Topeka Haines takes over Westar beginning Dec. 9. Terms of HainesÃ¢ÂÂ compensation package were not immediately available.
Haines was WestarÃ¢ÂÂs chief operating officer until 1996, when he left to become El PasoÃ¢ÂÂs president and CEO. He retired from the El Paso-based company in November 2001 and has been an adjunct professor of business at the University of Texas-El Paso.
Ã¢ÂÂI feel a significant amount of loyalty to the company, and there are people who I care about,Ã¢ÂÂ Haines said. Ã¢ÂÂItÃ¢ÂÂs potentially a great company.
Ã¢ÂÂMy intuition tells me that thereÃ¢ÂÂs no magic bullet out there.Ã¢ÂÂ
The board said in a news release that it was pleased to hire someone with HainesÃ¢ÂÂ experience.
During his tenure, El Paso Electric reduced its debt and preferred stock obligations by more than $500 million and regained its investment grade credit rating.
At Westar, he inherits control of a company with more than $3 billion in debt and credit rating that Standard & PoorÃ¢ÂÂs is considering downgrading further into junk status.
Haines said turning the company around began with an attitude of each employee to come to work each day to work better than the day before.
Ã¢ÂÂI have no feeling how many months or years it will take to resolve the problems,Ã¢ÂÂ Haines said. Ã¢ÂÂYou just have to stick with it.Ã¢ÂÂ
James Zakoura, an attorney representing Kansas Industrial Consumers who has been critical of WestarÃ¢ÂÂs management, said Haines was Ã¢ÂÂa very strong selection.Ã¢ÂÂ
Zakoura called Haines Ã¢ÂÂvery intelligentÃ¢ÂÂ and said his 25 years working for regulated utilities would serve Westar and its customers well.
Ã¢ÂÂHe has experience in turning around companies.Ã¢ÂÂ
A logical choice
Haines began his career in 1989 with KG&E, a subsidiary of Westar, in its legal department. In 1984, he became KG&EÃ¢ÂÂs vice president for regulatory affairs. He was KG&EÃ¢ÂÂs group vice president from 1985 to 1992, helping improve its credit rating through financial restructuring.
He was named executive vice president and chief administrative officer of Westar in March 1992. He served as chief operating officer from June 1995 until taking the post with El Paso in 1996. El Paso has about 300,000 customers and about one-quarter the generating capacity of Westar.
Haines was a logical choice because of his previous Westar and KG&E experience, said Walker Hendrix, a Lawrence attorney and counsel for CitizenÃ¢ÂÂs Utility Ratepayers Board. Haines was rumored to be WittigÃ¢ÂÂs replacement, Hendrix said.
Ã¢ÂÂI think there are a lot of people who have worked with him and have had a relationship with him,Ã¢ÂÂ Hendrix said. Ã¢ÂÂThey have confidence in him. He knows the company and can move it forward.Ã¢ÂÂ
Hendrix also noted that Haines left Westar for El Paso about the same time Wittig came onto the scene at Westar.
Ã¢ÂÂOne would have expected in 1995 that Haines would be named director,Ã¢ÂÂ Hendrix said. Ã¢ÂÂThis is like seeing history that would have occurred if Wittig had not been hired.Ã¢ÂÂ
John Wine, a member of the Kansas Corporation Commission, said Haines was a good selection to head Westar.
Ã¢ÂÂJim Haines has a long record of being a very capable and ethical manager and this is good news for the company,Ã¢ÂÂ Wine said.
Wittig era over
Unlike with Wittig, WestarÃ¢ÂÂs board said it would be selecting an independent chairman at a Dec. 11 meeting, a move in line with generally accepted business practices of having an independent governance of a corporate board.
Wittig, 47, had been placed on administrative leave without pay while he fought the charges. In the interim, WestarÃ¢ÂÂs operations were being handled by members of the board and other top executives.
A federal grand jury has accused Wittig and Clinton Odell Weidner II, the former president of the Capital City Bank, of hiding the purpose behind a $1.5 million loan from the bank to Wittig issued last year. Weidner left the bank in March.
The charges against Wittig and Weidner, 49, include conspiracy, money laundering and filing misleading loan documents with the bank. The two have pleaded not guilty and are to stand trial Jan. 22 in U.S. District Court in Topeka.
The indictment said Weidner helped Wittig increase his credit limit at the bank from $3.5 million to $5 million. The loan application said the money would go for home improvements and business investments, among other things. But the indictment said Wittig instead gave Weidner the extra money so he could buy into a Scottsdale, Ariz., real estate development. The indictment did not specify what motivated Wittig.
Westar is the stateÃ¢ÂÂs largest electric utility, providing service to about 647,000 Kansas customers. Nothing in the indictment suggests a connection between WittigÃ¢ÂÂs activity at the bank and Westar.
Haines takes over Westar on the heals of a ruling by state regulators to improve the companyÃ¢ÂÂs financial health.
The Kansas Corporation Commission has ordered Westar to reorganize its business to protect electric consumers from risks associated with WestarÃ¢ÂÂs non-utility business interests. Those non-utility business interests include an 88 percent share of the Protection One monitored security firm.
The commission also ordered Westar to reduce its more than $3 billion in debt and move its utility operations into one or more subsidiaries.
Haines said El Paso officials were able to reduce more than half the companyÃ¢ÂÂs debt over four years as it emerged from bankruptcy.
Ã¢ÂÂI do not in any way take issue with the KCC that Westar has too much debt,Ã¢ÂÂ Haines said.