Legislature(1997 - 1998)
08/18/1998 12:00 PM House EUR
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
JOINT COMMITTEE ON ELECTRIC UTILITY RESTRUCTURING
August 18, 1998
12:00 p.m.
COMMITTEE CALENDAR
ELECTRIC UTILITY RESTRUCTURING, PUBLIC TESTIMONY
TAPE(S)
98-5, SIDES A & B
98-6, SIDES A & B
98-7, SIDES A & B
NOTE: These minutes were prepared by Co-Chairman Rokeberg's
staff.
CALL TO ORDER
REPRESENTATIVE NORMAN ROKEBERG, Co-Chairman, convened the Joint
Committee on Electric Utility Restructuring meeting at 10:15 a.m.
PRESENT
Committee members present at the call to order were Representative
Dyson, Representative Austerman (via teleconference),
Representative Davies (via teleconference), Co-Chairman Rokeberg,
Co-Chairman Sharp and Senator Leman. Also present via
teleconference was Senator Adams' staff and Senator Taylor's staff.
Also present via teleconference was Senator Green and/or staff.
Also attending:
Sam Cotten, Chairman, Alaska Public Utilities Commission (APUC);
Charles McKee; Carol Heyman, Chugach Electric; Randy Cornelius,
City and Borough of Sitka, Electric Department; Robert Wilkinson,
Copper Valley Electric; M. P. (Bert) Shaw; Hal Borregg, Bethel
Utilities; Howard Garner, Alaska Power and Telephone; Ernie Meier,
Alaska Regional Hospital; Mary Ann Pease, Aurora Power; Walter
Sapp, Kodiak Electric; Donn Wonnell, Counsel, ML&P; Allan Yost;
Eric Yould, Alaska Rural Electric Cooperative Association (ARECA);
Dr. Peter Fox-Penner, The Brattle Group on behalf of ARECA; Gayle
Knepper, Chugach Electric Association; Dave Lappi, Growth
Resources; Paul Morrison, APUC; Meera Kohler, ML&P; Dick Barnes,
Enstar; Ken Langsford, Southeast Service Corporation; Dwight
Ornquist, APUC; Earl Ausman; Bruce Vergason, Alaska Fuel; Robert
Hansen, Golden Valley Electric; Glenn Clary, Anchorage Baptist
Temple; Mike Kelly, Golden Valley Electric; Mike Berry, Dimond
Center; Steve Bushong, Nushagak Electric; Barbara Jewel; Vince
Beltrani; Pat Jasper; Ann Robinson, Alaska Sales and Service; Mike
Notar (Teleconference Juneau); Robert Wiseman (Teleconference
Kenai).
SUMMARY OF INFORMATION
OPENING REMARKS:
CO-CHAIRMAN ROKEBERG: Calls roll welcomes all committee members
and people attending meeting either in person or by teleconference.
Mentions, ARECA Convention in Wasilla, Thursday morning. Announces
revision in program. Would like to request that anyone who has a
time constraint please let us know as soon as possible and we will
hear your testimony first. Will turn over to my Co-Chairman Sharp
for any opening comments, and hear from committee members then will
proceed with testimony. Looking forward to hearing the testimony
on this very important issue. After hearing all testimony if we
have the time, would like to have a short round table discussion.
CO-CHAIRMAN SHARP: No comments other than to say the next meeting
will be in Fairbanks, September 16, 1998 for public testimony.
CO-CHAIRMAN ROKEBERG: Asks if any other committee member has
comments.
REPRESENTATIVE DYSON: Briefly talks about the Year 2000 Conference
he attended before this committee meeting.
DICK BARNES, President, Enstar Natural Gas Company: Enstar serves
about one hundred thousand customers. Does not have a big stake in
the deregulation of electric power, but has a few observations to
share with the committee. Please carefully consider the consumer.
Please carefully consider this issue. Is concerned about a
possible monopoly as a result of deregulation and prices going up
for consumers.
KEN LANGSFORD, Facility Manager, Southeast Service Corporation, 320
West 5th Avenue, Suite 219, Anchorage, Alaska, (907) 258-4003:
States his company is in favor of the restructuring of electric
utilities. His company gets a discount on their natural gas bill
and wants this same type of arrangement with regards to electric
costs.
DR. PETER FOX-PENNER, The Brattle Group, on behalf of ARECA, 1133
20th Street, Suite 800, Washington, DC. 20036, (202) 955-5050:
See written testimony in committee file.
SAM COTTEN, Chairman, Alaska Public Utilities Commission (APUC):
Submitted memo on contract time lines. Submitted draft Black and
Veatch Report. Is here as a resource to the committee. Goes into
pilot programs, and regulatory dockets, touched on what
Commissioner Ornquist spoke on at the August 6, 1998, committee
meeting. Mentioned case between Chugach Electric and ML&P. States
the APUC does have the authority to allow competition, but service
areas by law are exclusive.
CHARLES MCKEE: See written testimony in committee file.
ROBERT WILKINSON, Copper Valley Electric Association: See written
testimony in committee file.
ERNIE MEIER, President, Chief Executive Office of Alaska Regional
Hospital, 2801 DeBarr Road, Anchorage, Alaska (907) 264-1713: Asks
the committee to favorably consider deregulation. States hospital
could potentially save substantially if they were able to
competitively bid. Hospital competitively bids everything from
construction to major medical equipment and supplies. Since
telecommunications has been deregulated, Alaska Regional Hospital
has been able to negotiate with Anchorage Telephone Utility (ATU)
and will have an 11.9 percent saving for $23,100 by competitively
bidding their long distance carrier alone. Currently served by
ML&P; Mr. Meier approached Chugach Electric, received a proposal
from Chugach which would save Alaska Regional Hospital 11.3 percent
on their electric bill. In 1997, they paid ML&P $662,700 for
electricity. We can have a $75,000.00 or 11.3 percent if
competition were permitted. That's $6,200 per month over $200 per
day just in savings alone.
DONN WONNELL, Counsel for ML&P: See written testimony in committee
file.
DAVE LAPPI, Chairman, Growth Resources: Is the developer of the
state's first natural gas development in Houston, Alaska. Has a
handle on the technology of open gas production in a fairly
populated place like Houston, would like to take that same concept
and move it into rural Alaska where electricity prices and energy
in general are fairly expensive. Two hundred twenty stand alone
electric utilities in rural Alaska. His company would like to
participate in supplying the Railbelt with electricity. Mr. Lappi
is in favor of deregulation in the electric utility industry.
Request the legislature make it possible for small companies to
participate in the electrical market.
EARL AUSMAN: Competition can take place in the Railbelt. States
committee needs input of experts in the field of electrical
industry, such as engineers who have worked in the industry. Must
put in place rules and regulations to help protect the consumer if
the electric utilities are deregulated.
GLENN CLARY, Assistant Pastor, Anchorage Baptist Temple on behalf
of Dr. Jerry Prevo: See written testimony in committee file.
MIKE BARRY, 800 East Dimond Boulevard, Suite 3-500, Dimond Center,
Anchorage, Alaska, (907) 344-2581,: Is very much in favor of
competition. States deregulation will benefit Alaska, as with
competition, there will be lower prices and this will help to
attract new business to Alaska. Competition would help the Dimond
Center, as it would lower their electric costs.
CO-CHAIRMAN ROKEBERG calls for a 15-minute recess will reconvene at
3:05 p.m.
CO-CHAIRMAN ROKEBERG calls meeting back to order at approximately
3:15 p.m.
BRUCE VERGASON, Plant Manager, Signature Flight: See written
testimony in committee file.
VINCE BELTRAMI: Chugach Electric consumer, questions survey of
1,400 Anchorage residents, that show 91 percent surveyed felt that
they should have the right to choose their power company. What was
the make up of the survey? Questions whether people who were
surveyed were told of the downside of deregulation. Very satisfied
with service and cost of service from Chugach Electric. Feels that
business will get a discount on their electric bills but feels like
the residential customer will have to make up the difference for
this discount given to business owners.
BARBARA JEWEL: Chugach Electric consumer also a member of
International Brotherhood of Electrical Workers, Ms. Jewel is
testifying for herself and not as a representative of IBEW. Has
traveled to the Lower 48 where deregulation has occurred in the
electric industry. The average consumer is not happy with the
results of deregulation. The service has deteriorated; the rates
have gone higher. Gave examples of how the service has
deteriorated. As a consumer, Ms. Jewel does not want to have her
service deteriorate and cost go up because of deregulation.
ANN ROBINSON, Alaska Sales and Service: Believes in the free
market concept. We provide the best possible product and the best
cost for service at the lowest possible price in order to be
competitive. Their customers have a choice as to where they
purchase and have their cars repaired Alaska Sales and Service
feels consumers should have the same choice when it comes to
electric service. Alaska Sales and Service is the 17th largest
customer that the electric company they are assigned to has;
electricity is one of their major costs. They have no real control
as electricity is a necessity and it would be more cost effective
for them to be able to choose an electric company that gives them
the lowest possible price.
ERIC YOULD, Executive Director, ARECA: See written testimony in
committee file.
CO-CHAIRMAN ROKEBERG closes the public hearing portion of the
committee meeting after asking if anyone else would like to
testify. Committee will discuss what direction they are going in
and how to proceed.
Engagement with APUC: Senator Leman will Chair, Representative
Dyson and Representative Davies will be on this subcommittee.
Purpose of this subcommittee is to develop a consensus. Co-
Chairman Rokeberg would like a report at the next joint committee
meeting which will be September 16, 1998, Fairbanks Legislative
Information Office, 10:00 am. Senator Leman requests written
statements, comments, suggestions by August 28, 1998. Chugach
Electric submits a 4-point letter that is submitted to the
committee. Further discussion on how long this process could take
to get through the legislative process.
CO-CHAIRMAN ROKEBERG: Brings Dr. Fox-Peneer to the table
DR. FOX-PENNER: Agrees to make himself available to the committee
and sub-committee. He states that his company will not bid for
pilot project.
CO-CHAIRMAN ROKEBERG: Calls Don Edwards, Chugach Electric to come
sit with the committee and give his thoughts.
DON EDWARDS, Chugach Electric: Agrees that a consensus is needed
and is a good idea. States his concerns about economic dispatch.
He is against a pilot program as there is too great a chance for
"gaming."
CO-CHAIRMAN ROKEBERG adjourned the Joint Electric Utilities
Restructuring committee meeting at 4:25 p.m.
COMMITTEE ACTION
The committee took no action.
ADJOURNMENT
The meeting adjourned at 4:25 p.m.
NOTE:
The meeting was recorded and handwritten log notes were taken. A
copy of the tape(s) and log notes may be obtained by contacting the
House Records Office at 130 Seward Street, Suite 211, Juneau,
Alaska 99801-1182, (907) 465-2214, and after adjournment of the
second session of the Twentieth Alaska State Legislature, in the
Legislative Reference Library.
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