Legislature(2007 - 2008)CAPITOL 17
04/27/2007 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB209 | |
| HB200 | |
| HB71 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 200 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 209 | TELECONFERENCED | |
HB 209 - REGULATORY COMMISSION OF ALASKA CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 209, "An Act relating to the chair of and the membership of and qualifications of members of the Regulatory Commission of Alaska; adding positions to the partially exempt service; creating an administrative law division and natural gas and oil pipeline division within the commission; amending the timeline requirements for a final order of the commission; relating to the commission's regulatory cost charges; and adding to the duties of the Alaska Judicial Council as they relate to the presentation of nominees for consideration for appointment to the commission." [Before the committee was the proposed committee substitute (CS) for HB 209, Version 25-LS0717\M, Kane, 4/12/07, which had been adopted as the work draft on 4/13/07.] 3:10:53 PM JOHN BITNEY, Legislative Liaison, Governor's Legislative Office, Office of the Governor, indicated that HB 209 proposes several revisions to the statutes pertaining to the Regulatory Commission of Alaska (RCA), revisions the administration hopes will improve the RCA and its decision-making processes; in part, HB 209 addresses the RCA's timelines for dockets, and provides that the governor shall appoint the RCA's chair. He then spoke briefly about other pieces of legislation. CHAIR OLSON offered his understanding that prior to 2002, the governor had the ability to appoint the chair of what used to be the Alaska Public Utilities Commission (APUC) and is now the RCA. REPRESENTATIVE GARDNER said she has concerns with the governor appointing the chair of the RCA, and requested clarification regarding the change proposed via Section 2. REPRESENTATIVE LeDOUX surmised that under Section 2, hearings and proceedings before the RCA would become more formal and complex. 3:21:27 PM RICHARD GAZAWAY, Hearing Examiner, Common Carrier, Regulatory Commission of Alaska (RCA), Department of Commerce, Community, & Economic Development (DCCED), concurred. REPRESENTATIVE GARDNER asked whether such hearings and proceedings would then take longer and be more expensive. MR. GAZAWAY acknowledged that that might be the case. 3:22:21 PM MARK JOHNSON, Commissioner, Regulatory Commission of Alaska (RCA), Department of Commerce, Community, & Economic Development (DCCED), concurred, but remarked that the RCA's hearing examiner staff is fully capable of handling more complex hearings and proceedings. 3:22:56 PM JANIS WILSON, Commissioner, Regulatory Commission of Alaska (RCA), Department of Commerce, Community, & Economic Development (DCCED), acknowledged, though, that the RCA's regulatory bar might need to make some adjustments. REPRESENTATIVE GARDNER questioned whether adopting Section 2 is the best approach given that one of the legislature's goals is to have the RCA's decision-making process take less time and be less costly. She then referred to page 2, lines 25-29 - proposed AS 42.05.151(e)(1) - and questioned what precluding petitions to intervene by those without a current, nonspeculative property interest in the subject of the proceeding will mean for groups such as the AARP and the Alaska Public Interest Research Group (AkPIRG), groups - or even individual members of the public - that would have a concern with how rates are set. MR. GAZAWAY replied that that the RCA currently adheres to a somewhat lenient standard regarding intervention, taking into consideration factors such as property interests, financial interests, or "other" interests, and whether participation by such parties will aid in the development of the record. He acknowledged that the proposed change creates a more stringent requirement for intervention. In response to a question, he also acknowledged that intervention, regardless of the interest, can lengthen the time of a proceeding. REPRESENTATIVE GARDNER referred to paragraph (1)(A) of Section 9, and offered her understanding that the term, "good cause" - as used in paragraph (1) - is well defined, whereas the term, "unusually complex and novel" - which is proposed as an additional qualifier in subparagraph (A) - is not. She opined that this change offers no benefit but will instead cloud the issue of whether a timeline should be extended. CHAIR OLSON suggested that the House Judiciary Standing Committee could better address that issue. REPRESENTATIVE GARDNER referred to subparagraph (C) of Section 9, and offered her understanding that currently the RCA does extend timelines due to its workload. MR. JOHNSON concurred, and explained that the RCA would like the flexibility to extend timelines when its workload necessitates it. CHAIR OLSON suggested that the House Judiciary Standing Committee could better address that issue as well. MR. BITNEY acknowledged the concerns regarding Sections 2 and 3, and offered that Section 9 contains suggested language "that came to us on the docket." 3:31:27 PM KRISTI CATLIN, Vice President, State Law & Government Affairs, AT&T Alascom, referred to Section 1, and said that her company is in favor of maintaining the existing system wherein RCA commissioners pick their own chair, but would like to see the chair's term of office lengthened. She shared her understanding that the existing system was put in place in order to depoliticize the process, and said her company believes that this system is working since one must gain the support of his/her peers before being elected to serve as chair. She then said that her company shares some of the previously mentioned concerns regarding Section 2; its proposed changes could cause further delays and heighten the system's level of technicality. Rules of evidence normally apply only in civil court and don't generally apply in administrative hearings, and while RCA staff may have the skills to handle the proposed change, everyone involved would have to be refreshed on what the technical rules of evidence are because they haven't had to operate under them. Therefore, her company's preference would be that the change proposed via Section 2 not be adopted. MS. CATLIN turned attention to Section 3, specifically proposed AS 42.05.151(d), and said the existing civil rules are not easily applied and therefore it might be better to allow the RCA to determine which rules it wishes to adopt, though if this has not occurred by the next legislative session, the legislature could address the issue at that point. Referring to proposed AS 42.05.151(e), she said her company is not opposed to the change regarding petitions to intervene because it feels that there should be rules regarding intervention, but mentioned that she herself does have a concern regarding precluding members of the public from filing petitions to intervene. Referring to the terms, "good cause" and " unusually complex and novel" as used in Section 9, she said she agrees that the proposed additional qualifier might cause difficulties with appeals. In conclusion, she said her company believes that the RCA has done a tremendous job of improving its processes and getting decisions out, and therefore has her company's support. MS. CATLIN, in response to a question, said that her company has no problems with the timelines outlined in the bill. 3:36:42 PM JAMES ROWE, Executive Director, Alaska Telephone Association (ATA), said that the ATA would like to see the RCA reauthorized, and agrees that the RCA has done a good job, a job wherein not all members of the industry are going to be happy with any given decision. Referring to Section 1, he said that the ATA has no adverse reaction to having the governor appoint the chair of the RCA, though it is also satisfied with the current system because it has resulted in a functioning RCA. Referring to Section 2, he posited that the current system has worked well without tighter guidelines regarding evidence brought before the RCA, and said that the ATA is happy with how things are going in that regard. Referring to Section 3, he said that the ATA shares the concerns regarding paragraph (e)(1), adding that it would be unfortunate if a party was precluded from offering beneficial information just because the party had only a speculative property interest. MR. ROWE, with regard to timelines, stated that the ATA is happy to see them. With regard to Section 9, he expressed agreement with the comments made by Janis Wilson at a prior hearing that the term, "good cause" has already been defined via case law. He opined that the change proposed via paragraph (1)(A) appears to be attempting to use the term ""unusually complex and novel" to define the term, "good cause", and suggested that doing so will lead to further delays. Referring to Section 10, specifically proposed AS 42.05.175(n), he opined that if the commission is not allowed to extend a timeline due to workload constraints, then this provision implies that a bad decision is preferable to a considered decision. Remarking that in the last few years there have been few dockets that have been extended due to the RCA's workload, he said he would prefer an extended timeline and a considered and good decision versus a poor decision. MR. ROWE, in response to a question regarding Section 1, said that he doesn't know that one methodology of picking a chair will serve the public any better than the other. He shared his hope that the commissioners of the RCA are focusing on the issues before them rather than who shall get to be chair. Upon a request to chose which methodology he prefers, Mr. Rowe said he would prefer for the commissioners of the RCA to elect their own chair, but suggested that the proposed three-year term ought to be deleted, adding that he would like the commissioners to have the opportunity to vote for the best chair. 3:48:35 PM VIRGINIA RUSCH, AARP, relayed that the AARP has been very interested in the impact of utility rates on consumers, and that she has worked with the RCA and its predecessor since 1981 and has worked as an assistant attorney general for 23 years - 14 of which she was assigned to represent the APUC and the RCA. She remarked that she has seen a lot of how the RCA operates, and mentioned that at one point she was assigned to the Transportation Section of the Department of Law (DOL) where she "did some large scale contract litigation in the court system" and so has observed how the technical rules of evidence and the rules of discovery in court operate in contrast with the RCA's proceedings. She said that although the AARP has sent the committee a letter that summarized the AARP's position, she would like to respond to some of the questions raised thus far. MS. RUSCH, referring to Section 2 and the question of whether having to apply technical rules of evidence would lengthen hearings and proceedings and make them more costly, opined that it would, recalling that it often took her many hours of preparation just to learn the technical utility, accounting, or finance-type issues involved in a case, and so if she'd had to also keep in mind technical rules of evidence, it would have required many more hours of preparation. Such increases in preparation time will result in increased utility expenses for all. MS. RUSCH referred to Section 3, specifically the provisions regarding discovery, and opined that this will take the RCA in the wrong direction if the legislature's goal is to cut some of the costs of proceedings. She suggested as an alternative that the bill be altered such that it contains standards directing the RCA to ensure that the parties have appropriate discovery at the least cost. Referring to the language of Section 3 regarding petitions to intervene, she characterized it as disturbing to the AARP because it would prevent the AARP from seeking to intervene or argue or present issues on behalf of consumers. There is just no need, she opined, for any statutory provision addressing intervention because the RCA, for many years, has had standards set out in regulations. MS. RUSCH mentioned a recent case wherein the court considered the RCA's decision regarding intervention; in that case, one refuse utility that competed with another refuse utility sought to intervene in the rate case of that other utility. The RCA refused intervention on the basis that the cost of discovery for the other utility "would drive out the competition," and the RCA's decision on that proceeding was upheld by the court. She offered her understanding that ever since the federal Public Utility Regulatory Policies Act of 1978 (PURPA) began requiring some compensation for consumers' interveners, there has been a policy to try to encourage consumer intervention. However, it's a little more problematic, she remarked, when two utilities are fighting each other and attempt to participate in each other's rate cases; intervention in such situations just results in longer, more expensive proceedings, but the bill's provisions regarding intervention aren't going to solve this sort of problem. She urged members to remove those provisions. MS. RUSCH, in conclusion, stated that the RCA should have flexibility with regard to timelines because, under the bill, if the RCA makes a mistake, it will be the consumers who might be hurt. For example, if a utility files a rate case asking for a 10 percent increase in rates, under the current statute if the commission doesn't act by certain dates, that rate increase goes into effect and consumers are required to pay it, but, under the bill, if the RCA has a proceeding in which it examines all the utility's rate justifications and concludes that the rate increase should only be 5 percent but the commission is unable to meet a deadline, the commission wouldn't have the flexibility to extend that deadline and so the consumers would end up paying [a rate increase double what the RCA thinks they should be paying]. CHAIR OLSON asked how many times in the last three years has the AARP intervened in an RCA decision. MS. RUSCH replied that the AARP has intervened twice, has asked to participate as an amicus curia in a court appeal on one case, and has appeared at consumer hearings or has sent comment letters four or five other times. CHAIR OLSON, after ascertaining that no one else wished to testify, closed public testimony on HB 209. 3:57:32 PM REPRESENTATIVE NEUMAN moved to report the proposed committee substitute (CS) for HB 209, Version 25-LS0717\M, Kane, 4/12/07, out of committee with individual recommendations and the accompanying fiscal notes. The committee took an at-ease from 3:58 p.m. to 4:02 p.m. CHAIR OLSON, noting that there were no objections to the motion, announced that CSHB 209(L&C) was reported from the House Labor and Commerce Standing Committee.
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