Legislature(2019 - 2020)BUTROVICH 205

03/09/2020 03:30 PM RESOURCES

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Audio Topic
03:30:30 PM Start
03:31:17 PM SB193
04:01:48 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
<Bill Hearing Canceled>
-- Public Testimony --
Heard & Held
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
+ Bills Previously Heard/Scheduled TELECONFERENCED
               SB 193-ELECTRIC UTILITY LIABILITY                                                                            
3:31:17 PM                                                                                                                    
VICE-CHAIR  COGHILL announced  that  the only  order of  business                                                               
would be  SENATE BILL NO. 193,  "An Act relating to  liability of                                                               
an  electric  utility  for contact  between  vegetation  and  the                                                               
utility's  facilities;  and  relating  to  vegetation  management                                                               
He noted that he is the sponsor of Senate Bill 193 (SB 193).                                                                    
3:32:27 PM                                                                                                                    
CHRISTIAN   ENGLISH,  Intern,   Senator  Coghill,   Alaska  State                                                               
Legislature, Juneau,  Alaska, read  the sponsor statement  for SB                                                               
193 as follows:                                                                                                                 
     This Senate Bill further  defines the responsibility of                                                                    
     a utility  providing electrical service to  the public,                                                                    
     and the damages in which they can be held liable for.                                                                      
     Senate Bill 193  makes clear in statute  that a utility                                                                    
     offering electrical  service to  the public may  not be                                                                    
     held  liable for  property damage,  death, or  personal                                                                    
     injury  resulting from  contact between  vegetation and                                                                    
     the  utility's  facilities,  unless the  vegetation  is                                                                    
     located   entirely  within   the   boundaries  of   the                                                                    
     utility's right-of-way or if  the utility fails to have                                                                    
     a  written  vegetation  management  plan  or  fails  to                                                                    
     comply with that plan.                                                                                                     
     To  specify, an  electric  utility is  not  to be  held                                                                    
     liable  for damages  that  come about  as  a result  of                                                                    
     natural  events  moving  vegetation into  a  facility's                                                                    
     right-of-way. Nor  is a utility  to be held  liable for                                                                    
     damages  caused  by  an unaffiliated  person  or  party                                                                    
     recklessly   endangering   a    facility   by   causing                                                                    
     vegetation to fall into its right-of-way.                                                                                  
     SB  193 protects  responsible  electric utilities  from                                                                    
     being held  liable for  the cost  of damages  caused by                                                                    
     vegetation that  they either cannot control  or are not                                                                    
     permitted to maintain,  consequently this also protects                                                                    
     Alaska  electric  customers  from having  to  bear  the                                                                    
     brunt of  those costs  through their  rates in  a state                                                                    
     where  electric utility  service costs  are already  so                                                                    
3:33:01 PM                                                                                                                    
SENATOR KAWASAKI joined the committee meeting.                                                                                  
VICE-CHAIR COGHILL asked for a sectional analysis on SB 193.                                                                    
3:34:50 PM                                                                                                                    
RYNNIEVA MOSS, Staff, Senator  Coghill, Alaska State Legislature,                                                               
Juneau, Alaska,  noted that the  language in Alaska  Statute (AS)                                                               
09.65.085  regarding electrical  utility liability  in SB  193 is                                                               
language  passed  in  a  1997   tort  reform  bill  sponsored  by                                                               
Representative  Porter.  The  reform  bill came  about  when  the                                                               
courts were looking  at utilities as providing  a product instead                                                               
of a service. The reform  bill released electrical utilities from                                                               
strict liability  where providing a product  meant utilities were                                                               
at fault  no matter  what. The strict  liability language  in the                                                               
reform bill protected utilities as  providers of a service rather                                                               
than a product.                                                                                                                 
MS.  MOSS  detailed  that  section  1 in  the  bill  adds  a  new                                                               
subsection  to  the  statute,  [AS  09.65.085(a)(2)].  If  damage                                                               
starts entirely  within the right-of-way  then the  utility would                                                               
be  responsible. However,  should a  neighboring property  drop a                                                               
tree, for  instance, on a  line and start  a fire, that  would be                                                               
the responsibility of the property  owner who owned the tree that                                                               
fell into the right-of-way.                                                                                                     
She said  the second  part of  the bill  includes caveats  to [AS                                                               
09.65.085(a)(2):  AS 09.65.085(a)(2)(A),  AS 09.65.085(a)(2)(B)].                                                               
She summarized that  the caveats hold the  utility responsible if                                                               
they do not  write a vegetation management plan or  do not comply                                                               
with their plan.                                                                                                                
3:36:37 PM                                                                                                                    
VICE-CHAIR COGHILL  asked Ms.  Moss to address  section 2  in the                                                               
MS. MOSS explained  that section 2 adds  "written vegetation plan                                                               
or policy" into statute, [AS 09.65.085(c)].                                                                                     
VICE-CHAIR COGHILL  summarized that  the written  vegetation plan                                                               
is a requirement.                                                                                                               
MS. MOSS answered yes.                                                                                                          
VICE-CHAIR COGHILL  noted that the  written vegetation  plan will                                                               
match the liability question that is not in statute.                                                                            
MS. MOSS  pointed out that the  bill still has language  from the                                                               
1997 reform bill  that a utility is not  precluded from liability                                                               
for civil damages  that are the result  of intentional, reckless,                                                               
or negligent acts or omissions, [AS 09.65.085(b)].                                                                              
3:37:16 PM                                                                                                                    
VICE-CHAIR COGHILL opened public testimony.                                                                                     
He said the  utilities probably will want to speak  about SB 193.                                                               
He explained  that based on  the recent fires in  California, the                                                               
legislation    addresses    both     utility    and    individual                                                               
responsibility. In  Alaska, trees are big  enough to occasionally                                                               
fall across  a right-of-way into  powerlines. The  bill addresses                                                               
responsibility questions  based on  a vegetation  management plan                                                               
and landowners who have trees along right-of-ways.                                                                              
SENATOR KIEHL said he does  not know what a vegetation management                                                               
plan  looks like.  He  asked what  needs to  be  in a  vegetation                                                               
management plan.                                                                                                                
MS. MOSS  replied that each  utility has a  vegetation management                                                               
plan. She  noted that Golden  Valley Electric  Association (GVEA)                                                               
in Fairbanks has a monthly  clearing schedule in their management                                                               
plan for property owner areas and powerline right-of-ways.                                                                      
She  noted that  GVEA removed  cottonwood trees  on her  property                                                               
that could  have fallen  on powerlines.  Property owners  that do                                                               
not  allow  utilities to  remove  trees  that  are in  danger  of                                                               
falling into a right-of-way is  an issue. Utilities have no right                                                               
to cut down a tree that is not in their right-of-way.                                                                           
3:39:49 PM                                                                                                                    
TRAVIS MILLION,  Chief Executive Officer, Copper  Valley Electric                                                               
Association, Glennallen, Alaska, testified  in support of SB 193.                                                               
He  noted  that  the  right-of-way management  plan  that  Copper                                                               
Valley  Electric Association  (CVEA) has  specifically calls  out                                                               
time frames to maintain its right-of-ways.                                                                                      
He  detailed   that  CVEA  separates  its   management  plan  for                                                               
transmissions  lines   into  northern  and   southern  districts.                                                               
Valdez, located  in the  southern district,  gets more  rain, and                                                               
requires right-of-way  maintenance every  5 to  7 years,  but the                                                               
northern district  requires right-of-way  maintenance every  7 to                                                               
10 years.  Distribution lines  right-of-way maintenance  is based                                                               
on growth patterns and rotates from 5 to 10 years.                                                                              
SENATOR BISHOP asked what CVEA's clearing limits are.                                                                           
MR.  MILLION   answered  that  clearing   limits  are   based  on                                                               
distribution or  transmission lines; the  combination encompasses                                                               
95 percent  of CVEA's powerlines.  Distribution lines have  a 30-                                                               
foot right-of-way  which means  15 feet from  the pole  on either                                                               
side.  Transmission lines  have  a 100-foot  right-of-way, so  50                                                               
feet from the center line outwards on either side.                                                                              
VICE-CHAIR COGHILL summarized that any  tree that is over 60 feet                                                               
could be an issue if the tree is right on the edge of the right-                                                                
MR. MILLION answered correct.                                                                                                   
3:41:49 PM                                                                                                                    
VICE-CHAIR  COGHILL noted  that  having trees  over 60-feet  tall                                                               
near the right-of-way is not uncommon.                                                                                          
He asked Mr. Million to  provide his testimony specifically on SB                                                               
MR.  MILLION  detailed  that CVEA  is  an  electrically  isolated                                                               
electric  cooperative serving  3,800 members  in the  interior of                                                               
Alaska.  CVEA,  headquartered  in   Glennallen,  serves  a  large                                                               
service  area that  encompasses Valdez  to the  south, 160  miles                                                               
north of Valdez, and 100 miles east and west of Valdez.                                                                         
He said SB  193 will clarify in statute that  holding an electric                                                               
utility  liable for  property damage,  death, or  personal injury                                                               
resulting from the  contact of vegetation outside  of a utility's                                                               
right-of-way  and  utility  infrastructure  may  not  occur.  The                                                               
legislation  protects ratepayers  which in  most cases  in Alaska                                                               
are the member-owners of the  electric cooperative or citizens of                                                               
the municipality.                                                                                                               
He  noted  that  even  prior   to  the  news  of  the  California                                                               
wildfires,  CVEA has  been  very aggressive  over  the last  five                                                               
years to  reestablish and  maintain the  utility's right-of-ways.                                                               
Not  only is  it CVEA's  responsibility  as the  stewards of  the                                                               
utility right-of-ways, it is also the right thing to do.                                                                        
He  said  maintaining the  right-of-way  in  Alaska can  be  very                                                               
difficult  work. In  places  like southeast  Alaska  and even  in                                                               
Valdez,  the  trees  and vegetation  grow  back  quickly.  CVEA's                                                               
vegetation  management  plan  describes  the  clearing  width  of                                                               
right-of-ways for both distribution  and transmission assets. The                                                               
methods used  to clear right-of-ways  include both  hand clearing                                                               
and  the use  of mechanical  equipment such  as Fecon  mowers and                                                               
vertical  clearing   machines.  CVEA  reviews   clearing  revisit                                                               
frequency  for any  given year.  CVEA  maintains a  100-foot-wide                                                               
clearing for its 106-mile-long  transmission line from Glennallen                                                               
to Valdez  that runs through some  of the most rugged  terrain in                                                               
Alaska.  CVEA  reestablished  nearly  the entire  length  of  the                                                               
Glennallen to Valdez transmission line since 2016.                                                                              
He remarked that if a tree  from outside of the right-of-way were                                                               
to come in contact with the CVEA  lines and cause a fire, it does                                                               
not seem right  for the utility that has an  established plan and                                                               
is doing  its due diligence  to maintain its right-of-ways  to be                                                               
held liable for property damage caused  by that tree, even if the                                                               
utility does not have the legal right to remove it.                                                                             
MR. MILLION said unlike many  utilities in the Lower 48, remotely                                                               
isolated utilities run the risk of  having to shut down its power                                                               
system if a lawsuit were to  bankrupt the utility. In most cases,                                                               
there  is  not another  option  to  receive electrical  services.                                                               
Essentially, a  utility liability  lawsuit would  ultimately hurt                                                               
the  member-owners,  not  the   shareholders  like  a  for-profit                                                               
electrical utility.  Without the  changes to Alaska  statute that                                                               
SB 193 introduces, there are  very few cost-effective options for                                                               
the  utilities to  mitigate their  liability  risks. Again,  CVEA                                                               
must pass any cost burden on to its member-owners.                                                                              
He summarized that  increasingly warm summers in  the interior of                                                               
the  state brings  drier conditions,  increased number  of spruce                                                               
beetle killed  trees, and higher  risk of wildfires.  The passing                                                               
of SB  193 will protect  the Alaska electric utilities  and their                                                               
3:45:13 PM                                                                                                                    
SENATOR KAWASAKI asked how a  utility works with a property owner                                                               
who has a large tree at the edge of the right-of-way.                                                                           
MR. MILLION  answered that CVEA handles  right-of-way issues with                                                               
trees  on a  case-by-case basis.  CVEA first  identifies who  the                                                               
property  owner  is and  then  discusses  whether they  would  be                                                               
willing to  allow CVEA to  remove the  tree. In most  cases, CVEA                                                               
member-owners are  willing to allow clearing.  However, there are                                                               
a few  people who really  enjoy their trees  and do not  want the                                                               
trees cut down for any reason.                                                                                                  
VICE-CHAIR COGHILL noted  that he topped a tree near  his home to                                                               
avoid interfering with a powerline right-of-way.                                                                                
3:46:44 PM                                                                                                                    
MICHAEL  ROVITO,  Deputy   Director,  Alaska  Power  Association,                                                               
Palmer, Alaska,  testified in  support of SB  193. He  noted that                                                               
the  Alaska   Power  Association  (APA)  is   a  statewide  trade                                                               
association representing the electric utilities in Alaska.                                                                      
He said SB  193 will clarify in statute that  holding an electric                                                               
utility  liable for  property damage,  death, or  personal injury                                                               
resulting from the  contact of vegetation outside  of a utility's                                                               
right-of-way  and utility  infrastructure may  not occur.  SB 193                                                               
will protect Alaska's electric  ratepayers from shouldering costs                                                               
related to  damage caused  by vegetation  outside of  a utility's                                                               
control.  SB 193  also requires  utilities to  create and  follow                                                               
written vegetation management plans  for the easements and right-                                                               
of-ways that they do control.                                                                                                   
MR. ROVITO explained that Alaska  is largely a public-power state                                                               
meaning  there are  no outside  investors to  absorb the  cost of                                                               
lawsuits  filed against  the utility,  it is  the ratepayers  who                                                               
bear  the  cost.  SB  193   will  protect  ratepayers  from  rate                                                               
increases  brought  on by  costly  litigation  related to  damage                                                               
caused by vegetation a utility cannot control.                                                                                  
He reiterated  that electric utilities  do not have  legal access                                                               
to vegetation  located on land  located outside of  the utility's                                                               
right-of-way. Not  having access creates a  situation where trees                                                               
or  other  vegetation  outside of  the  right-of-way,  but  large                                                               
enough to fall inside of  the right-of-way and contact powerlines                                                               
or  other utility  infrastructure, pose  an uncontrollable  risk.                                                               
Electric  utilities  should  not  bear the  burden  of  defending                                                               
against  lawsuits  over  wildfires  or  other  damage  caused  by                                                               
vegetation beyond  those utilities' easements  and right-of-ways.                                                               
Electric utilities  should have protection when  they develop and                                                               
carry out vegetation management  plans within their easements and                                                               
He said the reforms in SB  193 will protect Alaska consumers from                                                               
ultimately  having to  pay the  costs through  electric rates  in                                                               
cases  where  fires  begin  on property  not  under  a  utility's                                                               
control.  Electric  utilities outside  of  Alaska  have run  into                                                               
serious financial  difficulties in such instances,  and Alaska is                                                               
starting to see some litigation.                                                                                                
He  stated that  without the  immediate changes  made through  SB                                                               
193,  the only  alternatives  for utilities  is  to consider  the                                                               
costly  options of  either burying  electric  lines or  acquiring                                                               
easements  to  eliminate  the possibility  that  vegetation  from                                                               
outside  of  the  right-of-way   ever  contacts  powerlines.  The                                                               
easement   acquisition  option   is   also  environmentally   and                                                               
logistically unfeasible in most areas.                                                                                          
He summarized  that as  the cause of  wildfires increases  due to                                                               
hotter and  drier summers, invasive  insects, and  longer growing                                                               
seasons, it  is imperative that  SB 193 pass to  protect Alaska's                                                               
electric utilities and their ratepayers.                                                                                        
3:50:03 PM                                                                                                                    
SENATOR  KIEHL  noted  the use  of  the word  "entirely"  in  the                                                               
bill  regarding the  base of  a tree  being entirely  outside  of                                                               
the  right-of-way.  He asked  what  occurs  if a tree  grows  and                                                               
leans  above the right-of-way.                                                                                                  
3:50:46 PM                                                                                                                    
JOHN   LEMAN,   General   Counsel,  Alaska   Power   Association,                                                               
Anchorage, Alaska,  testified in support  of SB 193.  He conceded                                                               
that trees do  not generally observe the property  lines so there                                                               
could be  a situation where  a tree hangs  over. He said  he does                                                               
not believe that  Alaska law would let a utility  cut down a tree                                                               
that is  growing from an  adjacent parcel of land.  An electrical                                                               
utility may  have the ability to  do some trimming to  the extent                                                               
that  the  tree  is  growing   into  the  right-of-way.  However,                                                               
"entirely" is in  the bill because vegetation  that is straddling                                                               
the right-of-way boundary  complicates what a utility  must do in                                                               
the interest of powerline protection.                                                                                           
SENATOR KIEHL  noted that one  of the things associated  with the                                                               
California  fires  was powerlines  catching  fire  due to  strong                                                               
winds  blowing  material into  them.  He  asked if  the  airborne                                                               
branch  is entirely  within the  utility right-of-way  or is  the                                                               
base of the tree.                                                                                                               
MR.  LEMAN answered  that  the way  the bill  reads  is that  the                                                               
airborne branch would be vegetation  outside of the right-of-way.                                                               
He reiterated  that there is  nothing the  utility can do  if the                                                               
branch blows off in a storm if  the tree it came from was outside                                                               
of the right-of-way.                                                                                                            
VICE-CHAIR COGHILL  noted that his experience  is that electrical                                                               
utilities  will work  with homeowners,  especially  if they  know                                                               
they have a liability.                                                                                                          
3:53:04 PM                                                                                                                    
MR. LEMAN agreed that a utility has  a lot of incentive to try to                                                               
keep  any tree,  either inside  or outside  of the  right-of-way,                                                               
from   contacting  their   powerlines.   In   addition  to   fire                                                               
prevention,  a utility  wants to  maintain system  integrity, not                                                               
have angry  customers who do not  have power, and avoid  the cost                                                               
of  repairing  powerlines  in  remote  areas.  Alaska's  electric                                                               
utilities are  very willing to take  out a tree that  is over the                                                               
right-of-way line  if the  landowner will  let them  because they                                                               
are already  going to be  clearing the easement  or right-of-way,                                                               
the cost is minimal if they are in the area.                                                                                    
SENATOR KIEHL addressed page 2, line  6 in the bill and asked why                                                               
the  bill  does not  shield  or  preclude  a utility  from  civil                                                               
damages  that are  the  result of  an  intentional, reckless,  or                                                               
negligent act.                                                                                                                  
MR. LEMAN  answered that the purpose  of the bill is  to preclude                                                               
someone  from saying  that  a  utility was  negligent  if a  tree                                                               
outside of the  right-of-way caused a fire. He said  he is having                                                               
trouble imagining  the bill saying someone  intentionally causing                                                               
a fire from  outside of the right-of-way. The intent  is to avoid                                                               
the negligence argument.  There have been utilities  in the Lower                                                               
48  that have  experienced juries  willing  to say  a utility  is                                                               
negligent because a tree outside  of the right-of-way fell on the                                                               
powerline;  the referenced  section in  the bill  is designed  to                                                               
protect against that.                                                                                                           
He   added  that   within  the   right-of-way  itself   regarding                                                               
vegetation, the question is going to be did the utility have the                                                                
written  vegetation management  plan and  if they  did, did  they                                                               
substantially comply with it. That  is what is going to determine                                                               
liability for vegetation inside the right-of-way.                                                                               
He summarized  that the  section in  the bill  sets the  rules of                                                               
liability  in a  clearer way  than just  a common  law negligence                                                               
3:56:07 PM                                                                                                                    
MS. MOSS stated that she  thought Senator Kiehl was right because                                                               
the  miswritten   section  incorrectly  applies   the  precluding                                                               
liability to  paragraph (a)(1) and  it should  preclude liability                                                               
for all that section, paragraphs (a) and (b).                                                                                   
VICE-CHAIR COGHILL  said his office  will have to ask  their bill                                                               
drafter for assistance.                                                                                                         
SENATOR  BISHOP   commented  that   the  intent  is   to  protect                                                               
ratepayers  from  not paying  for  something  that they  are  not                                                               
responsible for.                                                                                                                
VICE-CHAIR  COGHILL said  the  intent  is to  draw  a clean  line                                                               
between  liability  responsibilities.  He said  his  office  will                                                               
address the confusion caused by line 6 on page 2.                                                                               
MS.  MOSS suggested  that homeowners  make  sure they  understand                                                               
what  their  liability  is   under  their  homeowner's  insurance                                                               
coverage. She  noted that most  utilities carry up to  $2 million                                                               
in liability insurance for right-of-way damages.                                                                                
SENATOR BISHOP remarked that GVEA  in Fairbanks would rather send                                                               
a bucket truck and two guys to take  down a tree then to send two                                                               
line-trucks in the  dead of winter to  put in a new  pole and new                                                               
3:58:23 PM                                                                                                                    
SENATOR   GIESSEL  agreed   and  noted   that  Chugach   Electric                                                               
Association in  Anchorage would  also be happy  to help  remove a                                                               
VICE-CHAIR  COGHILL remarked  that the  utilities have  worked on                                                               
vegetation management,  but liability becomes a  key question due                                                               
to the fires in California.                                                                                                     
MR.  LEMAN  stated  that most  homeowner  insurance  would  cover                                                               
damage to homes and businesses from wildfire.                                                                                   
He suggested that line 6 on  page 2 is correctly written. He said                                                               
he would  be concerned  if rewriting  [paragraph (b)]  results in                                                               
reimposing a negligence standard for  trees outside of the right-                                                               
of-way when the  bill is trying to  say there is not  going to be                                                               
liability  in  that circumstance.  He  added  that liability  for                                                               
vegetation within the  right-of-way is going to  be determined by                                                               
the vegetation management plan.                                                                                                 
VICE-CHAIR  COGHILL said  the committee  will revisit  [paragraph                                                               
(b)]  to make  sure  the liability  ladder  of responsibility  is                                                               
properly in context. He suggested  that the legal drafter for the                                                               
bill will assist.                                                                                                               
4:00:46 PM                                                                                                                    
VICE-CHAIR COGHILL  announced that  public testimony  will remain                                                               
open for SB 193.                                                                                                                
He commented that transmission issues  in Alaska and the Lower 48                                                               
are getting tougher.                                                                                                            
4:01:19 PM                                                                                                                    
VICE-CHAIR COGHILL held SB 193 in committee.                                                                                    

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