04/27/2005 01:30 PM House FINANCE

HOUSE BILL NO. 243                                                                                                            
                                                                                                                                
     "An Act  relating to the maximum annual  regulatory cost                                                                   
     charge   collected   from   certain   regulated   public                                                                   
     utilities  and pipeline carriers;  and providing  for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
KATE  GIARD, CHAIR,  REGULATORY COMMISSION  OF ALASKA  (RCA),                                                                   
testified via  teleconference in support of  the legislation.                                                                   
She gave a  brief history of her chairmanship  and noted that                                                                   
she  was  responding  to  concerns   expressed  to  her.  She                                                                   
emphasized that  the RCA needed  to address several  concerns                                                                   
before its renewal comes before  the legislature in 2007. She                                                                   
acknowledged  the frustrations the  legislature had  with the                                                                   
RCA.  As soon  as she  became  chair, she  began an  outreach                                                                   
effort  to  the  public  utilities   and  pipelines  that  it                                                                   
regulates  in order to  find out  more about their  concerns.                                                                   
She  gave examples  of  her attempts  to  demonstrate to  the                                                                   
utilities  that  more  can  be  expected  of  the  Regulatory                                                                   
Commission  of Alaska.  She acknowledged  that the RCA  lacks                                                                   
systems,  management, and normal  ongoing processes  expected                                                                   
to track,  follow, monitor, and  manage data in order  to get                                                                   
its  work done  in  a timely  manner.  The legislation  would                                                                   
increase [the amount allowed  to fund the commission] from .7                                                                   
to  .9 percent  for  three years.  The goal  is  to bring  in                                                                   
sufficient  additional revenues  to  support the  acquisition                                                                   
and  implementation  of these  systems  after  which the  RCA                                                                   
would  return  to  its  current funding  level.    Ms.  Giard                                                                   
concluded   by  noting   that   she  would   appreciate   the                                                                   
Committee's support of HB 243.                                                                                                  
                                                                                                                                
4:51:44 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  asked  if the  utilities  support  the                                                                   
increase. Ms. Giard  noted that through a public  process the                                                                   
utilities  asked for  an advisory  group,  which occurred  in                                                                   
January. There  has been unified  support from  utilities. Mk                                                                   
asked  for assurance  that the increase  would be  temporary,                                                                   
which Ms. Giard provided.                                                                                                       
                                                                                                                                
4:54:02 PM                                                                                                                    
                                                                                                                                
Representative  Hawker asked if  the receipts are  ultimately                                                                   
passed  on  to the  consumers  of  the utilities.  Ms.  Giard                                                                   
acknowledged  that   utilities  pass  the  cost   on  to  the                                                                   
ratepayers, but emphasized that  she didn't want the money to                                                                   
sit on  the capital side  because it's money  that ratepayers                                                                   
have paid.  Ratepayers pay approximately  72 cents  per year,                                                                   
per  regulated  services.  The  average  customer  has  three                                                                   
services ($2.16  per year for  there years). The  funds would                                                                   
be used as  operating expenses to fund the  systems and would                                                                   
not be put  into capital. She noted that capital  funds could                                                                   
be used for  other projects. The funding would  be designated                                                                   
as operating and would return  to the consumers the following                                                                   
year if it is not spent.                                                                                                        
Representative  Hawker summarized  that  that the  Regulatory                                                                   
Commission  of  Alaska  would  receive $3.9  million  in  new                                                                   
money.  He asked what  the public  would be  buying with  the                                                                   
money. Ms. Giard explained that  it would enable utilities to                                                                   
electronically file data and to  have a holding place, a data                                                                   
warehouse, for  that data.  Representative Hawker  noted that                                                                   
the  bill  is  the  A version  and  has  survived  Labor  and                                                                   
Commerce.                                                                                                                       
                                                                                                                                
4:58:04 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  referred to  the  Governor's  transmittal                                                                   
letter  of  Nov.   30,  which  asks  for  money   to  improve                                                                   
information systems.  He voiced a concern about  "to fund the                                                                   
operation of  the commissioner"  to reduce regulatory  costs.                                                                   
Ms. Giard said she could understand  that concern and pointed                                                                   
out that the funding is contractual.                                                                                            
                                                                                                                                
5:00:47 PM                                                                                                                    
                                                                                                                                
Representative Kelly spoke in  support of the legislation. He                                                                   
felt  that the  Regulatory  Commission  of Alaska  is  moving                                                                   
forward in the right direction.                                                                                                 
                                                                                                                                
5:02:28 PM                                                                                                                    
                                                                                                                                
WILLIAM  CLIFTON, BRITISH  PETROLEUM,  spoke in  favor of  HB
. He described  his company's services. He  noted that the                                                                   
process  in place is  extremely expensive  for the  regulated                                                                   
parties.  He   stressed  that  efficiencies   create  greater                                                                   
financial certainty for all parties.                                                                                            
                                                                                                                                
5:06:04 PM                                                                                                                    
                                                                                                                                
HB 243 was HELD in Committee for further consideration.