Topeka ? State regulators on Friday endorsed a proposal from Westar Energy Inc. to sell one of its major assets so that it can pay off some of its $3.2 billion debt.

Kansas Corporation Commission members said they would approve an agreement covering the plan from the state’s largest electric company to sell its 45 percent interest in ONEOK Inc., a Tulsa, Okla., natural gas company.

Westar wants to sell its ONEOK stock back to ONEOK for $971 million, though Westar would receive $738 million after taxes. The deal, among the two companies and other parties, was designed to settle issues surrounding the proposed sale.

The three commissioners endorsed the proposal as the KCC continued hearings into Westar’s finances. Commission Chairman John Wine said the KCC would issue a written order Monday accepting the agreement.

“I agree with all the parties that this transaction is a good idea, and I certainly don’t want to do anything to prevent it from happening,” Wine said.

While the commissioners endorsed the proposal, they made it clear that their order would be limited to this transaction only.

On Tuesday, when Westar, ONEOK and the other parties submitted the agreement, commissioners worried that accepting the agreement might tie their hands later.

“I don’t have any problem with what the agreement purports to do,” said Commissioner Brian Moline.

Wine said the order would make it clear that if ONEOK does not buy back the stock, or if the terms of the Westar-ONEOK deal change, the KCC must give its approval before any transaction is completed.

Westar has said its first choice is to sell is stock back to ONEOK, but the company has until Aug. 28 to decide. Failing that, Westar plans to sell the stock on the open market.

Westar and the KCC see reducing Westar’s debt as a key goal. The company wants to improve the financial rating for its securities, which now trade as junk bonds, and believes the ONEOK transaction will lead to such an improvement by 2004.

ONEOK said it needed the commission’s approval of the agreement to clear regulatory hurdles, which likely would have prevented it from being able to find financing to purchase the stock from Westar.

ONEOK is the largest retail natural gas supplier in Kansas, with about 635,000 customers.