00                            SENATE BILL NO. 205                                                                         
01 "An Act relating to the power of the Regulatory Commission of Alaska to fix rates after                                 
02 an investigation and hearing."                                                                                          
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. AS 42.05.431(a) is amended to read:                                                                   
05            (a)  When the commission, after an investigation and hearing, finds that a rate                              
06       demanded, observed, charged, or collected by a public utility for a service subject to                            
07       the jurisdiction of the commission, or that a classification, rule, regulation, practice, or                      
08       contract affecting the rate, is unjust, unreasonable, unduly discriminatory, or                               
09       preferential, or compensates for the utility's negligent conduct, recklessness, or                            
10       intentional violation of the law, the commission shall determine a just and                                   
11       reasonable rate, classification, rule, regulation, practice, or contract to be observed or                        
12       allowed and shall establish it by order. A municipality may covenant with bond                                    
13       purchasers regarding rates of a municipally owned utility, and the covenant is valid                              
14       and enforceable and is considered to be a contract with the holders from time to time                             

01       of the bonds. The financial covenants contained in mortgages and other debt                                       
02       instruments of cooperative utilities organized under AS 10.25 are also valid and                                  
03       enforceable, and rates set by the commission must be adequate to meet those                                       
04       covenants. However, a cooperative utility that is negotiating to enter a mortgage or                              
05       other debt instrument that provides for a times-interest-earned ratio (TIER) greater                              
06       than the ratio the commission most recently approved for that cooperative shall submit                            
07       the mortgage or debt instrument to the commission before the instrument takes effect.                             
08       The commission may disapprove the instrument within 60 days after its submission. If                              
09       the commission has not acted within 60 days, the instrument is considered to be                                   
10       approved.