Legislature(2007 - 2008)CAPITOL 17
02/19/2007 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HJR8 | |
| HB116 | |
| HB28 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 116 | TELECONFERENCED | |
| *+ | HB 28 | TELECONFERENCED | |
| += | HJR 8 | TELECONFERENCED | |
HB 28-POWER SOURCE DISCLOSURE 3:50:12 PM CHAIR OLSON announced that the final order of business would be HOUSE BILL NO. 28, "An Act requiring retail suppliers of electricity to disclose sources of electricity to consumers." REPRESENTATIVE NEUMAN made a motion to adopt CSHB 28, Version 25-LS0189\C, Kane, 2/15/07, as the working document. There being no objection, Version C was before the committee. 3:50:40 PM BARBARA COTTING, Staff to Representative Jay Ramras, sponsor, began by explaining the changes made by Version C. Section 3 is the "crux" of the bill, adding a new section. Version C removes the words "potential end-use" from Section 3. This new section requires retail suppliers supplying electricity consumed in Alaska to disclose the sources of electricity to consumers annually. The Regulatory Commission of Alaska (RCA) would establish how and when this should be done. 3:51:54 PM CHAIR OLSON offered his understanding that this is done by several utilities, currently. MS. COTTING agreed, adding that the RCA may wish to establish a more uniform reporting requirement. The remainder of the bill is conforming language. REPRESENTATIVE LEDOUX inquired as to what this is expected to cost utilities. MS. COTTING replied that the RCA submitted a zero fiscal note. She pointed out that Section 3(b) states that the cost of the aforementioned disclosures will be considered generation- related. More information would be required from the utilities in order to make this estimation. She surmised that the cost would also depend on the regulations established by the RCA. REPRESENTATIVE LEDOUX questioned how "generation-related" costs would effect the consumer, and asked whether the tariffs can be raised. MS. COTTING offered her understanding that the tariffs can be raised. REPRESENTATIVE GATTO surmised that the reporting requirement would be satisfied with a sentence in the utility's annual report. MS. COTTING replied [yes]. CHAIR OLSON offered his understanding that the Homer Electric Association, Inc., currently provides this information. REPRESENTATIVE NEUMAN inquired as to how this would effect small companies wishing to produce electricity to sell into a power grid. MS. COTTING offered her understanding that the utility purchasing the electricity would be required to report the information, rather than the company selling the electricity. REPRESENTATIVE NEUMAN inquired as to the intent behind the legislation. REPRESENTATIVE RAMRAS speaking as sponsor of HB 28, explained that previously, there was resistance to alternative energy sources "based on the notion that this would increase the portfolio cost of energy for consumers." He then gave examples of this. He stated that he owns property in California, and receives a yearly statement disclosing energy use and sources. This information was included as an insert, which is more likely to be noticed. He explained that this information is already tracked by the utility, therefore the only cost would be in producing the document. He explained that this requirement would apply to the utilities that are purchasing the wholesale electricity for retail use. He opined that over time, this would result in a greater appetite for alternative energy among consumers, which is the intent. This is not meant to be a burden for consumers or utilities. 3:59:37 PM REPRESENTATIVE NEUMAN offered his understanding that it would be the utilities responsibility to include this information. MS. COTTING [replied yes]. REPRESENTATIVE RAMRAS, in response to a question from Representative Neuman, reiterated that the method of reporting would be left up to the RCA; however, he would prefer a separate document. 4:02:57 PM JAMES KEEN, Chief/Engineering, Regulatory Commission of Alaska (RCA), Department of Commerce, Community, & Economic Development (DCCED), explained that there are several methods of reporting that may be used. These include: a separate insert, a "line item" on a bill, adding it to the annual report, or posting the information on a web page. One area of concern is Section 5(e), which requires that those utilities grossing less than $50,000 to comply. The RCA does not keep track of utilities that it does not regulate. All utilities grossing more than $50,000 are regulated. Through the public comment period and regulatory proceedings, the RCA would come up with the reporting requirements. In response to a question from Chair Olson, he said that he is unable to estimate how many unregulated utilities exist. REPRESENTATIVE LEDOUX shared her concern regarding the effect this requirement might have on smaller utilities. REPRESENTATIVE NEUMAN inquired as to whether utilities currently send out this information. MR. KEEN replied that he is unsure of this. He offered his understanding that this is not required. He opined that the commission would consider the size of the utility, and would attempt to minimize costs. 4:06:57 PM REPRESENTATIVE BUCH referring to Page 2, line 4, inquired as to the definition of "retail supplier." MR. KEEN replied that he is not aware of the definition. In response to questions, he explained that the RCA regulates all utilities which gross over $50,000. It does not regulate those grossing less than $50,000. He said "It would just be those utilities grossing less than $50,000 annually that would not have to comply, if you change this legislation." In response to a question from Representative Gatto, he stated that under this legislation, a village using a diesel engine would be required to report this to the community, if the utility in question was certificated by the RCA. REPRESENTATIVE RAMRAS, in response to a question from Representative Gatto regarding the "Findings and Purpose" in Section 1, offered his understanding that this language was inserted by Legislative Legal and Research Services. 4:10:54 PM MS. COTTING explained that Legislative Legal and Research Services based this on California law. She offered her understanding that the intent language does not become statute; however, she opined that if HB 28 were to pass, this would be an accurate statement. REPRESENTATIVE GATTO said that he is careful to "search out ... challengeable statements." He added that when he finds a challengeable statement with no "proper answer," he is "caught off guard." However, he stated his intent to vote in favor of HB 28. 4:12:11 PM REPRESENTATIVE LEDOUX asked whether the intent of the legislation is to require villages and those utilities grossing less than $50,000 annually to report this information. REPRESENTATIVE RAMRAS replied that the intent was to conform to the current RCA regulation standards. He stated that this would apply to the aforementioned communities and utilities, as the intent is not to make a distinction between rural and urban use. He opined that this would not be a "heinous" burden. He reiterated the importance of creating "an appetite" for alternative energy sources, adding that benchmarking the source of energy once a year is a "useful and constructive exercise." He stated that he recently met with individuals regarding utilizing nuclear energy for Galena, in addition to how the nuclear waste should be dealt with. He would like to see alternative sources of energy used. 4:17:02 PM REPRESENTATIVE LEDOUX offered her understanding that currently , the RCA does not regulate utilities grossing less than $50,000 annually. MR. KEEN agreed that this is correct. He reiterated that because the RCA does not regulate these utilities, it would be difficult to inform them of regulatory discussions, as well as to enforce this once regulations are in place. REPRESENTATIVE GATTO expressed concern regarding the language in Section 5. He opined that "does not gross $50,000 annually" is not specific enough, and questioned whether this should be rewritten. 4:19:01 PM RICHARD GAZAWAY, Common Carrier Specialist, Common Carrier Section, Regulatory Commission of Alaska (RCA), Department of Commerce, Community, & Economic Development (DCCED), explained that $50,000 is the maximum an unregulated utility can gross. REPRESENTATIVE GATTO opined that the current language does not properly communicate the intent of the bill. MR. GAZAWAY offered his understanding that this is an incorporation of existing statutory language. REPRESENTATIVE LEDOUX requested further clarification as to whether the sponsor intends for the reporting requirement to apply to utilities that earn less than $50,000 annually. REPRESENTATIVE RAMRAS [replied no]. MR. KEEN, in response to a question from Chair Olson, suggested removing Section 5, if the bill is not intended to apply to those utilities grossing less than $50,000 annually. 4:20:47 PM REPRESENTATIVE RAMRAS said "we're certainly not trying to regulate utilities that the RCA is currently not regulating." He opined that Legislative Legal and Research Services should be consulted regarding the removal of this language. REPRESENTATIVE NEUMAN expressed confusion regarding the sectional analysis. MS. COTTING noted that the sectional analysis contains errors. MR. GAZAWAY, in response to a question from Representative Gatto regarding the use of $500,000 on Page 3, line 2, explained that the bold underlined text is new. The remainder is current statutory language. He explained that the $500,000 exemption has been in statute since 1970. 4:24:27 PM REPRESENTATIVE GATTO suggested that the sponsor clarify the term "exempt," in addition to the use of $50,000 and $500,000. CHAIR OLSON stated that the bill would be held over until the next committee hearing.
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