photo by: Westar Energy

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Kansas utility regulators gave their blessing Thursday to a merger between the two largest electric companies operating in the state.

Westar Energy, based in Topeka, and Kansas City Power & Light’s parent company, Great Plains Energy, will soon become wholly-owned subsidiaries of a new parent company, Evergy. Together, they form a company with $14 billion in equity and will serve an estimated 1.6 million customers in Kansas and Missouri.

Missouri regulators gave their approval to the deal earlier in the day. The merger is expected to become final in early June.

The merger is expected to generate savings and efficiencies that will immediately be reflected in customers’ bills.

Under terms of a settlement agreement, neither utility will be allowed to apply for base rate increases for five years after the merger. Instead, Westar will issue bill credits to its customers totaling $23 million, while KCP&L will issue $7.5 million in one-time credits. Those credits will appear on customer bills sometime this fall, officials said.

Westar currently has a separate rate case before the Kansas Corporation Commission in which it is seeking a $52 million rate increase. But Westar spokeswoman Gina Penzig said the merger will effectively cut that by more than half. The merged company will not be allowed to apply for another increase in its base rates for at least five years.

Penzig said the two utilities plan to change their names to Evergy sometime in 2019. But beyond that, she said, customers should notice little difference.

“Same phone number, same website. A lot of the practical aspects of that are going to stay the same,” she told reporters. “With the efficiencies that are going to come with being part of a bigger company, we’re hoping to be able to bring more innovation, whether it’s how we serve customers behind the scenes or the services that customers are going to be able to take advantage from us”

Under terms of the settlement, Westar must keep its headquarters in downtown Topeka for at least five years, and it must keep employees in Topeka, although not necessarily downtown, for another five years after that. The two utilities also must maintain separate capital structures and separate debt.

The deal is being described as a “stock-for-stock merger of equals.” That means each share of Westar Energy stock and each share of stock in Great Plains Energy will convert to one share of Evergy stock.

When that conversion is complete, Westar shareholders will own 52.5 percent of Evergy, and Great Plains shareholders will own the other 47.5 percent.