Legislature(1999 - 2000)
05/07/1999 03:26 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSSB 133(RLS) am - REGULATORY COMMISSION OF ALASKA
[Contains discussion of HB 183.]
Number 0740
VICE-CHAIRMAN HALCRO announced the committee's next order of
business is SB 133, "An Act creating and relating to the Regulatory
Commission of Alaska and transferring to it certain powers and
duties of the Alaska Public Utilities Commission; repealing the
Alaska Public Utilities Commission; relating to the powers of the
chair of the Regulatory Commission of Alaska; relating to
regulatory cost charges for public utilities and pipelines;
relating to the appellate procedures of the Regulatory Commission
of Alaska; relating to the Alaska Oil and Gas Conservation
Commission; and providing for an effective date." He invited the
bill sponsor, the Senate President, forward.
Number 0779
SENATOR DRUE PEARCE, Alaska State Legislature, came forward
accompanied by Mr. Pat Carter, Legislative Assistant. She thanked
the committee for bringing up SB 133 in a timely manner and
proceeded to describe the legislation, basing her comments on the
sponsor statement for CSSB 133(RLS) am. Senator Pearce said she
knows the committee is familiar with many of the issues from its
work on a piece of similar legislation, HB 183, although HB 183
cannot be considered a companion bill, per se. Commenting that SB
133 has changed considerably since its introduction, Senator Pearce
listed a number of items the legislation does not do. Senate Bill
133: 1) Does not combine the Alaska Public Utilities Commission
(APUC) and the Alaska Oil and Gas Conservation Commission (AOGCC)
into one commission at present. 2) Does not deregulate garbage.
3) Does not transfer pipeline regulation to the AOGCC. 4) Does not
make any policy changes to either commission. 5) Does not transfer
any function from one to commission to the other. 6) Does not
alter the number of commissioners on either commission.
SENATOR PEARCE reviewed the legislation. The following changes
would be made to the APUC. The APUC would be repealed and the
Regulatory Commission of Alaska (RCA) created, effective July 1,
1999. All commissioners shall be either reappointed or replaced.
All staff shall remain. Regulations and pending matters before the
commission shall be carried forward to the new commission. The new
commission will be composed of five commissioners. The five shall
be members of the general public; there are no requirements in this
legislation at present for areas of specific expertise. After
working through a number of possibilities in terms of specific
expertise, the conclusion was reached that attempting to figure out
the proper round and square holes to fit people into becomes
limiting, and the public interest is best served by having the
maximum flexibility in acquiring qualified individuals from the
general public to serve on this extremely important commission.
Number 0911
SENATOR PEARCE stated the legislation strengthens the position of
the chairperson. He or she would have limited authority over the
other commissioners, would have oversight of all commission staff,
would assign the work of the commission and staff, would set time
lines by which a matter shall be resolved, and would determine when
advocacy staff is required, given certain standards. A number of
items have also been inserted into the legislation that would
streamline the actual hearing process the commission undertakes in
considering its dockets: 1) The chairman would have the ability to
empanel any three or more commissioners as a hearing panel to
decide each docket. This would allow the chairman the flexibility
to assign the applicable number of commissioners depending upon the
size of the case, so that not all five commissioners would be
required to hear every case. 2) The appeals process has been
limited so that it would only be considered when a decision taken
is contrary to a precedent made by the commission. 3) The
legislation would mandate the commission to promulgate timeliness
standards.
SENATOR PEARCE recalled her experience as a freshman legislator and
member of the House Labor and Commerce Standing Committee; they had
had the sunset of the APUC before them for the entire two years.
She remembered complaints at that time about the lack of timeliness
by the commission in terms of receiving even a commission hearing,
much less an actual order. She also remembered, in order to
clarify that some progress has been made since then, that one of
the electric utilities had complained that the commission, in an
order, had told the utility what color it had to paint its trucks.
Therefore, perhaps the commission has made some progress in all
those years, since that sort of complaint is no longer before them.
However, there is certainly still a timeliness problem, which she
is sure the committee is aware of. Senate Bill 133 mandates that
the commission promulgate timeliness standards, depending on the
complexity of the docket, for the types of cases which come before
the commission. Senator Pearce noted that certainly not all the
cases are the same in type or complexity. The APUC handles
telecommunications, electric utilities, gas utilities, pipelines,
joint cases on joint boards with both the Federal Trade Commission
(FTC) and the Federal Energy Regulatory Commission (FERC), and
finds itself from time to time in other matters and rulemaking.
Senator Pearce indicated, therefore, it has been her opinion that
specific time lines should not be inserted into statute, and they
should not attempt to determine in statute time lines for every
type of case which comes before the commission. However, the
commission would be required to promulgate its own timeliness
standard, and the regulations be adopted by December 31, 1999. In
that way, if a specific case comes before the commission where
parties agree that the time lines should be changed, the commission
would have the opportunity to do emergency regulations to address
the situation at hand.
Number 1099
SENATOR PEARCE commented that a provision has also been established
for formal hearings to be held before an arbitrator in appropriate
cases. This gives the commission another tool to hopefully make
its process more efficient and more effective. Within the
commission, a separate advocacy group would be established to
represent the public interest when necessary. Senate Bill 133
instructs the commission to adopt a time management system. This
suggestion goes back to the LB&A [Joint Committee on Legislative
Budget and Audit] 1977 audit, and has been in every audit since.
This time management system is to ensure accurate accounting for
time billed on each aspect of the commission's functions. Senator
Pearce noted she thinks all are familiar with the regulatory cost
charge (RCC) structure put into place for the commission in 1991.
To date, the APUC does not use industry or utility codes on payroll
time sheets and, therefore, workloads are approximated using rough
estimates. A time management system would provide improved
accuracy when assessing regulatory cost charges to individual
sectors of the utility industry. It should also assist in ensuring
that the cost causer is the cost payer.
SENATOR PEARCE explained that the current version of SB 133 would
make only two changes to the AOGCC. The physical move of the AOGCC
is being required to the same location as the new RCA. The
legislation asks for this to happen no later than July 1, 2000.
The Department of Administration has testified that it hopes to
have that move finished by September of 1999. The AOGCC's current
building is inadequate and a move was already being worked on.
Senator Pearce noted there is space in the present APUC building.
The two commissions would then be able to share record-keeping
facilities and clerical staff under the legislation. The AOGCC
would also have access to hearing officers once the move has
happened, and after July 1, 1999 [the effective date]. The AOGCC
has not had access to hearing officers in the past. The belief is
that with some of the issues arising in the merger of BP [BP
Exploration (Alaska) Incorporated] and ARCO [ARCO Alaska,
Incorporated], and other important dockets and issues that will be
coming before the AOGCC, this commission could also streamline its
ability to function if it had access to a hearing officer.
Therefore, even though the commissions would not be combined,
access [to hearing officers] has been allowed.
Number 1233
SENATOR PEARCE informed the committee she understands there is one
hearing officer at the APUC presently who has handled every
pipeline case for nearly the past 20 years. This person has a
tremendous amount of knowledge which could, and probably should, be
shared with the AOGCC as some of these issues arise. This
legislation authorizes LB&A to prepare a transition report to be
brought back the next legislative session to the legislature and
the Governor. The request is that the report address both
commissions and their functions, making recommendations on any
other structural changes which might serve in the state's best
interests. Senator Pearce indicated this is in substitution for
the combination [of the APUC and AOGCC] she had originally
envisioned. The legislation asks the Governor to appoint one
commissioner from each commission to work with LB&A on the
transition report.
SENATOR PEARCE mentioned she is aware the chair of LB&A
[Representative Gail Phillips] has requested that this language be
deleted because LB&A already has the authority to compel the
Administration's cooperation on such a study. Senator Pearce
stated she has no problem with that. She thinks SB 133 will
improve their ability to protect the long-term public interest
through increased functional efficiencies of both commissions.
Senator Pearce added that all the recommendations in terms of
changes to the way the commission, the new RCA, does business in
Alaska came from either the internal audit - the NRRI [National
Regulatory Research Institute] report the APUC had done the
previous fall - or from the legislature's own LB&A audits. She
stated they did not reinvent any wheels in this bill. Senator
Pearce indicated that concluded her testimony and she would be
happy to answer any questions, indicating Mr. Carter might provide
assistance. Senator Pearce expressed her hope the legislation
would move at this hearing; however, if the committee should meet
the following day [Saturday, May 8], Mr. Carter will be before the
committee but she, unfortunately, will not be able to attend.
Number 1342
VICE-CHAIRMAN HALCRO noted one of Senator Pearce's opening comments
that this legislation does not combine the two commissions [APUC
and AOGCC] into one. Therefore, if the legislation were to take
effect, AOGCC would move into the same building as APUC on July 1.
The vice-chairman noted there are five APUC commissioners; he
questioned how many commissioners AOGCC has.
SENATOR PEARCE answered three. She clarified the legislation
requires the move to take place by July 1, 2000, but the Department
of Administration is hoping to have the two commissions in the same
building by September 1999. They are on an accelerated time frame
because they have to get the AOGCC out of its present building as
soon as possible.
VICE-CHAIRMAN HALCRO questioned how LB&A would do the analysis of
how the two should be combined. He noted there are five
commissioners here and three here; they are not going to be
combined into one, but how is that analysis is going to be done?
SENATOR PEARCE answered that the language in the legislation has
been deliberately changed in order to not predispose LB&A to
recommend that the two commissions be combined; LB&A would be asked
to come back with an analysis of what the best structure for
regulatory commissions for Alaska would be, and whether it makes
sense to combine the two entities. Senator Pearce described some
of the other states' structures: Oklahoma has a combined
commission with divisions - it only has three regulatory
commissioners for the entire state, Texas has the "Texas Railroad
Commission" - it also regulates all the state's utilities, Kansas
has a combination commission, and some state has an actual
corporate commission where even all the business licenses are under
the same commission. Therefore, there are a number of methods out
there. The expectation is that the auditors, as they are highly
qualified to do, would look at Alaska, the sorts of cases that come
before both [commissions], the interests of both the people and the
businesses of the state, and then inform the legislature if there
are changes to the regulatory structure that could be made which
would make the entire structure more efficient and effective.
Number 1479
VICE-CHAIRMAN HALCRO referred to the time management system and
public testimony on HB 183 that one of the industries has 23
percent of the workload but pays 50 percent of the commission's
costs. Therefore, obviously, the time management system is
designed to improve the assurance that the cost causer becomes the
cost payer ["cost user" stated].
SENATOR PEARCE responded that when the initial legislation was
passed which set up the first regulatory cost charge, the
expectation was that each utility would pay for its own issues.
Senator Pearce indicated she thought the initial legislation had
come from either the Senate Finance Standing Committee or from
former-Senator Pourchot. The telecommunications industry, electric
utilities, gas utilities, and the pipelines were all expected to
pay for their own issues. In fact, however, the pipeline industry
was "at the door knocking" saying it did not want to have to pay
for phone wars or any other wars. Therefore, the RCC was created
and it was always the legislature's intention that the cost be
apportioned out by who actually caused the costs back to the users.
Senator Pearce said it has not worked that way; that is why they
are coming back, making the further change, and mandating it in
law.
VICE-CHAIRMAN HALCRO noted debate in the discussion of HB 183
regarding time limits - 30 days or 60 days depending of the
complexity of the issue. There had been some debate about what a
practical time frame is, 30 or 60. Senate Bill 133 gives the
commissioners time to decide their own standards.
Number 1577
SENATOR PEARCE replied CSSB 133(RLS) am would require the
commission to promulgate regulations that set time lines by the end
of calendar year 1999. They examined standards at the FTC and
FERC, for example, in an attempt to determine good standards to
include in the legislation because Senator Pearce also believes the
people and utilities of the state have the right to receive
hearings and decisions in a timely manner. This is an ongoing
problem with the APUC; there is no doubt about that. The other
side of the issue is that it is always difficult to write statutes
which meet each and every individual case. Therefore, after being
unable to come up with specific language that was going to be able
to deal with all the different cases and all the different
industries, they decided not to include specific time lines in this
legislation. They also found that while the FTC does, Senator
Pearce believes, have some time lines written into its regulations,
the FTC is having some problems as well and is in the process of
attempting to reevaluate those.
SENATOR PEARCE said her initial thought had been to take the FTC
standards, telling Alaska's commission that when it adopts its
standards, the standards must be at least as timely as those of the
FTC, FERC, or some other federal agency that would be specified.
However, since those standards are not apparently working well at
the moment, this did not seem like such a good idea. Therefore,
without knowing all the right numbers, Senator Pearce expressed her
concern with the expectation that the commission would always be
able to get orders out in 60 days. She thinks the commission is
given enough tools that it should be able to have hearings within
the time in the proposed amendment. However, she is not sure about
actually having the orders out. Senator Pearce does not know that
there is a correct date; she would just point out to the committee
that the Alaska Supreme Court is more than two years behind in
getting decisions out, and this is also an adjudicatory process.
Indicating she is not saying the legislature should slow the
commission down, she, however, expressed her doubt about the
desirability of putting 60 days into statute; she does not want to
force bad decisions in the interest of time. She indicated the
argument could be lengthy on both sides.
Number 1704
VICE-CHAIRMAN HALCRO added he thinks the argument comes from the
fact that the major criticism of the commission is the time limits,
and the need to receive a response in certain market conditions
where a response is needed.
SENATOR PEARCE noted she understands that, and commented that has
been one of her major criticisms of the APUC.
REPRESENTATIVE MURKOWSKI questioned what SB 133 does with the
executive director position.
SENATOR PEARCE confirmed that position would no longer exist.
REPRESENTATIVE MURKOWSKI noted, then, the current role or
responsibility of the executive director has been shifted to the
chair.
SENATOR PEARCE answered yes and no. What they have given to the
commission, and through the commission to the chair, is direct
authority over the staff. The commission can decide if it wants to
have an administrative manager; it can choose the form of staffing
it wishes in order to be the most efficient possible. However, the
statutorily-defined provinces of the executive director the
commission has no ability to effect would be eliminated.
Number 1764
REPRESENTATIVE BRICE commented that if this is passed the Governor
would have to appoint five new members.
SENATOR PEARCE noted the Governor would appoint five members,
indicating the members wouldn't necessarily have to be new.
REPRESENTATIVE BRICE questioned what the effect would be on the
dockets currently before the public utilities commission if five
new members are appointed.
SENATOR PEARCE commented that the actual dockets, all pending
matters, and the staff transfer "along with the regulations
transfer." The real effect is that there would be some period of
time at the beginning of fiscal year (FY) 2000 where it could be
expected that the new commission members would be playing catch-up
and reading through the dockets. Senator Pearce said there is no
perfect time for making the change. On the other hand, she would
hope that the quality individuals who would be appointed and then
confirmed by the legislature, would be able to quickly understand
the basic issues and make good decisions in, frankly, a more timely
manner than the present commission has been able to do, even though
some of the present commissioners have been there for a long time.
Senator Pearce stated, "They are so dysfunctional that a couple of
months of catch-up is certainly not going to put us in any worse
shape."
REPRESENTATIVE BRICE questioned if the sponsor saw the requirement
to establish the time lines by the end of this calendar year, in
addition to everything else, as an additional burden which put
"them in that much more of a crunch."
Number 1865
SENATOR PEARCE answered not really. She knows that internally in
the commission and amongst commission staff, feasible time lines
have been discussed. Promulgating regulations, even though the
Administrative Procedures Act must be used, does not have to be a
burden. However, Senator Pearce indicated she thinks it is
absolutely imperative an ethic of timely completion of items is
expected from the commission; if it takes the commission awhile to
set those sorts of regulations, then that is fine. Three of the
commissioners are either already at the end of their terms, have
retired, or are approaching the end of their terms. There will
already be a major change. Considering that a majority of the
commission is required to make decisions, five people reading the
records, rather than three people, is certainly not necessarily
going to slow things down when the majority of members could
possibly be turning over. Senator Pearce indicated the majority
turnover was a possibility, but not necessarily what could happen.
REPRESENTATIVE CISSNA asked for an explanation of how the public
advocacy concept works.
SENATOR PEARCE indicated the NRRI report contained questions
brought forward by a number of the utilities and by the commission
employees. Alaska has an interesting situation: there is no
consumer protection section in the state's Department of Law.
Therefore, the consumer protection power of the commission and duty
toward Alaskans is extremely important, perhaps even more so than
elsewhere. A perception of conflict of interest can be construed
when there is not a separate section advocating for the general
public. The NRRI report recommended that there be separate
advocacy and advisory functions. The people who give the direct
advice, work with the commission on writing the orders, and work
with the commission to provide the commission, should work directly
for the commission. The advocates who have an ex parte role, who
are actually in front of the commission arguing on behalf of the
people of the state against utility rate increases, should stay ex
parte. Therefore, the legislation creates a separate section [for
this purpose].
Number 2007
REPRESENTATIVE CISSNA questioned how that works; she asked how many
new positions the sponsor saw that being and if there is a fiscal
note with this.
SENATOR PEARCE confirmed there is a fiscal note. She explained it
would work exactly the way the FTC and the FERC work, and the way
many other commissions in the states work; there is a separate
advocacy section within the commission led by an attorney (indisc.)
a hearing officer. This section develops the record on the
advocacy side, and develops the arguments if an advocate is
assigned to the particular docket or rulemaking. Some current
commission staff has the necessary expertise. In some cases, these
people are attempting to be both advocates and advisors at the same
time; there is no way to truly separate those functions even though
the individuals do the best they can to avoid a conflict of
interest. However, by definition, those are inherently conflicted
activities. The NRRI report recommended the establishment of
separate sections. Senator Pearce said it is her opinion that if
the public utilities commission needs a few more staff to establish
a separate advocacy section and gain that expertise, this is for
the protection of Alaskan consumers and is exactly what should be
done. That is the entire point of an advocacy section: protecting
the public.
REPRESENTATIVE CISSNA noted she is still trying to conceptualize
this. She questioned what kind of staff and resources this section
would have in terms of having the same body of knowledge.
SENATOR PEARCE commented they have subpoena power and access to all
the same documents. They can already ask, by law, for discovery;
SB 133 does not change that. The public utilities commission staff
has an enormous amount of power to compel the regulated utilities
to provide them with the documents that back-up the rate increases
or tariffs being requested. Senator Pearce added that the
commission sometimes presently contracts out for this sort of
expertise - it doesn't have to be done internally - and this would
still be possible under SB 133. She indicated the staff has the
same ability to ask for whatever information they desire from the
utilities when a rate case is brought to the commission.
Number 2158
PAT CARTER, Legislative Assistant to Senator Drue Pearce, Alaska
State Legislature, added that the way the public utilities
commission adjudicates a particular issue or docket would not be
changed. Currently, staff may work on several different
items/dockets throughout a day; a person may be an advisor on one,
an advocate on another. The NRRI report spoke of the creation of
a "Chinese Wall" in a person's mind: where he/she is acting as
advisor to a commissioner on one hand, but is not able to convey a
message to the commissioner on a similar issue where that person is
acting as an advocate because those things need to be separate in
an adjudicatory function. However, even if those things could be
separated, where regulations are being set which affect all the
cases being worked on, when the person comes back before the
commission on rulemaking, Mr. Carter thought it would be virtually
impossible to not bring some level of bias to that, depending on
the person's role. By separating the two roles and staff, the
intent is to bring more uniformity to each issue.
SENATOR PEARCE commented on their thought process through this.
She indicated her first thought had been that if the commission is
supposed to be representing the people of Alaska and if there are
public members on the commission who are supposed to be protecting
the consumers, there would be no need for advocates; they should be
eliminated and the commission just be allowed to do its job.
Senator Pearce noted the Department of Law was pretty unhappy with
that idea and so was the APUC. Then, in order to have the "Chinese
Wall" and the separate section as called for in the NRRI report,
and as other commissions do, so that there would never be a
perception of conflict [of interest], the suggestion was made to
move the advocates into the Department of Law. The Department of
Law did not think that would be the proper place; it did not want
to become the utility consumer section. Therefore, after working
through several other possible solutions, they have returned to
setting up a separate section within the commission. Senator
Pearce indicated the Administration recommends this option.
Number 2270
REPRESENTATIVE MURKOWSKI appreciated the need for the "Chinese
Wall" in dealing with the advocacy issue. She wonders, then, if
the same type of separation is being envisioned with regards to
this communications carriers section. Representative Murkowski
questioned if that would be staff specifically dedicated to working
within those areas, a kind of a commission within the commission.
She wondered how integrated it is.
MR. CARTER answered that the communications carriers section is
something which is currently in statute; aside from the separation
of the advocacy section, it will largely continue to function as
is. He noted there was some discussion whether to even have a
communications carriers section, or whether it should be removed
entirely.
REPRESENTATIVE MURKOWSKI asked, then, if there is existing staff
who work on nothing but those communication issues.
SENATOR PEARCE commented there is a separate section, but she
cannot say if they work only on those cases.
REPRESENTATIVE MURKOWSKI indicated, then, it is not as if an area
of expertise has been developed in that section, with the wish to
keep this staff separate and not utilize them for other aspects of
commission work.
SENATOR PEARCE noted the section already exists and no attempt is
being made to further isolate that staff; however, the attempt is
being made to isolate the advocates.
VICE-CHAIRMAN HALCRO announced the committee would proceed to take
some teleconference testimony from Anchorage.
Number 2342
JIMMY JACKSON, Regulatory Attorney, GCI [General Communications
Incorporated], testified next via teleconference from Anchorage.
He provided the following testimony:
"My name is Jimmy Jackson, and I am an attorney for GCI.
I would like to thank you for the opportunity today to
testify on SB 133. We would like to propose two
amendments to [SB] 133. The first is to delay the
effective date for a couple of months, in order to
provide for a smoother transition. The current effective
date would require that new commissioners be in place
less than 45 days after the bill is passed and becomes
law. That seems to be an awful short time to get at
least several new commissioners, have them leave whatever
it is that they're doing now and be ready to take on
these new responsibilities. A couple of month[s] delay
to August or September would seem to ease this and work
a little better.
"The second issue where we would like to propose changes
concerns the topic which has just been discussed in some
detail, which is the change in the existing role of the
commission staff. Presently, staff acts as a party in
some cases; for example, if a utility asks for a rate
increase, that increase is decided through a hearing
procedure which is very similar to a trial, and staff
acts as a party to represent the public interest,
opposing the rate increase if it's deemed to be
excessive. It's necessary to have staff assume this
role, because without it the commission would have to
make a decision based solely on the evidence presented by
the utility. In these cases where staff members are
parties to the case, they cannot have ex parte contacts
with the commissioners about that case. In other
proceedings, the same staff members are available to the
... commissioners in an advisory capacity. This system
has been in place for many, many years and it works. I
have been on both sides of the system, 10 years at the
commission and 5 years since I left the commission, and
from both sides, I believe that it works quite well."
Number 2426
"SB 133 proposes to change this structure by creating a
separate 'advocacy staff' within the commission. This
advocacy staff would be separate, it would have only the
advocacy role, and they would never be advisors to the
commission. Although this is a structure which is used
in some commissions, and in theory it can work, we
believe it would require a significant increase in
personnel at the staff [? commission], because of
efficiencies which would be lost. We do not believe that
it can work with the current level of employment on
staff, and the increase in cost that would be passed to
utilities and to consumers to make it work is unnecessary
and undesirable.
"... I'll give one example which fits in with some of the
questions regarding the common carrier section
[communications carriers section]. The common carrier
section has three people at this point in time. They
have expertise in telecommunications, and each of the
three persons has a slightly different expertise. Under
the current structure, in some cases they can be parties,
and all three of them can lend their expertise to the
party function. In other cases where they are advisors,
all three of them can lend their expertise to the
commission as advisors. If you split those three and put
one or two in the advocacy group, both the advocacy group
and the advisory group will have the short end of the
stick. [Neither would have all the resources and
expertise they would need in a particular case (from
draft testimony)] ..." [TESTIMONY INTERRUPTED BY
AUTOMATIC TAPE CHANGE]
TAPE 99-54, SIDE B
Number 0001
MR. JACKSON continued his testimony:
"... other sections of the commission. Now, I would
distinguish this from what the NRRI report talks about in
terms of the attorneys, where they talk about ensuring
that you don't have an attorney who represents one side
of the case, has to defend on appeal a decision which
they argued against. I would totally agree that that
should be structured so that an attorney does not have to
represent in court a position which he opposed when it
was before the commission.
"Another reason that we believe that it's not a good idea
to change this role of staff at this time is that the
other changes embodied in this bill will obviously have
a significant short-term impact on the commission, which
was discussed, and it will take a while for new
commissioners to get up to speed. It seems undesirable
to layer the change in the role of staff on top of the
other changes, which would cause more disruption
problems, at least in the short term. For these reasons
we would encourage you to amend the bill to retain the
current role of staff. Again, I want to thank you and
I'd be happy to answer any questions."
Number 0051
VICE-CHAIRMAN HALCRO noted Mr. Jackson had mentioned repercussions
if a separate advocacy/advisor situation is created. The
vice-chairman commented Senator Pearce testified she felt, in the
interest of serving the consumer, that hiring additional staff if
needed for the advocacy side would be a good idea. Vice-Chairman
Halcro indicated one of the overwhelming items heard in the
discussions on HB 183, sort of the cousin bill to SB 133, is the
timeliness issue - the time it takes to get a decision. He
questioned if hiring more staff wouldn't expedite decisions and
provide more flexibility to the commission as far as getting work
done and cases heard.
MR. JACKSON replied he guesses he would say that even in the
commission's present configuration, it may well be true that the
commission needs additional staff. He would not argue this point,
and said that, if necessary, they should be added. Mr. Jackson
commented that if the legislature makes this change regarding the
role of staff, he thinks it would then add another increment of
people who would be necessary. He believes the staff does a good
job of protecting the public interest in the current situation. If
the legislature makes this additional change, the public will pay
for the additional staff members; that cost flows to the consumer
through the regulatory cost charges paid by the utilities. He
stated that they truly just do not believe it is necessary to incur
the additional cost. It is a small commission because Alaska is a
small state. The efficiencies work pretty well now; he thinks a
lot will be lost and, therefore, there will be some fairly
significant additional costs passed on to consumers if the change
in staff is made.
VICE-CHAIRMAN HALCRO asked Mr. Jackson to speak a bit about
possible perceptions of conflict with the advocacy/advisor role.
Number 0140
MR. JACKSON answered he believes there may at times be that
perception. He said it is probably also true that the perception
comes from the utilities. Mr. Jackson indicated part of the nature
of the process when the desired decision is not received is the
possible feeling that something somehow went wrong which should not
have gone wrong, and that may be an easy thing to point to. As he
has said previously from his experience on both sides of the fence
for fairly lengthy periods of time, Mr. Jackson noted he has never
seen anything which causes him to believe that is the source of any
unfairness.
REPRESENTATIVE BRICE questioned what the impact of this change
would be on GCI's current dockets before the APUC. In response to
Mr. Jackson's request, Representative Brice clarified he is
referring to the entire bill, SB 133.
MR. JACKSON indicated that GCI is experiencing somewhat of a lull
right now in current cases before the APUC. Mr. Jackson commented
he does not have as many cases in front of the commission as
perhaps he has had in the past. He agreed with Senator Pearce that
there would be a short-term period with some disruption. He
guesses the hope is, and he would join in that hope, that in the
longer run it would be faster and by some time in the fall they
would be ahead of where they would otherwise be. Mr. Jackson
indicated, however, this could not be known in advance.
VICE-CHAIRMAN HALCRO confirmed there were no further questions for
Mr. Jackson.
Number 0240
MARK VASCONI, Director of Regulatory Affairs, AT&T Alascom,
testified next via teleconference from Anchorage. He provided the
following testimony, based on a written statement:
"Good afternoon. My name is Mark Vasconi and I am
testifying on behalf of AT&T Alascom, where I serve as
Director of Regulatory Affairs. As you know, AT&T
Alascom is one of the largest public utilities in Alaska,
with an extensive network of telecommunications
facilities throughout the state. Alascom has been
regulated by the APUC for almost 30 years and has been
directly involved in many of the most significant cases
in the commissions's history. We have a detailed
knowledge of how utility regulation in Alaska works, born
of long experience. My brief comments today are about
some of the shortcomings we see in SB 133 and are based
on that experience.
"Before turning to the specific problems we see with SB
133, I think it is important to state the principal goals
that AT&T Alascom believes the legislature should aim for
in making any changes to the public utilities commission.
These goals are efficiency, professionalism, and
objectivity. We believe the commission should be
composed of trained professionals who, ideally, have some
knowledge of the technical complexities of utilities
regulation and who are not beholden to any industry group
or political party. Those professionals should be
required to live by a clear set of guiding principles,
established by the legislature, which promote
competition, protect the public interest, and promote
fair decision-making on the merits. We are concerned
with at least three provisions of the current version of
SB 133, as they may unintentionally undermine these goals
of professionalism, efficiency, and objectivity.
"Our first concern is with the elimination of the
requirement that commissioners have at least minimal
professional education and training. The current
requirement that there be one lawyer seat, one
engineering seat, one business seat, and two citizen
seats may need to be expanded or made more flexible, but
we question whether abolition of any professional
qualifications is wise.
"AT&T Alascom's second concern is over the provisions
dealing with the Public Advocacy Section. In Section
.070(c), it says that the chairman shall direct the
Public Advocacy Section to participate in a proceeding
when the chair believes it to be in the public interest.
Section .150, however, appears to conflict with .070 by
requiring the Public Advocacy Section to participate
whenever 'it is in the public interest to do so,' without
saying who decides when that is. This provision of the
bill goes on to say that the Public Advocacy Section
'shall operate separately from the rest of the
commission.' Does that mean separately from the
chairman? If so, who decides what is in the public
interest and when participation is appropriate? Is it
the head of the Public Advocacy Section? Is there a head
of the Public Advocacy Section? The way the bill reads
now, the chairman has the power to set this group in
motion, but he or she does not have the power to stop it
from striking out on its own. At a minimum, this
confusing allocation of responsibility needs
clarification. We also think that the addition of
personnel to the Public Advocacy Section and to the
advisory staff would be necessary if this section of the
bill is enacted."
Number 0385
"The third aspect of the bill that AT&T Alascom believes
could be significantly improved is Section .080(b), which
creates an internal appeal procedure whereby an aggrieved
party could appeal the decision of a three-commissioner
panel to the full five-member commission. AT&T Alascom
thinks that this is an entirely unnecessary layer of
additional procedure. It will do nothing but increase
the agency's case backlog and delay prompt resolution of
disputes. An additional layer of procedure is directly
at odds with the goal of enhanced efficiency. We
strongly recommend that this provision be eliminated from
the bill if it is going to be passed into law.
"These are just three of the most significant
shortcomings we see in the bill as currently drafted.
There are other ambiguities - for example, the chair is
appointed by the governor for a four-year term. Can a
new governor appoint a new chair before the four-year
term expires? It isn't clear - all of which leads us to
the conclusion ... that more time should be taken to
permit industry and the public to digest this
legislation. We urge the legislature to clarify the
ambiguities and carefully consider some of the unintended
consequences that may result from the changes SB 133
makes to the existing APUC structure. Otherwise, AT&T
Alascom believes that there is a real danger that the
perceived problems with the APUC may only be aggravated
by this legislation, and that hasty passage of this bill
may result in unforeseen consequences that hinder
efficient and objective decision-making by the new
commission. Thank you for considering these comments and
I am available for any questions."
Number 0465
REPRESENTATIVE MURKOWSKI noted Mr. Vasconi had mentioned the
professional qualifications [for commissioners] and the fact that
they have been eliminated from SB 133. She questioned if he is
suggesting they return to the existing professional qualifications
or if he is suggesting any addition to those.
MR. VASCONI said he thinks the qualifications, at a minimum, might
want to contain some clarification with respect to a college
degree. Mr. Vasconi thought it might make some sense to maintain
those particular areas which have been in statute, and it also
might make sense to expand those qualifications to areas where
people have had experience or education in public policy making.
VICE-CHAIRMAN HALCRO confirmed Mr. Vasconi was aware the
legislature has to confirm any appointees [to the commission].
Commenting on the obvious removal in SB 133 of the current required
qualifications for commissioners, the vice-chairman noted, however,
that the legislature's role as a line of defense against what could
be termed poor appointees makes him rest somewhat easier.
MR. VASCONI responded he understands the legislature's role
regarding its ability to confirm appointees. Any additional
requirement which might come into the professional qualifications
could be seen as a "belt and suspenders" set of rules which would
further ensure professional qualifications to a body that often has
to deal with quite technical economic, engineering and legal
matters.
Number 0564
JIM ROWE, Executive Director, Alaska Telephone Association (ATA),
testified next via teleconference from Anchorage. Mr. Rowe
provided the comments of the ATA. He appreciates the time the
legislature has spent this session examining the matters of the
APUC. He was in Juneau a number of times when ideas of
restructuring and impetus were before the House Special Committee
on Utility Restructuring (URS). Many of those items they discussed
were adopted, both in the House version [HB 183] and in SB 133.
Mr. Rowe indicated ATA is very much in favor of some of the issues
discussed at this current hearing that both Mr. Jackson and Mr.
Vasconi are not in favor of. The Alaska Telephone Association
believes in the separation of advocacy of staff; this is an issue
ATA has brought before the legislature for a number of years.
Removing the professional qualifications of the commissioners is an
attribute; it allows the governor to appoint whomever he thinks is
the best person and allows the legislature to decide on that as
well. Mr. Rowe indicated the best candidate would not be precluded
because of professional qualification requirements. He noted he is
concerned whether many of the changes in SB 133 will really work,
as quickly as they have gone through this. The current version of
SB 133 has had many changes since the version that existed a month
ago. Mr. Rowe indicated ATA has spent quite a bit of time going
over some of the items and the association is very excited about
some of the direction the legislation is taking. However, ATA is
concerned that they have not looked at the legislation long enough,
and that SB 133 might contain items which would not be advantageous
for the industry or the public when cast into law. One item
discussed is the ability of the governor to appoint new people and
the legislature to confirm those new appointees to the commission.
He noted the current commission members were all appointed by a
governor and confirmed by a legislature.
MR. ROWE referred to the three common carrier section
[communications carriers section] staff being either parties or
advisors to the commission, as Mr. Jackson had mentioned and as
has been discussed. Mr. Rowe indicated that sometimes all three
act as party, which is exactly why ATA has said to the legislature
that there should be separation. This is because there are no
advisors to be staff to the commission when all three are parties.
He indicated the ATA thinks the public is not served by the lack of
staff in all those positions, both to advise those who are going to
make the decision, and to act as party on behalf of the public at
the same time. Mr. Rowe noted ex parte [communication] has been a
concern and it has been mentioned a number of times. He indicated
the possibility of adverse decisions regarding ATA members
attributed to ex parte, mentioned "sour grapes," and indicated
sometimes industry has complained the commission was too slow when
industry did not received the desired answer. In summary, Mr. Rowe
indicated he is mostly coming before the committee to thank the
legislature for what is in CSSB 133(RLS) am, the work done in both
houses, and the direction the legislation is going, but informing
the legislature of his apprehension. Although most of what is in
the legislation is good, if all of it is not good, he is not sure
either the public or industry will be served. He is worried about
the loss of institutional knowledge there would be with a "clean
sweep," but is sure they would struggle along with it. Mr. Rowe
also commented he thinks there will be lull in getting dockets
closed, and part of that is just human; the new commission, or any
new commissioner that will be acting in the decision-making
process, will have to read the record, and that takes time. Mr.
Rowe indicated that concluded his testimony.
VICE-CHAIRMAN HALCRO confirmed there were no questions for Mr. Rowe
and no further witnesses on SB 133 at the Anchorage Legislative
Information Office (Anchorage LIO). He requested the testimony of
Pat Davidson.
Number 0798
PAT DAVIDSON, Legislative Auditor, Division of Legislative Audit,
Legislative Agencies and Offices, came forward in Juneau. Ms.
Davidson stated she is present to answer questions on the amendment
["motion"] from Representative Gail Phillips regarding the audit.
She would remain present in case needed.
Number 0834
GINNY FAY, Legislative Liaison, Office of the Commissioner,
Department of Commerce and Economic Development (DCED), came
forward. Ms. Fay commented the Administration has been working
with Senator Pearce since the legislation's introduction. The
Administration has worked closely with Senator Pearce and feels the
number of initial concerns it had with the bill have all been
addressed. The Administration is content with CSSB 133(RLS) am.
Number 0873
ERIC YOULD, Executive Director, Alaska Rural Electric Cooperative
Association, Incorporated (ARECA), came forward. Mr. Yould noted
ARECA is the trade association for the electric utility industry in
the state of Alaska. He stated that, very basically, ARECA is in
favor of this bill. When it first came up in the Senate it had
sort of a shotgun marriage associated with AOGCC, however he thinks
the manner in which the Senate has decided deal with a good,
comprehensive assessment of the desirability of that marriage
satisfies ARECA - that whatever the ultimate future outcome is, it
is something that will be better for the state of Alaska. Mr.
Yould noted ARECA has some concerns regarding transition,
institutional memory, change resulting in an unknown period of
time; however, he indicated ARECA feels the commission will be able
to get through this with good, dedicated people. Mr. Yould listed
some of the positive items ARECA sees in CSSB 133(RLS) am. He
noted the staff time tracking system. Back in 1979, "a very group
such as yours" recommended to APUC that it have a time tracking
system. This never happened. In 1995, "a same group such as
yours" made the same recommendation and again it never happened.
Currently there is still no time tracking system. This legislation
finally requires that a time tracking system be put into place;
ARECA thinks that is positive. The current legislation also
requires that there be a management information system accessible
through the Internet; ARECA thinks this is a very positive addition
to APUC management tools.
MR. YOULD continued that CSSB 133(RLS) am stipulates the use of
hearing officers established by the commission, plus arbiters if
appropriate. The legislation establishes time lines by the
commission for dockets. However, ARECA notes that there is an
amendment before the committee [1-LS0771\XA.4, Cramer, 5/7/99] that
attempts to establish some definitive time lines; it actually came
out of actions out of this committee. Mr. Yould said ARECA, as a
general rule, would like to see that amendment passed. The
legislation gives more power to the chair to exercise authority
over staff. An item that the electric utility industry is
interested in is an allocation of the RCC [regulatory cost charge]
based on the level of effort committed to each individual industry
as opposed to simply an average amount for the entire utility
sector. Therefore, basically, the electric utility industry, for
instance, would be paying for the services that were actually
provided to the industry (indisc.) regulation. ARECA thinks that
is good. ARECA is in favor of the establishment and set-up of the
independent public advocacy section. The section is independent
and assures ex parte. Although it might require extra staff, Mr.
Yould expressed that the cost for this additional staff translated
to the individual on a bill would represent approximately a few
pennies more, a very insignificant increase. He said the real
question is whether the legislature wants to authorize those
additional positions or not. It does set up a "Chinese Wall" ARECA
feels is valuable; he thinks staff in an ex parte position
sometimes carry that over to their function when they are in an
advisory position. ARECA feels there is some value in the way it
is set up. Mr. Yould stated ARECA does support this legislation,
although it is concerned about the institutional memory. However,
ARECA is willing to move forward with a bill it feels imparts a
number of management changes. He indicated there is question
whether these management changes will work, but he expressed the
belief that if there are good, dedicated commissioners and staff
who want to make these changes work, they will work, to the
betterment of the industry.
Number 1089
REPRESENTATIVE HARRIS noted the references by more than one witness
to the loss of institutional memory. He questioned if it would be
the staff loss, noting it does not seem like there would probably
be any loss of institutional memory (indisc.) on the commission,
since there is the possibility of three of the commission members
changing in the near future. Under this legislation, the Governor
has the opportunity to reappoint those people, if he so chooses, or
appoint new people. Representative Harris asked why the concern.
MR. YOULD said he frankly agrees with Representative Harris'
comment; ARECA does not envision significant change in staff. He
would suspect that very few staff would not be carried forward.
Perhaps all would be carried forward, he does not know; it would be
up to the commission to closely examine its own staff, perhaps
doing its own management audit. Mr. Yould commented on the ability
this would allow for redefinition and staff changes, if desired.
As a general rule, he would tend to agree that he does not think
there would be a large loss of institutional knowledge from the
staff. However, it is an open question on the commission. It is
hard to say how many new commissioners they would have. Mr. Yould
commented the electric utility industry likes the present chairman.
Mr. Yould indicated that perhaps the chairman has been hampered by
commission chemistry in his efforts. If there are five new
commission members, however, there would be some institutional
knowledge lost.
REPRESENTATIVE HARRIS noted one other question which came to mind
as he is reading through again; it is a question the committee has
asked Mr. Yould before, and, in fact, something the committee has
had a couple of amendments on before. Representative Harris
stated, "This bill calls for 60 days, a decision must be made in 60
days. ... It does not - it does not, at least (indisc.) I can
read, give any extension period ability. Does that bother you?"
Number 1216
MR. YOULD said he guesses it does not bother him. Mr. Yould
commented, as he has mentioned before, that if there are the
resources to get the docket out within a timely finish then the
docket can be gotten out. He noted the previous discussion
regarding 30 and 60 days, and his support of 30 days. However,
realistically, they can work with 60 days just fine. Mr. Yould
said he does not think anybody knows what the proper time is. He
is sure there are some dockets out there that may take longer, but
he does not think the industry would have a problem with extensions
beyond 60 days for cause.
REPRESENTATIVE HARRIS noted, in follow-up, "And the other thing I
think that it says in here is that you get five months from the
time, I guess, (indisc.) have it on the docket, so to speak. Is
that a problem?"
MR. YOULD reiterated he had advocated amendments that would attempt
to make that sort of an absolute: If you have to take up to five
months, then do so. The previous amendment's drafting did not seem
to have the cause and effect the electric utility industry really
wanted to see. Again, as Representative Harris remembers, Mr.
Yould noted he had offered up some amendments with punitive
language which made everyone nervous, perhaps rightly so. He
commented ARECA would like to see as many teeth in there as
possible. Perhaps they could take some indication from FERC,
which, as he understands, has certain time lines mandating when the
commission shall act on certain issues. However, short of that,
coming to the close of the legislative session, Mr. Yould said that
if they could get this amendment, at least it is a step in the
right direction. Certainly there is always the next session if
they find they need to further tighten up on the time lines. He
reiterated they would like to see time lines.
Number 1319
REPRESENTATIVE BRICE commented there are communications carriers
sections and public advocacy sections under this bill. He
questioned if there is any [provision] for an electric utility
section.
MR. YOULD answered he does not think it is absolutely necessary,
and he does not understand why there has to be a communications
section. He does not know why they have to compartmentalize the
telecommunications section.
REPRESENTATIVE MURKOWSKI referred to Mr. Yould's comments regarding
the opposition to the AOGCC "marriage" situation and the current
acceptability now that it is simply a roommate situation. The
legislation provides the AOGCC access to hearing officers. She
questioned if Mr. Yould views this as a workable situation.
MR. YOULD responded it somewhat depends on the attitude of the
personnel: how motivated they are, how strong management is. He
just has to feel that motivated people are going to try to get the
job done. Mr. Yould said he guesses ARECA does not have a real
problem with the marrying together of some of the [two
commissions'] administrative functions.
Number 1412
REPRESENTATIVE HARRIS asked Mr. Yould about the lack of required
commissioner qualifications in the present legislation, noting he
guesses it is up to the legislature to make sure it is happy with
the governor's appointees.
MR. YOULD noted ARECA agrees with this. He indicated in their
testimony on HB 183, they had commented they did not necessarily
see the need for the separate profession seats of lawyer, engineer
and accountant. As a general rule, ARECA feels the governor will
attempt to appoint the most capable individuals, and ultimately the
legislature will have the authority to screen those people.
VICE-CHAIRMAN HALCRO commented on the possible near-future turnover
of three APUC commissioners, and the, he believes, 469-case
backlog. He indicated there is always going to be this period of
catch-up, even if there is only one new commissioner, and he
questioned if that is a safe assumption.
Number 1503
MR. YOULD replied he guesses it is a possibility that a problem
exists there. As he understands the legislation, it would have
staggered terms for future commissioners. This would somewhat
alleviate that particular problem. However, he said there is no
guarantee this particular commission will significantly change -
maybe there will not be three new commissioners in the near future.
Mr. Yould said ARECA does not have a problem with giving the
Governor and the legislature the opportunity to examine the entire
slate and deciding what is best.
VICE-CHAIRMAN HALCRO invited Senator Pearce and Mr. Carter back to
the table, stating he wished to provide them with an opportunity to
respond to some of the expressed concerns. The first concern was
a request to delay the effective date to provide more of a
"cushion" regarding transition.
Number 1608
SENATOR PEARCE indicated she believes the chances of passing SB 133
through the House and back to the Senate for concurrence before the
121st day of the legislative session are reduced unless the
legislature believes it is also going to have the opportunity to
confirm the new commissioners before the end of this session. It
has certainly not been hers or anyone else's intention to establish
a situation where the legislature passes a bill which completely
repeals the APUC and there are possibly five new commissioners who
do not go through any confirmation process for a full year. This
is not good conduct for Alaska's public, in Senator Pearce's
belief, and she thinks it could entertain all sorts of mischief.
Having said that, Senator Pearce noted she does not see that much
is gained by delaying the effective date of the change for two
months. The present commission would continue to serve until the
changeover date. She would think the legislators would want to
confirm new people before leaving town, and have the confirmed
commissioners on the job working to gain the knowledge and
expertise just as soon as possible.
Number 1700
MR. CARTER related they had briefly discussed the possibility
initially, when the two-commission merger was still being
considered, of retaining the existing commission at some level to
act in an advisory role. However, this might work on paper but he
thinks it would be a disaster in reality. He indicated the idea
had been dismissed because of this belief.
REPRESENTATIVE CISSNA commented the committee has spent a
significant amount of time going over the House bill [HB 183] which
seems to be quite different from this [CSSB 133(RLS) am].
Personally, she has a real distrust, a real question why things
have to move that quickly. Representative Cissna questioned if she
has understood correctly regarding the confirmation of the new
commission in the next week and a half.
SENATOR PEARCE responded that under CSSB 133(RLS) am the repeal and
reenactment of the APUC to the RCA would take place on July 1.
That assumes the new commissioners are named before July 1, and the
legislature certainly would like to have the opportunity to confirm
them. Therefore, Senator Pearce indicated Representative Cissna's
understanding is correct. She noted that is somewhat the point of
the legislation.
Number 1800
REPRESENTATIVE CISSNA commented that pieces of this paper have just
been placed in front of her at this moment, noting this is a
substantial change. She questioned why so quick.
SENATOR PEARCE replied, "I'm not trying to be flippant, but welcome
to the legislature."
REPRESENTATIVE CISSNA noted she is really asking a serious
question.
SENATOR PEARCE responded that she is providing a serious answer.
She related there is a process: the bills go through the Senate
and then they go through the House or vice versa. No one can
control the opportunity of the public and affected parties to bring
new comments to whatever committee at whatever step of the way.
She added, "If you said, 'Oh, something new came along and
therefore I can't move because there's a new idea in front of me,'
frankly, this entire building would be shutdown, and that's an
honest answer." Senator Pearce indicated her feeling that the
present commission is dysfunctional and needs to be replaced. The
only way to get to that is to repeal it. The only way to get to
that, unless the legislature sets aside its duty of confirmation,
is to get it done before the legislators leave town [after the end
of the legislative session].
VICE-CHAIRMAN HALCRO noted there is a concern that splitting
advocacy and advisory will cause unnecessary staff expenditures;
that staff would have to be added, and the testifiers did not feel
this was a wise move.
Number 1908
SENATOR PEARCE referred to her belief expressed in her testimony
that the advocates are extremely important because they are the
people who are supposed to protect the interests of Alaskan
consumers. She reiterated if that takes more staff, within reason,
she is willing to entertain this. Senator Pearce mentioned the
fiscal note, commenting they do have the money for the time
management system. The Senate understood, as it passed the bill on
a 16 to 4 vote, this was going to have additional costs on the
capital side and it would represent new staffing levels. They have
also supported new technical staff at the AOGCC. Senator Pearce
agreed with the comments of ARECA and others that having the
separate section is important enough that the needed expertise can
be created without having to balloon the staff greatly. The
information is available, and with staff expertise, this can be
done. Senator Pearce noted it does not bother her to give the
public utilities commission more staff; she approved more staff for
the APUC two years ago when the present chairman requested, she
believes, four new staff members. The APUC was before the
legislature this year for another number; she believes the Finance
Committees have entertained that request. Senator Pearce stated
the legislature has responded to the utility commission in an
effort to make the commission more efficient and more effective.
She thinks it is also important the legislature responds in a
manner which ensures that protection for the consumer.
Number 2038
MR. CARTER added that they have not heard complaints about a
separate advocacy section from groups such as AKPIRG [Alaska Public
Interest Research Group] or other groups out there. They have
heard from industry, but the public advocacy section is set aside
to protect the public interest and this is what they would be
tasked with. If it takes additional staffing levels to accomplish
that goal, then so be it.
REPRESENTATIVE BRICE asked about the relationship between the chair
and public advocacy section. He asked how they envisioned
resolving the paradox.
SENATOR PEARCE said this is the first time that AT&T Alascom has
brought written testimony to them, and she was just telling Mr.
Gillespie [Ray Gillespie, Gillespie and Associates, lobbyist for
AT&T Alascom] they are quite willing to work to clarify the
language if it needs clarification. Senator Pearce commented she
thinks his questions may be partly drafting style and due to the
way the Alaska Statutes are written. However, she would envision
the commission as a chairperson; through the chair the commission
has oversight of the staff in terms of how they do their
organization, who they hire, who they fire. Senator Pearce noted
this is a problem at the present. There are some (indisc.)
questions as to whether the commission or the executive director
has the right to hire and fire staff, and it has been an ongoing
thorn in an effort to get things done. Under this scheme, the
commission, through the power they embody in the chair, would
supervise the staff. The commission would also, under this bill,
formally set standards for when advocates would be appointed for
specific cases. This is something she understands the commission
is already discussing informally. Advocates are not required for
every single case. Therefore, the commission would set standards
so that all of the utilities would have an idea of when to expect
to have the advocates as an ex parte and when not. Then, under
those kind of broad outlines, the chairman would chose to assign a
certain docket to a certain group of commissioners, and choose to
assign the advocates to that docket at that time. Senator Pearce
assured the committee they will clarify that the language does
indeed work in the way they have intended, and have no problem with
that.
VICE-CHAIRMAN HALCRO stated the next concern was over eliminating
the professional qualifications of potential commissioners.
Number 2258
SENATOR PEARCE said they had tried to come up with qualifications.
She thinks that if one goes through the APUC over the years, one
will find that some of the best, most notable commissioners the
state has ever had have been the public members. She gave as first
example of this, Susan Knowles, the state's First Lady, former
[APUC] commissioner and former chair of NARUC [National Association
of Regulatory Utility Commissioners], who served with distinction
in both places. Senator Pearce indicated Ms. Knowles' appointment
did not have to fill any specific professional qualifications.
Senator Pearce related that they had looked at standards because
she has an image of the sort of person she would like to have on
the APUC; she suspects everyone in this room has an idea of what
they would like to see. ARECA brought them some language which the
telecommunications industry didn't like; the telecommunications
industry brought them some language ARECA didn't like; the
pipeline folks didn't like any of it. They worked through various
and sundry suggestions.
SENATOR PEARCE noted that as she said on the floor of the Senate
and at every committee she has been before with this bill, they are
willing entertain any sort of specific requirements people want to
bring forward, but when one begins setting requirements, one makes
it more difficult to find qualified people to take these positions.
Recruiting has been a problem, and they want to ensure that they do
not make it impossible to find the appropriate people. Senator
Pearce emphasized she is open to ideas, mentioning the previous
suggestion of someone with public policy experience. She does not
want to ever deny the opportunity to someone who has worked in any
one of these industries for a number of years to have the
opportunity to be appointed because he or she had never been chair
of his/her community council, or something. Therefore, to her that
would be problematic. The idea was examined that a person would
have to have a degree in business, accounting - some sort of a
professional degree in some direction. Senator Pearce said she
then noted her own degree is in biology and she thinks she could be
a public utilities commissioner, however emphasizing that she does
not want to be one ever. [TESTIMONY INTERRUPTED BY TAPE CHANGE]
[Tape log notes indicate the testimony lost was a non-serious
comment that former legislators should never be APUC
commissioners.]
TAPE 99-55, SIDE A
Number 0001
VICE-CHAIRMAN HALCRO said, "... And the second to the last concern
was about the power of the public advocacy section, and I think the
concern there was does the chair have power? Are they an island
unto themselves? If you could speak to that particular section,
42.04.150." [CSSB 133(RLS) am, Section 1, Article 3, read:
Article 3. Public Advocacy Section
Sec. 42.04.150. Public advocacy section. There is
established within the commission a public advocacy
section. The section shall participate as a party in
matters that come before the commission to represent the
public interest when it is in the public interest to do
so. The public advocacy section shall operate separately
from the rest of the commission.]
SENATOR PEARCE responded she does not think much more clarification
is needed beyond her previous comments. The staff has to work for
somebody, so clearly they do work for the commission. However,
assigning the advocacy section to a particular docket, case or
rulemaking is a function of the commission chair through the power
embodied by the commission. Once the advocacy staff is assigned,
they do their work, act on an ex parte basis before the commission
and make their recommendations. Senator Pearce noted they do that
presently but without the "Chinese Wall." Therefore, she does not
see that there will be some power-mad subsection of staff running
amok.
Number 0111
VICE-CHAIRMAN HALCRO noted the last expressed concern was the
appeal process.
SENATOR PEARCE commented that, as originally envisioned, when they
had first put forward the idea of being able to empanel a subset of
the full commission, it was a new idea in Alaska for regulatory
commissions. She indicated it is, however, a technique used by the
Court of Appeals. Because it was a new idea for regulatory
commissions, the reaction was that all five commissioners were
needed at everything. Senator Pearce related she then proposed
giving the chair the ability to assign any three or more
commissioners to each specific one. Noting this is a standard used
by the Court of Appeals, Senator Pearce described the scenario that
if the commission makes a decision which contravenes a previous
commission decision, then the parties have the right to ask the
full commission to review it. The commission can say no, and then
there would still be the right to court appeal. They were not
trying to add a layer of bureaucracy; they were trying to allay the
concerns some of the utilities had expressed early on in the
process. This today, and the AT&T testimony, is the first time she
has heard a concern about this, and she will be talking through it
with them. However, Senator Pearce did not think the concern which
was expressed is what they would actually see happen because there
are specific times to ask for the appeal and the commission does
not have to accept the appeal. Senator Pearce noted, though, she
does not like always throwing everything to the courts.
SENATOR PEARCE indicated she would like to add some comments
regarding the time limits. She thinks she previously mentioned
that they had also talked through a lot of iterations of this one.
Senator Pearce noted, "I'm not sure that any of us have much
understanding of how complex some of the cases which go before the
PUC [Public Utilities Commission] are, particularly pipeline tariff
cases." She informed the committee that years of discovery can go
on. In her opinion, the time line in this amendment
[1-LS0771\XA.4, Cramer, 5/7/99] would not work. It would not even
be possible to get to discovery in time. Senator Pearce provided
an example, stating, "We've had testimony by Tesoro at previous
hearings over the possible transfer. Tesoro is before the PUC in
a tariff case that has been before them now for how many years ...
like five years, ... they're not complaining that the commission's
going too slow, it has taken that long to get to all of the
discovery. We're talking about the TAPS Pipeline ... and we do not
want to tie the hands of our utilities commission so that we tell
them they have to force a decision quickly, and they don't have an
opportunity to do the work that we would really like them to do."
Senator Pearce stated that is one of the many reasons she has been
concerned all along about putting strict time lines in the statute,
although she would be the first one to say that utilities have
experienced inexcusable delays, noting she is referring to the
electric utilities and the telecommunications companies, but not so
much the pipeline companies. However, it always difficult to think
of every case when attempting to put something in statute and it is
often best to leave some flexibility.
Number 0424
REPRESENTATIVE BRICE commented he had touched upon this with ARECA.
He sees that having a specific communications carriers section as
potentially leading to other separate sections, and he questioned
the rationale for having a specific communications carriers
section.
SENATOR PEARCE answered that that is present law; it already exists
in statute.
MR. CARTER noted the section remains mostly as it is currently
except the public advocacy section has been separated out.
SENATOR PEARCE indicated the only reason the section shows in the
legislation is because the public advocacy portion of it has been
separated out.
MR. CARTER indicated that section came from when the "White Alice"
system was transferred from federal control to the private sector
20-some odd years ago. Mr Carter commented they have examined this
and whether or not it is needed; this is still being debated.
REPRESENTATIVE BRICE confirmed there was no federal requirement for
this specific section.
SENATOR PEARCE indicated her long-term expectation is it will be
found that a more efficient system is probably possible if more of
the state's regulatory agencies are at least combined under one
umbrella, with resulting divisions like Oklahoma's structure.
Oklahoma has a telecommunications division, utilities division, and
an oil and gas division. In response to Representative Brice's
mention of a water division, Senator Pearce responded that Oklahoma
does not separate them that far down. However, Oklahoma does have
this division structure. Returning to the communications carriers
section, Senator Pearce reiterated that section already exists in
law and the reason the language is in the bill is because of the
way the legislation had to be drafted. [CSSB 133(RLS) am, Section
1, Article 2 read:
Article 2. Communications Carriers Section.
Sec.42.04.100. Communications carriers section.
There is established within the commission a
communications carriers section that shall develop,
recommend, and administer policies and programs with
respect to the regulation of rates, services, accounting,
and facilities of communications common carriers within
the state involving the use of wire, cable, radio, and
space satellites.]
Number 0563
VICE-CHAIRMAN HALCRO noted the presence of Chairman Rokeberg and
returned the gavel.
CHAIRMAN ROKEBERG welcomed the Senate President to the committee
chambers. He apologized for his previous absence due to attendance
at a Senate Resources Standing Committee hearing. The chairman
asked if there were further questions of the sponsor.
MR. CARTER noted there had been one question from Representative
Harris regarding the loss of institutional knowledge brought up by
one of the testifiers. Under the current system, there is probably
going to be the loss of three commissioners and the retention of
two. It is important to note that all of the staff would be
carried forward. It would be up to the commission, as it is now,
whether or not to make staffing changes and when to make those.
This legislation does not do anything to the staff; the staff goes
forward, as does all current regulatory authority, regulations and
pending matters before the commission. Mr Carter said he thinks
that embodied in the staff is the institutional knowledge which
will be necessary to prepare all the new commissioners, however
many there may be.
Number 0689
CHAIRMAN ROKEBERG commented he had a couple of questions, several
of which have probably been asked and answered in his absence. The
chairman noted there are some amendments before the committee which
the committee would like the sponsor's input on. He referred to
the removal for cause section on page 2. [CSSB 133(RLS) am, Sec.
42.04.020(e) read:
(e) The governor may remove a commissioner from
office for cause, including incompetence, neglect of
duty, or misconduct in office or because the member,
while serving on the commission, is convicted of a
misdemeanor for violating a statute or regulation related
to public utilities or is convicted of a felony. A
commissioner, to be removed for cause, shall be given a
copy of the charges and afforded an opportunity to be
publicly heard in person or by counsel in the
commissioner's own defense upon not less than 10 days'
notice. If a commissioner is removed for cause, the
governor shall file with the lieutenant governor a
complete statement of all charges made against the
commissioner and the governor's finding based on the
charges, together with a complete record of the
proceedings.]
CHAIRMAN ROKEBERG indicated he is curious about the formal
structure for the type of hearing, unless there is something
elsewhere in statute for the type of hearing. Noting the language,
"an opportunity to be publicly heard in person or by counsel", he
questioned if there is a formal hearing structure somewhere in
statute that would allow this type of hearing. He commented it is
rather unusual.
SENATOR PEARCE replied this language is straight out of the AOGCC
statute. In response to the chairman's comment that it has
probably never been used, Senator Pearce noted she thinks it has
been used.
MR. CARTER added he also thinks it has been used but would defer to
the Department of Law for that.
Number 0787
SENATOR PEARCE stated that in terms of the hearing process she does
not know where there is a separate statute which deals with the
hearing process. She noted that, of course, there is the
Administrative Procedure Act which does deal with hearing processes
and there are also personnel laws in place. Senator Pearce stated
they had deliberately taken the AOGCC language, with the language
regarding violation of statute or regulation related to public
utility and felony conviction added at the Department of Law's
request.
CHAIRMAN ROKEBERG commented he is sure the sponsor is absolutely
correct and will just make a note to double-check that as the
legislation progresses. As another question, the chairman referred
to page 3, line 17, of CSSB 133(RLS) am, noting HB 183 contains the
additional language, "by the commission", which gave a certain
amount of currency and power to the commission, not just the chair.
[This sentence in Sec.42.04.050 of CSSB 133(RLS) am, page 3, lines
15-17, read: "The commission chair may employ engineers, hearing
officers, experts, clerks, accountants, and other agents and
assistants considered necessary." Chairman Rokeberg indicated that
in HB 183 the additional language, "by the commission", appeared at
the end of that sentence]. The chairman noted that, in other
words, the commission chair would do the employing of all the
personnel, if they were believed to be necessary by the commission.
He commented there was a joint consent issue there: the commission
would find that the employment would be necessary and then the
chairman would do the selection. He indicated he wondered if the
sponsor thought this would diminish that.
SENATOR PEARCE responded she thinks that is inherent in the
language of lines 13 through 15, the preceding sentence, "The chair
of the commission is responsible for directing the administrative
functions of the commission and carrying out the policies as set by
the commission.". She said one would assume that if the commission
set and directed what the administration functions are going to be,
the commission would also inherently decide the staffing levels.
Senator Pearce noted that then also comes to the legislature as
well. The desire is to have a commission without the sort of
institutional disagreements the present commission has.
Number 0940
CHAIRMAN ROKEBERG indicated his reason for asking the question was
to ensure that power was not being invested in the chair regarding
the hiring of personnel without the consultation of the commission.
SENATOR PEARCE commented that no amount of statutory language is
going to make people who do not like each other work together.
CHAIRMAN ROKEBERG noted the point is well-taken.
MR. CARTER explained there is currently some disagreement as to who
the staff works for. He indicated this is addressed by removing
the executive director from the equation, but the intent is to also
eliminate confusion that one staffer could be working for one
commissioner but not another; therefore, the chair oversees all.
CHAIRMAN ROKEBERG said his take was that if the commission
authorized a position then the chair would hire it, if that
language was added. The chair would still maintain the selection
process, et cetera, but consent from the commission would be needed
to do the hiring. [Sec. 42.04.050 of CSSB 133(RLS) am, Sec.
42.04.050 read in its entirety:
Sec. 42.04.050. Employment of commission personnel.
(a) The chair of the commission is responsible for
directing the administrative functions of the commission
and carrying out the policies as set by the commission.
The commission chair may employ engineers, hearing
officers, experts, clerks, accountants, and other agents
and assistants considered necessary. Employees of the
commission who are not in the exempt service under AS
39.25.110, other than legal counsel, are in the
classified service under AS 39.25.100.]
Number 1015
SENATOR PEARCE said that in the language on lines 13 through 15 she
referred to, she believes that, inherently, the commission has to
approve the budget it submits to OMB [Office of Management and
Budget, Office of the Governor]. Some one person has to be in
charge; on the other hand, this person has to have the support of
the members of his/her body, as does the Speaker of the House, and
herself as President of the Senate. Therefore, she honestly
believes the chairman's concerns are addressed by the language in
lines 13 through 15, without attempting to make a more burdensome
administrative process in statute. She questioned if it would be
desirable to have to go to the commission every time a new clerk is
hired; she does not think that is necessary.
CHAIRMAN ROKEBERG commented, then, they have that on the record; it
should be very clear in the future. He noted there is something of
technical detail on page 5, line 4 - the use of the conjunctive
word "and" rather than "or". Lines 2 through 5 of page 5 read, "A
decision of a hearing panel under AS 42.05 may be appealed to the
commission if there is an allegation that action or a decision
taken by the commission is contrary to commission precedent and is
not based on an intervening change in law." The chairman
questioned whether it might not be desirable to use "or" rather
than "and" in the phrase, "contrary to commission precedent and is
not based on an intervening change in law".
SENATOR PEARCE responded the question need to be addressed to Ms.
Cramer [the bill drafter: Terry Cramer, Legislative Counsel,
Legislative Legal and Research Services, Legislative Affairs
Agency].
Number 1117
CHAIRMAN ROKEBERG indicated he thinks they would want the "or"
allowance and it would be checked out. Noting the time of day, the
chairman announced he would like to take up the amendments in a
somewhat informal process to receive the sponsor's input. He noted
the existence of an amendment from Representative Gail Phillips.
The chairman commented this is intended as a friendly amendment
from LB&A [Joint Committee on Legislative Budget and Audit]. He
indicated LB&A thought the language was somewhat superfluous. The
chairman asked Senator Pearce if she had any problems with this
amendment.
SENATOR PEARCE answered in the negative.
CHAIRMAN ROKEBERG noted the amendment is "XA.3, Cramer, 5/6/99" and
should be marked as Amendment 1. Amendment 1, labeled
1-LS0771\XA.3, Cramer, 5/6/99, read:
Page 11, lines 18 - 21:
Delete "The governor shall appoint one member from
the Regulatory Commission of Alaska and one member from
the Alaska Oil and Gas Conservation Commission to work
with the Legislative Budget and Audit Committee on the
report."
Number 1199
REPRESENTATIVE HARRIS moved Amendment 1. There being no objection,
Amendment 1 was adopted.
CHAIRMAN ROKEBERG asked the committee to take up the amendment
labeled "XA.4" to page 5, lines 9 through 12. This amendment,
labeled 1-LS0771\XA.4, Cramer, 5/7/99, read:
Page 5, lines 9 - 12:
Delete all material and insert:
"(c) On the filing of a petition, application,
or complaint concerning a matter within the
jurisdiction of the commission under AS 42.05 for
which a hearing is clearly warranted, the chair of
the commission shall assign a priority rating to
the issue and promptly set a date for hearing. The
hearing shall be expedited in accordance with the
priority rating. Regardless of the priority
rating, a hearing may not be scheduled to begin
later than five months after the petition,
application, or complaint was filed unless the
commission approves an extension of time for good
cause. After the conclusion of the hearing, the
commission shall enter its order within 60 days."
CHAIRMAN ROKEBERG noted this amendment concerns the procedures in
terms of the timeliness of the commission hearings. He questioned
if Mr Carter had had a chance to examine the amendment, mentioning
some discussion.
MR. CARTER responded they had discussed this at length and Senator
Pearce has some rather strong feeling about putting time lines in
statute.
CHAIRMAN ROKEBERG said to Senator Pearce he notices the theory in
SB 133 asks that the timeliness be had by regulatory promulgation
by the commission and requested her opinion on this amendment.
Number 1261
SENATOR PEARCE replied she does not support the amendment. She
does not believe that the hands of the commission should be tied
regarding the commission's opportunity to have the amount of time
needed for some of the more complicated cases which come before it.
On the other hand, she too believes the commission should act in a
more timely fashion than has been seen, going all the way back to
the audits of the 1970s. The legislation requires the commission
to set regulations so that there are guidelines and expectations
everyone can share. The guidelines would not necessarily have to
be the same for each type of utility or each type of case, under
the commission's ability to set regulations. She thinks that is
definitely the sort of flexibility the commission should be
allowed. Furthermore, if the commission does regulations and there
is a case which does not fit in the time line set by the
regulations, the commission has the power to do emergency
regulations. Senator Pearce indicated she does not believe the
opportunity would always exist to even do the discovery that is
necessary for some of these complicated cases in the five months
mentioned by the amendment.
SENATOR PEARCE indicated the amendment would set a five-month
deadline; some cases can move that quickly, but there are some
cases which come before the commission that cannot possibly be
handled in that amount of time. There are some joint board issues
in cases. Senator Pearce indicated she does not know if the
questions to be asked in discovery, what documents one would wish
to request, could be determined in that amount of time. Therefore,
she is attempting to give a new commission the amount of
flexibility possible to set reasonable guidelines. The commission
has much more knowledge about what comes before it than any of the
members of the legislature. She indicated this is providing the
commission an opportunity to be flexible in those guidelines if
necessary. If it does not work, (indisc.) the sunset process goes
on, and the legislature will have the opportunity to set time lines
in statute if it does not like the commission's regulations or
amount of time the commission takes on something specific. She
stated, "But I think you're asking a lot of a brand-new entity if
you try to set some (indisc.) time lines."
CHAIRMAN ROKEBERG indicated it seemed to him that time lines would
be appropriate because a new entity is being created and the
regulations might take a lengthy time to be promulgated. He
commented that sometimes it takes longer than two legislative
sessions.
SENATOR PEARCE noted the legislation requires that those
regulations be promulgated by December 31, 1999.
CHAIRMAN ROKEBERG thanked the senator for refreshing his memory.
However, he noted on the other hand this amendment is to direct the
commission to follow the legislative dictate to operate in a more
timely fashion. The committee did receive testimony on this
amendment during the HB 183 hearings; it was actually agreed to by
Mr. Lohr [Robert Lohr, Executive Director, Alaska Public Utilities
Commission] and Mr. Zobel [Ron Zobel, Assistant Attorney General,
Fair Business Practices Section, Civil Division (Anchorage),
Department of Law] after some "arm-twisting." However, the
chairman indicated they were not opposed because of the
commission's ability to extend the time beyond the five months to
meet the exigencies Senator Pearce has mentioned.
SENATOR PEARCE reiterated that she does not support the amendment.
Number 1470
CHAIRMAN ROKEBERG noted, given that, the amendment would be set
aside. The chairman commented the committee would take up "XA.5."
He indicated this amendment was new to him as well. It was to be
marked Amendment 2. The chairman requested a motion on the
amendment so they could have a (indisc.). Amendment 2, labeled
1-LS0771\XA.5, Cramer, 5/7/99, read:
Page 12, following line 15:
Insert a new bill section to read:
"* Sec. 29. APUC ASSISTANCE TO RCA. The Alaska
Public Utilities Commission shall, to the extent
possible, transfer as many duties and activities as
possible from members of the commission to commission
staff in order to make the transition between the Alaska
Public Utilities Commission and the Regulatory Commission
of Alaska as smooth as possible."
Renumber the following bill sections accordingly.
Page 14, line 13:
Delete all material and insert:
"* Sec. 33. (a) Section 29 of this Act takes effect
immediately under AS 01.10.070(c).
(b) Except as provided in (a) of this section, this
Act takes effect July 1, 1999."
Number 1507
REPRESENTATIVE HARRIS moved Amendment 2.
CHAIRMAN ROKEBERG and REPRESENTATIVE MURKOWSKI objected to the
amendment.
CHAIRMAN ROKEBERG noted he objected for discussion. He questioned
if Mr Carter had had an opportunity to examine this amendment.
MR. CARTER answered in the affirmative.
CHAIRMAN ROKEBERG commented he did not know where the amendment
originated. He noted it has to do with the transition provisions
and questioned if Mr. Carter has an opinion on that.
MR. CARTER replied that from his examination it does not seem to
accomplish anything more than what the legislation already
accomplishes. Certainly, he does not think the drafter of the
amendment intended to transfer duties of a commissioner to staff.
He commented he does not know if that could even be statutorily
accomplished.
CHAIRMAN ROKEBERG indicated his agreement with that.
MR. CARTER continued that, given that all existing staff and
pending matters before the commission would be carried forward, all
the activities of existing dockets are going to be carried forward
anyway. He does not know what the amendment accomplishes or what
the intent is.
CHAIRMAN ROKEBERG questioned if Senator Pearce would agree.
SENATOR PEARCE stated she does not truly understand the language
and what is trying to be accomplished with the amendment. One of
the things they are attempting to do in the legislation is to not
only give the commission more direction, but also more power and
responsibility. To turn around and say that it should all be
transferred back as the transition occurs seems counterproductive
to her.
CHAIRMAN ROKEBERG again expressed his lack of knowledge regarding
the amendment's origin, commenting it does not sound like the
amendment has a lot of support.
REPRESENTATIVE HARRIS stated he would withdraw the amendment.
Number 1614
CHAIRMAN ROKEBERG noted he has a conceptual amendment to offer
which he hopes will not be as hostilely received by the sponsor as
some of the prior amendments. He drew the committee's attention to
page 7, line 31, of CSSB 133(RLS) am. The chairman noted he would
like to insert language after the word "assigned" on line 31,
adding "A decision of an arbitrator is not final until approved by
the commission". [The affected section, Section 6, of CSSB
133(RLS) am, read:
* Sec. 6. AS 42.05.171 is amended to read:
Sec. 42.05.171. Formal hearings. A formal hearing
that the commission has power to hold may be held by or
before a hearing panel appointed under AS 42.04.080
[THREE OR MORE COMMISSIONERS], a hearing officer, or an
administrative law judge designated for the purpose by
the chair of the commission. In appropriate cases, a
formal hearing may be held before an arbitrator
designated for the purpose by the commission. The
testimony and evidence in a formal hearing may be taken
by the panel [COMMISSIONERS], by the hearing officer, by
the arbitrator, or by the administrative law judge to
whom the hearing has been assigned. A commissioner who
has not heard or read the testimony, including the
argument, may not participate in making a decision of the
commission. In determining the place of a hearing, the
commission shall give preference to holding the hearing
at a place most convenient for those interested in the
subject of the hearing.]
CHAIRMAN ROKEBERG commented he thinks they went through this before
and staff has spoken about this. He questioned if the sponsor has
any problem, noting he thinks this is actually a necessary
amendment. Arbitration had been provided for here but it is
necessary to have finality by the commission itself, not the
arbitrator.
MR. CARTER said he believes the intent was that it has to be
approved by the commission to be an act of the commission.
CHAIRMAN ROKEBERG noted that needs to be included.
MR. CARTER commented he had also had some discussion with Ms. Cook
from the legislature's legal department [Tamara Cook, Director,
Legislative Legal and Research Services, Legislative Affairs
Agency] where she had questioned the need for the language
following that, where a commissioner who has not heard the
(indisc.) the testimony.
CHAIRMAN ROKEBERG questioned if Mr. Carter had received any
feedback on that.
MR. CARTER answered in the affirmative. He commented he does not
have an amendment drafted yet, they were still discussing it.
Noting the language, "A commissioner who has not heard or read the
testimony ...", Mr Carter explained that apparently the rule of law
states that in an adjudicatory function they have to consider the
record. However, he noted this language was actually intended for
the hearing officer, adding, "So an arbitrator -- so rather than
saying a commissioner, it would say an arbitrator or a hearing
officer or administrative law judge who has not heard or read the
testimony may not participate in decision-making."
Number 1720
CHAIRMAN ROKEBERG said this is a very important part, particularly
because of its impact on the transitional provisions. He
questioned that the sponsor's office had not been able to get the
written opinion on that.
MR. CARTER said they have not come to conclusion on that yet,
answering no.
SENATOR PEARCE commented, however, the first language the chairman
is proposing is fine.
CHAIRMAN ROKEBERG confirmed, then, there is no objection to the
conceptual amendment from the sponsor. The chairman moved the
Conceptual Amendment to page 7, line 31, after the word "assigned"
to conceptually add "'A decision of an arbitrator is not final
until approved by the commission' or words to that effect
conceptually." Chairman Rokeberg commented this was in HB 183 and
indicated he wondered if that was acceptable to the sponsor.
MR. CARTER answered in the affirmative. Mentioning Legal
Services' involvement with the capital budget, Mr Carter noted part
of the question on this, and the ongoing debate, is that if the
decision of an arbitrator has to be confirmed by the commission to
be an act of the commission, does this also apply to the hearing
officer and administrative law judge as well. The confusion they
were having is what is the intent of having an expedited process by
utilizing an arbitrator, hearing officer, or administrative law
judge, if it has to go back before the full commission and the full
commission has to hear or read all the testimony or the argument.
Therefore, they were trying to clean up that language. Mr Carter
indicate he thinks everyone understood the intent but there has not
been time to have that clarified.
Number 1825
SENATOR PEARCE pointed out that she believes the chairman's
language refers only to the arbitrator but the section is speaking
about hearings before an arbitrator, administrative law judge, or
the commission. She explained the attempt is being made to
discover the correct language to reach the point the chairman is
trying to make. Senator Pearce added they have not had a chance to
figure out the proper language with the Department of Law.
CHAIRMAN ROKEBERG commented he thinks they are actually two
different issues, although it could be expanded to include the
hearing officer if desired.
MR. CARTER agreed the conceptual amendment is fine; they had
discussed this with Ms. Cook. However, Ms. Cook had just not
thought that that was complete; that by doing so the hearing
officer and the administrative law judge had been omitted. The
question would be whether the hearing officers' or the
administrative law judges' decisions were then final; do they
actually act as the commission and is that then a decision of the
commission?
CHAIRMAN ROKEBERG thought they could conceptually add "hearing
officers" and then would have to wait to see what "legal" came up
with on the next sentence ["A commissioner who has not heard or
read the testimony, including the argument, may not participate in
making a decision of the commission."]
MR. CARTER said to serve the purposes of the chairman, both the
hearing officer and the administrative law judge needed to be
added, if the intent is for them to be able to act in regards to
the commission's decision.
Number 1893
CHAIRMAN ROKEBERG noted, then, he would move an amendment to the
amendment to that effect, adding the administrative law judge and
hearing officer conceptually.
SENATOR PEARCE added that while a conceptual amendment is being
made, she would hope the committee is comfortable allowing the
drafters to work out the proper legal way to make it all work.
CHAIRMAN ROKEBERG responded it is conceptual in that regard also;
he appreciates that and the point will be noted.
SENATOR PEARCE indicated she has no problem.
MR. CARTER reviewed the intent so that he could explain it to Ms.
Cook: The intent is to expedite the process so we use an
administrative law judge, hearing officer, arbitrator, and then the
commission should come back, consider the record, and make a final
decision.
CHAIRMAN ROKEBERG agreed; the power to make the final decision
vests in the commission, not the hearing officer, administrative
law judge, or the arbitrator - they make recommendations. The
chairman commented he does not think it is that substantive but
they would be remiss in not having it. Chairman Rokeberg noted the
real issue is "the reading the next sentence there."
SENATOR PEARCE commented on that thought - that, in fact,
considering the record does not necessarily mean reading every
page or being required to have heard every word. She stated,
"You've got some specific language here that is (indisc.)..."
CHAIRMAN ROKEBERG injected that he finds it very troublesome,
particularly given the transition issue. This brings to light the
fact that they are mandating this type of thing. He indicated it
does not mean only reading everything but also hearing the
arguments, which would almost mean listening to the tapes.
MR. CARTER made an indiscernible comment.
Number 1999
CHAIRMAN ROKEBERG returned the pending conceptual amendment. He
questioned if there were any objections to the Conceptual Amendment
as amended. The chairman confirmed the committee did not wish him
to restate the amendment.
REPRESENTATIVE BRICE indicated he thinks what the committee is
conceptually doing is requiring that a decision made on behalf of
the commission by anyone who can hear, act or make a decision on
the commission's behalf has to be finally approved by the
commission.
CHAIRMAN ROKEBERG indicated, there being no objection, the
Conceptual Amendment as amended was adopted. [A handwritten
photocopy of Chairman Rokeberg's Conceptual Amendment as amended
was distributed to the committee and read:
P7 line 31
after "assigned"
add "a decision of an arbitrator, hearing officer,
administrative law judge, is not final until approved by
the Commission."
Intent: Expedite the process
Comm should consider record and make final decision]
CHAIRMAN ROKEBERG informed the committee it has a decision to make
regarding the legislation. The committee could do nothing and
recommend that the next committee of referral take it up or "they
could sit around here and muddy the waters further." The chairman
noted that Mr Carter has been working on this and charged him with
taking it up.
MR. CARTER indicated he would make sure the committee members each
received a copy of what would be done.
Number 2055
REPRESENTATIVE BRICE questioned why the committee didn't just
delete that next sentence or at least loosen that language up. He
asked for a review of why that is included.
SENATOR PEARCE indicated it is not desirable to have commissioners
making decisions without ever having considered the record. On the
other hand, it is probably not desirable to tie the commissioners'
hands with these specifics. This is why Mr Carter has been working
with Ms. Cook on different language.
CHAIRMAN ROKEBERG questioned if Senator Pearce would like the
committee to make a conceptual amendment to expedite the process or
what her recommendation would be.
SENATOR PEARCE expressed her preference to continue working with
the drafters, indicating it something that must be addressed and
the legislation has further referral to the House Finance Standing
Committee.
CHAIRMAN ROKEBERG said he agrees and appreciates the senator's
point. He thinks they would just confuse the issue further by
trying to conceptualize something that agreement could be found on.
Number 2110
REPRESENTATIVE CISSNA questioned if the committee was past that
topic. She noted a question had been raised that has not been
addressed regarding a possible conflict in the language on page 4,
line 23 though 27 [from Sec. 42.04.070, powers and duties of
commission chair, CSSB 133(RLS) am]:
(c) The chair of the commission shall direct the
public advocacy section to participate as a party in a
matter when the chair believe that
(1) the matter has a major public policy
implications; or
(2) the financial interest of the public is at
stake and the parties to the matter will not adequately
represent the public interest.
and the language on page 5, lines 19 ["20"] through 24:
Article 3. Public Advocacy Section
Sec. 42.04.150. Public advocacy section. There is
established within the commission a public advocacy
section. The section shall participate as a party in
matters that come before the commission to represent the
public interest when it is in the public interest to do
so. The public advocacy section shall operate separately
from the rest of the commission.
REPRESENTATIVE CISSNA said there appears to be some possible lack
of clarity in terms of what the public advocacy section's role is
with the commission; whether it is a separate entity, or separate
section and is operating separately.
REPRESENTATIVE HARRIS noted he thinks the sponsor addressed that
earlier in testimony.
REPRESENTATIVE CISSNA commented she wonders about the wording.
CHAIRMAN ROKEBERG said he had had some questions but had not wanted
to bring it up because of his absence during the testimony.
MR. CARTER responded he believes Senator Pearce had spoken to that
point earlier. He believes AT&T Alascom was the entity that had
brought this up. Mr Carter noted the intent is that the chair
would decide when the public interest needed to be represented, and
then it went to the advocate to represent that. If the drafting
style needs to be clarified, Mr Carter indicated it would be taken
care of. This is the first time that concern has been heard.
Number 2209
REPRESENTATIVE HALCRO indicated he believes the senator had
commented that of course the public advocacy section works for the
chair. This should clear up any questions regarding whether the
section is a power base unto itself or if there should there be any
conflict. He expressed it seems to him that it was explained.
SENATOR PEARCE added that they would be happy to check that the
drafting style is correct, and she, as she has said, will be happy
to work with AT&T Alascom on its specific questions. She
emphasized, however, it is clear that the staff would work for the
commission. She indicated that is not clear with the present
commission. Senator Pearce added she had testified earlier that it
is their understanding that the present commission and staff are
already working on internal guidelines regarding what cases should
have advocates appointed. In the legislation, the commission is
being asked to formalized those "sideboards" so that the public and
the utilities have some expectation in knowing when ex parte
advocates will be appointed.
REPRESENTATIVE CISSNA commented the other part of that does seem to
be a conflict that perhaps the sponsor has answered, but she still
wonders about part of the language she has referred to.
Representative Cissna noted page 4, line 24, "participate as a
party in a matter when the chair believes that" and page 5, part of
lines 22 and 23, "when it is the public interest to do so". She
said it does seem to be contradictory.
SENATOR PEARCE explained that when statutes are drafted that place
a commission into being like this, there are sections such as
Article 3, the public advocacy section, that set out what is
established and what the sections' purpose is. This is pretty much
what Article 3 does. Section 42.04.070, powers and duties of the
commission chair, clarifies when and where the chairman directs the
people in that section to act, and under what circumstances.
Senator Pearce believes the question Representative Cissna is
asking is the same question AT&T Alascom asked and they will make
sure they do not have conflicting language.
Number 2339
CHAIRMAN ROKEBERG mentioned his quick perusal of the bill and
questioned if the public advocacy section is the one that handles
consumer complaints.
SENATOR PEARCE answered in the negative. The public advocacy
section acts as the representative of the consumer before the
commission in the dockets and the cases that are before the
commission.
CHAIRMAN ROKEBERG asked, then, where consumer complaints are
handled. He questioned if that is in existing law.
SENATOR PEARCE responded that consumer complaints are not
specifically in the legislation. Consumers can complain to the
commission and the commission deals with complaints in its own
matter. The commission is not being instructed on how to handle
these complaints.
CHAIRMAN ROKEBERG noted, however, the commission currently has a
consumer complaint group.
MR. CARTER commented that is not being altered.
CHAIRMAN ROKEBERG questioned if this is in existing statute. He
indicated the legislation would not repeal all the statute.
SENATOR PEARCE noted the commission does have some personnel who
handle complaints but she does not know if they are in statute.
CHAIRMAN ROKEBERG said his opinion is that it is just conspicuous
by its absence and that is his reason for bringing the question up.
The chairman said he wondered if it was part of the existing
statutory scheme that would be left in place, because it is in
statute. He mentioned the revisor instructions [CSSB 133(RLS) am,
Section 31]
MR. CARTER stated it is not part of what is being repealed. In
response the chairman's comment, Mr. Carter restated that the
intent was never to repeal that particular statute and he does not
believe it is being repealed.
CHAIRMAN ROKEBERG noted, then, it is Mr Carter's testimony is that
it is not repealed.
MR. CARTER responded that they have taken no specific action on the
public complaint section. He confirmed for the chairman that that
would still be in the law.
[An item was apparently handed to the bill sponsor by the committee
aide.]
CHAIRMAN ROKEBERG questioned if it was another amendment.
SENATOR PEARCE answered in the negative. She said, "This is just
the language that you had in House Bill 183 on the obligation to
hearing, read all testimony."
CHAIRMAN ROKEBERG asked if there were further questions of the
sponsor.
Number 2437
REPRESENTATIVE HARRIS questioned if the committee would be
considering amendment XA.6.
CHAIRMAN ROKEBERG indicated it was not his wish to take the
amendment up. [This amendment, labeled 1-LS0771\XA.6, Cramer,
5/7/99, read:
Page 4, lines 23 - 27:
Delete all material.
Page 5, lines 13 - 18:
Delete all material.
Page 5, line 19:
Delete "Article 3"
Insert "Article 2"
Page 11, line 10:
Delete "42.05.123,"]
CHAIRMAN ROKEBERG stated, "Mr. Carter, I guess Mr. Zobel wants you
to take..." [TESTIMONY INTERRUPTED BY AUTOMATIC TAPE CHANGE]
[From tape log notes: 'will it to you']
TAPE 99-55, SIDE B
Number 0001
REPRESENTATIVE MURKOWSKI confirmed that Amendment 1 had been
addressed previously.
Number 0050
REPRESENTATIVE BRICE indicated that amendment XA.6 had come from
Mr. Zobel and he (Representative Brice) is interested in part of
this: the deletion of lines 13 through 18 on page 5, and the
change on page 5, line 19 from "Article 3" to "Article 2".
CHAIRMAN ROKEBERG questioned if Representative Brice is offering an
amendment.
REPRESENTATIVE BRICE answered in the affirmative. Representative
Brice's amendment, as excerpted from the 1-LS0771\XA.6, Cramer,
5/7/99 amendment, read:
Page 5, lines 13 - 18:
Delete all material.
Page 5, line 19:
Delete "Article 3"
Insert "Article 2"
Multiple committee members questioned if that was the amendment
that had just been "trashed."
REPRESENTATIVE BRICE disagreed, commenting there is a lot of other
stuff here too. In response to the chairman's request to speak to
his amendment, Representative Brice stated the reason is that the
new commission deals with all the utilities. He indicated that his
understanding, according to the sponsor's testimony is that it [the
communications carriers section] is sort of a throwback to a
transitional period in the state's history 20 to 30 years ago.
Representative Brice indicated the amendment would remove the
communications carriers section on page 5 of the legislation. [The
language to be deleted on page 5 by the first portion of
Representative Brice's amendment read:
Article 2. Communications Carriers Section.
Sec.42.04.100. Communications carriers section.
There is established within the commission a
communications carriers section that shall develop,
recommend, and administer policies and programs with
respect to the regulation of rates, services, accounting,
and facilities of communications common carriers within
the state involving the use of wire, cable, radio, and
space satellites.]
REPRESENTATIVE BRICE commented if they do get to a time where they
want to establish specific sections for specific utility functions,
then maybe that could be considered. He thinks this section is
somewhat of an appendix; it is his understanding that there is no
great need to divide up the commission in this manner.
CHAIRMAN ROKEBERG indicated he wished to hear the sponsor's
comments.
Number 0122
SENATOR PEARCE responded she would not agree with Representative
Brice's representation of Mr. Carter's comments. Mr. Carter did
not say that this was a throwback to some former time. He did say
that the communications carriers section was first put in place at
the commission by the legislature when the "White Alice" system
transferred; this is present statute. This does not mean that
there is not a place for the communications carriers section.
Indeed, communications are highly technical; they are different
from pipelines and gas lines. They are becoming more like electric
utilities every day as the electrics are putting in fiber optic and
carrying communications in their system. Senator Pearce emphasized
there has not been any audit or recommendation made by the
legislative auditors or by the NRRI study that would lead her to
believe it would make sense to get rid of the communications
carriers section "just because we want to." Senator Pearce
indicated they stayed with recommendations from the audits in the
creation of the legislation. The communications carriers section
only appears in this bill because the public advocacy section is
being set up in Article 3. The present law speaks to public
advocacy under the communications carriers section. Therefore, it
only appears in the legislation because of drafting requirements.
Senator Pearce commented that does not meant that they just want to
eradicate it without knowing what they are doing.
CHAIRMAN ROKEBERG questioned, "The practical effect is to provide
this section so there is a split of personnel and responsibility
between the advocacy section that has a different function and
responsibility, in one hand, in terms of who they're representing,
and the carriers section."
SENATOR PEARCE said it would seem to her that the people who have
been defending technical expertise in a particular industry, as Mr.
Jackson [GCI] did, would not want to eliminate further technical
expertise in the telecommunications industry. She said it does not
make a lot of sense that that section would be removed. Senator
Pearce asked if there could be some sharing of staff and if some
day they would see the telecommunications and electric industries
so intertwined because of the computer age that the difference
could not be distinguished. She indicated this might happen in the
future.
Number 0233
CHAIRMAN ROKEBERG commented that is a good case in point. He noted
the definition of the communications carriers section of all wire,
cable, radio, and space satellites. The chairman questioned if
they had missed "UHF" or other types of cellular transmission that
are not on the space satellites, or if these are being defined as
radio.
SENATOR PEARCE noted she would just ask the committee if it has a
good reason to delete a section she does not think the committee
has heard any testimony on; whether the committee should just get
rid of a section. One utility has testified that the public
advocacy section should not be established. There was testimony
from all of the other entities that there should be a separate
public advocacy section. However, she did not hear anyone say that
the communications carriers section should be eliminated. Senator
Pearce commented that section appears to be working just fine.
CHAIRMAN ROKEBERG asked, "Then the balance of the staffing would be
on all other utilities that would be under the purview, is that
correct or they have the pipeline section ...?"
SENATOR PEARCE replied that she is not telling them how to set up
their staff.
CHAIRMAN ROKEBERG noted, then, it is up to the commission and the
chair to organize it as they see fit. The chairman questioned if
that is Senator Pearce's testimony.
SENATOR PEARCE answered that is true. However, there is presently
a communications carriers section in statute and at the commission
that neither the auditors nor the NRRI have indicated there was any
reason to eliminate. She questioned why the committee would want
to eliminate the section at 5:55 p.m. when there has been no other
testimony.
CHAIRMAN ROKEBERG asked Representative Brice why he wished to get
rid of it.
Number 0307
REPRESENTATIVE BRICE responded that if he had been called on 10
minutes previously he would have just said he withdraws the
amendment, but he guesses they have had a good talk and now the
importance of the communications carriers section is on the record.
Representative Brice stated he withdraws.
MR. CARTER informed the committee, for the record, that while the
public advocacy section is to act separately/independently from
within the commission, the communications carriers section does not
contain that language. It is the sponsor's understanding that the
staff can be utilized by the entire commission in whatever capacity
it wants.
CHAIRMAN ROKEBERG asked about the crossover regarding the
potential of electrical transmission and telecommunications coming
down the same cabling.
MR. CARTER noted that, as he had stated, they [the communications
carriers section] are not set aside to act independently or
separately from the rest of the commission.
Number 0368
REPRESENTATIVE MURKOWSKI indicated she has a question in a
different area. In HB 183, one of the items which was apparently
important was that members of the commission not be engaged in a
political activity, lobbying, attending fund-raisers, et cetera.
She commented on the absence of any political discussion in SB 133,
although she noted there are restrictions on commission members
regarding what they can do after leaving the commission, and there
is also a section on restrictions [Sec. 42.04.060, restrictions on
members and employees]. Representative Murkowski wondered if there
had been any discussion about prohibitions on political activity
and whether, in the sponsor's opinion, this is needed.
SENATOR PEARCE replied that there was discussion but she indicated
no motion had been made in any previous committee. The public
utility commissioners do not act and, in her opinion, should not
act as political appointees or advocates. Having said that, the
only three places she can think of where strict limitations exist
in law on the political activities of board and commission members
are in the Select Committee on Legislative Ethics, the oversight
committee over the "Administrative Ethics Act," and the
"reapportionment folks." She indicated that there is a political
party component for at least the reapportionment board. Senator
Pearce stated her personal opinion is that one should not, cannot,
and it makes no sense, to take away the First Amendment rights of
people to act in a political manner as they see fit. She cannot
recall any past case of a public utilities commissioner acting
inappropriately in terms of campaigns, and she certainly does not
think that restrictions should be added regarding partisanship to
membership on the commission itself. Senator Pearce said she sees
no public policy that is served by telling a public utility
commissioner he/she cannot be a part of the political process;
there is not a nexus there, in her opinion.
Number 0474
REPRESENTATIVE MURKOWSKI commented that the restrictions presently
in HB 183 are very similar to those a judge would have. Therefore,
Representative Murkowski said she made that assumption that a
commissioner is sitting in a quasi-judicial capacity, practically.
SENATOR PEARCE agreed they are quasi-judicial, but they are not
quasi-judicial over the state's elected body - the 60 legislators,
the 2 statewide offices, and the 3 delegation members. The
commissioners do not have oversight of elected officials. Judges
do, and that is why she thinks that is included in the judicial
system. Senator Pearce expressed that she does not see that
restricting a public utilities commissioner from making a
contribution or going to a political activity makes any difference
to the public good for Alaska.
CHAIRMAN ROKEBERG asked if there were further questions of the
sponsor or if anyone else wished to testify on SB 133. There being
no further witness, Chairman Rokeberg closed the public hearing.
The chairman noted he has one final question for the sponsor. He
asked Senator Pearce how she would propose that the new
appointments be made, and in what type of a time frame, because of
the relationship between the legislature and the Governor, and the
fact that the legislature would, in essence, be terminating the
existing commission, thereby requiring the appointment of new
commissioners. The chairman said he was not sure if she had spoken
to that earlier, but he would like to hear.
Number 0578
SENATOR PEARCE responded that they had spoken to that because of a
question from Representative Cissna. Senator Pearce said that she
has, as recently as Wednesday [May 5] spoken personally with the
Governor. She related that she had informed the Governor of the
legislation's progress and her belief that the bill could still be
passed [this legislative session]. She had asked if the Governor
was ready to name his commissioners so they could be confirmed by
the legislature before it leaves town. Senator Pearce related that
the Governor had said that that was still his intention. Senator
Pearce reiterated she does not believe the legislature would be
well-served by passing the bill and not having the opportunity to
confirm the [commission] members before the legislators leave. She
does not think it is in the state's best interest to have a
brand-new commission established with as many as five new members
appointed and no confirmation process for what is effectively a
full year, since the legislature never goes to confirmations until
the end of the legislative session.
CHAIRMAN ROKEBERG noted he appreciates the senator's candor. He
stated it is the committee's intention to continue to work on HB
183, indicating he has fears regarding SB 133's progress. The
chairman asked the committee's will, noting the committee meeting
scheduled for the next day [Saturday, May 8] is dependent on the
action regarding this legislation.
SENATOR PEARCE indicated she has not put in a kind or unkind word
for anyone regarding the appointment of commissioners. That is not
her responsibility. However, she noted that the Governor said he
would not forward names without first having a meeting with the
Speaker of the House and herself, the Senate President, to discuss
his probable appointments so that any possible confirmation
problems could be pointed out. Senator Pearce commented that is
the end of the promises made or promises kept.
Number 0726
REPRESENTATIVE HARRIS made a motion to move to CSSB 133(RLS) am, as
amended, with individual recommendations and the attached fiscal
notes.
REPRESENTATIVE CISSNA objected.
A roll call was taken. Representatives Rokeberg, Sanders, Harris,
Murkowski and Halcro voted in favor of moving the bill.
Representatives Brice and Cissna voted against it. Therefore, HCS
CSSB 133(L&C) moved from the House Labor and Standing Committee by
a vote of 5-2.
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