Local control of electricity moves another step away tomorrow, when Kansas City Power & Light officially takes over Aquila.

The city of St. Joseph was willing to spend $245 million in 2005 to grasp that local control of the electric utility, according to bid documents recently obtained by the News-Press through an open records request. It’s not known how the city’s bid compares to what KCP&L’s holding company, Great Plains Energy, will pay for the asset.

Even context-free, the figure of $245 million reflects the confident days of then-Mayor David Jones, when supporters believed the city could spend hundreds of millions on a utility because it wanted to — not because the U.S. Environmental Protection Agency forced it to, as will likely be the case with sewers.

Regardless, after more than 100 years of local control under St. Joseph Light & Power, the utility now moves through its second sale in less than 10 years.

“I’ll never understand why (former Light & Power executive Terry) Steinbecker sold the company,” said Bob Powell, who retired in 1984 as a senior accountant after 44 years with Light & Power. “I’m not bitter with him. I just hate to see the company go downhill under Aquila’s management at the very top.”

While Mr. Powell said it’s “not good at all” that the utility isn’t run locally, he feels that KCP&L is a good company. In fact, he wonders how much better off his company stock price would be if KCP&L had bought the old St. Joseph Light & Power utility in 1999 instead of Aquila.

Beyond new billing statements and placards on the sides of service trucks, the loss of control has real impacts on service and infrastructure, said Kansas City utility attorney Stu Conrad.

“When you have a utility whose key management is distant from a community, I feel there’s a greater tendency to shrug their shoulders and say, ‘Oh well,’” Mr. Conrad said.

For its part, KCP&L executives have promised more investments in the electrical system and a more focused approach to tree trimming. “We have better access to capital than Aquila,” Mike Chesser, Great Plains chief executive, told the News-Press earlier this year.

“Time’s going to tell,” Mr. Conrad said of the differences between Aquila and KCP&L. “They have dramatically different approaches to management.”

Mr. Conrad intervened in the Aquila-KCP&L merger on behalf of industries. Analysis of the deal suggested that ratepayers were shouldering more of a burden than stockholders, he said.

“We felt pretty strongly that the existing Aquila customers were getting the short end of the stick,” Mr. Conrad said. “But that has to be taken in context ... The Aquila company has been a dead man walking. It was probably just a matter of time before their debt caught up with them.”

Mr. Conrad favors local control, and he said St. Joseph need only consider as evidence its water company, electric company and loss of industry.

“It’s just not been good,” said Mr. Conrad, who has family ties here.

Still, he’s not a champion of city-run electric utilities.

“It can work sometimes, but generally they have a tendency to overprice services to keep taxes low,” Mr. Conrad said. “They see the utility as turning a profit to avoid a tax increase, which is politically palatable.”

THE CITY’S BID

In spring of 2005, Aquila put six of its gas and electric utilities up for sale. The city of St. Joseph quickly jumped on the “once in a lifetime” opportunity, with the full backing of the St. Joseph Area Chamber of Commerce, as a tool for growth and local control.

That September, Aquila sold its gas utilities in several states but announced it would not sell its electric utilities.

The city spent $525,480 in consulting fees to prepare the bid. The bid itself, however, was kept closed to the public during a three-year confidentiality agreement between the city and Aquila. The News-Press requested the documents after the confidentiality agreement expired in late May.

The bid of $245 million was submitted Aug. 29, 2005, according to the documents. The city redacted or removed all “proprietary” information that went into determining the bid.

The city was prepared to buy the utility by issuing revenue bonds — not general tax obligations — which would’ve been paid back through customers’ electricity charges.

The News-Press has been unable to compare the city’s bid to the current KCP&L purchase price. Neither Aquila, KCP&L nor the Missouri Public Service Commission said such a figure is available, explaining that the purchase is a lump sum of $1.5 billion.

Aquila, then known as UtiliCorp, completed its $270 million purchase of Light & Power in early 2001.

Aquila said there’s no connection between the decision against selling to the city and its agreement 18 months later with KCP&L.

“In 2005, we needed to raise cash to reduce our debt,” said Aquila spokesman Al Butkus. “If you look at our heritage, we’re an electric utility, so we were able to sell our gas utilities, reduce our debt and remain as an electric utility.”

Joe Blumberg can be reached at joeblumberg@npgco.com.