The Federal Energy Regulatory Commission appointed Bud Earley policy advisor on electric matters. Earley most recently served as director of the electric policy division of the FERC's Office of...
Managing the Merger: The View from Corporate Counsel
Every project is unique in some way. Setting up the working group will be a new experience each time. But once it is done and the process begins to get comfortable, it is amazing what the group can accomplish. The more complex and volatile the situation, the more carefully the team must be organized and led - with a commitment from the top down, plus ample resources and good communications. It's a tall order, but I've seen it done.
John K. Rosenberg, president of JR Consulting LLC, Topeka, Kan., is also a senior advisor to the Brattle Group, a national economic and management consulting firm. Previously, he served as executive vice president and general counsel of Western Resources Inc., which is still pursuing a merger with Kansas City Power & Light Co.
A Tortured Timeline Western/KCPL merger case marked by fits and starts.
Aug. 22 First Filing. Western files unilateral application at FERC asking to merge with KCPL.
November Merger Talks. Bilateral negotiations begin.
Feb. 7 First Deal. Agreement reached with KCPL.
Sept. 18 Second Filing. New application, predicting closing date of June 3, 1998. Acknowledges potential for vertical market power due to gas transmission/distribution activities in Kansas and Oklahoma.
Nov. 17 Challenge. Missouri munis intervene, allege market power, transmission rate increase under combined tariff, inadequate protections for transmission customers.
Nov. 27 Divestiture. Western trades gas operations to OneOK Inc., for a 45 percent equity interest.
Dec. 19 Meanwhile. Southwest Power Pool files regional tariff at FERC.
Jan. 9 Stalled? Western asks FERC to hold case "in abeyance," citing problems over fairness opinion from Salomon Smith Barney.
March 13 Meanwhile. SPP regional tariff OK'd for point-to-point service, with flow-based, distance-sensitive pricing.
Tariff to be expanded later to cover long-term and network services.
March 23 Still Alive. Western advises FERC of new revised merger agreement to form single combined utility subsidiary, Westar Energy.
Aug. 7 Third Filing. Parties submit revised merger agreement, say new plan will meet muni concerns over fuel cost differential. Also commit to join an ISO - either within SPP or outside if no SPP ISO within one year of merger close.
Aug. 24 More Data, Please. FERC writes to parties, asks for more supporting data in light of new SPP tariff, announces AEP/CSW merger and Midwest price spikes.
Sept. 8 Still Unhappy. Missouri munis renew protest, claim customer protection provisions not adequate, since combined average Westar fuel costs still will exceed prior KCPL charges.
Sept. 23 Rebuttal. Parties counter muni charges.
Dec. 2 Cost Data. Parties comply with FERC's request for revised analysis on market power, renew claim of no anticompetitive impact. - B.W.R.
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