05/13/2002 09:10 AM House RLS

SB 324-MUNICIPAL  PUB.UTIL.COMPETING W/TELECOM                                                                                
                                                                                                                                
CHAIR KOTT  announced that the  final order of business  would be                                                               
CS  FOR  SENATE BILL  NO.  324(L&C),  "An  Act providing  that  a                                                               
utility  or electric  operating entity  owned and  operated by  a                                                               
political  subdivision of  the state  competing  directly with  a                                                               
telecommunications utility  is not subject  to the  Alaska Public                                                               
Utilities Regulatory Act."                                                                                                      
                                                                                                                                
RANDY RUARO, Staff to Representative  Bill Williams, Alaska State                                                               
Legislature,   explained  that   SB   324   continues  to   allow                                                               
municipally  operated utilities  to  continue to  be exempt  from                                                               
regulation by the Regulatory Commission  of Alaska (RCA) when the                                                               
utility  faces  competition  from a  telecommunications  utility.                                                               
Therefore, regulations  for municipally operated  utilities would                                                               
continue to  be done at  the local  level by the  citizen utility                                                               
boards  and   elected  municipal  officials.     That  system  of                                                               
regulation has  been in  Ketchikan for  at least  50 years.   Mr.                                                               
Ruaro noted  that the RCA  has submitted  a letter that  does not                                                               
oppose the  bill.  He informed  the committee that the  states of                                                               
Oregon and Washington maintain exceptions for utilities.                                                                        
                                                                                                                                
REPRESENTATIVE BERKOWITZ  asked if this legislation  applies only                                                               
to the Ketchikan utility.                                                                                                       
                                                                                                                                
MR.  RUARO  clarified  that  the  statute  is  drafted  to  apply                                                               
statewide to any utility.   In further response to Representative                                                               
Berkowitz, Mr.  Ruaro said that he  has heard that there  are two                                                               
other   municipal  utilities   that  are   operating  up   North.                                                               
Furthermore,  it's  possible  for  any  municipality  to  form  a                                                               
utility any time in the future.                                                                                                 
                                                                                                                                
REPRESENTATIVE McGUIRE asked what prompted this legislation.                                                                    
                                                                                                                                
Number 2313                                                                                                                     
                                                                                                                                
KARL  AMYLON,   General  Manager,  Ketchikan   Public  Utilities,                                                               
answered  that  this legislation  attempts  to  preserve a  level                                                               
playing  field  for  the  different  utility  components  of  the                                                               
Ketchikan  Public  Utilities.   Without  this  legislation, if  a                                                               
telecommunications  company comes  to Ketchikan,  "we potentially                                                               
risk all of our utilities  ... becoming regulated."  Furthermore,                                                               
there are  different degrees of  regulations.  He  explained that                                                               
if   a  lightly   regulated  telecommunications   company  enters                                                               
Ketchikan, Ketchikan  Public Utilities would face  becoming fully                                                               
rate regulated and the associated expenses.                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE  inquired as to  why a utility owned  by a                                                               
political subdivision of the state  should not be regulated while                                                               
the others should.                                                                                                              
                                                                                                                                
MR.  AMYLON clarified  that the  aforementioned isn't  [Ketchikan                                                               
Public Utilities'] position.  He  specified that the desire is to                                                               
treat   competing  utilities   within  the   Ketchikan  political                                                               
subdivision equally.   In  response to  Representative Berkowitz,                                                               
Mr. Amylon related  his belief that Alaska Power  & Telephone did                                                               
make comments on this legislation,  although they aren't directly                                                               
competing with Ketchikan Public Utilities at the present time.                                                                  
                                                                                                                                
TAPE 02-15, SIDE B                                                                                                              
                                                                                                                                
CHAIR KOTT,  determining no  one else  wished to  testify, closed                                                               
the public testimony.                                                                                                           
                                                                                                                                
Number 2385                                                                                                                     
                                                                                                                                
REPRESENTATIVE  PORTER  moved  to  report CSSB  324(L&C)  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note.  There  being no objection, CSSB  324(L&C) was                                                               
reported from the House Rules Standing Committee.