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Archive for Sunday, October 28, 2001

Western Resources gives KCC details of corporate restructuring

October 28, 2001

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— The Kansas Corporation Commission on Friday heard details of Western Resources new corporate restructuring plan during a meeting with the Western's chairman David Wittig.

The closed-door session took place at the KCC after a brief public hearing on an earlier commission decision to grant Western more time. Initially due Oct. 18, the plan is expected to detail how the Topeka-based company intends to pay down its $2.8 billion debt and restore the credit ratings of its KPL and KGE electric utilities. The KCC, however, earlier gave Western until Nov. 6 to finalize the plan.

In July, the KCC rejected Western's request for a $151 million rate increase, and instead ordered the company to cut its rates by $15.6 million. The KCC also prohibited Western from implementing a plan to split off its unregulated operations. Western planned to reorganize so that it could separate KPL and KGE from its other business interests, then merge the utility operations with the Public Service Company of New Mexico in a $4.4 billion deal.

Some consumer advocates suggested that Western was trying to shift debt from other, unregulated, nonutility business interests to KPL and KGE, then have consumers pay off that debt. The KCC agreed with them, saying the split-off plan would have loaded too much debt onto the utilities.

"The goal of the discussions is to exchange information that might assist the company in developing a good, uncontested financial plan," said Rosemary Foreman, a KCC spokeswoman.

Meanwhile, the merger deal is on hold pending the outcome of legal dispute between Western and PNM. PNM contended in a lawsuit filed earlier this month in a New York court that the agreement it reached last November with Western was not workable because of the KCC rulings. Western provides electricity to about 636,000 Kansas customers through its KPL and KGE subsidiaries.

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