NGI The Weekly Gas Market Report
Kansas City Power & Light and Western Resources successfullyreached an agreement with the FERC settling all merger-relatedissues, Western Resources said yesterday. The company also said theagreement forged between the merging parties and the MissouriPublic Service Commission staff is currently being reviewed by theMissouri commissioners. Only the Kansas Corporation Commission(KCC) approval stands in the way of the merger’s completion, thecompany said.
The agreement with the FERC staff settles market power,transmission and, in concept, customer protection issues, Westernsaid. A document reflecting the settlement with the staff isexpected to be filed with the FERC for its review within the nextfew weeks. Under the terms of the agreement, Westar Energy, thename of the merged entity, will join a FERC-approved regionaltransmission organization (RTO). The RTO is designed to ensure allparticipants in the regional electricity market have fairtransmission access and an equal opportunity to compete forgeneration supply.
The Southwest Power Pool (SPP) is developing an RTO whichWestern Resources believes will meet the requirements of thisagreement with the FERC staff. Both Western Resources and KCPL aremembers of the SPP. Hearings are scheduled to begin Oct. 25 inWashington, D.C., if necessary.
Yet while other processes are moving forward, the merger’s marchthrough Kansas’ regulatory procedure has not been smooth. Earlier thismonth, the commissioners on the KCC reopened the agreement reachedbetween the KCC staff and the merging companies, because it feltWestar would be able to recover too much of the merger-related costsfrom Kansas consumers under the terms of that agreement. Western wasangered by the KCC’s decision and has threatened to sell itsoperations and exit the state if the KCC changes its stance too much(see Daily GPI, August 4).
The reopened merger agreement is still being debated in Kansas.David Wittig, Western Resources’ CEO, said the company continued tohope for a decision from the KCC that will allow the company tocreate a with KCPL by year end.
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