Legislature(2021 - 2022)GRUENBERG 120
04/09/2021 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| Commission on Judical Conduct | |
| HB29 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 29 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 29-ELECTRIC UTILITY LIABILITY
1:14:23 PM
CHAIR CLAMAN announced that the final order of business would be
HOUSE BILL NO. 29, "An Act relating to liability of an electric
utility for contact between vegetation and the utility's
facilities; and relating to vegetation management plans."
1:16:15 PM
LYN ELLIOTT, Assistant Vice President, State Government
Relations, referred to a joint letter from the American Property
Casualty Insurance Association (APCIA) and the National
Association of Mutual Insurance Companies (NAMIC) entitled, " HB
29 Additional Document - APCIA and NAMIC Joint Letter to HJUD
4.9.2021.pdf," [included in the committee packet]. She stated
that the letter addressed tow concerns with HB 29, as drafted.
She stated that the first concern was that HB 29 would grant
broad immunity of liability to utilities [companies], and the
second concern was the vegetation management plan requirement
that lacks specificity and oversight authority. She suggested
that a proper balance considering the needs of utilities,
property owners, and the insurers should be sought.
MS. ELLIOTT referred to a document entitled, "HB 29 Additional
Document - APCIA and NAMIC Draft Amendment to HB 29 (Distributed
by the HJUD Committee) 4.9.2021.pdf," [included in the committee
packet] which contains suggested language to include in a
potential future proposed amendment.
1:19:38 PM
REPRESENTATIVE KURKA referred to the joint letter entitled, "HB
29 Additional Document - APCIA and NAMIC Joint Letter to HJUD
4.9.2021.pdf," [included in the committee packet], in paragraph
3, which read as follows [original punctuation provided]:
"If a utility company's negligence causes a wildfire,
the company would have the argument that they are
statutorily immune from civil liability,"
REPRESENTATIVE KURKA asked whether, should HB 29 pass, utilities
would be immune from any liability whether the [precipitating
event to cause a wildfire] was within the utility's control or
not.
MS. ELLIOTT answered that, should a utility act negligently, it
would not have immunity from liability should HB 29 pass as
drafted.
1:22:22 PM
KAREN COLLINS, Assistant Vice President of Personal Lines,
American Property Casualty Insurance Association (APCIA),
offered additional information in reference to Representative
Kurka's question. She stated that among the concerns expressed
by insurers with HB 29, one was that although the easements upon
which utility equipment is situated, vegetation control is not
an issue, but an issue may arise in the case where a private
property owner's vegetation [encroaches on an easement,
contributing to a wildfire,] and that the current proposed
language in HB 29 does not clearly address the issue of
liability.
1:25:27 PM
REPRESENTATIVE VANCE referred to a document entitled, "HB 29
Additional Document - APCIA and NAMIC Draft Amendment to HB 29
(Distributed by the HJUD Committee) 4.9.2021.pdf," [included in
the committee packet, and drew attention to page 1, item 1(b),
which read as follows [original punctuation provided]:
(b) If an electric utility identifies vegetation along
but outside of its real property, lease, permit,
easement, or right-of-way that poses a particular
hazard as defined in the electric utility's filed and
approved wildland protection plan, it may enter onto
the property and perform vegetation management
pursuant to the wildland protection plan. The electric
utility may not be held liable for trespass as long as
its actions are limited to those necessary to
comply with the wildland protection plan.
REPRESENTATIVE VANCE asked what the intent had been of the
drafter of the proposed amendment language and stated that
property owners may take issue with trespassing allowed on
his/her property.
CHAIR CLAMAN offered that the proposed language had been modeled
after a law that had been passed in the State of Utah in 2020.
He stated that, should an amendment be adopted and HB 29 pass,
the Regulatory Commission of Alaska would be responsible for
reviewing and approving vegetation management plans put forth by
utility companies.
MS. COLLINS answered that the intent of the language would
address right of way access. She stated that many states have
laws regarding right of way and [the complexities that may exist
among] multiple property owners but there exists a threat to
public safety because of wildfires caused by hazardous
vegetation. She gave an example in which branches from a tree
or a fallen tree from an adjacent property could cause a
wildfire. She stated that [a utility company,] as a part of its
vegetation management plan, would request that a property owner
remove the hazardous vegetation and should the owner not address
it, the proposed language would allow the utility company to
remove the hazardous vegetation.
REPRESENTATIVE VANCE expressed her concern that communication
with property owners take place prior to any trespass. She
explained that the City of Homer had removed hazardous
vegetation in rights of way, and it had caused concern to
property owners who may have wished to remove the vegetation
themselves.
1:30:20 PM
REPRESENTATIVE KURKA cited Article 1, Section 7 of the Alaska
State Constitution and commented that the proposed language
would permit utilities property rights. He stated his agreement
that additional language should be included to address issues of
liability.
1:31:31 PM
REPRESENTATIVE VANCE referred to the document entitled, "HB 29
Additional Document - APCIA and NAMIC Draft Amendment to HB 29
(Distributed by the HJUD Committee) 4.9.2021.pdf," [included in
the committee packet,] and drew attention to page 2, which read
in part [original punctuation provided]: "The proposed civil
liability immunity provision in the bill could adversely impact
affordability of homeowners' insurance for consumers" and asked
whether a property owner would be subject to insurance rate
increases.
MS. COLLINS answered that the losses resulting from catastrophic
wildfires have resulted in higher insurance premiums for
property owners. She stated that in the case when utility
companies or any party responsible for the ignition of a
wildfire on insured property occurs, the insurance company will
pay to restore the property but that it would pursue cost
recovery, known as subrogation, to offset the costs. She stated
that, if an insurance company would lose its ability to pursue
cost recovery from an at-fault party, the costs to policy
holders would increase.
REPRESENTATIVE VANCE asked whether Ms. Collins had observed rate
increases to policy holders in states that have passed
legislation similar to HB 29.
MS. COLLINS answered that recently passed legislation in other
states has been in response to wildfires and stated that the
right to subrogation would provide a balance to keep rates from
increasing. She recalled that wildfires in California in 2017,
2018, and 2020 had prompted the passing of legislation and that
other states had been affected. She noted that the risk of
wildfires was compounded by climate change and drought over time
are expected to become more problematic and costly.
1:35:47 PM
REPRESENTATIVE VANCE asked the number of Alaskan policy holders
represented by the APCIA.
CHAIR CLAMAN stated that the APCIA represented insurers and not
policy holders directly.
MS. ELLIOTT stated that there exist 520 companies that provide
property casualty insurance, of which, five are domiciled in
Alaska and three are headquartered in Alaska.
1:36:48 PM
REPRESENTATIVE EASTMAN asked, in states that allow utility
companies to conduct vegetation control on private property,
whether there exists any "hold harmless" language for the
property owner.
MS. ELLIOTT answered that the bill that had passed in the State
of Utah had only very recently passed, and that data was not yet
available on approved vegetation mitigation plans. She added
that the insurance industry and utility companies had consulted
on the language that had been included in the passage that bill.
CHAIR CLAMAN asked Ms. Elliott to confirm that this type of
legislation had not been passed in very many states, other than
the State of Utah and the State of California.
MS. ELLIOTT confirmed this as correct.
MS. COLLINS stated her understanding that the laws had been
passed in the State of Utah and the State of California in each
of their most recent legislative sessions as a result of the
2020 wildfire season in western states.
1:40:00 PM
CHAIR CLAMAN asked whether increased liability in states
affected by wildfire had resulted in insurers reluctant to issue
insurance policies.
MS. COLLINS answered that there existed an "availability crisis"
in the State of California due to wildfires in the state. She
cited factors such as climate change, drought, accumulated fuel
wells, and the increasing number of properties being built in
wildland/urban interface all had accelerated issues over the
last 5 to 10 years. She stated catastrophic wildfires had
increased due to these factors and wildfires had increased in
frequency. She stated the importance of managing costs to
insurers as critical to maintaining affordable insurance
availability.
CHAIR CLAMAN stated that it was possible for insurers to either
raise costs or cease providing insurance and asked whether
either consequence had occurred in the State of California.
MS. COLLINS stated that both had occurred in the State of
California. She stated that proposed rate increases were
subject to approval by the State of California Regulatory
Authority, Department of Insurance. She stated that other
regulations had been imposed on insurers that made it difficult
to manage the portfolio of [liability] exposures in a manner
common in other states, and that destabilization in the
marketplace had resulted.
1:44:01 PM
REPRESENTATIVE SNYDER asked whether there existed in current
statute a clear directive on what should be included in a
vegetation management plan and what regulatory oversight would
exist, or whether that was the intent of HB 29, as proposed.
CHAIR CLAMAN stated his understanding that it would be the
intent to establish regulatory authority by the Regulatory
Commission of Alaska for vegetation management plans for
utilities in statute with the passage of HB 29. He added that
the legislation passed in the State of Utah had resulted in its
regulatory commission establishing standards for vegetation
management plans. He asked Mr. Leman, General Counsel for the
Alaska Power Association (APA)to further explain.
1:46:42 PM
ANDY LEMAN, General Counsel, Alaska Power Association, stated
his belief that the statements made by Representative Snyder and
Chair Claman were correct, that no such statutory requirement
exists. He expressed his desire to continue conversations to
address any concerns on behalf of utility companies, and that
some locations in the state would not require vegetation
management plans [due to terrain] and that other companies would
be compelled to have a plan for operational stability. He
stated that it was worth noting for the committee that may of
the utility customers in Alaska are owners of cooperative
utility companies, which results in a high level of
accountability on the part of the utility companies that may not
otherwise exist.
CHAIR CLAMAN asked whether a lack of any regulatory oversight
for determining the adequacy of vegetation management plans
could result in potential litigation regarding the adequacy of
any such plans.
MR. LEMAN answered that the determination of liability in the
case of [damages from a] wildfire would be a reasonable person's
standard of negligence and that experts would likely be called
upon to analyze whether a plan existed and whether it had been
adequate. He stated that it had not been a goal [of the
proposed bill] to provide absolute immunity to utilities but to
better define in advance where liability may exist, such as in
the case of vegetation inside outside of a utility right of way,
and to set a standard for such a plan.
1:50:42 PM
CHAIR CLAMAN asked how much the state had spent on fighting the
McKinley fire, the Swan Lake fire, and the Deshka [Landing] fire
and to explain the funding mechanisms associated with fighting
fires.
NORM MCDONALD, Fire Program Manager, Division of Forestry,
Department of Natural Resources, answered that the final billing
would take place within the next month and offered preliminary
cost data. He explained that the Swan Lake fire cost $44.5
million and had originated on U. S. Fish & Wildlife Service land
and was 100 percent reimbursable resulting in no cost to the
state. He stated that the Deshka Landing fire was approximately
a couple thousand acres which he characterized as relatively
small. He added that it had occurred west of the Parks Highway
in the state-owned Matanuska-Susitna (Mat-Su) area and cost $3.9
million. He stated that it had been caused by a four-wheeler
and had not occurred due to any power line [mishap.] He
explained that the McKinley fire, which had also occurred in the
Mat-Su area outside of Willow, Alaska cost $14.3 million and 86
percent had occurred on state land. He added that the remainder
of that fire [liability] was borne by the U. S. Department of
the Interior.
CHAIR CLAMAN asked for clarification that the Sawn Lake fire had
cost the state approximately $44.5 million, and that the federal
government would reimburse the state 100 percent [of the cost.]
MR. MCDONALD answered that the cost had been approximately $27
million to the state, and that costs would be reimbursed through
a mechanism called cross-billing.
CHAIR CLAMAN asked whether [the difference between the $44.5
million and the $27 million] was the amount paid directly by the
federal government to fight the fire.
MR. MCDONALD confirmed this as correct.
CHAIR CLAMAN asked whether the $3.9 million for the Deshka
[Landing] fire had been spent by the State of Alaska.
MR. MCDONALD confirmed this as correct and explained that any
fire that starts on state, private, or municipal land is the
responsibility of the State of Alaska, Department of Natural
Resources, Division of Forestry and added that the Deshka
Landing faire had started on state land and [had been contained
to] state, private, or municipal lands.
CHAIR CLAMAN asked whether there existed a potential for the
state to recover any costs associated with the fire.
MR. MCDONALD answered that a potential cost recovery could exist
via the Federal Emergency Management Agency (FEMA) Fire
Management Assistance Grants (FMAG) for both the Deshka Landing
and McKinley fires, both of which qualified for an estimated 75
percent cost recovery from FEMA.
CHAIR CLAMAN asked what potential exists for cost recovery for
insurance companies or private entities for cost recovery in the
Deshka Landing or McKinley fires.
MR. MCDONALD answered that there exists a process in which each
fire is investigated by the Alaska Department of Natural
Resources and the Alaska Attorney General's Office to determine
origin and cause and whether negligence exists. He further
explained that, should negligence be determined in the
investigation, cost recovery would be sought. He explained that
the investigation of the Deshka Landing fire had determined the
origin of the fire to be on state land and to have been caused
by a four-wheeler but that it had not determined who had been
operating the four-wheeler and so no attempt at cost recovery
could be made. He added that costs not covered by FEMA FMAG
funds would be borne by the state.
CHAIR CLAMAN asked whether additional cost recovery mechanisms
had been identified for the McKinley fire.
MR. MCDONALD stated that he was aware that some civil claims
associated with the McKinley fire existed for individuals who
lost property, but he stated he was unaware of any other cost
recovery efforts underway.
CHAIR CLAMAN asked to confirm that those claims [for cost
recovery] were being sought by individual homeowners and were
not efforts put forth by the state.
MR. MCDONALD confirmed this as correct.
1:57:14 PM
REPRESENTATIVE DRUMMOND asked whether it had been the intent of
the APCIA and NAMIC to promote the Alaska Regulatory Commission
to create a wildfire protection plan. She asked whether such a
plan already exists.
CHAIR CLAMAN answered that the state does not have a wildfire
protection plan and stated that the language suggested by the
groups had been to model Alaska law similarly to that which had
passed in the State of Utah.
REPRESENTATIVE DRUMMOND asked what the difference would be
between a wildfire protection plan and a wildland protection
plan.
CHAIR CLAMAN suggested that the committee should consider
whether the Regulatory Commission of Alaska should be involved
in creating plans or approving plans for vegetation management
[for utility companies.]
1:59:18 PM
REPRESENTATIVE KURKA asked whether any fires in Alaska had
occurred because of negligence on the part of a utility company.
CHAIR CLAMAN referred to a document entitled, "HB 29 Additional
Document - Anchorage Daily News Article (Distributed by HJUD
Committee) 3.28.2021.pdf," [included in the committee packet] in
which the Matanuska Electric Association was involved in a
lawsuit brought by insurance companies which had not yet been
ruled on in court.
MR. LEMAN offered that he believes there was one other lawsuit
with a similar scenario. He stated that interest in the
proposed legislation on the part of utility companies had been
prompted by wildfires and resulting lawsuits that had occurred
in other states.
REPRESENTATIVE KURKA asked for additional information resulting
from investigations by the State of Alaska determining whether
liability for wildfires had been found to be on a utility
company.
MR. MCDONALD offered that between 2011 and 2019, there had
occurred 313 power line fires within Alaska, the largest and
most expensive of which were the McKinley fire, Twin Creek fire,
and the Tyonek fire. He stated that the Tyonek fire was the
only fire to his recollection that could have been litigated but
was instead settled out of court.
CHAIR CLAMAN asked whether any lawsuits had been associated with
the Twin Creek fire on Kodiak.
MR. MCDONALD answered that none had been filed by the State of
Alaska and he stated that he was unaware of any private lawsuits
that may have occurred.
REPRESENTATIVE KURKA asked whether any finding of fault had been
determined to have originated outside of the [utility] easement.
MR. MCDONALD stated that he would inquire with the Attorney
General's Office and follow up with the committee.
REPRESENTATIVE EASTMAN stated that two of the fires had occurred
in his district and that the costs that had been provided in
earlier testimony had been associated with fire suppression
efforts and did not include structural damages.
CHAIR CLAMAN asked the will of the committee on whether it
wished to move HB 29 out of committee.
2:06:04 PM
REPRESENTATIVE VANCE said that she would like to hear from
utility companies about proposed language. She mentioned the
balance that needed to be struck between the insurance industry
and utility companies regarding liability and increased costs to
consumers. She asked whether a vegetation management plan
definition [in statute] would further achieve that balance.
CHAIR CLAMAN asked if APA was prepared to offer its opinion on
proposed Utah statute
MR. LEMAN stated that APA would appreciate additional time to
consider the recommended language.
REPRESENTATIVE VANCE offered to clarify her previous statement
to ask whether a clarified vegetation management plan would be
helpful or burdensome to the rate payers.
CHAIR CLAMAN echoed Representative Vance's previous statement
that there exists a third consideration of the potential impact
to rate payers and homeowners regarding cost of rebuilding. He
stated that the committee would be interested in hearing
additional testimony from interested parties, including
testimony from the APA on its position on whether a uniform plan
or an approval structure with the Regulatory Commission of
Alaska.
CHAIR CLAMAN stated that HB 29 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Commission on Judicial Conduct Appointment - Aldean Kilbourn Application 4.9.2021.pdf |
HJUD 4/9/2021 1:00:00 PM |
|
| Commission on Judicial Conduct Appointment - Jane Mores Resume 4.9.2021.pdf |
HJUD 4/9/2021 1:00:00 PM |
|
| HB 29 v. A 2.18.2021.PDF |
HJUD 3/22/2021 1:30:00 PM HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Sponsor Statement 3.22.2021.pdf |
HJUD 3/22/2021 1:30:00 PM HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Supporting Document - Electric Utility Liability Information 3.22.2021.pdf |
HJUD 3/22/2021 1:30:00 PM HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Supporting Document - APA Letter 3.1.2021.pdf |
HJUD 3/22/2021 1:30:00 PM HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Supporting Document - CVEA Letter 3.9.2021.pdf |
HJUD 3/22/2021 1:30:00 PM HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Supporting Document - GVEA Letter 3.16.2021.pdf |
HJUD 3/22/2021 1:30:00 PM HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Additional Document - Anchorage Daily News Article (Distributed by HJUD Committee) 3.28.2021.pdf |
HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Opposing Document - Testimony Received by 3.29.2021.pdf |
HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 v. A Amendment #1 HJUD Final Vote 3.29.2021.pdf |
HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM |
HB 29 |
| HB 29 Additional Document - Communications with American Property Casualty Insurance Association (Distributed by HJUD Committee) 4.7.2021.pdf |
HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Additional Document - HB 66 Utah Wildland Fire Planning and Cost Recovery Amendments (Distributed by HJUD Committee) 4.7.2021.pdf |
HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Additional Document - APCIA and NAMIC Joint Letter to HJUD 4.9.2021.pdf |
HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Additional Document - APCIA and NAMIC Draft Amendment to HB 29 (Distributed by the HJUD Committee) 4.9.2021.pdf |
HJUD 4/9/2021 1:00:00 PM HJUD 4/16/2021 1:00:00 PM |
HB 29 |
| HB 29 Fiscal Note LAW-CIV 3.12.2021.pdf |
HJUD 3/22/2021 1:30:00 PM HJUD 3/29/2021 1:00:00 PM HJUD 4/9/2021 1:00:00 PM |
HB 29 |