Topeka ? What a difference a year makes at Westar Energy Inc.

In the months since the last shareholders meeting in New York, the company has lost its president, lost stock value and shed some of its financially draining assets.

As the curtain rises on today’s annual meeting in Topeka, Westar has a new president, new regulations for corporate governance, a plan to reduce its $3.2 billion debt and return to its utility roots.

Westar appears to be recovering, but it’s a slow, uncertain process to emerge from the debt incurred under former CEO David Wittig’s reign, said David Springe, chief counsel for the Citizens Utility Ratepayers Board.

The company’s image must be fixed, too, which will be difficult as Wittig’s federal trial gets under way June 30. He’s pleaded not guilty to charges of hiding the purpose behind loans unrelated to Westar business.

Recent revelations showing Westar tried to influence energy policy by contributing to Congressional campaigns don’t help the utility’s public persona either, he said.

“Internally they’re working in the right direction, externally they’ve got certain demons to battle,” Springe said.

New leadership

Under new CEO Jim Haines, a former Westar executive, the company has pledged to be more honest and to return to being a pure electric utility, shedding its partial ownership of ONEOK Inc., an Oklahoma natural gas conglomerate, and Protection One, the monitored security firm that has drained heavily on Westar’s finances.

“We think that they’re very good at that, that it’s been a very profitable operation for them and that the utility operations by any measure are excellent,” said Jim Zakoura, attorney for Kansas Industrial Consumers.

Zakoura noted that shares of Westar have rebounded from $8.50 last fall to close to $16. The improvement indicates, he said, Haines’ management ability and the realization that much of the company’s troubles were tied to previous leaders.

Investigation of CEO

Still tarnishing the company’s image, however, is the company’s investigation of Wittig and former chief strategic officer Douglas Lake’s abuse of power, Springe said.

A 376-page report released in early May said the pair misused corporate aircraft, misled directors and squashed dissent among employees.

“There might be a lot of shareholder angst given this report, given that it’s clear the board of directors and management weren’t exactly looking out for shareholders,” he said.

Topeka attorney Dan Lykins is a shareholder and one of Westar’s more vocal critics. He said the company’s board of directors shoulders much of the blame for allowing Wittig and Lake to ruin the company.

“What they have done has been devastating for the company,” said Lykins, who made corporate oversight an issue in his unsuccessful congressional bid in 2002.

But tempers can be calmed, Springe suggested, under the frank, new leadership of Haines, who’s been open about Westar’s past and vocal about fixing the company’s finances.

¢Westar wants up to $100 million back¢See past coverage of Westar Energy

“He’s a good leader, he’s got good integrity. He’s trying to do the best of his ability to right things on behalf of the utility,” Springe said.

Long, long process

Lykins said he was giving Haines time to get Westar’s ship righted but still questions why any board members who were present under Wittig remain.

Zakoura said the change in management has created an environment where Westar officials are willing to be open about the company — good and bad.

He said it was encouraging that Westar took swift action to implement changes in corporate governance that were identified by the internal investigation, including political activity.

“Certainly, any company, including Westar, has the right to suggest or propose some type of legislation, but the issue of contributions tied to those proposals is troubling,” Zakoura said.

Springe said outside forces could still derail the recovery.

“I think it’s going to be a long, long process,” Springe said. “There’s still a certain level of uncertainty involved.”

That includes how Westar would be able to react financially if a power plant went down or an unforeseen event occurs, he said. In the last few years, Westar has not been strong enough with its $3.2 billion debt, Springe said.

Shareholders have filed a lawsuit against Westar, charging the company and its top executives with knowingly issuing false and misleading statements about the company’s finances. The suit contends hundreds of thousands of people lost money because Westar securities sold at artificially high prices.

Lykins is not part of the lawsuit but understands shareholders’ concerns.

“I would say right now they hope things are going to be turned around, but they want to see action,” he said. “Right now, the new CEO talks a good talk but now it depends on not so much talk but action.”