By Editors of Power Engineering
The Kansas Corporation Commission has rejected the $12.2 billion merger between Westar Energy and Kansas City Power & Light.
The commission’s order, which was approved unanimously, indicated the merger was “simply too risky” and “not in the public interest,” the Wichita Eagle reported.
The commission’s major concerns were the price offered by KCP&L’s parent company Great Plains Energy and the potential for creating a financially weaker company that might have to cut jobs or reduce service.
The Wichita Eagle noted the $12.2 billion offer was $4.9 billion more than the value of Westar’s assets. The original offer for the company was $8.6 billion.
“Both KCP&L and Westar have a long history of providing sufficient and efficient service in Kansas and the Commission agrees that based on their geographies a merger makes sense,” the order said. “But not this merger.”
Spokesmen from both Westar and KCP&L indicated the companies would need to study the order. The companies have the options to ask the commission to reconsider the decision, send it to the state Court of Appeals or create a new merger proposal.
If the merger was approved, it would have created a power company with 1.5 million customers and $14 billion in rate base in Kansas and Missouri.