Carla Eckles Interview

If you would, please give me your full name and title. Okay, my name is Nikki. That's an I.K.I. Christopher. I'm an attorney for the Citizens' Utility, right-payer board in Topeka. Okay, there's a weird sound to me. I wonder, hmm, okay, we'll just go on and if there's, if I keep hearing it all, do something. But anyway, in regard to the perception of west art and of course with the indictment of Wittig and everything that's going on right now, how has the ratepayers board, how have you all responded to what's going on? Well, of course, we're concerned that the indictment will further create financial problems for western or west art. And hope that that doesn't happen because the company's having enough problems as it is. Nikki, there's some kind of a little buzz on here. Let me see if I can get it worked out just a second. Sure. Nikki.

Nikki. Yeah. Okay, that's a little bit better. But hold on a second. Okay. Can you just sort of, is that maybe what, I want to ask the problem. Yeah. Okay. That may have been the problem right there, maybe. Okay, Nikki, hold on. We're just trying to double check in everything. Okay. Yeah, that's better. Okay. You got it? Yeah, we're just going to, just moving few levels around and make certain. Levels around. Make sure that everything's okay. How is the weather there? Very nice. Very nice. Cool, but nice. Okay. There's some feedback there.

Hold on. We're still kind of working it out. So Walker's in Chicago? Yeah. There's two meetings going on up there. The consumer advocate meeting for attorneys like us in the utilities field. And at the same time, the National Association of Utility Commissioners is meeting as well. So a lot of the KCC personnel are up there as well. Oh, okay. And so they left you at home base to handle all the interviews there. Well, no. Walker still likes to do him when he can. I'm usually willing to pinch hit for him when he'd be. Okay. Again, what should, could should consumers be concerned about this indictment and what's happening now in terms of rates going up? Well, our main concern is, as West ARC continues to have financial difficulties, its ability to borrow is going to be impaired.

So you noticed as the indictment was announced, the stock price dove, and though it has recovered, especially in light of the earnings report, they came out here the last couple days. But we continue to be concerned that the interest rates that West ARC has to pay on the debt that it has is excessive and that rate payers are going to have to subsidize that as the years go on. Nikki, have you heard any more in terms of them hiring a new president and CEO? No, I know what I've read in the papers is my understanding that the board is interviewing some people and considering their alternatives, I haven't heard anything definitive yet. Well, and as I mentioned, I did try to call Carla, so hopefully she'll get back with me and see what's going on in terms of an acting president. What about what should consumers be on the lookout for as far as what's going on now? Is there anything in particular people need to be to keep in mind?

Well, we're concerned that there are continuing investigations at West ARC, apparently there's a number of agencies who are in the process of going through the books and records there. Of course, we do have some serious concerns about what the outcome of that might be. But until we find out what's going on over there, we really can't say what the impact would be on rate payers. But I can guarantee you that more bad news is not going to be good news for rate payers because every instance of bad news we get tends to impact West ARC stock price and credit rating. Well, you know, recently, Nikki, a couple of the board of directors has resigned and just a lot of variety of things. Would you say that West ARC's image seems tarnished? Is that a correct perception? Well, it's certainly not what it used to be.

Unfortunately, the utility has taken most of the brunt of the image problem when most of the problems really have derived out of their unregulated businesses, such as Protection One, who had such great financial difficulties that it's dragged the utility down with it. We still maintain that somewhere down in the middle of all this is a fairly well-run utility that is capable of surviving this. It's just a matter of taking the proper steps to ensure that the unregulated businesses don't drag it down anymore than they already have. Well, what about the, I understand earlier this month there's a desire to split the regulated and the unregulated assets of the company? Well, the commission ordered on Friday that they do that by placing the utility the KPL portion of their utility in a separate subsidiary. KG&E is already a subsidiary. So that there would be a distinct separation between the regulated and unregulated companies

and that should help regulators track better the influence of the non-regulated on the regulated utilities. Could you describe, Nicky, for us, the function of the Ray Pears Board? We are created by the legislature to represent residential and small commercial rate payers of the publicly-related utilities in the state of Kansas. We generally do not initiate complaints. We generally intervene in rate cases, complaint documents, investigation documents, to watch out for the interests of residential and small commercial rate payers. So what do you think is, well, I know you can't, this is kind of a broad question about what's next for WestR, but obviously they've got to be concerned about what's going on financially.

Well, certainly the financial problems are number one at WestR. I would call that even greater than the concerns we have over Mr. Wittich's personal problems right now. Like I say, there's an ongoing investigation over there, which may have some impact that we can't foresee as yet. Mr. Invote on election made him physically sick, and he says he will not let the matter die now that the election is over. You're cut there, the tag. Democratic Party Chairman Tom Sawyer defend. Parties that have been involved with the WestR energy dealings in the past couple of years have complained that multiple layoffs and other things that have happened over there kind of indicate that maybe the last rate case really didn't take care of all the overerning that's out there. So from that point of view, there may be another rate case coming up.

We'll see about that as this restructuring docket develops. And we should also watch out for further deterioration of WestR's financial condition in which case could have some future impact on ratepayers as far as having to subsidize. It's heavy cost of debt. Any other comment, Nikki? No. You really done just fine. I was just thinking when you mentioned that, I forgot about what was it? Some bad news from WestR about revising figures related to expenses. So that may happen again that the numbers may have to be revised again. Well, yeah. It seems like it's a good news, bad news situation. We've got the bad news. They've had to revise the impact of the right off of protection one losses. Then we've got the good news that other earnings had improved because of the warm fall weather.

So I don't think one offset the other, but at least it's not all bad news. That's true. Thank you, Nikki. I appreciate your time. Okay. Take care now.