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Fortnightly Magazine - August 1996

KCP&L, UtiliCorp Fight Hostile Takeover

Kansas City Power & Light Co. (KCPL) and UtiliCorp United Inc. (UU), which announced plans to merge on January 22, have amended their merger agreement in response to a hostile takeover attempt by Western Resources, Inc. The revised terms create a new KCPL subsidiary, which would be merged into UU. The resulting company would then be merged with KCPL to form the combined company. UU shareholders would receive one share in the merged company for each UU share held. KCPL shareholders would continue to hold their existing KCPL shares.

Byline: 
Lori A. Burkhart
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Penn. Upholds Gas-cost Incentive Program

The Pennsylvania Commonwealth Court has upheld a ruling by the state Public Utility Commission (PUC) implementing a three-year, performance-based, gas-cost incentive program for Columbia Gas of Pennsylvania, Inc., a local distribution company (LDC). The program compares LDC spot-market purchases to the New York Mercantile Exchange (NYMEX) average, sharing any savings between the company and ratepayers. The court rejected allegations that state law forbids recovery in excess of prudently incurred actual costs.

Byline: 
Phillip S. Cross
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PP&L Resources Seeks Piece of SWEB

Power Markets Development Co., a subsidiary of PP&L Resources, Inc., is negotiating to acquire a minority interest in British electric distribution company South Western Electricity Board (SWEB). It has submitted a proposal to purchase an interest in Southern Investments-UK, the holding company for SWEB, from Southern Electric International (SEI), which acquired SWEB last fall. Should the purchase go through, SEI intends to maintain majority ownership and management control of SWEB. t

Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

Byline: 
Lori A. Burkhart
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Court Considers Inflation Adjustments, Advertising Costs

The Pennsylvania Commonwealth Court has asked the state Public Utility Commission (PUC) to explain 1) why it disallowed a substantial portion of advertising costs in setting rates for National Fuel Gas Corp., a local distribution company (LDC); and 2) why it had rejected the LDC's request for a separate inflation adjustment of 2.58 percent for 17 cost elements.

The court found the PUC's rationale (em that the LDC's advertising was "in essence targeted to seek and retain load" (em insufficient, since recovery of costs associated with similar advertisements had been allowed in

Byline: 
Phillip S. Cross
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