04/10/2002 10:38 AM Senate RLS

SENATOR COWDERY  moved to calendar SB 324-PUBLIC  UTILITIES EXEMPT                                                          
FROM  REGULATION   with  its  accompanying  fiscal   note  at  the                                                          
Chairman's discretion.                                                                                                          
                                                                                                                                
SENATOR  ELLIS  asked if  the  idea  of SB  324  is to  allow  the                                                              
Regulatory  Commission  of Alaska  (RCA)  to continue  to  protect                                                              
consumers  through the  regulatory  process if  a private  utility                                                              
enters Ketchikan.                                                                                                               
                                                                                                                                
SENATOR  ROBIN TAYLOR,  sponsor  of  SB 324,  said  the bill  will                                                              
continue  the status quo.  He explained  that most  municipalities                                                              
that own utilities  are exempt from regulation  because they elect                                                              
the  very people  who  regulate  the utility  therefore  requiring                                                              
municipal utilities  to be regulated by the RCA  has always seemed                                                              
duplicative.  He  noted  the  issue  is complex  in  the  case  of                                                              
Ketchikan    because    the    possible     competition    is    a                                                              
telecommunications  system  that will  only take  a  piece of  the                                                              
market.  However,  because  it  will   be  subject  to  regulatory                                                              
enforcement by  RCS, all utilities  in Ketchikan would  be subject                                                              
to RCA's  regulatory blanket. Sadly,  there is no  regulation that                                                              
RCA can do  other than to grant  a certificate to the  new entrant                                                              
to   the  field;   the  RCA   is  preempted   under  the   Federal                                                              
Communications Act.  Yet, the mere  fact that an entrant  has come                                                              
into the  market sweeps  all of  the other  utilities under  RCA's                                                              
purview.                                                                                                                        
                                                                                                                                
SENATOR  ELLIS said  he  agrees with  the  bill  and supports  the                                                              
concept but noted  it is ironic that the legislature  must use its                                                              
power  to  protect  a community  from  predation  by  the  private                                                              
sector, especially  when the Majority  argues that  competition is                                                              
good.                                                                                                                           
                                                                                                                                
SENATOR TAYLOR indicated  that the private company  can still come                                                              
in to the  market but the regulatory  aspects of the RCA  will not                                                              
be invested on the community.                                                                                                   
                                                                                                                                
SENATOR ELLIS  said he  will join with  Senator Taylor  to protect                                                              
consumer interests in Ketchikan.                                                                                                
                                                                                                                                
The  Chairman  noted that  with  no  objection,  SB 324  would  be                                                              
calendared.