#Great_Plains_Energy to buy rival Kansas utility #Westar for $8.6B RSS Feed

Great Plains Energy to buy rival Kansas utility Westar for $8.6B

As electric utilities across the country feel the squeeze of low commodity prices, stagnating electricity demand and regulatory pressures, an increasing number are turning to consolidation to shore up revenues and ensure financial stability.

Already this year, Dominon announced plans to buy natural gas utility Questar for $4.4 billion while Exelon closed its deal with mid-Atlantic utility Pepco for $6.8 billion, though the merger still faces residual regulatory hearings.

Both those deals, Reuters notes, are dwarfed by the dollar value of Great Plains’s bid for Westar Energy, which priced the Kansas utility at $8.6 billion, or about $51 per share in cash and $9 per share in stock.

The companies said they will pursue approval from shareholders and the Kansas Corporation Commission this year, and expect the deal to close in the spring of 2017. The merger must also be approved by the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission.

Westar operates 7.2 GW of electricity generation, with a projected 2017 capacity mix of 41% coal, 30% natural gas, 22% renewables (mostly wind), and 7% nuclear.

Great Plains operates 6.4 GW of generation through its Kansas City Power & Light subsidiary. In 2015, it generated 74% of its electricity from coal, 16% from nuclear, 8% from wind, and 1% each from hydro power and combined gas and oil.

Though the deal would be the largest electric utility merger so far this year, there is a larger acquisition involving a power provider that’s expected to close later this year. In March, regulators in California unanimously approved the acquistion of natural gas utility AGL Resources by Atlanta-based Southern Co. for over $12 billion, which would create the nation’s second-largest gas and power utility, serving about 9 million customers.

Read full article at Utility Dive