout the WECC region, negotiating sales and purchases in the day-ahead, short-term and forward physical and financial markets. Mr. Currey′s organization consists of 45 power and gas trading professionals. Prior to joining PPM, Mr. Currey was vice president of trading (North America Texaco natural gas. There he was responsible for managing the fixed price, futures, physical and options trading books for the company. His 22 years of energy experience include positions at Chevron Natural Gas and KCS Energy Marketing. He has been involved in gas thermal projects at PPM, with the Klamath Falls Cogeneration project and also various generation plants in San Jacinto, California, for Chevron and Texaco. Mr. Currey earned bachelor and master degrees from West Virginia University as well as a masters in economics from the Colorado School of Mines.
20.6 Upon information and belief, Allan Query is vice president of construction and operations for PPM Energy, and vice president of engineering and operations for Pacific Klamath Energy, the subsidiary that operates the Klamath Cogeneration Plant. Mr. Query is responsible for the operation of the Klamath Cogeneration Plant, as well as the engineering and project management activities surrounding the development and construction of future ventures. Mr. Query′s team consists of approximately 30 engineering and project management professionals in Klamath Falls and Portland, Oregon. Prior to joining PPM, Mr. Query was director of project engineering for PacifiCorp′s Pacific Generation Company. He has been responsible for project management during the engineering, construction and start-up phases of several recent notable projects, including the 240 MW Crockett Cogeneration combined-cycle facility and the 500 MW Klamath Cogeneration Project. Mr. Query has over 30 years of related experience which includes 18 years with General Electric Company. Mr. Query received his BS in mechanical engineering from Seattle University and a professional engineering (mechanical) certification in Washington.
20.7 Upon information and belief, Julian Brown is vice president of new business initiatives of PPM Energy, having most recently served as group director, strategy, for ScottishPower. He is responsible for developing related new areas of business to expand and supplement PPM′s current activities in thermal generation, renewable generation and gas storage. Prior to joining ScottishPower in 1993, Mr. Brown was with Exxon Chemical in Australia and subsequently spent seven years with management consultants McKinsey & Company. He holds a BSc from the Australian National University and a PhD in chemistry from University College London.
20.8 Upon information and belief, Don Winslow is vice president of policy and regulatory affairs for PPM Energy. Mr. Winslow has also previously served at PPM as vice president, economic analysis and structuring for PPM Energy. Prior to joining PPM, Mr. Winslow worked in various technical and engineering functions throughout the energy industry. This experience included 15 years at Unocal, an international oil and gas producing company where he worked both as a petroleum engineer and a financial analyst. He subsequently moved into risk management roles at Cinergy and Pinnacle West. Mr. Winslow has a degree in physics from Georgia Tech and an MBA from Southern Methodist University.
20.9 Upon information and belief, J.J. DiNorscia is vice president of pricing, structuring and market analysis. He is responsible for overseeing the economic analysis of PPM′s prospective development projects and origination transactions. Examples of these commercial activities include the construction of wind farms and gas storage fields as well as the structuring of gas and power marketing deals. Mr. DiNorscia manage s a group of 16 professionals. Mr. DiNorscia came to PPM Energy from RWE Trading Americas Inc. in Houston, where he served as vice president of risk control. He has spent more than 30 years in the energy industry. This experience included 12 years at ARCO where he both implemented trading strategies and managed marketing portfolios across different energy commodities. He also has held executive mid-office positions at both Texaco Natural Gas Inc. and TPC Corporation. Mr. DiNorscia holds a Bachelor of Science degree in Chemical Engineering from the University of Delaware and a Masters of Business Administration in Finance from Winthrop University.
20.10 Upon information and belief, Patrick Haye is responsible for risk management and control information technology y back office contract administration and compliance. With over 18 years of experience in the energy business, he manages a team of 26 professionals. Prior to joining PPM Energy, Mr. Haye was senior director of financial operations at Dynergy, where he was responsible for managing various mid- and back office functions for their energy asset and trading company. He also spent 12 years with Chevron, holding various positions of increasing management responsibilities within finance, risk and information system organizations. Mr. Haye graduated from Oregon State University with a bachelor′s degree in accounting and computer science. He is also a member of the Institute of Management Accountants and is a Certified Management Accountant.
20.11 Upon information and belief, Vera Johnson is vice president of organizational effectiveness with responsibility for management of human resources, internal communications, facilities and oversight of administrative support staff. Prior to joining PPM, Ms. Johnson worked in various positions of increasing human resources responsibilities at Texaco Natural Gas, Exxon Company USA and BellSouth Cellular, where her focus was compensation analysis. She has over 20 years experience in human resources management and has obtained the designations of Certified Compensation Professional and Certified Professional in Human Resources. Ms. Johnson earned a bachelors degree in English from Alabama A&M University and an MBA from Nova Southeastern University in Ft. Lauderdale, Florida.
20.12 Upon information and belief, Jean Wilson, Vice President, Renewable Business Development, is responsible for PPM′ s wind power supply business, including greenfield development, project acquisition and long term power purchase agreements. She has over 11 years experience in wind power development and marketing, including four years in wind development with Kenetech Windpower. Prior to joining PPM, she co-managed PacifiCorp′s green power marketing business. Her pre-wind energy career includes four years in corporate banking with Bank of America and four years in commercial real estate development with Tishman Real1y Corporation. Jean holds a B.S. in Finance from the University of Southern California and an MBA from Stanford University.
20.13 Upon information and belief, Paul Kaufman is PPM Energy′s lead counsel. Prior to joining PPM, Mr. Kaufman was an attorney with the law firm of Tonkon Torp LLP in Portland, Oregon, where he focused on renewable resource transactions. Prior to his tenure with Tonkon Torp, Mr. Kaufman was a Vice President with Enron Corp., with responsibility over legislative and regulatory matters in the Western United States and a partner with the Portland office of Ater Wynne LLP. During his tenure at Ater Wynne, Mr. Kaufman′s practice involved the development of electric generation resources, power sale contracting, electric energy and natural gas regulation and policy development for the qualifying facility industry in California, Nevada, Oregon and Washington. Mr. Kaufman holds a B.S. in Natural Resources from Cornell University and a J.D. from Lewis and Clark Law School.
The Empire District Electric Company
28. Based in Joplin, Missouri, The Empire District Electric Company (NYSE:EDE) is an investor-owned utility providing electric service to approximately 157,000 customers in southwest Missouri, southeast Kansas, northeast Oklahoma and northwest Arkansas.
29. The Empire District Electric Company transmits and distributes electricity to nearly 160,000 customers in southwestern Missouri and adjacent areas of Arkansas, Kansas and Oklahoma.
30. The Empire District Electric Company has interests in fossil-fueled and hydroelectric power plants that give it a generating capacity of 1,100 MW, and it also buys and sells power on the wholesale market.
31. Upon information and belief, The Empire District Electric Company is pursuing non-regulated opportunities, such as leasing capacity on its fiber-optic network, providing Internet access, and offering energy-related services, customer information software services, utility industry technical training and has an investment in close-tolerance, custom manufacturing.
32. The Empire District Electric Company also supplies water to three Missouri towns.
33. The history of The Empire District Electric Company is closely interwoven with the story of the development of this region. While Empire was organized in 1909, tracing its history takes us back to 1890 when the use of electrical power in the mining industry was still untried.
33.1 Individual zinc and lead miners who had staked their claims used mules and hard labor to scratch out a living. The names of the mines: Yellow Dog, Grasshopper, Windy Bill and the Morning Star, were as colorful as the people who worked them. As mining companies sprung up across the tri-state region, electrical motors began to replace the mule and steam power engines in several of the mines.
33.2 Electrical generating companies were born in several locations across the region. These small companies appeared haphazardly to supply the new mining district with the power it demanded.
33.3 On October 16, 1909, papers of incorporation were filed in Topeka, Kansas, bringing the Consolidated Light, Power and Ice Company, the Spring River Power Company, The Galena Light and Power Company and the Joplin Light, Power and Water Company together to form a Company that would be known as The Empire District Electric Company, under its parent company, Cities Services.
33.4 The formation of Empire marked the end of indiscriminate electrical development in the area and was the beginning of a construction program designed to meet the needs of a growing region. The vision of the New York financiers who invested in this area is still alive today. Hoping to develop a financially feasible venture, they referred to this region as “Little Empire” or the “Empire District” to denote their pride in New York, the “Empire State.” To this day, the name “Empire” represents the history of mining development in this area.
33.5 At the time of its organization, Empire had 109 miles of transmission line, 8 megawatts of generating capacity, and 2,400 customers. Today, the Company utilizes over 1,200 miles of transmission line and over 1000 megawatts of capacity to serve over 150,000 customers.
33.6 As industry grew and families moved into the four-state region, the demand for electrical power grew as well. Electrical power for Empire was first produced from generation at the Lowell and Redings Mill hydroelectric plants.
33.7 In the summer of 1909, work began on the Riverton Generating Station. Nine months later, it was completed. One of the generators at the plant was dubbed “Old Kate.” Kate was famous for supplying power to the St. Louis World′s Fair in 1904. Today, the Riverton Plant is still in operation, generating 136 megawatts of electricity. With its five turbines, the Riverton generating station is one of the oldest operational power plants in the United States. Although the plant was flooded in 1993 by the overflow of Spring River, it remains today a vital part of Empire′s generation mix.
33.8 Construction of the Ozark Beach Dam began in 1911 in Taney County, Missouri. Two years later, the dam was completed. It is 1,300 feet long and forms Lake Taneycomo, which stretches for 22 miles. Today, Ozark Beach Hydroelectric Plant supplies Empire with 16 megawatts of power and the Taney County area with a beautiful recreational area. Empire Park, located just above the dam, is a recreational park maintained by Empire District. In 1999 the park was honored with the annual Advisory Council on Disabilities Community Award for the refurbishment and addition of handicap accessible facilities.
33.9 In 1944 The Empire District Electric Company separated from its parent company to become an independent company with its stock listed on the New York Stock Exchange. From 1910 to its independence from Cities Services, Empire had purchased 27 separate power companies to become the dominant provider of electric service in the region.
33.10 From 1959 to 1966, Empire spent approximately $25 million on construction, mostly on new transmission and distribution facilities, to handle the increased demand for electric energy. This construction program included new high-voltage transmission lines and new substations. It also included new transmission lines to tie Empire′s system with neighboring electric companies, making Empire an important part of a vast power grid embracing the Midwest.
33.11 In the early 1960′s, the need for more automation in Empire′s operations brought about the construction of an operations and communications center in Joplin. System Operations was completed in 1964. Equipped with the latest design in electronic technology, this nerve center monitors and controls the production and power flow throughout the entire Empire system.
33.12 On September 10, 1967, just north of the town of Asbury, Missouri, ground was broken for a 200-megawatt, coal-fired power plant. The $26-million Asbury Generating Station was put into operation in June of 1970. Asbury was designed as a “mine-mouth” plant to burn coal from the Empire Mine located just north of the plant. Total plant capacity is 213 megawatts. Unit One is rated at 193 megawatts. Unit Two, completed in 1986, generates 20 megawatts of electricity from the excess boiler capacity of Unit One. In 1990 the plant was converted to use a blend of low-sulfur Wyoming coal and native coal to comply with new clean air standards. In 1997 Asbury set a continuous run record of 170 days. It was a remarkable feat, considering the 27-year age of the plant. Today, Asbury remains one of the lowest cost generating plants in the Midwest.
33.13 In 1978 Empire added the first of two 90-megawatt combustion turbine peaking units at the Empire Energy Center near LaRussell, Missouri, some twenty miles east of Joplin. An opportunity to purchase 12 percent, or 80 megawatts, of the 650 megawatt Iatan Power Plant, near Kansas City, postponed the addition of a second 90 megawatt unit at the Empire Energy Center until 1981. Although these units originally utilized only fuel oil for combustion, they were converted to use natural gas in 1994.
33.14 In 1993 Empire announced the addition of the State Line Power Plant located west of Joplin. A 98-megawatt combustion turbine began providing energy to Empire′s customers in May of 1995. Two years later, a second 150-megawatt turbine was added to the State Line power plant. Plans were announced in 1998 for construction of an additional 350 megawatts of electric power generation at State Line. A new 150-megawatt combustion turbine, combined with the existing 150-megawatt unit, generate enough waste heat to produce an additional 200 megawatts of steam¬ powered, combined-cycle energy. The combined cycle unit began providing energy to Empire customers in June 2001. Westar Generating, Inc., a wholly own subsidiary of Western Resources, Topeka, Kansas, is a partner in the State Line combined cycle. Empire owns 60 percent and is the operator of the plant. Total plant output at State Line is 600 megawatts, making it Empire′s highest megawatt-output power plant. All three combustion turbines at State Line Power Plant use natural gas.
The Empire District Electric Company Management
34. Upon information and belief, The Empire District Electric Company is operated by a management team made up of William L. Gipson, President and Chief Executive Officer; Gregory A. Knapp, Vice President, Finance and Chief Financial Officer; David W. Gibson, Vice President, Regulatory and General Services; Michael E. Palmer, Vice President, Commercial Operations; Bradley P. Beecher, Vice President, Energy Supply; Ronald F. Gatz , Vice President , Strategic Development; Janet Watson, Secretary-Treasurer; and Darryl Coit, Controller, Assistant Secretary and Assistant Treasurer.
34.1 William L. Gipson, President and Chief Executive Officer, joined The Empire District Electric Company in March 1981 in the Information Technology area and was promoted to the Manager of Economic Development in 1987. In October 1995, he was promoted to Director of Commercial Operations and, in February 1997, was named General Manager of Commercial Operations. He was elected vice President of Commercial Operations in April 1997, executive Vice President in February 2001 and Chief Operating Officer in October 2001. He was elected to the Board of Directors in April 2002 and President and Chief Executive Officer effective May 1, 2002. A native of Jasper County, Missouri, Gipson graduated from Missouri Southern State College with a Bachelor of Science degree in Management Technology. Mr. Gipson is currently serving as Chairman of the Missouri Energy Development Association, Vice¬ Chairman of the Joplin Business and Industrial Development Corporation and is a board member of the Joplin Area Chamber of Commerce where he is Chairman-elect. He is also a member of the Missouri Southern State College School of Business Advisory Council, active in the United Way of Southwest Missouri and is a member of the Joplin Rotary Club.
34.2 Gregory A. Knapp, Vice President, Finance and Chief Financial Officer, was elected to his current position effective March 15, 2002. He had been named General Manager of Finance for the Company effective January 21, 2002. During an eighteen-month separation in employment, he held the position of Controller for the Missouri Department of Transportation. Prior to that, Knapp had twenty-two years of service to the Company, beginning as the Director of Auditing in 1978, and in 1983 was named Controller and Assistant Treasurer. Knapp has broad overall responsibility for all aspects of financial planning, as well as the accounting and treasury activities of the Company. Knapp received a Bachelor of Science in Business Administration from Missouri Southern State College. He also holds a Master of Business Administration from Southwest Missouri State University. Throughout his career, Knapp has taken an active role in the community, serving on several committees at the Joplin Area Chamber of Commerce, as a member of the City of Joplin Board of Adjustment and the United Way LinkLine Board. Knapp has served as a member and president of the Joplin RVIII Board of Education and is currently a Director for the Joplin Schools Foundation. Mr. Knapp is a member of the local chapter of the Missouri Society of Certified Public Accountants and is a graduate of Leadership Missouri.
34.3 David W. Gibson, Vice President, Regulatory and General Services, joined The Empire District Electric Company in 1979 as a Senior Auditor. He was promoted to Director of Corporate Planning in 1982, Director of Financial and Regulatory Accounting in 1987, Director of Financial Services and Assistant Secretary in 1991, General Manager of Finance in January of 2001, Vice President, Finance in March 2001, Vice President, Regulatory Services in March 2 002 and Vice President Regulatory and General Services on July 1, 2002. A native of Sioux City, Iowa, Gibson graduated from the University of Nebraska at Lincoln with a Bachelor of Science degree in Accounting. Mr. Gibson served in the United States Army as an Infantry Platoon Leader in Vietnam and later as an Infantry Company Commander.
34.4 Michael E. Palmer, Vice President, Commercial Operations, joined The Empire District Electric Company in June 1986 as a Customer Service Consultant. He was named District Manager for the Aurora area in 1994 and Director of Operations in Branson in March 1997. In February 2001, he was named General Manager, Commercial Operations, and at the April 25, 2001 meeting of the Board of Directors, he was elected Vice President, Commercial Operations. A native of Pierce City, Missouri, Palmer graduated from Pittsburg State University in 1980 with a Bachelor of Science degree in Construction Management. Mr. Palmer is an active participant in the community, having served on the Branson City Council, Branson Lake Area Chamber Board, Skaggs Community Hospital Board of Trustees and Taney Economic Partners Board. Currently, Mr. Palmer serves on the City Council of Carl Junction, the Governor′s Business/Education Committee, Joplin Area Chamber of Commerce Public Policy Committee and is a member of the Rotary Club.
34.5 Bradley P. Beecher, Vice President, Energy Supply, joined The Empire District Electric Company in February 2001 as General Manager of Energy Supply and was elected Vice President, Energy Supply at the April 25, 2001 meeting of the Board of Directors. Before returning to Empire in February 2001 he was the Associate Director of Marketing and Strategic Planning for Black & Veatch′s Energy E&C Division. Beecher originally began work for Empire in May of 1988 as a Staff Engineer at the Riverton Power Plant. In November of 1990, he was named Production Staff Specialist and in 1993 became Director of Production Planning. In November of 1995, Beecher was named to the position of Director of Strategic Planning. A native of northwest Kansas, Mr. Beecher graduated from Kansas State University in 1988 with a Bachelor of Science degree in Chemical Engineering. Mr. Beecher is a registered professional engineer in the State of Kansas.
34.6 Ronald F. Gatz, Vice President, Strategic Development, joined The Empire District Electric Company as General Manager of Non¬ regulated Services in March 2001 and was elected Vice President at the April 25, 2001 meeting of the Board of Directors . In this position, he is responsible for the organization and development of new business opportunities. Mr. Gatz is a native of Newton, Kansas and earned a BS in Agricultural Economics from Kansas State University and a graduate degree in banking from the University of Delaware. Gatz was in the banking industry for 28 years with 12 of those years at Mercantile Bank of Joplin as Executive Vice President, Senior Credit Officer and Chief Financial Officer. Prior to coming to Empire, he was Chief Administrative Officer for Hook Up, Inc. of Joplin. Mr. Gatz is President and member of the Board of Directors for Main Street Joplin, serves on the R-8 School Board and is also a member of the Joplin Rotary Club and St. Mary′s Catholic Church.
34.7 Janet Watson, Secretary-Treasurer, joined The Empire District Electric Company in October 1994 as Accounting Staff Specialist and was elected to her present position in October 1995. Prior to joining The Empire District Electric Company, Watson was Accounting Superintendent with Missouri-American Water Company. She was also formerly employed by Freeman Hospital in Joplin as a Cost Analyst and with Teledyne Neosho as a Senior Administrative Accountant. A native of Southwest Missouri, Ms. Watson graduated Summa Cum Laude from Missouri Southern State College with a Bachelor of Business Administration in Accounting and special emphasis in Computer Science. Ms. Watson is an active member of the American Society of Corporate Secretaries, the National Investor Relations Institute and the Risk and Insurance Management Society, Inc. She is a past regional director and historian of the Heartland Council of the Institute of Management Accountants and past president of the Joplin Tri-State Chapter of the Institute of Management Accountants.
34.8 Darryl Coit, Controller, Assistant Secretary and Assistant Treasurer, began his career at The Empire District Electric Company in 1971. Coit held several positions in the Accounting Department including Financial and Regulatory Analytical Accountant, Supervisor of Property Records and Manager of Property Accounting. In July 2000, he was elected to his present position. A native of Joplin, Missouri, Coit is a graduate of Missouri Southern State College where he earned a Bachelor of Science degree in Marketing and Management.
35. Upon information and belief, the Board of Directors of The Empire District Electric Company include Myron McKinney, Chairman; Nick Chubb, Ross Hartley, Bill Helton, Julio Leon, Bob Lamb, D. Randy Laney, Tom Mueller, Mary Posner, Allan Thoms and Bill Gipson, Directors.
35.1 Upon information and belief, Myron W. McKinney is Chairman of the Board of Directors, Retired President and Chief Executive Officer of The Empire District Electric Company, and has been a Director since 1991.
35.2 Upon information and belief, Melvin F. (Nick) Chubb, Jr. is the Retired Senior Vice President of Eagle-Picher Industries, Inc., Cincinnati, Ohio and has been a director since 1991.
35.3 Upon information and belief, Ross C. Hartley is Co-Founder and Director of NIC Inc., Overland Park, Kansas, and has been a Director since 1988.
35.4 Upon information and belief, Bill D. Helton is the Retired Chairman and CEO of New Century Energies, Amarillo, Texas, and has been a Director since 2004.
35.5 Upon information and belief, Robert L. Lamb is the Retired President of The Empire District Electric Company and has been a Director since 1978.
35.6 Upon information and belief, D. Randy Laney is Co-Founder and Chairman of Mercari Technologies, Fayetteville, Arkansas, and Co¬ Founder and Partner in Bentonville Associates Ventures, Lowell, Arkansas, and has been a Director since 2003.
35.7 Upon information and belief, Dr. Julio S. Leon is President of Missouri Southern State University, Joplin, Missouri, and has been a Director since 2001.
35.8 Upon information and belief, B. Thomas Mueller is the Founder and President of SALOV North America Corporation, Hackensack, New Jersey, and has been a Director since 2003.
35.9 Upon information and belief, Mary McCleary Posner, President and Principal, Posner McCleary Inc., Columbia, Missouri, has been a Director since 1991.
35.10 Upon information and belief, Allan T. Thoms of Wilk & Associates/LECG, San Francisco, California, has been a Director since 2004.