Crane collapse reopens review of Aquila purchase

The deadly May 23 collapse of a massive crane at Kansas City Power & Light's Iatan power plant north of Kansas City has led state regulators to reopen their review of the company's purchase of a rival utility.

The Missouri Public Service Commission on Tuesday said it will hold a June 11 hearing to hear more testimony as it continues to review KCP&L's proposed acquisition of Aquila Inc.

In particular, commissioners, who ended evidentiary hearings in the Aquila deal on May 1, said they want to determine if the collapse will significantly delay construction at the plant and whether such a delay could worsen credit ratings for KCP&L's parent company, Great Plains Energy Inc.

Great Plains, which said Tuesday it was reviewing the decision and couldn't immediately comment, has told the commission it doesn't believe the accident will delay construction or affect its ratings.

Construction worker Terry Eugene Stimpson, 23, of Peculiar, was killed and three others were injured when the boom for the 800-ton crane collapsed as it was being lowered after a test of wind speed determined that its use was unsafe. The crane had been used to install pollution-control equipment on Iatan 1, the operating power plant, next to a second unit under construction by KCP&L.

A group of industrial customers of KCP&L asked the commission last week to hear more evidence in the Aquila case, citing reports that the crane was the largest at the site and could be difficult to replace.

"The use of common subcontractors on both the Iatan 1 upgrades and the Iatan 2 plant construction necessarily leads to some concern that if the Iatan 1 schedule is threatened, the scheduled completion of the Iatan 2 power plant will be similarly threatened," the group said in its filing.

The industrial customers said they worried that a significant delay in construction or increase in costs for the projects could cause rating agencies, which have relied on the company's estimated completion schedules, to give Great Plains a lower credit rating following the Aquila purchase. That would increase the company's costs for borrowing money, which it could pass on to utility customers.

Great Plains opposed reopening the case, arguing in its filings that the accident wasn't expected to delay construction and that credit ratings rarely change because of a single event.

"If the commission were to reopen the case every time an assumption changed that a rating agency might have relied upon, it would never be able to make a decision," the company said in a filing.

But commissioners agreed to the one-day hearing, arguing they had no evidence to determine if Great Plains was correct.

KCP&L's proposed acquisition of Aquila has dragged on for more than a year as customers, consumer advocates and commission staff members have criticized the deal as possibly overloading the utility and eventually raising electric rates. The company has until Aug. 6 to complete the purchase.