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Archive for Thursday, March 4, 1999

CITIES SEEK KCC AID WITH UTILITY MERGER

March 4, 1999

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The city of Topeka has launched a campaign to safeguard northeastern Kansas residents from higher electric rates caused by Western Resources' merger with Kansas City Power & Light Co.

The city on Tuesday filed a motion with the Kansas Corporation Commission to intervene in Western's merger case. Topeka joins the city of Wichita, which also has intervened in the case.

Lawrence officials have no plan to follow suit, City Manager Mike Wildgen said Wednesday, but are keeping an eye on the situation.

The issue arises out of political and regulatory wrangling over Topeka-based Western's proposed $2.1 billion merger with KCPL.

In Wichita, where customers of Western subsidiary Kansas Gas & Electric pay an average 33 percent more for electricity than residents of Lawrence and northeastern Kansas, city and state officials are calling for regulators to require Western to lower rates as a condition of the merger. Western has balked.

The corporation commission last month added pressure by recommending that Western be required to use part of the $900 million it expects to save over 10 years after the merger to cut Wichita-area rates.

But regulators added that if the merger savings weren't enough to cover the cost of rate cuts there, Western would have to make up the difference by raising rates in the northeastern Kansas region served by its KPL subsidiary.

That got the attention of Topeka city officials, who are getting involved despite repeated hints that the city could lose out on jobs and facilities if too many conditions were imposed on the merger.

The motion it filed said proposals submitted by the corporation commission and the city of Wichita were "directly antagonistic to the interests of the city and its citizens."

"The city and its inhabitants would be adversely affected by any order of this commission authorizing or requiring an increase in KPL rates for electric service," the motion said, adding that the city opposed any order that gave preferential treatment to customers of KG&E or KCPL.

Western's proposed merger with KCPL would create a new electric utility to be known as Westar Energy. It would be headquartered in Kansas City, Mo. But Western, which would own 80.1 percent of Westar, would maintain its corporate headquarters in Wichita.

-- Richard Brack's phone message number is 832-7194. His e-mail address is rbrack@ljworld.com.

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