Western Resources Threatens to Exit Kansas After KCC Decision
Western Resources yesterday threatened to cut its losses and
sell the company to a national energy conglomerate because of a
decision by the Kansas Corporation Commission (KCC) to reopen the
docket on its merger with Kansas City Power and Light. The KCC
issued an order late Monday to reopen the merger docket because of
a stipulation and agreement Western signed with the Missouri Public
Service Commission staff and others in the Missouri docket.
"To think that the KCC will force us to re-open the record in
Kansas after we reached an agreement in this merger is
unbelievable," said Carl M. Koupal Jr., Western Resources executive
vice president and chief administrative officer. "The facts are
these: the Missouri and Kansas agreements cannot be compared given
the differences in rate base, rate design, cost of service and
legal precedent in both states.
"This most recent action has forced us to seriously contemplate
the company's future in Kansas," he added. "Companies like Western
Resources and KCPL - on a stand-alone basis - could be targeted by
out-of-region conglomerates as takeover candidates, which could
have 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 to
recover $300 million. Koupal said the recovery of the $300 million
is over 40 years and likely will be offset by more than $7 billion
in cost savings during the same time period.
"The agreement reached in Kansas provides customers with
tangible benefits resulting from the merger. We will not tolerate
additional financial restrictions placed on our company by the
state regulatory body as a means to placate the winds of change,"
said Koupal. "Those involved in this case who are misrepresenting
these facts are doing a great disservice to the future of the
energy industry in our state."
Western Resources utilities KPL and KGE provide electric service
to 620,000 customers in Kansas and through its ownership in Oneok
Inc. Western has a 45% interest in the eighth largest gas
distribution company in the nation, serving more than 1.4 million
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