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Energy and Environment
Support for KMUW's energy and environment coverage comes from ITC Great Plains and the Corporation for Public Broadcasting.

Westar, Great Plains Offer Bill Credits And Job Promises, But Balk At Rate Hike Moratorium

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Kansas News Service/File photo
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Westar Energy and Great Plains Energy say they can agree to some, but not all, of Kansas Corporation Commission staff requests to change the terms of their proposed merger.

Executives pushing the merger of the two largest utility companies in Kansas have told regulators they’ll give in on some customer bill protection and job guarantees.

But the leaders at Great Plains Energy and Westar Energy say promising a five-year moratorium on rate hikes could leave the new, larger company unable to keep step in a fast-changing industry.

Late last month, staff at the Kansas Corporation Commission testified in favor of the proposed merger of Great Plains Energy and Westar Energy, if it protected ratepayers and kept jobs at a Topeka headquarters for a full decade.

KCC staff worried that the two companies would be passing on too much of the savings from the proposed merger to shareholders, so they suggested increasing the applicants’ offer of $50 million in upfront bill credits to $125 million.

In a response filed Monday, Great Plains Energy CEO Terry Bassham countered the offer by proposing to give customers $75 million in bill credits.

“Credits at the levels proposed do not fairly balance all interests,” he said.

Bassham agreed to the staff’s recommendation to keep significant staff in Topeka for 10 years, rather than five.

But the executives from the two companies opposed a recommendation to put a five-year moratorium on rate increases.

Westar CFO Anthony Somma argued in his response that a ban on rate hikes could sap the new company of money it will need to shift with changes in the industry.

“Nobody will benefit if the companies are pushed too far initially,” he said, “only to risk their financial strength with the first change in the law or next cycle in business conditions.”

Bassham said he was encouraged by most of the suggestions and thinks the companies and regulators will be able to reach an agreement to OK the merger.

“The merger is the best path forward,” he said. “It protects Kansas, Kansas jobs and our local economy.”

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Brian Grimmett is an energy and environment reporter for KMUW’s Kansas News Service, a collaboration of KMUW, Kansas Public Radio, KCUR and High Plains Public Radio covering health, education and politics. Follow him on Twitter @briangrimmett.