Legislature(1999 - 2000)

04/28/1999 03:26 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HB 183 - ALASKA PUBLIC UTILITIES COMMISSION                                                                                     
                                                                                                                                
[Contains discussion relevant to SB 133.]                                                                                       
                                                                                                                                
Number 0638                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's next order of business                                                              
is HB 183, "An Act relating to the powers and duties of the chair                                                               
of the Alaska Public Utilities Commission; relating to membership                                                               
on the Alaska Public Utilities Commission; and relating to the                                                                  
annual report of the Alaska Public Utilities Commission."  The                                                                  
chairman informed the committee there are some suggested amendments                                                             
patterned after provisions of SB 133.  It is the intention to try                                                               
to mirror some of the provisions placed in SB 133 that the industry                                                             
as a whole can agree on that would be a betterment to the                                                                       
commission.  The chairman mentioned amendments I.1 and I.2 [there                                                               
is also I.3].                                                                                                                   
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned if the committee needed to                                                                  
adopt the committee substitute (CS) [Version I].                                                                                
                                                                                                                                
There was some discussion among the committee regarding                                                                         
distribution of the three amendments.                                                                                           
                                                                                                                                
Number 0697                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called a brief at-ease at 4:40 p.m.  The                                                                      
committee came back to order at 4:41 p.m.  The chairman announced                                                               
that before taking up the amendments, the committee would hear                                                                  
public testimony.                                                                                                               
                                                                                                                                
Number 0719                                                                                                                     
                                                                                                                                
SHARON DANIEL, Copper Basin Sanitation Service Company, testified                                                               
via teleconference from Glennallen.  Ms. Daniel commented that she                                                              
does not have any of the amendments, but she does support the                                                                   
original Version I work draft.  However, if the three amendments                                                                
change the legislation much, she may withdraw her support.                                                                      
                                                                                                                                
CHAIRMAN ROKEBERG confirmed Ms. Daniels was concerned about subject                                                             
of refuse regulation.  He stated there is nothing in this                                                                       
legislation and it is not the sponsor's intention to add that to                                                                
this legislation.                                                                                                               
                                                                                                                                
MS. DANIELS stated her concern is the deregulation of garbage                                                                   
service.  She does not support that; if garbage service is left out                                                             
of HB 183, the legislation has her support.                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG reiterated that it is not in the legislation nor                                                              
is it the chairman's intention.                                                                                                 
                                                                                                                                
REPRESENTATIVE HALCRO informed Ms. Daniels as co-chair of the House                                                             
Community and Regional Affairs Standing Committee that HB 178,                                                                  
which he believes Ms. Daniels is referencing, would possibly be                                                                 
heard by that committee the following Tuesday [May 4].                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG added that he believes Senator Pearce's                                                                       
legislation, SB 133, does include the garbage or refuse provisions.                                                             
He indicated HB 183 and SB 133 are along the same lines, but HB 183                                                             
does not have those specific provisions.  The chairman indicated he                                                             
would suggest that Ms. Daniel should track both HB 178 and SB 133.                                                              
He questioned whether Mr. Zobel in Anchorage wished to testify.                                                                 
                                                                                                                                
Number 0805                                                                                                                     
                                                                                                                                
RON ZOBEL, Assistant Attorney General, Fair Business Practices                                                                  
Section, Civil Division (Anchorage), Department of Law, spoke via                                                               
teleconference from Anchorage.  Mr. Zobel told members he was                                                                   
available for questions that had arisen at the last hearing [April                                                              
26] concerning amendments on arbitration, the 60-day limit on                                                                   
issuing decisions and the consumer complaint amendment [Amendment                                                               
2 to Version H].  Mr. Zobel indicated Mr. Baldwin [Jim Baldwin,                                                                 
Assistant Attorney General, Governmental Affairs Section, Civil                                                                 
Division (Juneau), Department of Law] had thought it would be                                                                   
better to have an attorney who worked day-to-day with the Alaska                                                                
Public Utilities Commission (APUC) present for these questions.                                                                 
Mr. Zobel is one of the two assistant attorney generals assigned to                                                             
the commission.                                                                                                                 
                                                                                                                                
Number 0838                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to adopt the Version I CS for                                                               
HB 183, labeled 1-LS0764\I, Cramer, 4/28/99.  There was no                                                                      
objection to the motion.                                                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG questioned if Mr. Zobel and Mr. Lohr [Robert                                                                  
Lohr, Executive Director, Alaska Public Utilities Commission] had                                                               
Version I.                                                                                                                      
                                                                                                                                
MR. ZOBEL responded that he believed he had that version.                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG requested that Ms. Seitz conceptually explain the                                                             
amendments to the committee and then Mr. Yould could discuss the                                                                
amendments' substance.  The chairman indicated the amendments would                                                             
be marked I.1 as Amendment 1, I.2 as Amendment 2, and I.3 as                                                                    
Amendment 3.                                                                                                                    
                                                                                                                                
Number 0895                                                                                                                     
                                                                                                                                
JANET SEITZ, Legislative Assistant to Representative Norman                                                                     
Rokeberg, Alaska State Legislature, came forward as aide to the                                                                 
House Labor and Commerce Standing Committee.  Ms. Seitz explained                                                               
that Amendment 1 is in the same area as the amendment passed at the                                                             
last meeting [April 26] "dealing with the chair of the commission                                                               
shall promptly fix a date."  The committee adopted 60 days at the                                                               
last hearing; this amendment would reinsert the 30-day provision.                                                               
Ms. Seitz indicated the last portion of the amendment is new                                                                    
language regarding timely closure of dockets.  Amendment 1, labeled                                                             
1-LS0764\I.1, Cramer, 4/28/99, read:                                                                                            
                                                                                                                                
     Page 1, line 5, following ";":                                                                                             
          Insert "relating to timely action by the Alaska                                                                       
     Public Utilities Commission;"                                                                                              
                                                                                                                                
     Page 3, line 26:                                                                                                           
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 3, lines 28 - 30:                                                                                                     
          Delete ", the chair of the commission shall promptly                                                                  
     fix a date for hearing when a hearing is appropriate.                                                                      
     The hearing shall be without undue delay.  The"                                                                            
          Insert "for which a hearing is clearly warranted,                                                                     
     the chair of the commission shall assign a priority                                                                        
     rating to the issue and promptly fix a date for hearing.                                                                   
     The hearing shall be expedited in accordance with the                                                                      
     priority rating.  Regardless of the priority rating, a"                                                                    
                                                                                                                                
     Page 4, line 2:                                                                                                            
          Delete "60"                                                                                                           
          Insert "30"                                                                                                           
                                                                                                                                
     Page 4, following line 2:                                                                                                  
          Insert a new subsection to read:                                                                                      
               "(c) Unless to do so would violate the due                                                                       
          process rights of a party, the commission shall                                                                       
          ensure that its dockets are closed in a timely                                                                        
          fashion and not delayed due to inaction, complexity                                                                   
          of issues, or another reason.  Failure of a                                                                           
          commission member to comply with this subsection                                                                      
          constitutes grounds for removal from the commission                                                                   
          under AS 42.05.035.  The chair of the commission                                                                      
          may dismiss a commission employee for failure to                                                                      
          comply with this subsection."                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG questioned whether Mr. Zobel had the I.1                                                                      
amendment.                                                                                                                      
                                                                                                                                
MR. ZOBEL answered they did not have that in Anchorage.                                                                         
                                                                                                                                
MS. SEITZ informed the chairman the amendments had been received                                                                
just prior to the hearing.  The amendments are being faxed to the                                                               
Anchorage Legislative Information Office (Anchorage LIO).                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG indicated he wished to hear Mr. Zobel's comment                                                               
on Amendment 1 after his (Mr. Zobel's) review.  The chairman                                                                    
invited Mr. Yould and Walt Wilcox [aide to the House Special                                                                    
Committee on Utility Restructuring, sponsor of HB 183] forward.                                                                 
Chairman Rokeberg questioned Mr. Yould regarding the nature of                                                                  
Amendment 1.                                                                                                                    
                                                                                                                                
Number 1013                                                                                                                     
                                                                                                                                
ERIC YOULD, Executive Director, Alaska Rural Electric Cooperative                                                               
Association, Incorporated (ARECA), came forward.  He noted ARECA is                                                             
a trade association for the electric utility industry.  Mr. Yould                                                               
commented there had been an amendment before the committee at the                                                               
previous hearing which attempted to put some "teeth" into the time                                                              
in which it takes to get dockets through APUC.  An amendment was                                                                
adopted that required, among other things, a certain prioritization                                                             
on dockets when they come in.  There was also a requirement that                                                                
the commission enter its order within 60 days after conclusion [of                                                              
a docket].  The timeliness of dockets is the major issue relating                                                               
to the APUC that ARECA sees coming before its body, from the                                                                    
electric utilities' standpoint.  There were many comments the other                                                             
day that that completed section was still loosely worded and could                                                              
be tightened up; ARECA agreed with that.  Mr. Yould indicated that                                                              
ARECA also privately felt that perhaps there could be even more                                                                 
teeth put into getting dockets out in a timely fashion.                                                                         
                                                                                                                                
                                                                                                                                
MR. YOULD commented this is what he has attempted to do.  Amendment                                                             
1 to Version I ["Version T" misstated on tape] is a derivative of                                                               
what he put together; it was reworded by the legislative drafters.                                                              
The amendment suggests that the question of how soon decisions                                                                  
shall be made should be revisited.  ARECA suggests 30 days is                                                                   
better than the 60 days passed previously.  ARECA is also saying                                                                
that the chairman should examine and prioritize an incoming docket                                                              
by importance, place it into a management tracking system, and get                                                              
to it as soon as possible.  Mr. Yould noted the last portion of the                                                             
amendment, subsection (c), tries to ensure that the commission and                                                              
its staff understand the importance of getting dockets out in a                                                                 
timely fashion.  If there is a continual history of slowness or                                                                 
inattention to dockets, this would serve as grounds for dismissal.                                                              
ARECA is not looking for dismissal, nor does it believe that would                                                              
happen.  However, Mr. Yould indicated ARECA would certainly like to                                                             
know that dismissal could be had if timeliness of dockets continues                                                             
to be an issue.                                                                                                                 
                                                                                                                                
Number 1165                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO referred to the language, "assign a priority                                                              
rating" in paragraph 3 of Amendment 1, relating to page 3, lines 28                                                             
through 30 of Version I.  He questioned the intent with the                                                                     
priority rating, wondering if would be as simple as "one through                                                                
five."                                                                                                                          
                                                                                                                                
MR. YOULD answered it could very well be; that is up to the                                                                     
commission to decide by regulation.  He added, "It's just trying to                                                             
say one docket is more important than another, and just because you                                                             
have a full slate, it doesn't mean that if you don't get an                                                                     
important one in, it shouldn't get bumped to the top.  And,                                                                     
frankly, there's been some dockets that have come in - at least                                                                 
with the electric utility industry, having to do with the takeover                                                              
of one utility by another - that I wish APUC had taken on and made                                                              
a decision on, and we wouldn't be still trying to figure out what's                                                             
going on."                                                                                                                      
                                                                                                                                
Number 1206                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI indicated, however, that if they are to                                                                
enact language that says nothing can be done which would cause                                                                  
undue delay, a prioritization schedule, by nature, would delay some                                                             
items in favor of others.  A prioritization schedule with "hot"                                                                 
items relating to electric utility dockets would delay the garbage                                                              
dockets, for example, making it difficult to keep to the time                                                                   
management schedule. Representative Murkowski expressed that she                                                                
likes the idea of prioritization and thinks it may need to be                                                                   
examined, but she questioned this delaying effect on the less                                                                   
urgent items.                                                                                                                   
                                                                                                                                
MR. YOULD said he fully agreed with Representative Murkowski's                                                                  
comments; it is necessary to ensure that some of those less                                                                     
important dockets ultimately get heard.  He proposed using some new                                                             
hearing techniques that perhaps the commission has not used enough                                                              
of in the past, such as having some dockets heard by a hearing                                                                  
officer or arbiter, or using other tools the commission has                                                                     
available to it.  He stated, "We want to see a little bit more                                                                  
action over there, frankly. ... Some of the dockets are very                                                                    
important, and they should be put on an expedited basis.  I'd have                                                              
to say that there's been a couple of recent dockets that have cost                                                              
... members in utilities a lot of money, because the utilities have                                                             
come to APUC and said, 'Give us a decision.'  Still, today, no                                                                  
decision ... is there and hence people are spending money, throwing                                                             
grenades back and forth with newspaper ads and that sort of thing,                                                              
that in some respects, perhaps, could have been settled through a                                                               
timely adjudication by APUC."  Mr. Yould continued, "Now, I'm not                                                               
even going to pretend to say that there wasn't a due process that                                                               
didn't slow it down because I agree with that and I've even tried                                                               
to acknowledge the fact that due process does need to take its                                                                  
place.  It absolutely does.  But I just think a sense of urgency                                                                
and prioritization is very necessary over there.  And, yes, some                                                                
dockets would get bumped down, but at the same time I think that                                                                
good managers will find ways to deal with that."                                                                                
                                                                                                                                
Number 1339                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Zobel if he had received a copy of                                                                  
Amendment 1.                                                                                                                    
                                                                                                                                
MR. ZOBEL replied they had not received it yet.                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG noted that Amendment 1 replaces the 60 days in                                                                
Version I with 30 days, and puts a lot more "fangs" into it.  The                                                               
chairman questioned whether Mr. Zobel wished to comment.                                                                        
                                                                                                                                
MR. ZOBEL asked if Amendment 1 refers to the closing of a docket.                                                               
                                                                                                                                
CHAIRMAN ROKEBERG indicated the 30 days or 60 days relates to the                                                               
order afterwards, found on page 4, line 2, of Version I.                                                                        
                                                                                                                                
Number 1383                                                                                                                     
                                                                                                                                
MR. ZOBEL pointed out that there is an important distinction                                                                    
between the issuance of an order after a hearing and the closing of                                                             
a docket.  The closing of a docket is a fairly routine thing when                                                               
the entire docket is completed.                                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG noted that Version I, page 4, lines 1 and 2,                                                                  
says, "After the conclusion of the hearing, the commission shall                                                                
enter its order within 60 days."  He asked how Mr. Zobel would                                                                  
interpret that, and whether he was distinguishing between a docket                                                              
hearing and another hearing.                                                                                                    
                                                                                                                                
Number 1421                                                                                                                     
                                                                                                                                
MR. ZOBEL explained that there can be a hearing or a series of                                                                  
hearings leading to various orders being issued in a particular                                                                 
docket.  The closing of the docket comes later, after virtually                                                                 
everything has been finished, and is a rather routine, bureaucratic                                                             
chore of simply closing the file.  He suggested that the problem                                                                
they are getting at is that once a matter has been heard in a                                                                   
hearing and submitted to the APUC for decision, that is when the                                                                
time clock would start to run.  He pointed out, however, that what                                                              
is reasonable varies with the complexity or nature of the docket,                                                               
and 30 days is a very short time for many items.  Mr. Zobel said                                                                
he doesn't think that there is necessarily a legal problem with                                                                 
directing the commission to do this, but, obviously, they want the                                                              
right number of days to be in there so that it is a practical                                                                   
provision.  He noted that the bill he was looking at didn't specify                                                             
a remedy for a violation of that directive.                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG suggested the legislature could cut the funding.                                                              
                                                                                                                                
MR. ZOBEL said that it is always an option.  He noted that a                                                                    
directory statement like that is a standard against which the APUC                                                              
can be measured.  He paused to look at Amendment 1, which had just                                                              
been handed to him.                                                                                                             
                                                                                                                                
Number 1560                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked whether Mr. Zobel would counsel the                                                                     
committee to leave the time as 60 days.                                                                                         
                                                                                                                                
MR. ZOBEL said he believes 60 days is a much more reasonable period                                                             
of time for many dockets.                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Yould to respond.                                                                                   
                                                                                                                                
Number 1613                                                                                                                     
                                                                                                                                
MR. YOULD replied, "Everything's subjective.  If I have an attorney                                                             
that works for me, and I say that I want something tomorrow, I'm                                                                
going to pay for it, and I'm going to get it tomorrow.  And it                                                                  
would seem to me that if something is important enough and it needs                                                             
to be done, it can be done.  And I think that APUC has the                                                                      
resources, either through the attorney general's office or, as                                                                  
amended, through outside legal resources, that they should be able                                                              
to get the job done.  I certainly wouldn't want to see them                                                                     
expending undue funds on trying to get dockets out that are of a                                                                
relatively low priority, but it would seem to me that you should                                                                
have the resources within this commission to act in a timely                                                                    
fashion."                                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG responded that it depends on the scope of the                                                                 
work, which he believes is Mr. Zobel's point.                                                                                   
                                                                                                                                
Number 1667                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked whether there has been testimony                                                                 
from the other utilities involved in APUC hearings, in terms of                                                                 
what they might consider reasonable.                                                                                            
                                                                                                                                
CHAIRMAN ROKEBERG said no.                                                                                                      
                                                                                                                                
REPRESENTATIVE MURKOWSKI added that it may be easier for electric                                                               
utility cases, as opposed to pipeline rate cases, for example,                                                                  
where even 60 days might be unreasonable.                                                                                       
                                                                                                                                
MR. YOULD answered that everybody has learned to expect something                                                               
longer rather than shorter, which he believes is unfortunate.                                                                   
                                                                                                                                
CHAIRMAN ROKEBERG proposed going back to 30 days, with extensions                                                               
requiring justification, as discussed in the previous meeting.                                                                  
                                                                                                                                
MR. YOULD said he has no problem with that.                                                                                     
                                                                                                                                
Number 1729                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO asked if the expectation of delays isn't                                                                  
simply because there hasn't been any time line in force.                                                                        
                                                                                                                                
MR. YOULD said that is a good point, adding that perhaps some other                                                             
management techniques put in place would obviate the need for this                                                              
sort of thing.                                                                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG suggested that could be a compromise.  He asked                                                               
Mr. Zobel and Mr. Lohr if they had heard the discussions, and if                                                                
they believe it is more reasonable to revert to 30 days, with                                                                   
extensions for good cause.                                                                                                      
                                                                                                                                
Number 1776                                                                                                                     
                                                                                                                                
MR. ZOBEL answered that certainly some latitude would be more                                                                   
reasonable.  He cautioned against distracting the commission from                                                               
the issue at hand, however, by the process of getting extensions                                                                
and findings of good cause.  There are going to be a large number                                                               
of cases where good cause would be necessary to get some extra                                                                  
time, he said.  To him, having 30 days and then another extension                                                               
adds a procedure to jump through, which could be a little                                                                       
cumbersome, although it would keep everybody on track.  He proposed                                                             
that the chairman should always have a system to determine what                                                                 
remains in a particular matter at any given time, because sometimes                                                             
it isn't readily apparent what is still out there to be decided.                                                                
Mr. Zobel believes that would be the best thing to help in meeting                                                              
deadlines.                                                                                                                      
                                                                                                                                
Number 1910                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG made a motion to adopt Amendment 1, and to amend                                                              
it by deleting lines 12 through 14 [of the printed amendment,                                                                   
relating to page 4, line 2, of Version I].  This would leave the 60                                                             
days in, with no extension.  He asked if there was any objection to                                                             
the amendment to Amendment 1.  The language to be deleted from                                                                  
Amendment 1 by the amendment to the amendment read:                                                                             
                                                                                                                                
     Page 4, line 2:                                                                                                            
          Delete "60"                                                                                                           
          Insert "30"                                                                                                           
                                                                                                                                
REPRESENTATIVE HALCRO objected for purposes of discussion.  He                                                                  
asked if the reason is fear of the 30 days.                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG referred to testimony and expressed concern that                                                              
30 days isn't enough time to write a report.  "We can tune this up                                                              
later," he added.  The chairman said he accepts Mr. Zobel's counsel                                                             
that adding another "cause" issue creates paperwork, which he                                                                   
himself doesn't want.                                                                                                           
                                                                                                                                
CHAIRMAN ROKEBERG asked if there was any objection to the amendment                                                             
to Amendment 1.  There being none, the amendment to the amendment                                                               
was adopted.  The chairman asked if there was any objection to                                                                  
Amendment 1 [as amended].                                                                                                       
                                                                                                                                
Number 2000                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI referred to the last section of the                                                                    
amendment and the language, "... the commission shall ensure that                                                               
its dockets are closed in a timely fashion and not delayed due to                                                               
inaction,".  She indicated this language is acceptable to her, but                                                              
she noted the following language, "complexity of issues".  She                                                                  
specifically referred to line 19 of the printed amendment which                                                                 
read, "delayed due to inaction, complexity of issues, or another                                                                
reason.  Failure of a"  Representative Murkowski believes                                                                       
"complexity of issues" is a valid reason to take 45 days instead of                                                             
30 days, for example.  Therefore, she expressed discomfort with                                                                 
inclusion of that language.  Although it could be used as an excuse                                                             
for delay, she believes there is a need to allow the APUC to wade                                                               
through incredibly complex issues.  She suggested urging the                                                                    
commission to deal with it in a timely manner, however.                                                                         
                                                                                                                                
REPRESENTATIVE HALCRO noted that if they are retaining the 60 days                                                              
because of the worry that 30 days is not enough time to respond                                                                 
because of complex dockets, then on line 19, "delayed due to                                                                    
inaction, complexity of issues, or another reason. ...", they are                                                               
punishing for something which has already been addressed in lines                                                               
12 through 14.  Representative Halcro commented they have said                                                                  
there are complex issues out there; 30 days is not enough, 60 will                                                              
be provided, but then again on line 19, they say that that is not                                                               
a reason to delay.  He said this is his concern.                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG replied that he had not thought of complexity of                                                              
issues as a reason to extend the 60 days, indicating his thought                                                                
had been toward bureaucratic inertia and failure to get things                                                                  
done.                                                                                                                           
                                                                                                                                
Number 2154                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA also referred to line 19 of Amendment 1,                                                                  
"delayed due to inaction, complexity of issues, or another reason.                                                              
..."  She asked whether "or another reason" doesn't essentially say                                                             
that there is no reason to do it.                                                                                               
                                                                                                                                
REPRESENTATIVE MURKOWSKI agreed.                                                                                                
                                                                                                                                
Number 2208                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked if there were any objections to Amendment                                                               
1 [as amended].                                                                                                                 
                                                                                                                                
REPRESENTATIVE MURKOWSKI and REPRESENTATIVE HALCRO objected.                                                                    
                                                                                                                                
REPRESENTATIVE MURKOWSKI suggested it might be all right if that                                                                
first sentence was deleted.                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG requested that Representative Murkowski fix the                                                               
amendment and bring it back on Friday [April 30].  The chairman                                                                 
requested that Ms. Seitz to comment on Amendment 3.                                                                             
                                                                                                                                
Number 2259                                                                                                                     
                                                                                                                                
MS. SEITZ noted that Amendment 3, labeled 1-LS0764\I.3, Cramer,                                                                 
4/28/99, read:                                                                                                                  
                                                                                                                                
     Page 4, line 29, following ".":                                                                                            
          Insert "A decision of an arbiter is not final until                                                                   
     approved by the commission."                                                                                               
                                                                                                                                
CHAIRMAN ROKEBERG reminded members that arbitration had been added                                                              
to the commission's tools, but it is necessary to ensure that the                                                               
commission approves the arbitration decision.  The chairman asked                                                               
if there was any objection to Amendment 3.  There being none,                                                                   
Amendment 3 was adopted.                                                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG noted Amendment 2 is a bit more complex.                                                                      
Amendment 2, labeled 1-LS0764\I.2, Cramer, 4/28/99, read:                                                                       
                                                                                                                                
     Page 1, line 8, following "Commission;":                                                                                   
          Insert "relating to regulatory cost charges;"                                                                         
                                                                                                                                
     Page 5, following line 13:                                                                                                 
          Insert new bill sections to read:                                                                                     
          "* Sec. 12. AS 42.05.254(a) is amended to read:                                                                       
               (a) A regulated public utility operating in                                                                      
          the state shall pay to the commission an annual                                                                       
          regulatory cost charge in an amount not to exceed                                                                     
          the maximum percentage of adjusted gross revenue                                                                      
          that applies to the utility sector of which the                                                                       
          utility is a part.  The total regulatory cost                                                                         
          charges that the commission expects to collect from                                                                   
          all regulated public utilities and regulated                                                                          
          pipeline carriers may not exceed .8 percent of the                                                                    
          total adjusted gross revenue of all regulated                                                                         
          public utilities and the total gross revenue of all                                                                   
          regulated pipeline carriers [DERIVED FROM                                                                             
          OPERATIONS IN THE STATE, AS MODIFIED UNDER (c) OF                                                                     
          THIS SECTION IF APPROPRIATE].  An exempt utility                                                                      
          shall pay the actual cost of services provided to                                                                     
          it by the commission.                                                                                                 
                                                                                                                                
          * Sec. 13.  AS 42.05.254(b) is amended to read:                                                                       
               (b) The commission shall by regulation                                                                           
          establish a method to determine annually the amount                                                                   
          of the regulatory cost charge for a public utility.                                                                   
          If the amount the commission expects to collect                                                                       
          under (a) of this section and under AS 42.06.286(a)                                                                   
          exceeds the authorized budget of the commission,                                                                      
          the commission shall, by order, reduce the                                                                            
          percentages determined under (i) [SET OUT IN (a)]                                                                     
          of this section so that the total amount of the                                                                       
          fees collected approximately equals the authorized                                                                    
          budget of the commission for the fiscal year.                                                                         
                                                                                                                                
          * Sec. 14.  AS 42.05.254(h) is amended by adding a                                                                    
     new paragraph to read:                                                                                                     
               (5) "adjusted gross revenue" means the gross                                                                     
          revenue of a utility as modified under (c) of this                                                                    
          section, if appropriate.                                                                                              
                                                                                                                                
          * Sec. 15.  AS 42.05.254 is amended by adding a new                                                                   
     subsection to read:                                                                                                        
               (i) The commission shall by regulation                                                                           
          establish a method to determine annually the                                                                          
          maximum percentage of adjusted gross revenue that                                                                     
          will apply to each regulated public utility sector                                                                    
          and the maximum percentage of gross revenue that                                                                      
          will apply to each regulated pipeline carrier                                                                         
          sector.  The method established shall allocate the                                                                    
          commission's costs, other than the cost of services                                                                   
          provided to exempt utilities, among the regulated                                                                     
          public utility sectors and the regulated pipeline                                                                     
          carrier sector based on the relative amount of the                                                                    
          commission's annual costs that is attributable to                                                                     
          regulating each sector.                                                                                               
                                                                                                                                
          * Sec. 16.  AS 42.06.286(a) is amended to read:                                                                       
               (a)  A pipeline carrier operating in the state                                                                   
          shall pay to the commission an annual regulatory                                                                      
          cost charge in an amount not to exceed the maximum                                                                    
          percentage of gross revenue that applies to                                                                           
          regulated pipeline carriers.  The total regulatory                                                                    
          cost charges that the commission expects to collect                                                                   
          from all regulated pipeline carriers and regulated                                                                    
          public utilities may not exceed .8 percent of the                                                                     
          total gross revenue of all regulated pipeline                                                                         
          carriers and the total gross revenue of all                                                                           
          regulated public utilities [DERIVED FROM OPERATIONS                                                                   
          IN THE STATE].  A regulatory cost charge may not be                                                                   
          assessed on pipeline carrier operations unless the                                                                    
          operations are within the jurisdiction of the                                                                         
          commission.                                                                                                           
                                                                                                                                
          * Sec. 17.  AS 42.06.286(b) is amended to read:                                                                       
               (b) The commission shall by regulation                                                                           
          establish a method to determine annually the amount                                                                   
          of the regulatory cost charge.  If the amount the                                                                     
          commission expects to collect under (a) of this                                                                       
          section and under AS 42.05.254(a) exceeds the                                                                         
          authorized budget of the commission, the commission                                                                   
          shall, by order, reduce the percentage determined                                                                     
          under (1) [SET OUT IN (a)] of this section so that                                                                    
          the total amount of the fees collected                                                                                
          approximately equals the authorized budget of the                                                                     
          commission for the fiscal year.                                                                                       
                                                                                                                                
          * Sec. 18.  AS 42.06.286 is amended by adding a new                                                                   
     subsection to read:                                                                                                        
               (f) The commission shall by regulation                                                                           
          establish a method to determine annually the                                                                          
          maximum percentage of gross revenue that will apply                                                                   
          to each regulated pipeline carrier sector and the                                                                     
          maximum percentage of gross revenue that will apply                                                                   
          to the regulated public utility sector in                                                                             
          accordance with AS 42.05.254(i)."                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
[Note: amendment copy quality very poor - unable to determine                                                                   
subsection specified in Section 17.]                                                                                            
                                                                                                                                
MS. SEITZ noted that Amendment 2 addresses concerns raised about                                                                
disparity between what telephone companies and electric utilities                                                               
pay, based on the amount of work done for them.  She deferred to                                                                
Mr. Yould.                                                                                                                      
                                                                                                                                
Number 2331                                                                                                                     
                                                                                                                                
MR. YOULD explained, "Presently, the commission computes the RCC                                                                
[regulatory cost charge] by equally apportioning the RCC to be                                                                  
collected, by dividing the total commission budget to be collected                                                              
from the utilities by the total gross utility receipts.  And it                                                                 
basically puts a cap on how much ... of those gross receipts ...                                                                
could go toward the commission; and I think the percentage is .8                                                                
percent of gross receipts.  What that means is that [regardless] of                                                             
the service, and the number of issues that you have before the                                                                  
commission, you're going to be paying a flat amount - no matter                                                                 
what - by your industry sector.  And as a 'for instance,' under the                                                             
present formula, last year the commission needed to recover ...                                                                 
$4,122,000 from the regulated utilities, of which ... a little over                                                             
a million was to be recovered from the electric utility industries.                                                             
That's roughly 25 percent."                                                                                                     
                                                                                                                                
MR. YOULD continued, "However, if you look at the level of effort                                                               
that is put in by the commission on electric utility dockets, you                                                               
will probably find that we are not getting 25 percent of their                                                                  
effort.  For instance, ... in 1996, there were 110 new dockets                                                                  
filed with the commission; that was a year before deregulation of                                                               
the telecommunications industry took place.  That's probably a                                                                  
period of time when we would say that we probably got equal                                                                     
representation within APUC.  In 1997, however..." [TESTIMONY                                                                    
INTERRUPTED BY TAPE CHANGE]                                                                                                     
                                                                                                                                
TAPE 99-49, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
MR. YOULD continued, "I can tell you ... that the preponderance of                                                              
the increase in dockets was not a result of the electric utility                                                                
industry, but simply because of the increased re-regulation                                                                     
associated with the deregulation of the telecommunications                                                                      
industry.  We believe that we are probably getting significantly                                                                
less than the 25 percent that we are paying into the commission                                                                 
through the RCC.   What we are recommending is an amendment, which                                                              
is some three pages long, which basically changes the formula so                                                                
that each individual industry will be allocated its charge based on                                                             
the anticipated level of effort needed for that industry within the                                                             
commission.  And that's what this amendment does."                                                                              
                                                                                                                                
Number 0090                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG requested that Mr. Lohr comment on this                                                                       
allocation-to-workload concept.                                                                                                 
                                                                                                                                
Number 0104                                                                                                                     
                                                                                                                                
ROBERT LOHR, Executive Director, Alaska Public Utilities                                                                        
Commission, testified next via teleconference from Anchorage.  He                                                               
told members that the regulatory cost charge was established in                                                                 
1992, based on recommendations of the legislative auditor and                                                                   
others who felt that it would be a more equitable way than using                                                                
unrestricted general funds to finance the APUC's operations.  Since                                                             
that date, the APUC has operated on a RCC and the APUC fund is a                                                                
separate fund in state accounting.  Mr. Lohr stated, "The approach                                                              
of the commission, following the statutes, has been to try to keep                                                              
the program simple, to keep the allocation to all utilities - all                                                               
regulated utilities - the same, to the extent possible.  That's                                                                 
been a very successful approach.  It's kept the program simple.  It                                                             
has avoided creating a kind of 'Internal Revenue Service of the                                                                 
North,' if you will, to have exclusions, deductions, exemptions and                                                             
so forth, or special treatment."                                                                                                
                                                                                                                                
MR. LOHR continued, "The legislature, in 1995, the last sunset                                                                  
review, did authorize a reduction in the electric regulatory cost                                                               
charge to exclude the cost of power from the calculation.  That had                                                             
the effect of reducing regulatory costs allocated to the electric                                                               
industry by 43 percent. ...  It's true, as Mr. Yould has indicated,                                                             
that the number of dockets has increased substantially ... in                                                                   
recent years, and that the primary increase has been in the area of                                                             
telecommunications.  However, the choice of formal dockets as the                                                               
measure of a commission activity misses some significant activity                                                               
by the commission.  For example, the electric restructuring                                                                     
contract with CH2M Hill and the work that the commission has done                                                               
with the legislature in that area is not reflected in the expenses                                                              
of any docket.  It's a regulatory docket; so, it would not show as                                                              
one that is allocated to electricity."                                                                                          
                                                                                                                                
MR. LOHR commented, "And yet, I think the primary benefit of that                                                               
contract is clearly to the electric industry.  Other things, such                                                               
as the number of tariff filings handled, reflect a much more                                                                    
general balance, with electricity having a far higher percentage                                                                
than the 10 percent indicated in the formal docket.  At this point,                                                             
the RCC has worked extremely well. ... In the last two full fiscal                                                              
years we have received more formal dockets than in the previous                                                                 
four fiscal years.  We'd like to focus on speeding things up,                                                                   
responding to the increased volume of activity, and not having to                                                               
do more detailed allocations of costs by industry, and having to                                                                
balance at the sub-level."                                                                                                      
                                                                                                                                
Number 0329                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Yould if he has consulted with the main                                                             
long-distance carriers in Alaska and the ATA [Alaska Telephone                                                                  
Association] about Amendment 2.                                                                                                 
                                                                                                                                
MR. YOULD replied that although he would not speak for them, he had                                                             
talked to ATA and would characterize its feeling as positive.  He                                                               
suggested the need to ask ATA that question directly.                                                                           
                                                                                                                                
CHAIRMAN ROKEBERG agreed that the ATA should be asked before taking                                                             
up Amendment 2.                                                                                                                 
                                                                                                                                
REPRESENTATIVE HALCRO referred to Mr. Yould's earlier testimony                                                                 
about the percentage of the workload of APUC compared to the                                                                    
percentage that ARECA contributes.  He asked Mr. Yould to restate                                                               
those figures.                                                                                                                  
                                                                                                                                
MR. YOULD replied that he didn't have the numbers before him, and                                                               
those he had provided were probably more hypothetical than not.  He                                                             
said one reason, as Mr. Lohr had noted, is that the APUC doesn't                                                                
have a time accounting system, despite the fact that two "sunset                                                                
commissions" have told them that they should have one.  Hence, he                                                               
doesn't believe the APUC can provide those numbers either.                                                                      
                                                                                                                                
Number 0419                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG suggested that is another problem they should                                                                 
look at.  With that, he announced his intention to hold the                                                                     
legislation over and take it up again on Friday [April 30].  Noting                                                             
that only Amendment 3 had been adopted that day, Chairman Rokeberg                                                              
requested that Mr. Lohr bring Version I to Chairman Cotten's [Sam                                                               
Cotten, APUC Chairman] attention and then provide comments. [HB 183                                                             
WAS HELD]                                                                                                                       
                                                                                                                                

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