Kansas City Power & Light and Western Resources successfully reached an agreement with the FERC settling all merger-related issues, Western Resources said last week. The company also said the agreement forged between the merging parties and the Missouri Public Service Commission staff is currently being reviewed by the Missouri commissioners. Only the Kansas Corporation Commission (KCC) approval stands in the way of the merger’s completion, the company said.

The agreement with the FERC staff settles market power, transmission and, in concept, customer protection issues, Western said. A document reflecting the settlement with the staff is expected to be filed with the FERC for its review within the next few weeks. Under the terms of the agreement, Westar Energy, the name of the merged entity, will join a FERC-approved regional transmission organization (RTO). The RTO is designed to ensure all participants in the regional electricity market have fair transmission access and an equal opportunity to compete for generation supply.

The Southwest Power Pool (SPP) is developing an RTO which Western Resources believes will meet the requirements of this agreement with the FERC staff. Both Western Resources and KCPL are members of the SPP. Hearings are scheduled to begin Oct. 25 in Washington, D.C., if necessary.

Yet while other processes are moving forward, the merger’s march through Kansas’ regulatory procedure has not been smooth. Earlier this month, the commissioners on the KCC reopened the agreement reached between the KCC staff and the merging companies, because it felt Westar would be able to recover too much of the merger-related costs from Kansas consumers under the terms of that agreement. Western was angered by the KCC’s decision and has threatened to sell its operations and exit the state if the KCC changes its stance too much (see NGI Aug. 9).

The reopened merger agreement is still being debated in Kansas. David Wittig, Western Resources’ CEO, said the company continued to hope for a decision from the KCC that will allow the company to create a with KCPL by year end.

John Norris

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