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Archive for Thursday, July 12, 2001

Consumer advocate scolds Western

July 12, 2001

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Hendrix said Western president and chief executive David Wittig has, with the board's blessings, pursued deals to the detriment of Kansas ratepayers.

Wittig "is kind of in the catbird's seat. He has the board's support," said Hendrix, consumer counsel for the Citizens Utility Ratepayers Board, a state agency charged with defending consumers' interests.

Western's board is a who's who of influence and power.

It includes Frank Becker of Lawrence, president of Becker Investments, and former Kansas University chancellor Gene Budig.

Budig now teaches at Princeton University and is a senior adviser to Major League Baseball Commissioner Bud Selig.

The board also includes: Charles Chandler IV of Wichita, chairman of the board and president and chief executive of Intrust Bank; John Dicus of Topeka, chairman and chief executive officer of Capital Federal Savings; Doug Lake of Topeka, chief strategic officer for Western Resources; and John Nettles Jr. of Overland Park, partner with the Morrison & Hecker law firm.

Wittig, of Topeka, is chairman of the board, president and chief executive of Western.

Kim Gronniger, a spokeswoman for Western, defended the board, noting that Wittig and Budig recently were re-elected to the board by overwhelming majorities of shareholders.

"Our directors have a fiduciary responsibility to shareholders," Gronniger said.

Speaking to the Lawrence Chamber of Commerce's government communications committee, Hendrix said he believed the Kansas Corporation Commission would reject Western's plan to spin off its unregulated companies from its regulated utilities, KPL and KGE.

The proposal would allow Western to put its unregulated companies in a new company called Westar Industries. The company's KPL and KGE utilities would then be sold to Public Service Co. of New Mexico.

Hendrix and other consumers have said Western's plan would burden the utilities with debt from Wittig's business ventures, specifically the purchase of Protection One, a home security company that has had severe financial problems.

Western also is seeking a $151 million rate increase for the utilities.

Several members of the committee voiced displeasure with Western's moves, saying they hoped the KCC would reject Western's proposals.

Gronniger said the restructuring plan would help ratepayers by generating about $120 million in revenue, which could be used to pay down the company's debt.

The KCC is expected to rule on the restructuring issue soon, then decide the rate case.

-- Staff writer Scott Rothschild can be reached at 832-7221.

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