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Westar-Great Plains Merger Gets Tepid Praise, Criticism Before Kansas Regulators

Four wind turbines on flat land with a cloudless blue sky as a backdrop.
Brian Grimmett
Kansas News Service
The Kansas energy equation, which includes wind turbines, could change if the Kansas Corporation Commission approves a large utility merger

A proposed merger between two of Kansas’ biggest electric utilities drew little criticism, or praise, during a public hearing Monday night in Topeka.

Westar Energy and Great Plains Energy, the parent company of Kansas City Power & Light, want to  create a new company worth about $15 billion. It would serve more than 1.5 million customers in Kansas and Missouri. The combined company would also have one of the largest portfolios of renewable energy in the country.

Six people spoke during the public hearing. Tuck Duncan was one of three who spoke against the merger. He expressed concern about moving the headquarters of the combined company to Kansas City, Mo.

“I did not want to wake up five years from now, as the moving vans loaded with desks and file cabinets was headed eastward, and as the padlock was affixed to 818 Kansas Avenue, saying to myself, ‘Shame on me for not having made a public statement in January 2018,’” he said.

“If we’re the majority of the assets and the majority of the entity,” Duncan said, “then we ought to have the headquarters here.”

This proposal is the second attempt in the past two years by Westar and Great Plains to combine. The Kansas Corporation Commission, the agency responsible for regulating large utilities in the state, rejected the first effort.

The commission said the terms of the first merger proposal would place the company on poor financial footing and potentially put ratepayers on the hook if the deal turned sour.

To address the issue, the companies’ current application contains a commitment to keep at least 500 employees at the Westar headquarters in Topeka for the next five years.

Westar spokeswoman Gina Penzig says the decision was part of larger negotiations and a give-and-take between the companies’ leadership.

“It’s pretty natural that when two companies combine that the headquarters may land in the larger community, as it did here,” she said.

Officials from both companies say the merger would cut the cost of generating and distributing electricity. They estimate $28 million savings in the first year alone, with the savings increasing to as much as $160 million by the fifth year. While they say there will be no involuntary layoffs, much of the savings will come from retirements and efforts to consolidate operations.

The KCC will make its final decision on the proposed merger by June 5.

Brian Grimmett, based at KMUW in Wichita, is a reporter for the 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.Kansas News Service stories and photos may be republished at no cost with proper attribution and a link back to the original story.

I seek to find and tell interesting stories about how our environment shapes and impacts us. Climate change is a growing threat to all Kansans, both urban and rural, and I want to inform people about what they can expect, how it will change their daily lives and the ways in which people, corporations and governments are working to adapt. I also seek to hold utility companies accountable for their policy and ratemaking decisions. Email me at grimmett@kmuw.org.
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