PSC to order Great Plains Energy to file acquisition applications in Westar merger

JEFFERSON CITY, Mo. – Six tariffs and new orders appeared on the docket of this week’s meeting of the Missouri Public Service Commission, but the major item of discussion in Thursday’s meeting concerned the case of Midwest Energy Consumers Group v. Great Plains Energy, which centers around KCPL’s acquisition of Westar.

“If you look at the reorganization statute, it’s clear that commission approval for reorganization of electrical corporations under our jurisdiction is required. That statute also expressly authorizes the commission to impose conditions that are reasonable and necessary,” Chairman Daniel Hall began. He then talked about the 2001 stipulation in KCPL’s becoming a subsidiary of Great Plains, saying that “under that condition, Great Plains agreed that they would not acquire a public utility without requesting and receiving prior approval from the commission. So the issue is: does ‘public utility’ in the stipulation include Westar?”

The issue there lies within the fact that Westar is based in Kansas, not in Missouri, and whether they have jurisdiction.

Chairman Daniel Hall

Chairman Daniel Hall

Hall maintains that under the statutes, the term “public utility” applies to Westar, citing two main reasons:

  1. The acquisition statute, 393.190 already requires Missouri-located utilities to seek commission approval for a sale. Hall says that under that, it cannot be confined to the purchase of only Missouri utilities.
  2. Section 7 is designed to protect ratepayers from potentially harmful acquisitions at the holding company level.

“That policy is not furthered by limiting its reach to only Missouri-located utilities, and in short, there is no rational policy basis for making that distinction,” Hall said. “Therefore, in my view, Great Plains Energy and KCP&L have violated the terms of the 2001 stipulation and the Commission order approving it by failing to seek commission approval for the transaction. I believe the appropriate relief would be to order GPE and KCP&L to file an acquisition application within 10 days.”

Hall proposed that they issue the order 10 days from the issuance of the order, and meet with the judge to consider consolidating the case with the affiliate transaction case. He further proposed cancelling the hearing in March and scheduling a hearing in the first week of April in regards to these changes.

“I want to resolve this case as quickly as possible,” he finished.

“I believe that MECG’s complaint is valid in this matter, and the agreement made in 2001 must be honored,“ Commissioner Stephen Stoll said, agreeing with Hall’s proposals.

Kenney

Commissioner Bill Kenney

“This is a very unique and complicated case,” Commissioner Bill Kenney said. “Great Plains and Westar chose to make the merger known through email and press releases and did not request approval at the Missouri Public Service Commission. So instead, we have two complaints filed in this merger, and our sister state Kansas is also hearing a case concerning the merger, and its staff has not come out in favor of the merger.”

“Normally, I would say this merger is outside our jurisdiction, but the case before us is more complicated,” Kenney continued. He says that it, very simply, comes down to one party not upholding their end of a bargain, and that it must be handed in an expeditious manner. All of the commissioners agreed with Kenney’s statements, and the commission asked that an order be drafted and placed before them in the next agenda meeting for them to vote on.

Other matters

The PSC approved two orders establishing an Actual Cost Adjustment (ACA) balance, one from Ameren Missouri and the other from the Empire District Gas Company. Hall said that the staff and companies were clearly on the same page concerning the adjustments, so both passed unanimously with little discussion.

The commission also approved an order granting Ameren Missouri’s request to sell a transformer to Mercy Health. Mercy wants to purchase the transformer due to the expansion that the Crystal City facility is currently undergoing. The order, passed with a vote of 5-0, grants them the authority to sell the asset for the agreed upon price of $3,317.08.

The work on the contentious Grain Belt Express Clean Line continues, with the latest issue appearing before the commission this week concerning testimony. Landowners who would be affected by the proposed line filed a request to ask that rebuttal testimony by company witnesses be stricken from the case.

“I believe the rule limiting rebuttal testimony should not be interpreted to prevent this type of testimony, which adds further support for the direct testimony provided by the utility,” Hall said. “The landowners are not prejudiced in that they can still file their rebuttal testimony.”

The PSC unanimously denied that order.

The commission approved Kansas City Power & Light’s request for a fuel adjustment clause true-up and authority to implement rate adjustments. Usually this would be two separate cases, but Chairman Hall said he liked the idea of consolidating the two, and wondered if it was something that could be done again going forward. He said he believes it makes sense to roll the two into one order. Since both the staff and company agreed on the numbers, the PSC approved the order 5-0. By passing the order, it sets the scheduled true-up, and the PSC allows the tariff to become effective by order of law.

The final order before the commission concerned Empire District Electric’s low income pilot program. Under the program, the customer charge for individuals who are registered with a designated CAA agency. Thursday’s action approved the compliance tariff, and the program has been given a $250,000 budget to operate under. Once those funds run out, the program will either cease or be given an intervening rate case to reexamine the program.

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