04/16/2021 01:00 PM House JUDICIARY

               HB  29-ELECTRIC UTILITY LIABILITY                                                                            
                                                                                                                                
2:35:07 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."                                                                       
                                                                                                                                
CHAIR CLAMAN reminded the committee  that previous discussions on                                                               
HB  29 had  included issues  related to  insurance companies  and                                                               
rates.   He stated  that the Alaska  Power Association  (APA) has                                                               
responded to  suggested draft language  by the  American Property                                                               
Casualty Insurance  Association and  the National  Association of                                                               
Mutual Insurance Companies.                                                                                                     
                                                                                                                                
2:36:25 PM                                                                                                                    
                                                                                                                                
CHAIR  CLAMAN asked  the  Alaska Power  Association  to answer  a                                                               
question he  had posed  to it  earlier that  remained unanswered,                                                               
which was,  according to the  preference of the APA,  whether the                                                               
legislature  should examine  creating  a  statewide standard  for                                                               
vegetation  management that  would be  enacted by  the Regulatory                                                               
Commission  of Alaska  (RCA) and  apply to  utility companies  or                                                               
whether   the   utility   companies  should   submit   vegetation                                                               
management plans to the RCA, subject to its approval.                                                                           
                                                                                                                                
2:37:01 PM                                                                                                                    
                                                                                                                                
ANDY LEHMAN, General Counsel,  Alaska Power Association, answered                                                               
on behalf  of the APA  that it opposed  either option.   He added                                                               
that  a single,  statewide standard  would  not work  due to  the                                                               
diversity of  vegetation and growth  rates throughout  the state.                                                               
He  stated  that  some  utilities   have  virtually  no  risk  of                                                               
vegetation interacting with facilities,  and other utilities have                                                               
significantly different risks.                                                                                                  
                                                                                                                                
CHAIR CLAMAN interjected  to ask whether the APA  would prefer to                                                               
submit vegetation  management plans  to the  RCA, subject  to its                                                               
approval rather than there being a statewide standard.                                                                          
                                                                                                                                
MR.  LEHMAN  asked for  the  committee  to consider  that  Alaska                                                               
[utility]  cooperatives have  maintained  an  option for  decades                                                               
that  permits their  memberships to  vote whether  they would  be                                                               
subject  to  regulation by  the  RCA.    He  added that  all  the                                                               
cooperatives outside of the Railbelt  had voted not to be subject                                                               
to  regulation.   He suggested  that vegetation  management plans                                                               
subject to  RCA approval would  amount to a fundamental  shift in                                                               
the way that  cooperatives are managed.  He stated  he was not in                                                               
a position to endorse either option.                                                                                            
                                                                                                                                
2:39:47 PM                                                                                                                    
                                                                                                                                
CHAIR  CLAMAN  acknowledged the  hesitancy  on  the part  of  Mr.                                                               
Lehman to answer and suggested that,  in the absence of any other                                                               
option, he  surmised that  the position  of the  APA would  be to                                                               
submit vegetation  management plans  to the  RCA, subject  to its                                                               
approval rather than a statewide standard.                                                                                      
                                                                                                                                
2:40:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VANCE stated her  understanding that the intent of                                                               
the  bill would  be  to  reduce the  liability  of vegetation  on                                                               
utility  [companies] and  asked  how many  instances resulted  in                                                               
liability to  utility companies and,  by extension,  to Alaskans,                                                               
and to what expense.                                                                                                            
                                                                                                                                
CHAIR  CLAMAN asked  Representative Vance  whether she  wished to                                                               
know whether  the urgency of  the proposed legislation  was based                                                               
on  how many  lawsuits [were  brought against  utility companies]                                                               
historically  or  whether  she  was asking  the  reason  for  the                                                               
urgency now.                                                                                                                    
                                                                                                                                
REPRESENTATIVE   VANCE  stated   that  she   was  attempting   to                                                               
understand  the   opposition  [to  HB   29].    She   stated  her                                                               
understanding  that the  [unfulfilled] need  would be  to protect                                                               
rate payers.                                                                                                                    
                                                                                                                                
CHAIR CLAMAN  asked Representative  Vance from whom  she inferred                                                               
opposition.                                                                                                                     
                                                                                                                                
REPRESENTATIVE VANCE  answered that  she had  inferred opposition                                                               
from the APA.                                                                                                                   
                                                                                                                                
CHAIR  CLAMAN  offered that  the  APA  does  not agree  with  the                                                               
perspective  offered by  the  insurance  companies and  suggested                                                               
that the  proposed legislation may protect  utility companies but                                                               
may place a  higher burden on property owners  and, while utility                                                               
rates may  be less  affected, property owners  may be  subject to                                                               
higher property insurance rates.   He recalled the Miller's Reach                                                               
fire that had  resulted in a lawsuit filed on  behalf of property                                                               
owners against  the State of  Alaska alleging that the  State had                                                               
mismanaged the fire and [should be  held liable].  He opined that                                                               
the utility companies  are articulate in their  opposition to the                                                               
RCA  reviewing   vegetation  management  plans  subject   to  its                                                               
approval.                                                                                                                       
                                                                                                                                
2:44:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  VANCE referred  to  a paragraph  from the  letter                                                               
from the APA [included in  the committee packet], entitled "HB 29                                                               
Additional  Document -  APA  Response to  APCIA  and NAMIC  Joint                                                               
Letter  to  HJUD  4.12.2021" which  read,  [original  punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     The  Division of  Forestry testified  that  out of  313                                                                    
     fires  resulting  from  vegetation  contacting  utility                                                                    
     facilities  from   2011-19,  the  state   only  pursued                                                                    
     compensation  from utility  companies for  firefighting                                                                    
     response  costs  once.  Out of  all  those  fires  that                                                                    
     involved utility  facilities, only  once (.3%)  did the                                                                    
     state believe a utility  should be held responsible for                                                                    
     State fire suppression costs.                                                                                              
                                                                                                                                
REPRESENTATIVE  VANCE  stated  her  understanding  that  the  APA                                                               
claims  that   [its  members]  are  already   taking  actions  to                                                               
sufficiently protect their facilities from  risk.  She asked whom                                                               
shall  benefit from  the passage  of the  bill and  expressed her                                                               
wish that the people should  benefit.  She expressed her sympathy                                                               
to utility  companies' reluctance to invite  more regulation that                                                               
will  result  in  more  cost.   She  acknowledged  the  insurance                                                               
companies'  interest  in  gaining more  [revenue]  from  proposed                                                               
changes  to regulations.   She  asked  how many  instances of  an                                                               
insurance company filing a claim against a utility had occurred.                                                                
                                                                                                                                
2:46:12 PM                                                                                                                    
                                                                                                                                
CHAIR  CLAMAN stated  that  there existed  at  least one  lawsuit                                                               
pending against the [Matanuska  Electrical Association] (MEA) and                                                               
referred  to   the  committee  packet   item,  entitled   "HB  29                                                               
Additional Document  - Anchorage Daily News  Article (Distributed                                                               
by  HJUD Committee)  3.28.2021"  and opined  that  there did  not                                                               
exist a complete picture on  the frequency of insurance companies                                                               
seeking compensation from other parties for damages.                                                                            
                                                                                                                                
CHAIR CLAMAN referred also to a  paragraph in the letter from the                                                               
APA  [included   in  the  committee   packet]  entitled   "HB  29                                                               
Additional  Document -  APA  Response to  APCIA  and NAMIC  Joint                                                               
Letter  to  HJUD  4.12.2021"  which  read  [original  punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     That demonstrates  that in  the State's  view, Alaska's                                                                    
     electric  utilities are  already doing  everything they                                                                    
      reasonably can to protect their facilities from fire                                                                      
     risk.                                                                                                                      
                                                                                                                                
CHAIR  CLAMAN  expressed  his disagreement  that  this  statement                                                               
could be construed as a  representation of the state's viewpoint.                                                               
He suggested  that the questions  posed during the hearing  on HB
 warranted further discussion by the committee.                                                                               
                                                                                                                                
2:47:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VANCE asked for testimony  from the bill's sponsor                                                               
regarding the questions that had been brought forward.                                                                          
                                                                                                                                
2:47:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GEORGE  RAUCHER,  Alaska  State  Legislature,  as                                                               
prime sponsor of HB 29, stated  that he had been listening to the                                                               
discussion and cautioned  that decisions made should  be based on                                                               
facts  and  data  rather  than on  the  opinions  [of  interested                                                               
parties].                                                                                                                       
                                                                                                                                
2:48:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN suggested that  testimony should be sought                                                               
from the Division  of Forestry to provide its  perspective on the                                                               
discussion.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  RAUSCHER suggested  that  an  amendment could  be                                                               
drafted to offer guidelines on an environmental management plan.                                                                
                                                                                                                                
2:50:31 PM                                                                                                                    
                                                                                                                                
CHAIR  CLAMAN stated  his appreciation  to the  bill sponsor  and                                                               
affirmed that it was the  committee's intent to work together and                                                               
encouraged additional conversation rather  than an amendment.  He                                                               
referenced law  existing in  the State of  Utah and  possibly the                                                               
State  of California  as  a potential  source  of information  to                                                               
further develop  effective policy.   He opined that the  State of                                                               
California   regulations  were   complex  due   to  the   State's                                                               
regulatory  complexities.   He suggested  that rate  increases to                                                               
utilities  and insurance  are unpopular  and that  the state  and                                                               
federal  government are  subject to  the largest  cost associated                                                               
with [wildfires].                                                                                                               
                                                                                                                                
2:52:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER noted that the  State of California has a                                                               
high number  of wildfires  and property  loss and  cautioned that                                                               
its policy  was not likely  drafted confined to  utility right-of                                                               
way.                                                                                                                            
                                                                                                                                
2:52:57 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN added that Alaska  has experienced more wildfires in                                                               
the last  10-15 years than  in prior years.   He opined  that the                                                               
discussion on  HB 29 had raised  complex issues.    He stated the                                                               
intention would  be a committee  substitute.  He stated  that the                                                               
APA, insurance  companies, and utility  consumers in  Alaska have                                                               
each raised legitimate concerns.                                                                                                
                                                                                                                                
2:53:53 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN announced that HB 29 was held over.