Document Actions
PR-09-01 -- PSC Approves Aquila Merger
Contact: Kevin Kelly (573) 751-9300
FOR IMMEDIATE RELEASE -- JULY 1, 2008
JEFFERSON CITY---The Missouri Public Service Commission has approved the merger of Aquila, Incorporated with a wholly-owned subsidiary of Great Plains Energy, Incorporated, determining the merger is not detrimental to the public interest. The commission’s vote was 2 to 1.
Great Plains Energy, Kansas City Power & Light and Aquila, Incorporated had filed an application with the Public Service Commission seeking authority for a series of transactions whereby Aquila would become a direct, wholly-owned subsidiary of Great Plains Energy.
“The substantial and competent evidence on the record as a whole demonstrates that Applicants’ revised merger proposal offers greater protection and more benefits to ratepayers than their original proposal,” said the commission. “There is long-term advantage in Aquila becoming an operating subsidiary of Great Plains in coordination with KCPL. Operational efficiencies and significant realized synergies will result in rates over time rising less than they would have otherwise. This will occur because the geographical service territories of the utilities are adjacent, therefore increasing the potential for economies of scale and improved reliability,” the commission said.
Approval by the Missouri Public Service Commission comes with a number of conditions. One such condition is that any post-merger financial effect of a credit downgrade of Great Plains Energy Incorporated, Kansas City Power & Light Company, and/or Aquila, Inc., that occurs as a result of the merger, shall be borne by the shareholders of the companies and not the ratepayers.
The commission considered a number of factors in determining the merger is not detrimental to the public interest. Those factors include projected synergy savings, transaction and transition costs, post merger credit worthiness, service quality and customer service. As part of its decision, the commission determined that Great Plains Energy Incorporated will not be allowed to recover transaction costs from ratepayers.
As part of its conditions for approval of the merger, the commission will require Great Plains Energy, Kansas City Power & Light and Aquila, Incorporated to implement a synergy savings tracking mechanism. In addition, Kansas City Power & Light and Aquila will be required, on a quarterly basis, to engage in periodic customer service performance reviews.
Aquila, Inc. provides electric service to approximately 235,500 customers in its MPS service area and to approximately 64,500 electric customers in its SJLP service area.
-30-
