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IOWA POWER AND IOWA PUBLIC SERVICE FILE APPLICATION TO MERGE

 IOWA POWER AND IOWA PUBLIC SERVICE FILE APPLICATION TO MERGE
 DES MOINES, Iowa, Dec. 17 /PRNewswire/ -- An application to merge Iowa Power Inc. and Iowa Public Service Co. into a single utility was filed today with the Federal Energy Regulatory Commission (FERC).
 The proposed merger of Iowa Power of Des Moines and Iowa Public Service of Sioux City - including its IPS Electric and Midwest Gas divisions - would create a single utility, MWR Power Inc. The two utilities are subsidiaries of Midwest Resources Inc. (NYSE: MWR) of Des Moines and provide electric service to 412,000 customers in Iowa and South Dakota and natural gas service to 360,000 customers in Iowa, Minnesota, Nebraska and South Dakota.
 FERC is the federal agency that regulates energy sales and transmission arrangements between utilities and has jurisdiction over utility mergers.
 The application with FERC states that the merger would produce a present value savings of $88.7 million over the 10-year period, 1992- 2001. The savings would result from a smaller workforce, lower requirements for new generating capacity, consolidated computer operations, combined energy efficiency plans and more flexibility in meeting the requirements of the amended Clean Air Act.
 "I believe the merger will, at a minimum, lead to greater rate stability for utility customers," said Russell E. Christiansen, president and chief operating officer of Midwest Resources. "Over the long term, as administrative and general functions are consolidated, these benefits will continue to accrue to customers and shareholders."
 In the application to FERC, the utilities say that this merger of affiliated utilities would not have any significant adverse impact on competition. The application points out that Iowa Power and Iowa Public Service share ownership with other utilities in generating plants and transmission lines, and are members of the Mid-Continent Area Power Pool, a network of electric power suppliers in the upper midwest and Canada. Combined, Iowa Power and Iowa Public Service would have a small percentage of the total generation and transmission capacity of the power pool.
 Other recent mergers reviewed by FERC have involved non-affiliated utilities while Iowa Power and Iowa Public Service are wholly-owned subsidiaries of the same company. FERC decisions on those applications took six to 18 months.
 In September, Iowa Power and Iowa Public Service also filed merger applications with the Iowa Utilities Board and the Minnesota Public Service Commission. The IUB is required to act on the application by Dec. 23. Minnesota regulators are expected to issue a decision by year's end. Approval by preferred shareholders of the two utilities also is required.
 -0- 12/17/91
 /CONTACT: Peter Langlois, 712-277-7810, or John McCarroll, 515-281-2785, both of Midwest Resources/
 (MWR) CO: Iowa Power Inc.; Iowa Public Service Co.; Midwest Resources Inc. ST: Iowa IN: UTI SU:


MC -- DV006 -- 3049 12/17/91 15:07 EST
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Publication:PR Newswire
Date:Dec 17, 1991
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