Western Resources yesterday threatened to cut its losses andsell the company to a national energy conglomerate because of adecision by the Kansas Corporation Commission (KCC) to reopen thedocket on its merger with Kansas City Power and Light. The KCCissued an order late Monday to reopen the merger docket because ofa stipulation and agreement Western signed with the Missouri PublicService Commission staff and others in the Missouri docket.

“To think that the KCC will force us to re-open the record inKansas after we reached an agreement in this merger isunbelievable,” said Carl M. Koupal Jr., Western Resources executivevice president and chief administrative officer. “The facts arethese: the Missouri and Kansas agreements cannot be compared giventhe differences in rate base, rate design, cost of service andlegal precedent in both states.

“This most recent action has forced us to seriously contemplatethe company’s future in Kansas,” he added. “Companies like WesternResources and KCPL – on a stand-alone basis – could be targeted byout-of-region conglomerates as takeover candidates, which couldhave a negative effect on the entire region.”

The agreement in Kansas allows for a four-year rate moratorium,$45 million in rate rebates and the company’s opportunity torecover $300 million. Koupal said the recovery of the $300 millionis over 40 years and likely will be offset by more than $7 billionin cost savings during the same time period.

“The agreement reached in Kansas provides customers withtangible benefits resulting from the merger. We will not tolerateadditional financial restrictions placed on our company by thestate regulatory body as a means to placate the winds of change,”said Koupal. “Those involved in this case who are misrepresentingthese facts are doing a great disservice to the future of theenergy industry in our state.”

Western Resources utilities KPL and KGE provide electric serviceto 620,000 customers in Kansas and through its ownership in OneokInc. Western has a 45% interest in the eighth largest gasdistribution company in the nation, serving more than 1.4 millioncustomers.

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