Kansas City Power & Light’s proposed purchase of Kansas based Westar Energy is being closely examined by Missouri regulators.
Great Plains Energy, parent company of KCP&L, says it doesn’t need the state’s permission for the merger. But James Owen with the Missouri Office of Public Counsel contends an earlier agreement between Great Plains and the state 15 years ago still requires any acquisition by the power company to fall under Missouri jurisdiction.
“We get into stipulations and agreements with utilities all the time” said Owen. “We expect those to mean something. Now they’re trying to say ‘we signed this 15 years ago and now don’t think it means what everyone thought it meant’.”
Owen notes there’s also concern the $12.2 billion transaction is 70 percent financed with cash and stock. “The reality is that when you have that sort of cash heavy transaction, there’s always a risk that it won’t work, that there’s going to be problems with it, that it could end up being something that, in the long run, gets passed on to ratepayers” said Owen. “I won’t say it’s a risky transaction. But I will says that it is something that is not conservative, and is pretty aggressive.”
Owens also notes Westar has operations in Missouri as part owner of a power company in Joplin, which means it is subject to the state’s oversight.
Owen thinks the state Public Service Commission will file a complaint against the merger, but says if it doesn’t, his office will.
The combined operations of KCP&L and Wester would serve 1.5 million customers on both sides of the border.
