US: Missouri fight could threaten $12.2 billion Westar Energy-KCP&L merger

A regulatory battle in Missouri could potentially pull the plug on the $12.2 billion merger of Westar Energy and Kansas City Power & Light.

It appears to hinge in large part on whether the transaction would harm customers and whether Westar, Kansas’ dominant utility company, is technically a “public utility” under Missouri law.

If the Missouri Public Service Commission does claim jurisdiction, and decides the merger would be detrimental to electric customers in the state, it could quash the sale of Westar to KCP&L’s parent company Great Plains Energy.

Missouri commission staff says job cuts and possible outsourcing spurred by the proposed aquisition could harm customers. The staff also claims Great Plains violated a 2001 agreement with the Missouri commission, where it agreed not to acquire any public utilities without commission approval.

Great Plains argues that combining Westar and KCP&L would benefit customers on both sides of the state line. Moreover, it says it’s a moot point anyway because Westar isn’t a public utility under Missouri law and therefore, Great Plains doesn’t need Missouri’s approval to buy it.

On May 31, Great Plains announced it had reached an agreement to buy Westar at a cost of $12.2 billion. The idea is that Westar and KCP&L operations would merge to serve 1.5 million customers on both sides of the state line.

Full Content: The Wichita Eagle

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