Legislature(2005 - 2006)HOUSE FINANCE 519
04/27/2005 01:30 PM FINANCE
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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 243. 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.