WICHITA, Kan. (AP) - Westar Energy is putting shareholder enrichment ahead of reasonable electric rates for customers with its proposed sale to Kansas City Power & Light, according to state analysts.
Analysts representing the staff of the Kansas Corporation Commission and the Citizens’ Utility Ratepayer Board raised the concerns in hundreds of pages of testimony filed last week, the Wichita Eagle (https://bit.ly/2h5fTXt ) reported.
“Westar’s franchise is a privilege bestowed by Kansas to serve the public; it is not Westar’s asset to sell for profit,” KCC staff consultant Scott Hempling testified.
A Westar spokeswoman said the company remains confident of completing the merger next spring.
KCP&L’s parent company, Missouri-based Great Plains Energy, is seeking to buy Westar. The $12.2 billion transaction would involve taking on $3.6 billion in Westar debt.
If the merger is approved, Westar and KCP&L will become a single electric company straddling the Kansas/Missouri border, with 1.5 million customers.
State analysts said higher-than-necessary electric bills will occur because the merged utility would be financially weakened from Westar shareholders being paid $4.8 billion more than the book value of the company’s assets.
“This transaction is being driven by the desire to handsomely reward Westar shareholders and to find a source of new earnings for GPE shareholders,” board consultant Andrea Crane said. “Ratepayers are a means to these ends, but providing benefits to ratepayers is not the primary focus of the proposed transaction.”
KCP&L vice president of public affairs Chuck Caisley said the company expects the merger to generate $2 billion in operational savings for customers over the first decade.
Information from: The Wichita (Kan.) Eagle, https://www.kansas.com
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