The merger of KPL Gas Service with Kansas Gas & Electric Co. won't have any effect at least in the near future on customers served by the two electric utilities, including KPL's customers in Lawrence, a KPL official said Wednesday.
"The immediate effect is no change," said Bill Brown, president of the KPL division of Kansas Power and Light Co. "We think in the long run there will be a combination of savings and synergies that will help us maintain the low rate level."
The merger was unanimously approved by directors of both companies and announced in a joint statement Sunday.
Brown, who was in Lawrence Wednesday, said the combined generating capability of KPL and KG&E; will allow the two companies to provide service to a geographic region that includes two-thirds of the state without needing to build new plants during the next decade.
"WE SEE the diversity of KG&E;'s nuclear and our coal operations and both of our gas operations giving us a flexibility and one of the cheapest energy sources in the future," Brown said.
Brown said the combined electricity transmission capability of the two companies will allow them to sell surplus electric power and to buy power in times of emergencies.
The transmission lines reach from Oklahoma to Nebraska and from the Missouri line to western Kansas, he said.
Brown said he foresees no rate increases as a result of the merger and that the company will continue to operate in Kansas as KPL and KG&E;, and in Missouri as Gas Service.
"In the long term we think that the savings and the synergies mean there will be less of a potential price increase than either one of us would have had separately," he said.
FOR EXAMPLE, Brown said KPL plans to install a new customer computer system next year to replace its own outdated system, he said.
"KG&E;'s system is also a number of years old," he said. "We can put their whole customer accounting system onto our new system."
Another example is that the merger will allow both companies to read all of the electric meters with one group of meter readers instead of two, he said.
"We can serve customers in Wichita, El Dorado, Fort Scott, Pittsburg, Arkansas City and Newton through one customer organization," he said.
Brown said he was not certain if the company plans to change its name after the merger is complete.
He said KPL Gas Service will be the parent company of KG&E.; But KG&E; will continue to operate under the KG&E; name.
KPL, which merged with Gas Service Co. in 1983, formerly was known as Kansas Power and Light Co. The utility has since reorganized into two divisions. The company's Gas Service division serves only natural gas customers located in Kansas and Missouri. The KPL division serves 32,000 electric customers in the Lawrence area and about 300,000 throughout the company's territory.
KG&E; serves about 250,000 electric customers, Brown said.