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Kan. electric cooperatives complete long-planned merger

Two nonprofit wholesale electric utility cooperatives in Kansas — Sunflower Electric Power Corporation Inc. and Mid-Kansas Electric Co. LLC — have merged in a move that is expected to save the companies about $500,000 on an annual basis.

Although the two companies officially became one on Jan. 1, Mid-Kansas has been jointly managed alongside Sunflower since 2007.

Mid-Kansas was formed by Sunflower member utilities to bid on certain transmission, distribution and generation assets of former Kansas utility Aquila Inc., the companies stated in a joint merger application filed with the Kansas Corporation Commission in August 2018. Sunflower was unable to bid on its own based on stipulations tied to its then-existing debt to the Rural Utilities Service.

"It was [...] always the Sunflower and Mid-Kansas members' intention to merge Sunflower and Mid-Kansas at the first opportune time to do so," according to the application. "That time has finally arrived."

The Kansas Corporation Commission approved a unanimous settlement agreement related to the proposed merger in March 2019, and the Federal Energy Regulatory Commission signed off on the companies' proposal to combine their respective transmission zones and rates the following September.

In approving the settlement, the Kansas Corporation Commission noted that its staff had determined the merger would be in the public interest and would result in operational savings. The agency also cited testimony from Davis Rooney, the CFO of both cooperatives, noting that the merger would lower borrowing costs and eliminate at least 125 duplicative processes, such as the preparation and filing of tax returns.

Both cooperatives are based in Hays, Kan., and count among their members Lane-Scott Electric Cooperative Inc., Prairie Land Electric Cooperative Inc., Victory Electric Cooperative Association Inc., Western Cooperative Electric Association Inc. and Wheatland Electric Cooperative Inc. Pioneer Electric Cooperative Inc. and its subsidiary Southern Pioneer Electric Co. round out the membership rosters for Sunflower and for Mid-Kansas, respectively.

Mid-Kansas' largest generation resource is the 146.7-MW Fort Dodge natural gas-fired steam turbine facility in Ford County, Kan. Sunflower's main generation resource is its 358.8-MW Holcomb coal-fired steam turbine in Finney County, Kan.