Legislature(2017 - 2018)BELTZ 105 (TSBldg)

04/10/2017 01:30 PM JUDICIARY

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Audio Topic
01:35:31 PM Start
01:37:19 PM Confirmation Hearings
02:11:27 PM SB58
02:21:06 PM HB108
02:26:10 PM SB100
02:31:16 PM HB106
02:44:17 PM Confirmation Hearings
02:54:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearings: TELECONFERENCED
Lynne Gallant, Alaska Judicial Council
David Barton, State Commission for Human Rights
Drew Phoenix, State Commission for Human Rights
+ SB 58 DEPT OF LAW: ADVOCACY BEFORE FERC TELECONFERENCED
Heard & Held
+ HB 108 FIDUCIARY ACCESS TO DIGITAL ASSETS TELECONFERENCED
Moved CSHB 108(JUD) Out of Committee
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 100 MUNICIPAL LIENS: AUTHORITY FOR & PRIORITY TELECONFERENCED
Moved SB 100 Out of Committee
+= HB 106 CIVIL LEGAL SERVICES FUND TELECONFERENCED
Moved SCS HB 106(JUD) Out of Committee
            SB  58-DEPT OF LAW: ADVOCACY BEFORE FERC                                                                        
                                                                                                                                
2:11:27 PM                                                                                                                    
CHAIR COGHILL announced the consideration of SB 58.                                                                             
                                                                                                                                
2:12:17 PM                                                                                                                    
ED   SNIFFEN,  Assistant   Attorney   General,  Civil   Division,                                                               
Regulatory Affairs  & Public Advocacy (RAPA),  Department of Law,                                                               
Anchorage,   Alaska,  introduced   SB   58  on   behalf  of   the                                                               
administration.  He reminded  the members  that public  utilities                                                               
and  pipelines   in  Alaska  are  regulated   by  the  Regulatory                                                               
Commission of Alaska  (RCA). The RCA pays for  the regulations by                                                               
assessing the utilities a regulatory  cost charge (RCC), which is                                                               
passed along to consumers through  their utility bills. To ensure                                                               
that the  public interest is  protected, the attorney  general is                                                               
allowed by  statute to  participate before the  RCA to  make sure                                                               
those rates  are just and  reasonable; DOL also receives  part of                                                               
that regulatory cost charge.                                                                                                    
                                                                                                                                
MR. SNIFFEN said  he had a short PowerPoint to  help explain what                                                               
the regulatory cost charge is and where it comes from.                                                                          
                                                                                                                                
     What is the regulatory cost charge (RCC)?                                                                                
                                                                                                                                
       The RCC is a fee assessed on public utilities and                                                                        
         pipelines that are regulated by the Regulatory                                                                         
     Commission  of  Alaska  (RCA).  It  is  created  by  AS                                                                    
     42.05.254 and AS 42.06.286.                                                                                                
                                                                                                                                
     Who Pays RCCs?                                                                                                           
                                                                                                                                
     Utilities and pipelines that are  regulated by the RCA,                                                                    
     including  over  125  public  utilities  and  about  20                                                                    
     common  carrier  pipelines  with  in-state  deliveries.                                                                    
     These utilities  and pipelines may  pass the  charge on                                                                    
     to  customers that  benefit from  RCA regulation.  Each                                                                    
     year, the RCA assesses  RCCs to utilities and pipelines                                                                    
     based on the amount of  work required for each industry                                                                    
     sector.                                                                                                                    
                                                                                                                                
     What does the RCC pay for?                                                                                               
                                                                                                                                
     The  money collected  in the  RCC provides  funding for                                                                    
     the  Regulatory Commission  of Alaska  (RCA), which  is                                                                    
     responsible  for  the  economic  regulation  of  public                                                                    
     utilities  and intrastate  common carrier  pipelines in                                                                    
     Alaska, and the Regulatory  Affairs and Public Advocacy                                                                    
     (RAPA)  section  in the  Department  of  Law, which  is                                                                    
     charged  with advocating  for  the  public interest  in                                                                    
     matters related  to the  economic regulation  of public                                                                    
     utilities  and   pipelines.  It   pays  for   just  and                                                                    
     reasonable rates for utility and pipeline customers.                                                                       
                                                                                                                                
     How much is it?                                                                                                          
                                                                                                                                
     Total RCCs  cannot exceed 0.87 percent  of the adjusted                                                                    
     gross  revenue  (revenue  derived  from  operations  in                                                                    
     Alaska)  of  the  regulated  utilities  and  pipelines.                                                                    
     Statute  allocates that  0.87 percent  between the  RCA                                                                    
     and  RAPA.  RCCs  funding the  RCA  cannot  exceed  0.7                                                                    
     percent  and  RCCs  funding  RAPA  cannot  exceed  0.17                                                                    
     percent.                                                                                                                   
                                                                                                                                
     RAPA's 2017 Budget.                                                                                                      
                                                                                                                                
     For 2017, the  statutory cap for the  Department of Law                                                                    
     was $2,374,390. The budget submitted  last year was for                                                                    
     $2,333,700,  which is  $40,690 under  the cap.  The pie                                                                    
     chart shows that DOL spent  about 7 percent of the time                                                                    
     on pipeline matters that came  before the RCA; the rest                                                                    
     of  the  time  was  spent on  utility  matters.  SB  58                                                                    
     doesn't ask to grow the size  of the pie; it would just                                                                    
     allow DOL to change the shape of the pieces.                                                                               
                                                                                                                                
     What would SB 58 change?                                                                                                 
                                                                                                                                
     This bill does  not change the 0.17 percent  RCC cap or                                                                    
     create  new  authority  for  the  attorney  general  to                                                                    
     participate  in  matters  before FERC.  The  bill  will                                                                    
     allow some costs incurred by  the department in matters                                                                    
     before  FERC (TAPS  pipeline tariffs)  in the  pipeline                                                                    
     RCC.  This  bill  might  increase  the  amount  of  RCC                                                                    
     allocated to  pipelines. Because the size  of the "pie"                                                                    
     is not changing, an increase  in the pipeline RCC would                                                                    
     reduce the RCC paid by utilities.                                                                                          
                                                                                                                                
2:16:52 PM                                                                                                                    
     How would SB 58 impact consumers?                                                                                        
                                                                                                                                
     Pipelines  can pass  the RCC  on to  customers for  in-state                                                               
     shipments. This  increase would  not be  significant because                                                               
     the cost is  spread across all regulated  pipelines and each                                                               
     unit of oil or gas  shipped. For example, adding $100,000 to                                                               
     the pipeline  RCC for  the last two  quarters of  2016 would                                                               
     increase the pipeline RCC surcharge  by about 0.041 percent.                                                               
     A $10,000 billing  to a pipeline customer  would increase by                                                               
     $4.10. The $4.10 surcharge helps  ensure the $10,000 bill is                                                               
     "just and reasonable."                                                                                                     
                                                                                                                                
     Why now?                                                                                                                 
                                                                                                                                
     For  over  30 years,  outside  counsel  has represented  the                                                               
     state  on FERC  pipeline matters.  To reduce  costs, DOL  is                                                               
     developing  the necessary  expertise  and  bringing more  of                                                               
     this work  in-house. In  the process  of budgeting  for this                                                               
     increased  in-house   workload  and  searching   for  budget                                                               
     efficiencies, it came  to our attention that the  RCC may be                                                               
     an appropriate funding source.                                                                                             
                                                                                                                                
     Will SB 58 impact AK LNG?                                                                                                
                                                                                                                                
     No.                                                                                                                        
                                                                                                                                
     Is there a check on RCC spending?                                                                                        
                                                                                                                                
     Yes. RCCs to  fund RAPA cannot exceed the  0.17 percent cap.                                                               
     RAPA's budget is  submitted to the RCA for  review of RAPA's                                                               
     certified  costs in  a public  docket  where any  interested                                                               
     party can comment.                                                                                                         
                                                                                                                                
2:18:23 PM                                                                                                                    
SENATOR  MEYER   asked  if   the  attorney   general  him/herself                                                               
participates as a party before the RCA or his or her designee.                                                                  
                                                                                                                                
MR.  SNIFFEN replied  the  attorney  general designee,  generally                                                               
someone in the RAPA section.                                                                                                    
                                                                                                                                
SENATOR COSTELLO asked if the RCA has an opinion on the bill.                                                                   
                                                                                                                                
MR.  SNIFFEN replied  DOL  has  talked with  the  RCA on  several                                                               
occasions and it has not voiced opposition.                                                                                     
                                                                                                                                
CHAIR  COGHILL  noted  that,  as  judiciary  chair,  he  has  not                                                               
received any negative comments from the RCA.                                                                                    
                                                                                                                                
SENATOR  MEYER  informed  members   that  RCA  Commissioner  Norm                                                               
Rokeberg  testified  in  support  of   the  bill  in  a  previous                                                               
committee.                                                                                                                      
                                                                                                                                
SENATOR WIELECHOWSKI asked how much  the statutory cap would need                                                               
to be increased to fully cover RAPA's budgetary needs.                                                                          
                                                                                                                                
MR. SNIFFEN estimated that the 0.17  percent cap would need to be                                                               
increased to 0.23 percent.                                                                                                      
                                                                                                                                
CHAIR COGHILL thanked Mr. Sniffen  and announced he would hold SB                                                               
58 in committee for further review.                                                                                             
                                                                                                                                

Document Name Date/Time Subjects
Gallant - Alaska Judicial Council.pdf SJUD 4/10/2017 1:30:00 PM
Barton - State Commission for Human Rights.pdf SJUD 4/10/2017 1:30:00 PM
SB 58 - Summary Statement.pdf SJUD 4/10/2017 1:30:00 PM
SB 58
SB 58 - Transmittal Letter.pdf SJUD 4/10/2017 1:30:00 PM
SB 58
HB 108 - Letters of Support.pdf SJUD 4/10/2017 1:30:00 PM
HB 108
HB 108 - Sponsor Statement.pdf SJUD 4/10/2017 1:30:00 PM
HB 108
HB 108 - Supporting Document - SASI Sheet.pdf SJUD 4/10/2017 1:30:00 PM
HB 108
HB 108 - Summary of Changes (ver. J to ver. R).pdf SJUD 4/10/2017 1:30:00 PM
HB 108
HB 108 - Supporting Document - ULC Fact Sheet.pdf SJUD 4/10/2017 1:30:00 PM
HB 108
HB 108 - Supporting Document - ULC Summary.pdf SJUD 4/10/2017 1:30:00 PM
HB 108
HB 108 - Supporting Document - ULC Why Adopt.pdf SJUD 4/10/2017 1:30:00 PM
HB 108
SB 100 - Letter of Support - Kenai.pdf SJUD 4/10/2017 1:30:00 PM
SB 100
SB 100 - Letter of Support - Municipality of Anchorage #2.pdf SJUD 4/10/2017 1:30:00 PM
SB 100
SB 100 - Letter of Support - FNSB.pdf SJUD 4/10/2017 1:30:00 PM
SB 100
HB 106 - Amendment A.1.pdf SJUD 4/10/2017 1:30:00 PM
HB 106
SB 58 - Presentation for Senate Judiciary.pdf SJUD 4/10/2017 1:30:00 PM
SB 58