Westar merger costs and weather knock KCP&L parent’s earnings down 92 percent

Costs tied to a pending merger with Kansas’ largest utility helped knock down profits at Kansas City Power & Light Co.’s parent company by 92 percent in the third quarter.

Great Plains Energy Inc. said Wednesday that it earned $10.5 million in an unusually mild July, August and September and that $159.5 million in merger-related expenses had the greatest impact.

The quarterly profit marked a 92 percent reduction from the $133.6 million the company had earned in those months a year ago, which also had been reduced somewhat by merger costs.

Great Plains and Topeka-based Westar Energy Inc. are working through regulatory approvals and expect to complete their merger in the first half of next year.

Westar on Tuesday reported a 2.3 percent increase in its third-quarter earnings. The $158.3 million it earned came on revenues of $794.3 million, which were up 3.9 percent from a year earlier.

Shareholders of the two companies are scheduled to vote on the merger Nov. 21. This is their second effort to merge. Kansas regulators rejected their original plans in April.

Great Plains’ announcement listed several expenses tied to the merger, including many costs tied to financing and securities issues.

It also said that energy demand from customers was reduced by “the impact of cooler summer weather, including the mildest August across our service territory in more than 25 years.”

Wednesday’s announcement from Great Plains did not include its revenues for the quarter.

Combining the firms would create a new Kansas City-based company called Monarch Energy Holding Inc. with about 1 million customers in Kansas and nearly 600,000 in Missouri. Merger plans call for shareholders of each company to swap their shares for stock in Monarch Energy.

This story was originally published November 2, 2017 at 8:23 AM with the headline "Westar merger costs and weather knock KCP&L parent’s earnings down 92 percent."