Topeka ? Families with high credit card balances or other big debts can struggle to meet household expenses, and financial disaster can loom only one big misfortune away.

Some critics of Westar Energy Inc. say likening the state’s largest electric company to a debt-burdened family is a good way to get a handle on Westar’s problems and understand their concerns about its future.

Last week, the Kansas Corporation Commission opened hearings into Westar’s finances. So far, those hearings have dealt with arcane accounting and financial issues.

But ordinary Kansans have a stake in the discussions because the issues lead directly into their wallets.

“If you have a utility that is financially unstable and unable to get capital to maintain its operations, then the only source of capital is a rate increase,” said Walker Hendrix, consumer counsel for the Citizens’ Utility Ratepayers Board. “This is big stuff.”

Disputed numbers

Westar disputes that it is financially troubled. In testimony filed with the KCC, Westar executives said the company continues to provide safe and reliable service.

“And no party has provided any evidence to the contrary,” said Richard Dixon, a senior vice president.

Also, KCC spokeswoman Rosemary Foreman said the agency’s concern was more about the future.

“We don’t want to put fear into the general public that their utility is going to collapse,” she said. “It’s not.”

Yet even company officials appear to understand that Westar’s $3.25 billion debt is too much for the company.

It reported $6.59 billion in assets in the last quarterly report filed with the Securities and Exchange Commission, for the first three months of this year.

Much of the debt is from Westar’s unregulated, nonutility operations, particularly its 85 percent ownership in the Protection One monitored security business.

Though Westar says Protection One has a positive cash flow, others like Hendrix see it as a money loser dragging on Westar.

And Foreman said: “Ratepayers should not be burdened by any negative activities associated with Westar’s unregulated entities.”

Relieving debt

Westar now wants to sell its 45 percent share in ONEOK, a Tulsa, Okla., natural gas company, to raise $738 million after taxes to pay down debt. Westar wants to sell its ONEOK stock back to ONEOK.

Westar officials have tied reduction of the company’s debt to its goal of improving the financial rating for its securities, which now trade as junk bonds. They believe such an improvement will come by 2004.

The KCC and Westar critics believe an improvement in the company’s securities rating will make it easier for Westar to raise capital.

In November, Standard & Poors Corp., the financial rating agency, said Westar, then doing business as Western Resources Inc., had “an exceptionally frail financial profile.”

Critics suggested comparing Westar to a debt-laden family is especially apt. They argue that Westar has trouble borrowing money, just as a family with high credit card balances might have trouble getting a loan.

“It directly relates to the finances of the electric utility,” said James Zakoura, an Overland Park attorney who represents large Westar customers. “In a broad sense, it relates to rates.”

Westar executives argue that it’s inaccurate to suggest that the company can’t get access to capital markets. This year, it refinanced $1.5 billion in debt that was coming due.

But Hendrix is skeptical. He said Westar refinanced existing debt as it was closer to coming due like a family using a Visa Card to pay off a MasterCard balance.

And in Hendrix’s mind, Westar may soon have only one place to go if it needs to build a new power plant, upgrade an existing one, deal with an emergency or perhaps even to struggle through its day-to-day operations. The source is consumers.