Dive Brief:
- Empire District Electric Co. reached a settlement with staff of the Kansas Corporation Commission, allowing the utility's merger with Canadian-based Algonquin Power & Utilities to move ahead.
- As part of the agreement, Empire’s pending rate case will be withdrawn and the utility's current rates will remain in effect until 2019.
- Empire noted the agreement also allows it to request updating the current Environmental Recovery Rider to include costs associated with the Riverton 12 Combined Cycle Project, which are expected to be approximately $1.2 million.
Dive Insight:
Empire District Electric will freeze rates for two years under a settlement that would allow its merger with Algonquin to move ahead. The companies are hoping to close the deal early next year, and have already received approvals from federal regulators as well as those in Missouri, Oklahoma, and Arkansas.
The company said it expects a decision from Kansas regulators no later than January 10, 2017, and hopes to close on the deal shortly thereafter.
Algonquin already owns a major asset in the U.S. — its Liberty Utilities subsidiary serves 485,000 customers, with operations in Arizona, Arkansas, California, Georgia, Illinois, Iowa, Massachusetts, Missouri, New Hampshire and Texas. Empire has approximately 218,000 customers in Missouri, Kansas, Oklahoma, and Arkansas.
Algonquin has said it expects to consolidate existing Liberty Utilities operations in the region under the Empire senior leadership, and Empire will maintain its headquarters in Joplin, Mo. The utilities also said customer rates would not be impacted.
The utility industry has seen a wave of consolidation as companies look to shore up revenues. Analysts at UBS Securities have said that Canadian power players are drawn to the U.S. market due to high demand growth in certain regions and the stable, financially viable regulatory model for U.S. utility companies in some states.
