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Second Appeal Summary
PA ID# XXX-XXXXX; Mid-Kansas Electric Company, LLC
DSR ID# XXXX; Legal Responsibility
FEMA-1675-DR-KS Mid-Kansas Electric Company, LLC (Applicant)Cross-reference: Legal ResponsibilitySummary:
On September 21, 2005, Mid-Kansas Electric Company, LLC, a Kansas non-profit public utility (Applicant) signed a contract to purchase the electric generation, transmission, and distribution assets of Aquila, Inc., a for-profit investor-owned utility (Seller), operating in Kansas and four other states. The contract required the Applicant to reimburse Aquila for any repairs Aquila made to the assets after the agreement was signed as a result of extraordinary or catastrophic weather. The reimbursement would be reflected in an upward adjustment of the purchase price at closing.
A severe winter storm struck the state of Kansas on December 28, 2006, and severely damaged the assets to be purchased by the Applicant. The Applicant submitted a claim for the full amount of the repair cost to FEMA before Aquila transferred the assets to the Applicant on April 1, 2007. On April 11, 2007, FEMA denied the Applicants claim for reimbursement of repair costs because FEMA determined that the Applicant did not have legal responsibility to repair the damaged Aquila property at the time of the incident. The Regional Administrator sustained this determination on first appeal in a letter dated October 17, 2007.
The Applicant submitted a second appeal on December 16, 2007, citing Kansas law as precedent and the basis for a favorable judgment. A copy of the purchase agreement and affidavits from corporate officers, attesting to the terms of the agreement was provided.Issues:
Was the Applicant legally responsible for the repairs to the Aquila property?Findings:
44 CFR §206.223.