Kansas City, Mo. Kansas regulators have signed off on Aquila Inc.'s plan to sell its electric utilities in the state for $249 million, the company announced Monday afternoon.
The Kansas Corporation Commission late Friday approved the sale, the final piece of a plan announced in 2005 to sell the company's natural gas utilities in Michigan, Minnesota and Missouri and other assets to three companies for $896.7 million.
It's not connected to the company's announcement earlier this month that it plans to sell the rest of its assets to utilities Great Plains Energy Inc. and Black Hills Corp. for more than $2.6 billion.
The Mid-Kansas Electric Co., a coalition of six consumer-owned cooperatives that also owns the Sunflower Electric Power Corp., is expected to close the Kansas electric deal by April 1, acquiring 69,000 customers, including 33,000 in Lawrence.
Aquila announced the three-company deal in September 2005 as a way to streamline operations and generate needed revenue to pay off high levels of debt incurred over the years from ill-fated forays into energy trading and other nonregulated businesses.
The Kansas electric deal originally was to bring in $255 million, but the price was scaled back because of existing contracts with Mid-Kansas and Westar Energy Inc.
Despite assurances it would not sell the company, Aquila officials said Feb. 7 that its cross-town rival, Great Plains Energy, would acquire all of the company's outstanding shares for $1.7 billion in cash and stock and assume about $1 billion in Aquila's debt.
Before the sale, Black Hills would purchase Aquila's electric utility in Colorado and its gas utilities in Colorado, Kansas, Nebraska and Iowa. Black Hills, based in Rapid City, S.D., would pay about $940 million in cash for the utilities.
Officials said it could take up to a year for regulators and shareholders to approve the deal.
Norwalk, Conn.-based hedge fund Pirate Capital LLC has led a chorus of investors lobbying shareholders to shoot down the sale. They say the price is too low and Aquila executives will receive exorbitant severance packages.