Western, KCPL Agree With KCC Staff
Western Resources of Topeka, KS, said a stipulation and agreement had been reached with the Kansas Corporation Commission (KCC) staff, resulting in a proposed set of recommendations for settlement in the company's merger with Kansas City Power & Light. The agreement has been filed with the KCC. The City of Topeka has agreed to, and the International Brotherhood of Electrical Workers local 304 support the recommendations and stipulations. They include:
An electric rate moratorium of four years beginning when the transaction closes.
Permission for the companies to include $300 million of the acquisition premium associated with the merger in the Kansas rate base of Westar Energy (the entity to be created by Western Resources' and KCPL's regulated electric utility operations), as well as the amortization of the $300 million in acquisition premium grossed up for state and federal taxes and ratemaking purposes. For regulatory purposes, the acquisition premium is to be amortized over a 36-year period beginning four years after the closing of the transaction.
Western Resources and KCPL will be allowed to earn a deferred return of 9.5% on already planned, new generating plant additions, which are expected to be approximately $330 million. Westar Energy will make three rebates in the amount of $15 million each to its Kansas retail customers on July 1 of 2001, 2002, and 2003. Western Resources agrees to keep its corporate headquarters in Topeka. Westar Energy's corporate headquarters will be in Kansas City.
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