A coalition of consumer groups has asked the Kansas Corporation Commission to get to the bottom of what's going on at Westar Energy, the state's largest electric utility company.
Since 1997, the Topeka-based company's investments have lost more than $1.7 billion; its debts now total $3.2 billion.
Despite these losses, the company's board of directors paid top executive David Wittig more than $32 million between 1998 and 2001 Â $18.5 million in salary, $14 million in proceeds from a special life insurance policy. Wittig also has received thousands of shares of company stock.
Worried the company's troubled finances eventually would affect its rates and services, attorneys representing the state's Citizens' Utility Ratepayer Board, city of Wichita, USD 259 (Wichita) and Kansas Industrial Consumers asked the KCC to order an audit of Westar Energy's management practices. The KCC staff filed a similar request.
"The briefs, basically, ask the KCC to conduct an independent 'management audit' that would get into the issues of executive compensation, the decisions to get into the home security business and the board of directors' willingness to support those decisions," said Walker Hendrix, general counsel for the Citizens' Utility Ratepayer Board.
Hendrix said Westar Energy recently was forced to write off $900 million in investments in Protection One, its home security business.
The decision to invest in Protection One is part of the Westar Energy's post-1997 plan to use the profits from its regulated operations to finance its getting into unregulated ventures.
Contacted by the Journal-World, a Westar Energy spokeswoman declined comment on the requested audit. But in briefs filed earlier this week, the company's attorneys argued its internal decision-making processes are not subject to KCC oversight, its utility customers have not suffered, and a debt-reduction plan is in place.
Hendrix, who lives in Lawrence, disagreed.
"We don't see a commitment on the part of management to stabilize the company," he said.
Led by the Citizens' Utility Ratepayer Board, consumer groups have asked the KCC to block Westar Energy's restructuring plan.
The two sides have until Aug. 30 to file responses to the other's briefs.
The KCC is expected to rule on the request in October or November.
"All options are open at this point," KCC spokeswoman Rosemary Foreman said.
Frank Becker of Lawrence is on the company's board of directors. Former Kansas University Chancellor Gene Budig also is on the board. Neither returned Journal-World calls for comment Tuesday.