RELATED PARTY TRANSACTIONS AND RELATIONSHIPS

12 Months Ended

Dec. 31, 2019

In the normal course of business, Evergy Kansas Central, Evergy Metro and Evergy Missouri West engage in related party transactions with one another. A summary of these transactions and the amounts associated with them is provided below. Transactions between Evergy Kansas Central and either Evergy Metro or Evergy Missouri West prior to June 4, 2018, the date of the merger, are not reflected below.

Jointly-Owned Plants and Shared Services

Evergy Metro employees manage Evergy Missouri West's business and operate its facilities at cost, including Evergy Missouri West's 18% ownership interest in Evergy Metro's Iatan Nos. 1 and 2. The operating expenses and capital costs billed from Evergy Metro to Evergy Missouri West were $172.8 million for 2019, $183.2 million for 2018 and $196.3 million for 2017.

Evergy Kansas Central employees manage JEC and operate its facilities at cost, including Evergy Missouri West's 8% ownership interest in JEC. The operating expenses and capital costs billed from Evergy Kansas Central to Evergy Missouri West for JEC and other various business activities were $24.9 million for 2019 and $12.3 million for 2018.

Evergy Metro employees manage La Cygne Station and operate its facilities at cost, including Evergy Kansas Central's 50% interest in La Cygne Station. Evergy Metro and Evergy Kansas Central employees also provide one another with shared service support, including costs related to human resources, information technology, accounting and legal services. The operating expenses and capital costs billed from Evergy Metro to Evergy Kansas Central were $154.9 million for 2019 and $82.9 million for 2018. The operating and capital costs billed from Evergy Kansas Central to Evergy Metro were $40.6 million for 2019 and $17.5 million for 2018.

Money Pool

Evergy Metro and Evergy Missouri West are also authorized to participate in the Evergy, Inc. money pool, an internal financing arrangement in which funds may be lent on a short-term basis to Evergy Metro and Evergy Missouri West from Evergy, Inc. and between Evergy Metro and Evergy Missouri West. At December 31, 2019 and 2018, Evergy Metro had no outstanding receivables or payables under the money pool.

Related Party Net Receivables and Payables

The following table summarizes Evergy Kansas Central's and Evergy Metro's related party net receivables and payables.



	December 31
	2019			2018
Evergy Kansas Central	(millions)
Net receivable from Evergy Missouri West	$	3.1		$	2.6
Net payable to Evergy Metro	(14.9		)	(13.5		)
Net receivable from (payable to) Evergy	6.9			(1.4		)

Evergy Metro
Net receivable from Evergy Missouri West	$	78.7		$	72.6
Net receivable from Evergy Kansas Central	14.9			13.5
Net receivable from (payable to) Evergy	(4.3		)	15.7

Tax Allocation Agreement

Evergy files a consolidated federal income tax return as well as unitary and combined income tax returns in several state jurisdictions with Kansas and Missouri being the most significant. Income taxes for consolidated or combined subsidiaries are allocated to the subsidiaries based on separate company computations of income or loss. As of December 31, 2019 and 2018, Evergy Kansas Central had income taxes receivable from Evergy of $37.9 million and $42.7 million, respectively. As of December 31, 2019 and 2018, Evergy Metro had income taxes payable to Evergy of $14.1 million and $2.0 million, respectively.

Leases

Evergy Metro leases certain transmission equipment from Evergy Kansas Central. This lease was entered into prior to the merger in an arms-length transaction and is accounted for as an operating lease. As of December 31, 2019, Evergy Metro had a right-of-use asset of $29.5 million recorded within other long-term assets, $0.6 million of lease liability recorded in other current liabilities and $28.9 million of lease liability recorded in other long-term liabilities on its consolidated balance sheet related to this lease. The assets and liabilities related to this lease between Evergy Kansas Central and Evergy Metro are eliminated at consolidated Evergy.