FINNEGAN, CONRAD & PETERSON L.C.

Empire District Electric and UtiliCorp United Merger

Federal Proceeding - EC00-28

The FERC proceeding to authorize the acquisition of Empire District Electric Company was filed concurrently with the application to acquire St. Joseph Light & Power Co.  As with that filing (which was joined by FERC) interventions were numerous.  FERC approved the application on a condition basis, that the applicants would be required to submit a transmission study upon determination that their transmission systems would be integrated.

Missouri Proceeding - EM-2000-369

On a somewhat delayed basis, the joint applicants filed for approval in Missouri.  Along with seeking approval for the merger itself, the joint applicants also sought approval of a "regulatory plan" which essentially was a mechanism to permit UtiliCorp to recover the roughly $800 million acquisition premium it had agreed to pay.  The plan involved a five-year rate "freeze" during which any savings would be assigned to the shareholders.  A second five-year plan to follow allowed a "sharing" between shareholders and ratepayers.  As an additional feature, the joint applicants sought pre-approval of numerous rate-case issues pertaining to a new generating unit being installed by Empire.

It its decision the Commission permitted the merger, but rejected the regulatory plan including the pre-approval of the rate case issues.

Following this decision, UtiliCorp announced that it would not go forward with the merger.  This decision was stated to have been driven by the Missouri decision as well as an earlier rejection of the merger by the Arkansas Public Service Commission.

Finnegan, Conrad & Peterson represented clients in the federal and Missouri proceedings.  While not opposing the merger, our clients urged rejection of the regulatory plan and, in particular, the pre-approval of the rate case issues that had been sought by the joint applicants.

Updated 05/17/06