CSHB 539(FIN): "An Act extending and relating to the Alaska Public Utilities Commission; and relating to regulation of public utilities and to regulatory cost charges; and providing for an effective date."
00CS FOR HOUSE BILL NO. 539(FIN) 01 "An Act extending and relating to the Alaska Public Utilities Commission; and 02 relating to regulation of public utilities and to regulatory cost charges; and 03 providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 36.30.850(b) is amended by adding a new paragraph to read: 06 (33) contracts for professional services or testimony related to 07 proceedings before the Alaska Public Utilities Commission, including the commission's 08 procurement of temporary legal counsel under AS 42.05.111(b). 09 * Sec. 2. AS 42.05.141(a) is amended to read: 10 (a) The Alaska Public Utilities Commission may do all things necessary or 11 proper to carry out the purposes and exercise the powers expressly granted or 12 reasonably implied in this chapter, including 13 (1) regulate every public utility engaged or proposing to engage in a 14 utility [SUCH A] business inside the state, except to the extent exempted by
01 AS 42.05.711 [, AND THE POWERS OF THE COMMISSION SHALL BE 02 LIBERALLY CONSTRUED TO ACCOMPLISH ITS STATED PURPOSES]; 03 (2) investigate, upon complaint or upon its own motion, the rates, 04 classifications, rules, regulations, practices, services, and facilities of a public utility 05 and hold hearings on them; 06 (3) make or require just, fair, and reasonable rates, classifications, 07 regulations, practices, services, and facilities for a public utility; 08 (4) prescribe the system of accounts and regulate the service and safety 09 of operations of a public utility; 10 (5) require a public utility to file reports and other information and 11 data; 12 (6) appear personally or by counsel and represent the interests and 13 welfare of the state in all matters and proceedings involving a public utility pending 14 before an officer, department, board, commission, or court of the state or of another 15 state or the United States and to intervene in, protest, resist, or advocate the granting, 16 denial, or modification of any petition, application, complaint, or other proceeding; 17 (7) examine witnesses and offer evidence in any proceeding affecting 18 the state and initiate or participate in judicial proceedings to the extent necessary to 19 protect and promote the interests of the state. 20 * Sec. 3. AS 42.05.253(a) is amended to read: 21 (a) A regulated public utility operating in the state shall pay to the commission 22 an annual regulatory cost charge in an amount not to exceed .8 [.61] percent of gross 23 revenue derived from operations in the state, as modified under (c) of this section if 24 appropriate. An exempt utility shall pay the actual cost of services provided to it by 25 the commission. 26 * Sec. 4. AS 42.05.253(c) is amended to read: 27 (c) In determining the amount of the regulatory cost charge imposed under (a) 28 of this section, 29 (1) a utility selling utility services at wholesale shall modify its gross 30 revenue by deducting payments it receives for wholesale sales; 31 (2) a local exchange telephone utility shall modify its gross revenue by
01 deducting payments received from other carriers for settlements or access charges; 02 (3) an electric utility shall reduce its gross revenue by subtracting 03 the cost of power; in this paragraph, "cost of power" means the costs of 04 generation and purchased power reported to the commission; 05 (4) a cable television utility shall include in gross revenue only 06 revenue attributable to services that the commission has authority to regulate 07 under this chapter. 08 * Sec. 5. AS 42.05.253(e) is amended to read: 09 (e) The commission shall administer the charge imposed under this section. 10 The Department of Revenue shall collect and enforce the charge imposed under this 11 section. The Department of Administration shall identify the amount of the 12 operating budget of the commission that lapses into the general fund each year. 13 The legislature may appropriate an amount equal to the lapsed amount to the 14 commission for its operating costs for the next fiscal year. If the legislature does 15 so, the commission shall reduce the total regulatory cost charge collected for that 16 fiscal year by a comparable amount. 17 * Sec. 6. AS 42.05.431(a) is amended to read: 18 (a) When the commission, after an investigation and hearing, finds that a rate 19 demanded, observed, charged, or collected by a public utility for a service subject to 20 the jurisdiction of the commission, or that a classification, rule, regulation, practice, 21 or contract affecting the rate, is unjust, unreasonable, unduly discriminatory or 22 preferential, the commission shall determine a just and reasonable rate, classification, 23 rule, regulation, practice, or contract to be observed or allowed and shall establish it 24 by order. [A MUNICIPALITY MAY COVENANT WITH BOND PURCHASERS 25 REGARDING RATES OF A MUNICIPALLY OWNED UTILITY, AND THE 26 COVENANT IS VALID AND ENFORCEABLE AND IS CONSIDERED TO BE A 27 CONTRACT WITH THE HOLDERS FROM TIME TO TIME OF THE BONDS. 28 THE FINANCIAL COVENANTS CONTAINED IN MORTGAGES AND OTHER 29 DEBT INSTRUMENTS OF COOPERATIVE UTILITIES ORGANIZED UNDER 30 AS 10.25 ARE ALSO VALID AND ENFORCEABLE, AND RATES SET BY THE 31 COMMISSION MUST BE ADEQUATE TO MEET THOSE COVENANTS.
01 HOWEVER, A COOPERATIVE UTILITY THAT IS NEGOTIATING TO ENTER A 02 MORTGAGE OR OTHER DEBT INSTRUMENT THAT PROVIDES FOR A 03 TIMES-INTEREST-EARNED RATIO (TIER) GREATER THAN THE RATIO THE 04 COMMISSION MOST RECENTLY APPROVED FOR THAT COOPERATIVE 05 SHALL SUBMIT THE MORTGAGE OR DEBT INSTRUMENT TO THE 06 COMMISSION BEFORE THE INSTRUMENT TAKES EFFECT. THE 07 COMMISSION MAY DISAPPROVE THE INSTRUMENT WITHIN 60 DAYS 08 AFTER ITS SUBMISSION. IF THE COMMISSION HAS NOT ACTED WITHIN 09 60 DAYS, THE INSTRUMENT IS CONSIDERED TO BE APPROVED.] 10 * Sec. 7. AS 42.05.431(f) is amended to read: 11 (f) In the establishment of rates of a utility furnishing solid waste material 12 collection and disposal service, the commission shall permit recovery of 13 (1) reasonable, net capital and operating costs relating to solid waste 14 recovery and recycling services after considering the utility's recovery of revenue 15 associated with the service; and 16 (2) a reasonable rate of return based on consideration of equity in 17 recycling equipment. 18 * Sec. 8. AS 42.05.431 is amended by adding new subsections to read: 19 (i) A municipality may covenant with bond purchasers regarding rates of a 20 municipally owned utility, and the covenant is valid and enforceable and is considered 21 to be a contract with the holders from time to time of the bonds. Rates set by the 22 commission must be adequate to meet those covenants. However, the commission is 23 not required to set rates for services regulated by the commission to recover the 24 allocated costs and coverage requirements of services that are not regulated by the 25 commission. Bonds or other debt issued to finance unregulated, competitive ventures 26 by a municipally owned utility may not be incurred in a manner that would permit a 27 creditor, on default, to have recourse to the assets of the basic regulated utility 28 business. 29 (j) The financial covenants contained in mortgages and other debt instruments 30 of cooperative utilities organized under AS 10.25 are also valid and enforceable, and 31 rates set by the commission must be adequate to meet those covenants. However, a
01 cooperative utility that is negotiating to enter a mortgage or other debt instrument that 02 provides for a times-interest-earned ratio (TIER) greater than the ratio the commission 03 most recently approved for that cooperative shall submit the mortgage or debt 04 instrument to the commission before the instrument takes effect. The commission may 05 disapprove the instrument within 60 days after its submission. If the commission has 06 not acted within 60 days, the instrument is considered to be approved. 07 * Sec. 9. AS 42.05.711(e) is amended to read: 08 (e) Notwithstanding any other provisions of this chapter, any electric or 09 telephone utility that does not gross $50,000 annually is exempt from regulation under 10 this chapter unless [25 PERCENT OF] the subscribers petition the commission for 11 regulation under AS 42.05.712(h). 12 * Sec. 10. AS 42.05.711(f) is amended to read: 13 (f) Notwithstanding any other provisions of this chapter, an electric or 14 telephone utility that does not gross $500,000 [$325,000] annually may elect to be 15 exempt from the provisions of this chapter other than AS 42.05.221 - 42.05.281 under 16 the procedure described in AS 42.05.712. 17 * Sec. 11. AS 42.05.711(g) is amended to read: 18 (g) A utility, other than a telephone or electric utility, that does not gross 19 $150,000 [$100,000] annually may elect to be exempt from the provisions of this 20 chapter other than AS 42.05.221 - 42.05.281 under the procedure described in 21 AS 42.05.712. 22 * Sec. 12. AS 42.05.711(i) is amended to read: 23 (i) A utility that [WHICH] furnishes collection and disposal service of 24 garbage, refuse, trash, or other waste material and has annual gross revenues of 25 $300,000 [$200,000] or less is exempt from the provisions of this chapter, other than 26 the certification provisions of AS 42.05.221 - 42.05.281, unless [25 PERCENT OF] 27 the subscribers [OR SUBSCRIBERS REPRESENTING 25 PERCENT OF THE 28 GROSS REVENUE OF THE UTILITY] petition the commission for regulation under 29 AS 42.05.712(h). Notwithstanding AS 42.05.712(b) and (g), if subscribers 30 representing 25 percent of the gross revenue of the utility petition the commission 31 for regulation, the utility is subject to the provisions of this chapter.
01 * Sec. 13. AS 42.05.711(k) is amended to read: 02 (k) A utility that [WHICH] furnishes cable television service is exempt from 03 the provisions of this chapter other than AS 42.05.221 - 42.05.281 [,] unless [25 04 PERCENT OF] the subscribers petition the commission for regulation under 05 AS 42.05.712(h). 06 * Sec. 14. AS 42.05.712(h) is amended to read: 07 (h) A utility or cooperative that is already exempt from regulation under this 08 section or that is exempt from regulation under AS 42.05.711(e), (i), or (k) may 09 elect to terminate its exemption in the same manner. 10 * Sec. 15. AS 42.06.285(a) is amended to read: 11 (a) A pipeline carrier operating in the state shall pay to the commission an 12 annual regulatory cost charge in an amount not to exceed .8 [.61] percent of gross 13 revenue derived from operations in the state. A regulatory cost charge may not be 14 assessed on pipeline carrier operations unless the operations are within the jurisdiction 15 of the commission. 16 * Sec. 16. AS 42.06.285(c) is amended to read: 17 (c) The commission shall administer the charge imposed under this section. 18 The Department of Revenue shall collect and enforce the charge imposed under this 19 section. The Department of Administration shall identify the amount of the 20 operating budget of the commission that lapses into the general fund each year. 21 The legislature may appropriate an amount equal to the lapsed amount to the 22 commission for its operating costs for the next fiscal year. If the legislature does 23 so, the commission shall reduce the total regulatory cost charge collected for that 24 fiscal year by a comparable amount. 25 * Sec. 17. AS 44.66.010(a)(4) is amended to read: 26 (4) Alaska Public Utilities Commission (AS 42.05.010) -- June 30, 27 1998 [1994]; 28 * Sec. 18. REPEAL OF SUNSET OF REGULATORY COST CHARGES. Sections 22, 29 26, 36, and 38, ch. 2, FSSLA 1992, are repealed. 30 * Sec. 19. APUC STAGGERED TERMS. Notwithstanding AS 42.05.030(a), after the 31 expiration in 1999 of the term of the member of the Alaska Public Utilities Commission with
01 a major or experience in engineering, the vacancy shall next be filled for a term of four years 02 in order to adjust the staggering of the terms of the members of the commission so that no 03 more than one commission member's term expires each year. 04 * Sec. 20. APPLICATION TO ONGOING PROCEEDINGS. The amendment to 05 AS 42.05.141(a), made by sec. 2 of this Act, applies to proceedings begun on or after the 06 effective date of sec. 2 of this Act. 07 * Sec. 21. Section 2 of this Act takes effect July 1, 1995. 08 * Sec. 22. Except as provided in sec. 21, this Act takes effect July 1, 1994.