Kansas City, MO, Aug. 9, 2007 — Great Plains Energy Inc. and its public utility subsidiary Kansas City Power & Light Co. (KCP&L) announced in a filing with the Missouri Public Service Commission (MPSC) that its proposed acquisition of Aquila Inc. is expected to deliver more synergies and lower costs to achieve than estimated in the original regulatory application. The filing is an update to testimony filed in connection with the April 4, 2007, MPSC acquisition approval application.
The company noted that it currently anticipates total synergies of approximately $643 million over the five-year period of 2008-2012. Costs to achieve these synergies (transaction and incremental transition costs) are currently estimated at $140 million.
Great Plains Energy expects to achieve $305 million of total utility non-fuel operating synergies over the five-year period of 2008-2012. Great Plains Energy and KCP&L propose that customers and shareholders equally share these synergies, offset by $45 million in transition costs.
The total synergies include an estimated $302 million of corporate costs, most of which are currently allocated to non-Missouri utility operations, including the properties proposed to be sold to Black Hills Corp. The total synergies also include an estimated $36 million of interest expense savings, net of debt reacquisition costs.
Great Plains Energy said that integration planning remains on track. The companies have formed a number of transition teams, which are planning for the operational and organizational integration of Aquila and KCP&L when the transaction is completed.
Great Plains Energy and KCP&L expect to eliminate 355 Aquila positions, while retaining 900 positions to be filled from the approximately 1,250 Aquila Missouri employees. Aquila Missouri employees may also be hired by Black Hills Corp. in connection with its proposed acquisition of certain Aquila assets. Additionally, Aquila Missouri employees may also be retained to fill positions vacated through retirement and attrition.
On February 7, 2007, Great Plains Energy entered into definitive agreements with Aquila providing for the acquisition of Aquila by Great Plains Energy following the sale of certain Aquila assets to Black Hills Corp. Under the terms of the Great Plains Energy/Aquila transaction, which was approved by the boards of directors of both companies, Great Plains Energy will acquire Aquila and its Missouri-based utilities, Missouri Public Service Co. and St. Joseph Light & Power. The transaction is expected to close in the first quarter of 2008.
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