Great Plains Energy Inc. has cleared the decks for the Kansas Corporation Commission (KCC) to approve its acquisition of Aquila Inc., the company said last week. Now it must placate regulators in Missouri to see the deal go forward.
“With the expected approval in Kansas, the transaction will have received numerous federal and state approvals,” said Great Plains CEO Michael Chesser. “We look forward to working with Missouri regulators to receive approval, clearing the final hurdle and bringing the benefits of this strong, regional utility to customers.”
The KCC is to consider at a hearing Thursday (March 7) the proposed settlement with all parties that had contested the deal. Highlights of the settlement include:
Great Plains recently submitted a revised proposal to the Missouri Public Service Commission that provides increased short- and long-term value to all stakeholders, the company said. Net customer benefits were accelerated, and the company agreed not to seek recovery of the portion of Aquila’s high interest cost related to its prior nonregulated activities. This came after settlement talks with parties to the case failed to reach an agreement (see NGI, Feb. 25).
Great Plains said that overall the deal would generate benefits and net customer savings of about $140 million by 2013 and $482 million by 2017.
“We believe that with the Kansas agreement and the Missouri proposal we have addressed concerns and showed our ongoing commitment to listen to and collaborate with key stakeholders in the community,” Chesser said.
The Aquila deal will add about 300,000 electric utility customers to Kansas City Power & Light’s existing 505,000 customers. Terms of the transaction call for it to be completed by May 1. It is part of a three-way deal that includes South Dakota-based Black Hills Corp. acquiring Aquila’s electric and gas operations in Colorado, Kansas, Nebraska and Iowa for $940 million. Colorado regulators recently approved the sale and transfer of Aquila’s utility operations in Colorado to Black Hills (see NGI, Feb. 18).
Great Plains is to pay approximately $1.7 billion in cash and stock and assume $1 billion of Aquila debt for the Missouri operations, effectively putting a period at the end of the 100-year saga of Aquila and its predecessor companies. The linked transactions were first announced in early 2007 (see NGI, Feb. 12, 2007).
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