“Governor, Wichita mayor back Westar-KCP&L merger,” an article appearing in The Wichita Eagle on December 5, 2016, quotes Kim Brabits, Vice-President of Program Operations at Catholic Charities of Northeast Kansas.
BY DION LEFLER
Gov. Sam Brownback and Wichita Mayor Jeff Longwell on Monday night endorsed a proposal to merge Westar Energy and Kansas City Power & Light.
Their representatives were among about two dozen government, economic development and charity executives from Kansas and Missouri who testified in favor of a plan by Great Plains Energy, KCP&L’s parent company, to buy Westar and merge it with the Kansas City utility.
If the merger is approved, the two utilities will become a single electric company straddling the Kansas-Missouri state line, with 1.5 million customers. Great Plains has offered $12.2 billion in cash, stock and assumption of debt to buy out Westar’s shareholders.
Brownback sent his policy director, Brandon Smith, to voice his approval of the acquisition. Smith said the governor will be following up with written testimony supporting the merger.
Smith said Brownback sees the transaction as an “opportunity for Kansans to see their economy grow.”
Gary Plummer, president of the Wichita Metro Chamber of Commerce, read a letter from Longwell supporting the acquisition.
In the letter, Longwell said Westar has been an agent for change and growth in the Wichita area, and “now it’s time for us to support their growth efforts.”
Monday’s hearing was the public’s only opportunity to testify before the members of the Kansas Corporation Commission, the state utilities regulatory agency.
The commission will decide whether the deal complies with a state law that requires utility mergers to benefit the rate-paying public. If approved, it will be the largest utility merger in state history.
About 150 to 200 people attended the hearing at a Topeka-area high school auditorium.
Several charity executives who work with and/or receive funding from the two power companies urged approval.
BOTH WESTAR AND KANSAS CITY POWER & LIGHT HAVE BEEN IMPORTANT COMMUNITY PARTNERS. — Kim Brabits, Catholic Charities of Northeast Kansas
Kim Brabits of Catholic Charities of Northeast Kansas said “both Westar and Kansas City Power & Light have been important community partners” in helping the poor apply for assistance with utility bills.
Lenexa Mayor Mike Boehm said the merger would keep the management in the region, a better outcome than Westar selling to a more distant utility holding company.
“I can’t imagine having an outage and having to call San Francisco or Charlotte,” N.C., where executives would be unaware of the challenges of Kansas’ harsh weather, he said.
Only one speaker sounded a cautionary note.
Customer George Phelps urged the commission to ensure that merger and fuel costs be equitably shared among customers on both sides of the state line.
WHO WILL HAVE THE RIGHT TO RULE? — Utility customer George Phelps
He also questioned “Who will have the right to rule?” if the regulatory commissions in Kansas and Missouri disagree on the combined utility’s rates and policies.
In an informal question and answer session before the hearing, Great Plains, KCP&L and Westar officials portrayed the acquisition as a neighborly merger that won’t degrade service but will cut costs through reducing workforce and retiring redundant power plants.
Darren Ives, KCP&L legislative affairs director, said the acquisition is projected to save electric customers $2 billion in the first 10 years.
Westar chief executive Mark Ruelle said Westar officials were delighted that the best offer for the company came from the neighboring utility.
He said Westar and KCP&L jointly own most of the power generation in the state, including 94 percent of the Wolf Creek nuclear plant, and are used to helping each other in emergencies.
Ruelle acknowledged that the new company would have fewer jobs than Westar and KCP&L do separately.
However, he said now is the time to make that change because baby boomer employees are nearing retirement age and the companies can “ride that wave” of demographic change and accomplish reductions mainly through early retirement and attrition instead of layoffs.
WE CAN GET THE SAVINGS SIMPLY BY BACKFILLING SOME OF THOSE (RETIREES’) JOBS. — Westar Energy CEO Mark Ruelle
“We can get the savings (on personnel costs) simply by backfilling some of those jobs,” he said.
Great Plains chief executive Terry Bassham, who would be the CEO of the merged company, said KCP&L is holding 180 positions open to absorb Westar workers and has vowed to do “everything we can to have the least impact possible on jobs.”
He also said the company expects to keep many employees in Kansas, including full staffing at Westar’s Topeka headquarters.
He said Great Plains has not yet identified jobs that will have to be moved to the combined company’s Kansas City headquarters, although the company is considering transfer requests from Westar employees who would rather live there than in Topeka.
Dion Lefler: 316-268-6527, @DionKansas
- Read the original Wichita Eagle article
