The provider of natural gas for 32,000 customers in Lawrence will not be put up for sale, an Aquila Inc. official said Wednesday, no matter what state regulators say.

Aquila, a Kansas City, Mo.-based utility, issued a stern response Wednesday to conclusions reached by Kansas Corporation Commission staffers and a consultant hired to study the company’s financial condition.

Portions of the commission’s report were released Tuesday, indicating that Aquila had but one way to reduce its “excessive nonutility debt” — and that would be to sell its remaining unregulated investments and “divest most, if not all, of its domestic utility businesses.”

Al Butkus, an Aquila senior vice president, called the report’s conclusion “not true” and “so far off” that it was “unbelievable.”

“It certainly sets the wrong tone,” Butkus said. “We have been on a track for three years of repositioning the company from being a powerhouse in energy trading and marketing to repositioning back to being a utility in seven states.

“We’ve been working on that, and telling people what we’re going to do, and then we do it.”

Butkus said that the latest step in that process started last week, when the company announced that it had plans to sell its natural gas operations in Missouri, Michigan and Minnesota; electric operations in Colorado and Kansas; and St. Joseph Power & Light in St. Joseph, Mo. The company estimated those assets to be worth $875 million and that the money would be used to retire $700 million of its $2.4 billion in debt.

The company also said it had plans to sell three seasonal power plants and Everest Connections, which provides digital cable, telephone and high-speed Internet services in the Kansas City area.

But the latest news from the commission report questioned how much Aquila could actually receive by selling those six utility businesses. The commission’s staff said the company likely would have to sell at a premium, leading to higher costs for ratepayers under the new ownership.

Butkus doesn’t buy it, and neither does the company. Aquila sent company employees — 145 work for the natural gas operation in Kansas, including Lawrence — a written rebuttal to the report Wednesday, and officials plan to file a formal response to the commission March 31.

The company intends to keep its electric operations in Missouri and natural gas operations in Kansas, Iowa, Nebraska and Colorado, serving nearly 730,000 customers.

“Our debt was $4 billion, and it’s down to $2.3 billion,” Butkus said Wednesday. “We can support that, and we’re going to reduce it further. …

“We have a plan that we’re on. … This is not a Westar (Energy) situation.”

Commission staff members and their consultant have spent months studying Aquila’s finances and in February released portions of a report with their findings. More of the report was unveiled Tuesday.

The commission still has not released sections dealing with Aquila’s future cash flow and its ability to repay debt. Regulators have scheduled a hearing next month in Topeka to decide whether to release more sections.

One of the report’s main recommendations is for the commission to take a larger role in deciding Aquila’s financial strategy. The commission has given the utility a deadline of February 2006 to boost its debt from a “junk” rating to “investment grade.”

Aquila shares fell 14 cents, or 3.5 percent, to close at $3.92 in Wednesday trading on the New York Stock Exchange. The stock has been trading at a 52-week range of $2.249 to $4.86.

Butkus said that Aquila’s natural gas utility in Kansas — serving 104,000 customers — would remain part of the company well into the future.

“It’s not for sale, will not be for sale and is not being considered for sale,” he said. “Would we sell it if somebody offered? No.”

— The Associated Press contributed information to this story.