The Kansas Corporation Commission won’t reconsider its decision in April to reject Great Plains Energy’s bid to acquire Westar Energy, the regulatory agency ruled Tuesday.
Great Plains Energy, the parent company of Kansas City Power & Light, and Westar Energy had asked for a May 31 deadline to come up with a revised deal that might satisfy the concerns that led to the commission’s decision to scuttle what had been a $12.2 billion deal.
The Kansas Corporation Commission said in its ruling a request for reconsideration must claim that the original decision was unlawful or unreasonable. The commission said Great Plains and Westar just asked for more time to revise the terms of their deal, which isn’t enough to warrant reconsideration.
Tuesday’s ruling encouraged both companies to continue working toward a revised deal and would welcome a new application for a merger that would meet legal standards.
A KCP&L spokeswoman said the two companies are continuing to explore a new deal.
“In summary, we appreciate the Commission is welcoming of a new application and we are pleased they recognize the outpouring of community support for the work our companies do,” said KCP&L spokeswoman Katie McDonald. “We continue to work with Westar in a timely manner to explore the possibility of a revised deal that is materially better than our standalone plan for both shareholders and customers. If a new agreement to combine is reached, the companies would file a new application under a new docket.”
Westar also responded to the Kansas Corporation Commission order.
“While we were disappointed that the KCC didn’t grant our request for reconsideration, we are encouraged that they said they would welcome a new application,” said Westar spokeswoman Gina Penzig in an email. “Westar continues to discuss potential changes to the merger agreement with Great Plains to determine if a new agreement can be reached that addresses the concerns of the KCC while still adding value for our customers, investors, employees and communities.”
A KCP&L spokesman said the company did not have an immediate comment.
The commission on April 19 struck down Great Plains’ bid, announced last year, to buy Westar in an acquisition that had Great Plains buying $8.6 billion in Westar’s energy and assuming $3.6 billion of its debt.
The regulatory commission sided with its staff as well as other critics of the deal, which included other utility companies and consumer watchdogs, that said Great Plains would take on too much debt if the deal went through and that it could lead to substantial job losses in Kansas.
Westar serves much of eastern Kansas and the western edge of Johnson County, while KCP&L serves most of the Kansas City metro area. The combined utility would have served 1.5 million customers. Both utilities argued that a combined company would result in a more efficient operation and ward off the possibility that an out-of-town concern would eventually buy up one or both of the utilities.
Kansas Corporation Commission staff and the Citizens’ Utility Ratepayer Board both filed briefs arguing against reconsideration of the merger. The ratepayer board said a revised deal would be so substantial that it would warrant a new application.