Legislature(1997 - 1998)
03/07/1997 03:24 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 7, 1997
3:24 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chairman
Representative John Cowdery
Representative Jerry Sanders
Representative Joe Ryan
Representative Tom Brice
Representative Gene Kubina
MEMBERS ABSENT
Representative Bill Hudson
COMMITTEE CALENDAR
* HOUSE BILL NO. 161
"An Act relating to deregulation of public utilities furnishing
collection and disposal service of waste material."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 161
SHORT TITLE: DEREGULATION OF GARBAGE UTILITIES
SPONSOR(S): REPRESENTATIVE(S) JAMES, Kohring
JRN-DATE JRN-PG ACTION
02/25/97 466 (H) READ THE FIRST TIME - REFERRAL(S)
02/25/97 466 (H) LABOR & COMMERCE
03/06/97 570 (H) COSPONSOR(S): KOHRING
03/07/97 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE JEANNETTE JAMES
Alaska State Legislature
Capitol Building, Room 102
Telephone: (907) 465-6822
POSITION STATEMENT: Sponsor of HB 161.
SAM COTTEN, Chairman
Alaska Public Utilities Commission
1016 West Sixth Avenue
Anchorage, Alaska 99501-1963
Telephone: (907) 276-6222
POSITION STATEMENT: Answered questions on HB 161.
ALYCE HANLEY, Commissioner
Alaska Public Utilities Commission
1016 West Sixth Avenue
Anchorage, Alaska 99501-1963
Telephone: (907) 276-6222
POSITION STATEMENT: Answered questions on HB 161.
ROBERT LOHR, Executive Director
Alaska Public Utilities Commission
1016 West Sixth Avenue
Anchorage, Alaska 99501-1963
Telephone: (907) 276-6222
POSITION STATEMENT: Answered questions on HB 161.
LARRY KELLY
Kelly and Associates
331 Gold Claim Avenue
Fairbanks, Alaska 99712
Telephone: (907) 452-7542
POSITION STATEMENT: Testified on HB 161.
GLEN THOMPSON
Tongass Sanitation, Incorporated
P.O. Box 7701
Ketchikan, Alaska 99901
Telephone: (907) 225-5561
POSITION STATEMENT: Testified on HB 161.
BOB DOYLE, Assistant Superintendent
of Finance
Mat-Su School District
1900 Porcupine Trail
Wasilla, Alaska 99687
Telephone: (907) 376-3172
POSITION STATEMENT: Testified in support of HB 161.
PETE KINNEEN, Co-Owner
Commercial Recycling Center
P.O. Box 870070
Wasilla, Alaska 99687
Telephone: (907) 279-3323
POSITION STATEMENT: Testified on HB 161.
FRED MORINO, Hauler
Arrow Refuse
3200 Hospital Drive
Juneau, Alaska 99801
Telephone: (907) 586-6255
POSITION STATEMENT: Testified against HB 161.
JOEL GRUNWALDT, Director
Department of Solid Waste Services
Municipality of Anchorage
P.O. Box 196650
Anchorage, Alaska 99519
Telephone: (907) 343-6262
POSITION STATEMENT: Testified on HB 161.
MIKE MEATH, President
Star Sanitation
2090 Van Horn Road
Fairbanks, Alaska 99701
Telephone: (907) 452-2009
POSITION STATEMENT: Testified against HB 161.
ACTION NARRATIVE
TAPE 97-17, SIDE A
Number 001
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce
Standing Committee to order at 3:24 p.m. Members present at the
call to order were Representatives Rokeberg, Cowdery, Sanders,
Brice and Ryan. Representative Kubina arrived at 3:30 p.m.
HB 161 - DEREGULATION OF GARBAGE UTILITIES
Number 025
CHAIRMAN ROKEBERG announced the committee would address HB 161,
"An Act relating to deregulation of public utilities furnishing
collection and disposal service of waste material."
Number 057
REPRESENTATIVE JEANNETTE JAMES, sponsor of HB 161, read the
following statement into the record:
"House Bill 161 deletes the authority of the Alaska Public
Utilities Commission (APUC) to regulate the furnishing of
collection and disposal service of garbage.
"Alaska appears to be one of the few states that has this type of
utility regulated on a partial statewide basis, some cities
currently set their own rates, as Haines does. Perhaps garbage
rates should be under local control if they are to be monopolies at
all. Competition is healthy, and should be encouraged whenever
possible.
"I have been, as a state representative, involved in two attempts
at regulation of garbage monopolies by the APUC, wherein the APUC
were and are unable to deal with garbage utilities in a timely
manner due to problems such as APUC personnel and commissioner
turnover, federal mandates related to telecommunications issues,
and other excuses. Perhaps the APUC simply does not have the time,
interest, or money to properly regulate this class of utility.
"I offer HB 161 as a point of beginning, an opportunity to
encourage open discussion on this issue, to hopefully provide
solutions to resolve what appears to be an ongoing concern. The
question is, `Should the state or any other governmental agency
regulate the furnishing of collection and disposal service of
garbage?'"
REPRESENTATIVE JAMES noted she currently isn't asking for any
action on the bill, but would like to wait a couple of weeks after
it is determined what the proper way is to go. She said she
believes it is a very important issue. She stated she has heard
from a lot of the garbage companies and some are in favor of the
legislation and some are opposed. She gave committee members a
copy of a position paper from Anchorage Refuse, Incorporated (ARI).
Number 261
CHAIRMAN ROKEBERG said the position paper would be included in the
committee file.
REPRESENTATIVE JAMES noted Walt Wilcox of her staff is present and
he is the staff person for the Administrative Regulation Review
Committee from which the legislation originated.
REPRESENTATIVE JOHN COWDERY said the municipality of Anchorage is
in the garbage business and there isn't much comfort in the fact
that since they are in the business themselves, they may not
protect another company's interest.
Number 380
REPRESENTATIVE JAMES responded that scenario is probably is true.
She stated she doesn't believe that it is proper for the
municipality to be in the garbage business. It should be fully
competitive and the municipality shouldn't be calling the shots.
REPRESENTATIVE COWDERY said the fact is that they are in the
business. He said he worked for about five or six years trying to
get them out of the business, but didn't have success.
Representative Cowdery explained he has a problem that the
municipalities or the city governments would take over regulations
after a given time.
Number 440
REPRESENTATIVE JAMES said that would be an option. The other
option would be for them not to take it over. It could be totally
unregulated and fully competitive. She said it would be up to the
people in the districts as to what they wish to do about that. It
would be a public policy issue. Representative James said she
understands Representative Cowdery's concern. She believes there
are severe problems with the way garbage has been managed over the
years. We have created monopolies and then allowed competition
within the monopolies. Representative James pointed out the APUC
has allowed competition, but it is restricted competition. She
said the market ought to drive the system. Representative James
indicated she has received complaints that APUC doesn't respond to
questions that have been asked. She said there is a systemic
problem. The place where the problem is felt the most is in the
garbage service.
REPRESENTATIVE COWDERY said most of the complaints are from her
district, but there have been complaints from around the state.
Number 588
REPRESENTATIVE JOE RYAN questioned what is done in the rural areas
where there are small markets and there are monopolies that charge
whatever they can bear and then blame in on gypping from Seattle.
He asked how this will be addressed.
REPRESENTATIVE JAMES said it would depend on what caused the
monopoly. If the monopoly is caused because only one person in a
small area has a certificate of convenience from the APUC,
therefore, they're ripping the public off, that's a supply and
demand problem. If it gets too painful for the people, somebody
else will come along and compete. The problem is when they make an
application to the APUC, if the APUC thinks it's an area that's not
big enough to have two people, then they're not going to accept the
threat to come in unless compelling interest has been shown.
REPRESENTATIVE JAMES said the issue was raised by the city of Healy
where there are approximately 1,700 people in the entire borough.
The problem in Healy was a person had a certificate of convenience
for providing the picking up of garbage and he passed away. At
about the same time all the rules and regulations that came down on
landfills, the landfill there was managed by the Healy Fire
Department, pretty much on a volunteer basis. The Healy Fire
Department decided they couldn't manage the landfill anymore
because of the overwhelming amount of responsibility and liability
they had by managing a landfill. The person who had the license is
dead and his family isn't following up and following through. The
residents now have to haul their garbage to Nenana, which is about
75 miles away. She questioned who is going to haul the garbage.
Representative James explained several people said they would get
a truck and haul the garbage, so they all made application to be
able to haul garbage. Those people never received a response from
the APUC. The garbage was piling up and nobody was hauling the
garbage. They finally started hauling it for free because they
couldn't charge as they didn't have a certificate of convenience.
She said that issue was finally resolved due to her interference.
Representative James said she has received complaints from Wasilla,
Anchorage, Ketchikan and Fairbanks.
Number 810
REPRESENTATIVE RYAN explained this same concern echoes a complaint
from last year when they tried to deregulate electric utilities.
He said Mike Kelly from Golden Valley Electric Association (GVEA)
said they didn't want deregulation because the big outfits would
come in, skim off the cream and leave the little more nonprofitable
utilities with hardly the ability to survive. That would mean a
reduction in service to the rural communities. They felt it should
stay the way it is so there would be adequate service. They didn't
want someone to come in and skim off the cream. Representative
Ryan said there is the same concern with garbage in that a large
company that is well funded would come in, take the choice routes
and leave the people in peripheral areas, where it's more expensive
to haul, on their own or somebody else would have to try and make
it a living doing it where it wouldn't be profitable. He stated he
doesn't think government has business in the marketplace.
Number 877
REPRESENTATIVE JAMES said that issue has been brought to her
attention. She said in the Fairbanks area there was a similar
situation that happened under APUC regulations. It was where
competition was allowed and the competition destroyed some of the
players. She said it has been her experience that the APUC hasn't
made a lot of protection for that. The APUC exists and all those
conflicts continue to exist with the APUC. She said she doesn't
see where they're solving that problem.
Number 946
CHAIRMAN ROKEBERG questioned if the problem is with the APUC having
a problem in responding or is it a philosophical issue relating to
deregulation and open competition.
REPRESENTATIVE JAMES informed the committee that her personal
position is that garbage ought to be competitive and that we ought
not to be regulating it. The market forces should drive the
system, but that is not the reason the bill is before the
committee. The bill is before the committee because of problems
with the APUC not responding to the needs around the state.
Representative James explained she received a complaint from
someone in Fairbanks where a decision was made on an application
last September and as of today, he hasn't received a response.
There was another case where a person hasn't received a response
and it has been over a year. She noted this was something that
came through the Administrative Regulation Review Committee, which
she chairs, that prompted her to introduce legislation.
Number 1066
CHAIRMAN ROKEBERG asked if that complaint was from Hite
Construction.
REPRESENTATIVE JAMES answered in the affirmative.
CHAIRMAN ROKEBERG asked Representative James if her testimony is
that the APUC has not issued that certificate despite of the fact
that it appears that they agreed to issue it.
REPRESENTATIVE JAMES said the APUC told Mr. Hite that a decision
was made and that he had been approved. There was nothing in
writing. It was just during a conversation.
Number 1095
REPRESENTATIVE GENE KUBINA asked if that is still the case.
REPRESENTATIVE JAMES responded, "That is still as of today."
CHAIRMAN ROKEBERG asked Mr. Cotten to give an overview of the
APUC's position regarding waste regulation.
Number 1174
SAM COTTEN, Chairman, Alaska Public Utilities Commission, testified
via teleconference. He explained that the APUC would be happy to
consider a position on the bill, but hasn't done so as of yet.
Traditionally, they wait until the legislature asks for a position.
They then hold a public meeting and if they can come to an
agreement, they would then inform the legislature of their
position.
REPRESENTATIVE JAMES said she hasn't specifically not requested an
opinion from the APUC Board. She said in speaking to Chairman
Cotten, he had indicated they would only do that if she made a
written request and she hasn't done that.
Number 1229
MR. COTTEN informed the committee that the APUC isn't at liberty to
discuss the merits of the cases being talked about. He referred to
the Hite Construction application and said a couple of things have
happened since the panel considered the case. Two of the
commissioners that were on the panel are no longer on the
commission. If a decision had been reached on that, somebody is
misunderstanding what has happened. He said, "It sounded as though
someone was told that the commission had agreed to approve the
application and told somebody that but we just haven't issued the
written order. Was that somebody's understanding?"
CHAIRMAN ROKEBERG answered in the affirmative.
MR. COTTEN said the APUC staff recommended the approval of the
certificate, but the commission didn't take any action for or
against it. He noted Commissioner Hanley was on that panel. Mr.
Cotten said, "If somebody got the impression that the commission
had approved it, but just hasn't written out the order, that was
incorrect."
Number 1306
ALYCE HANLEY, Commissioner, Alaska Public Utilities Commission,
said there has been no written order and that is unfortunate. A
decision was made, but the written orders did not go out. There
has been no public communication about what that decision was. She
noted she is the only original member left on that panel. There
are two new panel members and they hope to discuss the issue and
come to a decision soon.
Number 1362
MR. COTTEN added that in addition to the application in Fairbanks,
there is also an application in Anchorage for at least two people
to compete with the existing service provider. There is also one
on the Kenai Peninsula. He noted they are not able to talk about
the merits of the case while the cases are pending, but they
haven't been swept aside and they are doing the best they can under
the circumstances.
CHAIRMAN ROKEBERG asked what the time lines are in issuing written
decisions.
MR. COTTEN responded that there are no written requirements for
time lines. There are different response times. He noted they
currently have a backlog and they aren't happy about that. They
are making efforts to improve that. They have also arranged for
additional training for the commissioners and staff so more people
can be involved with the drafting and the final writing of the
orders which are very technical. Mr. Cotten said they have asked
the legislature for two more paralegals to assist. There has
already been approval from the Governor's office. The APUC is also
attempting to work with the utility organizations such as the
Alaska Telephone Associations and the Alaska Rural Electric
Association. Mr. Cotten referred to the question of how long does
it take them to write an order and said he doesn't have an answer,
but they do it as quickly as they can. Sometimes it is not that
easy to come to a decision.
Number 1486
CHAIRMAN ROKEBERG asked if there is a percentage of revenues that
the refuse wage companies contribute to the maintenance of the
APUC.
MR. COTTEN said it is between 3 percent and 4 percent of the APUC's
budget.
CHAIRMAN ROKEBERG questioned how much money that is.
Number 1507
ROBERT LOHR, Executive Director, Alaska Public Utilities
Commission, said the APUC receives approximately $130,000 a year.
CHAIRMAN ROKEBERG asked what other states regulate garbage
collection similar to the way Alaska does.
MR. COTTEN said they had hearings last fall about the application
to compete in Anchorage. The expert witnesses provided by both
sides used examples of other communities around the country. Some
resemble Anchorage and some don't. In Seattle, they cut the city
up into different districts and only allow one provider per
district. Other communities have gone to wide open competition
with various degrees of success. Mr. Cotten noted before he was on
the commission, the commission did allow competition. It seemed
like the pattern was that two companies would go head to head. One
would fail and the other would consume the loser and there would be
one company again.
Number 1589
CHAIRMAN ROKEBERG referred to having a deregulated regime and asked
if under existing statutes, would the municipalities have the
ability or right to regulate within their boundaries. He also
asked Mr. Cotten if he has an opinion to the impact of the cost of
service to the consumers.
MR. COTTEN responded that he thinks that the municipalities will
have an interest in it. He said in Anchorage, the municipality
does part of the garbage service and they require the people to
take the service. The authority for that is the protection of the
health and safety of the community. You can't just let the garbage
pile up, so the city has taken some responsibility to make sure
that doesn't happen.
Number 1641
CHAIRMAN ROKEBERG asked what the APUC's statutory responsibilities
are regarding waste regulation.
Number 1667
MR. LOHR explained his understanding is the commission is basically
involved in two areas of regulation with respect to refuse. The
commission is required to issue certificates of public convenience
and necessity to any regulated public utility that is found by the
commission to be fit, willing and able to provide refuse service.
That is a determination of basic fitness to operate. About 43
certificated refuse facilities operate in Alaska at the current
time. If the annual operations of those utilities exceed a certain
threshold, then those utilities are economically regulated by the
commission. That means the commission is involved as it is for
elected telephone utilities in regulation of the rates, services
and practices of those utilities, including their tariff
provisions. Mr. Lohr said to that extent, currently there are 13
regulated public refuse utilities in the state. Those tend to be
the larger utilities operating in the more urban areas. For
example, the commission looks at the rates, services and practices
for Anchorage Refuse, Incorporated.
MR. LOHR said in addition, when a certificate is applied for by a
utility, if there is an existing certificate already covering that
service area, then the commission is forced to make a decision of
whether or not competition among refuse utilities would be in the
public's interest. Those cases tend to be more complex and
controversial ones. The appropriate market structure is one of the
key decisions in those cases and tend to take longer than the
regular plain garden certificate or rate cases.
Number 1773
REPRESENTATIVE COWDERY asked if he is correct in saying that the
Municipality of Anchorage regulates and requires the public to
utilize their services.
MR. COTTEN said it is his understanding that the municipal
ordinance requires the residents in that service district to take
the service.
REPRESENTATIVE COWDERY asked if that is the municipality's service
or could it be someone in the private sector that provides that
same service.
MR. COTTEN responded that the municipality is the only company that
provides service in that area and has a certificate. He noted the
APUC doesn't economically regulate the city. It is up to the
municipality as to whether they want competition in that area.
REPRESENTATIVE COWDERY asked if the APUC regulates the rates for
the Municipality of Anchorage.
MR. COTTEN indicated they don't.
Number 1840
REPRESENTATIVE COWDERY questioned how the municipality's boundaries
were established.
MS. HANLEY said she thinks the boundaries are a small section of
mid-town. It is apparently the old boundaries of the city where
the garbage utility operates.
Number 1878
CHAIRMAN ROKEBERG said the APUC doesn't regulate the municipality's
refuse service, but they do regulate the Anchorage Refuse Service.
MS. HANLEY said that is correct. She explained municipal utilities
are exempt and the APUC doesn't regulate any municipal utilities.
CHAIRMAN ROKEBERG asked if the APUC could not certify a competitor
for the municipality's boundaries.
MR. COTTEN explained said they currently have a pending application
from somebody who wants to compete there. He referred to Title 29
and said there is a section that talks about the municipality
having the right to buy out any of the competitors the APUC lets in
there. Mr. Cotten said the city allows competition with some of
their commercial services. They contract some of it out and he
believes they have more than one person doing some of their work
for them.
Number 1941
REPRESENTATIVE RYAN said he serves on a subcommittee that reviewed
the APUC's budget a couple of weeks ago. He said as he remembers,
the APUC has about 35 or 40 employees.
MR. COTTEN said there is a total of 40 employees including the five
commissioners.
REPRESENTATIVE RYAN said he has information before him from Mr.
William Brunelle of Commercial Refuse, Incorporated. Mr. Brunelle
stated he spent a lot of time and $100,000 just to get a hearing
and hasn't received any communication for two years. There is also
a person by the name of Berry Hite from Fairbanks has been waiting
for 18 months for a response. He read from a letter from Mr. Hite
that says he is forbidden to talk to the commissioners. The only
contact Mr. Hite can have is with Patricia Clark, the hearing
officer. It says he has called every week and she can't help him
because she isn't allowed to tell him anything. Representative
Ryan said with 40 people, he has difficulty understanding why these
things can't be resolved in a more timely manner. Perhaps there
are too many in-house rules that they have to conform with. He
said he can't understand why people should have to wait two years
and spend $100,000 to get a hearing.
MR. COTTEN said he can't argue with Representative Ryan. He
referred to the Anchorage case and said hearings have been held and
the commission has met on the subject. They are attempting to
complete their work. Mr. Cotten noted he can't discuss the reasons
why they are having difficulty, but he is hopeful that it will be
resolved soon. He said they don't think it is acceptable to wait
that long and they are taking steps to improve their ability to act
more timely.
Number 2127
REPRESENTATIVE KUBINA said, "Wouldn't it seem a lot simpler just in
any kind of a place where there is a municipality with a local
government, that a local government deals with this totally, and we
as a state overall agency stay out of it? And if there are places
that are not to have local government I can understand that -- I
guess I'm asking why do we need you involved in the municipality of
Anchorage or the municipality of Fairbanks or any of them?"
MR. COTTEN said his personal opinion is he agrees with
Representative Kubina.
Number 2108
CHAIRMAN ROKEBERG said he thinks the state has a constitutional
mandate to be aware of what happens in terms of sanitation because
of our requirement under the constitution regarding the health of
citizens.
Number 2138
LARRY KELLY, Kelly and Associates, testified via teleconference
from Fairbanks. He noted he does management consulting for various
companies. Mr. Kelly explained his concern about deregulation of
refuse hauling, etc., stems strictly from a personal perspective in
that he doesn't want to see a reduction in the quality of life that
would result in a decrease of the regulation and the quality
requirements that are handed down by the APUC. Mr. Kelly said he
would like to see the APUC, whose mission statement is to make
decisions and promote competitiveness amongst the players, be done
in a more timely manner so that the representatives of the industry
would be able to make some decisions as to what to do with
equipment, etc.
MR. KELLY said he has never heard of the APUC trying to deregulate
telephones and pipelines. He said he would assure the committee
that if you don't get good phone service, it's an inconvenience,
but if you don't get your trash hauled, it is the beginning of a
major health problem. Mr. Kelly noted he has lived in Fairbanks
most of his life and in 1950 was the last time he saw a rat there.
He said there are some things occurring, specifically the complex
that Mr. Bartlett has out by the dump. He said by the decrease in
regulation, it creates a tremendous opportunity for rat infestation
and other vermin infestation. Mr. Kelly said he is somewhat
associated with some of the knowledge of players and he believes
they require regulation so that there is established criteria. He
noted concern regarding the APUC being able to take things up in a
timely manner.
Number 2260
REPRESENTATIVE COWDERY referred to the opportunity for rat
infestation and asked if that is a problem of the landfill or a
problem with the people who pick the garbage up.
MR. KELLY clarified it is not a problem with the North Star Borough
landfill or with the haulers at this time. He said Mr. Bartlett,
who is just across the street from the landfill on private land, is
an unregulated entity. He has been stacking paper, etc, claiming
some day that he would recycle it. On Mr. Bartlett's property
there are large quantities of paper, newspaper, etc., stacked up in
an uncontrolled manner and it would be perfect for the generation
of a rat infestation population.
Number 2313
GLEN THOMPSON, Tongass Sanitation, Incorporated, testified via
teleconference from Ketchikan. He said there are two points for
deregulating and several points against deregulating. One of the
points for deregulating is increased competition may create
efficiency and lower rates in the long term. The second point is
a reduced workload for the APUC may create a potential budget
savings for the state.
MR. THOMPSON read from his statement explaining the following
points against deregulating:
"Public health may be endangered. Regulation creates some
guarantee that garbage is collected and disposed of properly. If
public health does become an issue, who will be the new policing
agency? Local police, state troopers or will a new agency be
created to police the scofflaws?
"Service may suffer, especially residential. Competitors will
target high dollar volume, commercial customers, `the cream,' at
the expense of smaller customers.
"Residential service will not be mandated as a condition of
certification and unprofitable routes may be jeopardized.
"Commercial rates will likely drop due to increased competition
while residential rates will increase due to the labor intensive
nature of this type of service. Rates are currently developed
based on combining the commercial and residential operations.
"Monopolies are a given to get situation with regards to the refuse
industry: Limited profits, full cost disclosure, regulated
operations, reporting requirements, etc., in return for potentially
sole source certificate granted by APUC. There is clearly a
difference between having an exclusive operating area under income
restrictions and a true monopoly with little or no regulation.
This is especially true considering that unlike electricity,
telephone, sewer, etc., garbage customers have the choice to
utilize the service or not.
"Certificates granted by the APUC may have a marketable value much
like IFQs in fishing. Elimination of this license to operate may
constitute an eminent domain taking by the state and create a
financial liability for the state."
Number 2427
REPRESENTATIVE JAMES said she doesn't think Mr. Thompson has seen
the letter from Anchorage Refuse where they suggest a couple of
changes to the bill. She said one change would phase it out so we
could deal with whatever the amortization is on the cost of their
license so there wouldn't be a taking. The other issue was to
eliminate the repeal of AS 29.35.050 which would ensure that
constitutionally protected property interest of ARI and other
currently certified refuge haulers would be protected from unlawful
taking.
TAPE 97-17, SIDE B
Number 003
BOB DOYLE, Assistant Superintendent of Finance, Mat-Su School
District, testified in support of HB 161 from Wasilla. He said
deregulation of utilities is good in general and free enterprise
should be encouraged by any legislature. Mr. Doyle said he thinks
utilities should be allowed to work in a marketplace. He explained
when the Mat-Su Borough was allowed to competitively bid the same
people that had a monopoly on the school district have actually
dropped their rates by $50,000. He explained $50,000 for the
school district is a teacher in the classroom. With adequate
competition in the state, businesses could recoup their investments
in a competitive bidding environment and monopolies should be
avoided whenever possible. Mr. Doyle referred to enforcement of
regulations and making sure they (indisc.) standard of life in
Alaska is appropriate and said he isn't sure what kind of
enforcement there currently is by APUC. He said if there are 35
employees and they can't get certification back in two years, he
isn't sure how many more people there would have to be to enforce
the regulations. He said he would think deregulation would save
the state and school districts money. Mr. Doyle said he hopes the
legislature would allow deregulation to continue.
MR. DOYLE explained that Mat-Su has the city of Palmer providing
garbage service. Wasilla Refuse has a monopoly certification in a
lot of the areas. There are also areas of the borough that don't
have that monopoly. He noted there are some places in residential
areas where there is some competition. For the consumers,
competition can save even single family homeowners 40 percent to 50
percent of their garbage collection fees. This isn't just a
district issue, it can save a lot of people money. Mr. Doyle said,
"In the borough, there is some kind of an exemption where the
borough is able to move transfer sites and have folks haul it to
the main landfill. We tried to piggyback on that and we had the
borough try and handle our bids so that we could try and operate
under that and we were stopped with the lawyers. I appreciate
their diligence, but in this case, they're doing it for billable
hours and it's costing everybody, including the taxpayers, and I
think deregulation would stop that."
CHAIRMAN ROKEBERG said the school district is part of the borough
and asked why they couldn't piggyback.
MR. DOYLE said there was a threat of a lawsuit and rather then
going out to bid, and having the potential of losing a lawsuit,
they backed off and are going back to the APUC to try and get some
clarification on the issue. He said it sounds like it will be
several years down the road before they hear back from the APUC.
Number 269
REPRESENTATIVE COWDERY asked what the pickup fees are for a four
cubic yard container.
MR. DOYLE said the district doesn't have that many four yard
dumpsters. Most of them are 33 yard roll on, roll off. He said
they have actually built their own dumpsters so they don't have to
lease them from anyone. Mr. Doyle noted they have trimmed their
administrative overhead down to about 3.45 percent and are self
insured in many areas.
CHAIRMAN ROKEBERG asked Mr. Doyle when he gets his rate chart if he
would send it to Representative Cowdery and the Labor and Commerce
Committee.
Number 339
PETE KINNEEN, Co-Owner, Commercial Recycling Center, testified via
teleconference from Wasilla. He informed the committee that he
went to the APUC and they gave him did a computer read out of their
stance over the years from 1970 until the present time as to
whether they wished to be regulated or not. The essence of it is
that consistently, they have been since the beginning in favor of
being out of this regulatory phase. The Division of Legislative
Audit has done several audits in this regard and they seem to be in
favor of deregulation. He referred to an audit and said the APUC
did a survey of 49 states. He explained 29 out of the 32 states
that responded stated to the APUC that they do not regulate this on
a statewide basis at all. Mr. Kinneen said another point that was
made is that this in no way affects local government's ability to
handle the health, safety and welfare (indisc.) of the citizens.
He continued to discuss the audit in further detail and said he
would make the documents available to the committee.
MR. KINNEEN explained their commercial recycling center has been in
existence for six years and they have done some experiments and are
ready to move forward on significant serious recycling. He said
they find themselves stymieing to participate because the providers
in Anchorage have been consistently on the record that they have
elected not to provide curb side or consumer recycling because
(indisc.) particular demand for it from the consumers. Mr. Kinneen
said, "We are therefore restricted by circumstance to commercial
which means somebody - the way I detect it they're all (indisc.)
and bring it to us. So you're limited, by definition, to
commercial businesses. We found that through our own studies that
25 to 35 percent of the people in the Anchorage area would in fact
subscribe to a limited curb side recycling if it was available at
a price not exceeding what they're paying at the moment." Mr.
Kinneen said by deregulating or through some other methodology of
allowing providers to come in and offer recycling services, that
would be accomplished and there would be more recycling going on.
Number 608
REPRESENTATIVE COWDERY asked Mr. Kinneen if his recycling business
is profitable.
MR. KINNEEN indicated it is very profitable.
Number 685
FRED MORINO, Hauler, Arrow Refuse, came before the committee to
give his testimony. He explained his business is a hauling
business where they haul refuse for the public and commercial
sector to the local landfill. He indicated he has distributed
information to the committee of some of his thoughts regarding HB
161. Mr. Morino said a consideration is the economy of scale in
regards to the competitive nature of the service they provide. The
minimum expenditure in his area would be in the neighborhood of
$750,000 plus dollars just for the consideration of vehicles. For
a community the size of Juneau, it would be very difficult to say
that you could allow anyone to come in and have free competition.
He informed the committee that all states have laws on the books
regarding the handling of municipal solid waste. Mr. Morino said,
"In many states, it is allowed to be regulated by the municipality
or by the city or local government in the way they feel they should
under the direction of the state in the laws that they've provided
for the handling of municipal solid wastes." So all of the states
are regulated and they do have laws regarding the handling of
municipal solid wastes.
MR. MORINO said one of his concerns is the fact that the bill
provides no regulation regarding the handling of municipal solid
waste. The competitive factor is another interesting aspect. In
Juneau, for a capacity of 92 gallons per week they charge $22.38.
The city of Seattle charges $33.00 plus dollars for the same
service. The city of Portland charges in excess of $22.00 for a 60
gallon capacity. All of those communities have competition. The
city of Portland started out in 1989 or 1990, with 120 providers.
Today, they are down to less than 50 providers. Mr. Morino said,
"What's happening in America is there are a few large companies who
have gone out and acquired and have become very large as a
government agency or a large bureaucratic private company and are
not as efficient. And some of this now is turning again so that
the larger companies are showing less profitability although they
are still acquiring more of the market share which has been
exemplified by some of the larger banks, some of the business, as
well as in the refuse industry." Mr. Morino said it might be easy
in some of the areas in Alaska to say, "We have a large enough
population that we can handle this adequately." He said he isn't
sure that many of the smaller communities like Juneau would have
the expertise or the financial ability to say, "Handle it as well
as the APUC may be handling it for us today."
MR. MORINO said a consideration needs to be given to those areas
where there aren't regulations in place regarding the handling of
municipal solid waste. He said he thinks that is one of the
services that APUC does provide. Mr. Morino stated he hasn't run
into any obstacles in dealing with the APUC. He said he doesn't
have anything to say against them. It seems that the system works
well in most communities. If there is a perception that a
regulator, for example the APUC, has a problem or it is perceived
that they have a problem, then maybe that should be addressed. Mr.
Morino said he doesn't think that the industry is doing a poor job
in the state of Alaska.
Number 911
CHAIRMAN ROKEBERG asked Mr. Morino if he has a monopoly in Juneau.
MR. MORINO said he doesn't believe he has a monopoly. He noted he
is the only certificated hauler. The citizens of Juneau have an
opportunity to go directly to the landfill, which he has no
financial interest in. People in Juneau have a choice regarding
hauling refuse where they don't have a choice with water, sewer,
telephones or electricity.
CHAIRMAN ROKEBERG referred to utility services and pointed out that
a person could have his own septic tank, water well, satellite dish
for communications, generate electric power with a generator and
then take his trash to the landfill. Unless a person threw his
trash over the bank, they would need some type of regulated
landfill.
MR. MORINO said he would need a regulated landfill. He pointed out
the landfills will be the basis for the our municipal solid waste
at least for the next 100 years until the technological advances
change and make other options available. He said someone could
reproduce some of the utility functions that are available to them
now. Mr. Morino said he believes that self hauling would be more
expensive than the service his company provides.
CHAIRMAN ROKEBERG said Seattle has a $33 rate, but don't they have
a recycling factor.
MR. MORINO said there is a fee for recycling in Seattle. He said
he is talking about providing a similar service. So a 92 gallon
service in the city of Seattle, irrespective of recycling, would
cost 33 plus dollars a month, where in Juneau it is $22.38.
Number 1053
REPRESENTATIVE COWDERY asked Mr. Morino if they handle the large
dumpsters of four or five cubic yards.
MR. MORINO explained the largest they provide is a three yard
container. He noted they do have up to 40 yard containers as well
as compactors.
REPRESENTATIVE COWDERY asked Mr. Morino if his business services
all of Juneau.
MR. MORINO indicated they do. He said they go 30 miles out the
road. He noted he has five packer and two roll off trucks.
REPRESENTATIVE COWDERY asked what the average cost of a packer
truck is.
MR. MORINO responded that the minimum expense for a packer is
150,000 plus dollars.
Number 1114
CHAIRMAN ROKEBERG asked if there isn't a provision in statute or
regulation that provides for "gypo operators" to give limited
service.
MR. MORINO said, "Again, legally I don't know what the aspects of
that are. I think probably APUC could identify that much clearer.
There may be somebody here. I believe it's four commercial
customers under it's either nine or ten that someone can provide
that service today."
CHAIRMAN ROKEBERG said an uncertified, unregulated trash hauler
could service a limited number of sites.
MR. MORINO said he believes that is true.
Number 1168
JOEL GRUNWALDT, Director, Department of Solid Waste Services,
Municipality of Anchorage, testified via teleconference from
Anchorage. He informed the committee that within the Municipality
of Anchorage there are four certificated refuse haulers. Each of
them have specific areas. Peninsula Sanitation services Potter to
Portage. Anchorage Refuse, Incorporated, services the Anchorage
bowl, excluding what is referred to as the city service area. He
noted the city service area was the city of Anchorage at the time
of unification in 1975. Eagle River Refuse is also a certificated
carrier serving the area north of the military bases up to Eklutna.
Mr. Grunwaldt said the Department of Solid Waste Services provides
mandatory refuse collection and (indisc.) within the city services
area. They are a APUC certificated carrier, however, they aren't
economically regulated. The remaining private haulers are
economically regulated by the APUC. Mr. Grunwaldt informed the
committee that Fort Richardson and Elmendorf Air Force Base
provides their own service. Elmendorf Air Force Base provides
their service by contract and Fort Richardson is by civil service
employees. He said he doesn't have direct testimony with respect
to either endorsing or opposing HB 161. He noted they just
recently became aware of the legislation.
Number 1288
REPRESENTATIVE RYAN questioned how the municipality would be
affected if the law were to change so that they could no longer
provide garbage services.
MR. GRUNWALDT said he doesn't see HB 161 affecting the
municipality's ability to provide service. The municipality
provides a service via AS 29.35.050, where the municipality may
regulate it within its area. He said he has a legal question which
has to do with the municipal charter. The charter limits the
expansion of authority for powers that didn't exist upon
unification unless there is a vote of the people. He said Title 29
gives the municipality the power to do it, but is there a
constraint for the municipality to regulate refuse carriers outside
the city service area should HB 161 pass.
Number 1377
REPRESENTATIVE COWDERY asked Mr. Grunwaldt if the municipality has
to have the approval of the APUC to change the rates for garbage
collection.
MR. GRUNWALDT said they do not need approval. He explained that
prior to 1981, municipal refuse carriers were not regulated by the
APUC. Only the private haulers were regulated. That exemption
changed in 1981, and at the point in time, the municipality
submitted an application for a certificate as was required under
the new statute. At the same time, they requested an exemption
from economic regulation because Title 42 did provide for that
exemption. The municipality of Anchorage was granted the
exemption. He said his assumption is that it is based primarily on
the municipality's ability to regulate it by ordinance and the
historical regulation was in place prior to the state saying, "You
have to have a certificate."
REPRESENTATIVE COWDERY asked how they established their rates.
Number 1454
MR. GRUNWALDT explained their rates are established on a revenue
requirements analysis that is done annually. Their last rates were
approved in 1990. They are done by the adoption of an ordinance,
which is subject to a public hearing by the Anchorage Assembly. He
explained that from an economic standpoint, they would continue to
do a rate setting basis based on revenue requirements. He said
there would not be a impact on other utilities relating to
municipal refuse collection utility rates. Refuse collection is a
"stand alone utility," and they service private businesses provide
that are operating within the municipality wouldn't impact the
municipality's rate.
REPRESENTATIVE COWDERY asked if the municipality's rates are
comparable with the entities.
MR. GRUNWALDT said to best of his knowledge, they are the lowest in
the state.
Number 1557
REPRESENTATIVE JAMES said with deregulation of the garbage
business, that would mean that there wouldn't be the requirement of
having a certificate from the APUC. She asked what the result
would be if there wasn't the requirement of obtaining a certificate
from the APUC.
MR. GRUNWALDT indicated there wouldn't be an impact. He noted the
certificate they currently hold would be of no value.
REPRESENTATIVE JAMES asked if there is currently a value to the
certificate.
MR. GRUNWALDT said considering that it is owned by the government,
probably not.
Number 1607
CHAIRMAN ROKEBERG said if another company wanted to come in and buy
the municipality's certificate and service area, wouldn't it then
have value.
MR. GRUNWALDT said from that standpoint it would. He noted that
the municipal code would have to change.
CHAIRMAN ROKEBERG asked if a vote of 6 percent of the voters in
Anchorage would all the utility to be sold.
MR. GRUNWALDT said it would allow the utility to be sold and it has
a value in that sense.
Number 1649
CHAIRMAN ROKEBERG asked Representative James if the bill were to
pass as written, would the municipality still be able to regulate
its own refuse within its own boundaries.
REPRESENTATIVE JAMES responded that existing language says, "The
assembly acting may regulate, fix, establish and change the rates
and charges imposed." She said that doesn't change.
MR. GRUNWALDT said, "As long you don't change 29.35.050, paragraph
(A) you aren't removing authorities that the municipalities in the
state can -- you aren't taking anything away from the
municipalities."
REPRESENTATIVE JAMES indicated the bill isn't intended to do that;
however, there is an elimination of the 29.35.050 (B). It was
suggested by a witness that that repeal be eliminated.
Number 1755
CHAIRMAN ROKEBERG asked if the municipality would be willing to
open their boundaries to competition if it was mandated under state
statute.
MR. GRUNWALDT said it would be a policy decision that would have to
be established by the Administration and the Assembly. He said his
opinion is that as you open competition, in some cases you will see
the reduction of rates. In some cases, it may be a short-term
reduction of rates. Over time, it can possibly go up. He noted
they would have to consider where the competition would be allowed.
There would be very little, if any, in a residential collection
area. There would be more competition in the commercial collection
area because that is the more profitable aspect of the business.
Number 1849
CHAIRMAN ROKEBERG asked Mr. Grunwaldt if the municipality presently
allows a company like Anchorage Refuse to come into their service
area with extremely large containers.
MR. GRUNWALDT indicated they allow the collectors to collect the
roll-off units in the city service area. It is because the years
ago the utility didn't have the equipment and made the decision not
to enter that phase of the business. He noted that is by code.
Number 1884
REPRESENTATIVE COWDERY questioned what the municipality's rates
are.
MR. GRUNWALDT responded that their rates are currently $15 per
month, per household, for curbside service once a week. He
referred to the commercial rate and said it depends on the
frequency and the container size. He referred to a three yard
container, serviced once a week, and said the monthly rate is
$50.50. There is an additional charge if the customer rents the
container from the municipality before he owns it. If he owns his
own container, then there is no additional charge. He noted a
container rents for $9.50 per month.
Number 1968
REPRESENTATIVE RYAN asked how the tipping fees are established and
how they relate to the rates.
MR. GRUNWALDT explained in Anchorage, there are two separate
utilities. The rates are established by a revenue requirement
analysis. He noted the last one they did was in 1986, projecting
the opening of the new Anchorage regional landfill and central
transfer station. At that time, the rates were set both for
implementation over a three year period. One rate was in 1987,
another in 1988 and one in 1989. He noted they have not moved off
the 1989 rate of $45.00 per ton.
Number 2031
REPRESENTATIVE JAMES asked if anything has happened in Anchorage
where a small operator came in took the amount of pick up sites
that they could do under existing law without having to go through
APUC.
MR. GRUNWALDT informed the committee members they have exempted
approximately 70 of the large commercial, retail and wholesale type
businesses that require use of the roll off units. They are
serviced by three different haulers.
REPRESENTATIVE JAMES asked if Carrs is one customer or many
customers.
MR. GRUNWALDT informed Representative James that Carrs is many
customers. He noted the APUC defines customers as the location of
a pick up service.
Number 2106
REPRESENTATIVE RYAN asked if there is an average weight per yard of
refuse.
MR. GRUNWALDT said you could arrive at a number, but there will be
a significant variation from one type of customer to another type
of customer. It all depends on the type of business. For example,
wet food waste out of a restaurant can be significantly heavier per
cubic yard than mixed office paper coming out of a typical office.
Mr. Grunwaldt referred to an average three yard dumpster that is
serviced once a week and said the monthly weight is about 1,000 per
month. Therefore, the weekly waste in a three yard container would
be roughly 250 pounds. He noted that curb side waste collected per
week, per home, is about 230 pounds.
Number 2218
REPRESENTATIVE KUBINA said he isn't in favor of opening everything
to complete deregulation. He asked if the Municipality of
Anchorage could, themselves, handle all of the APUC's decisions
within their borough boundaries without having the APUC make those
decisions. He asked if the municipality, borough and the city of
Anchorage couldn't make all those decisions themselves instead of
having a state body do it.
MR. GRUNWALDT said there is a cost to regulating refuse collectors.
The question is, "How much does that cost and how would the
municipality recover those costs if it in fact decided to provide
oversight or regulatory authority over (indisc.)?" He said that is
unknown.
Number 2307
CHAIRMAN ROKEBERG asked if the municipality of Anchorage pays any
percentage to the APUC for regulation.
MR. GRUNWALDT explained they presently do not pay because they are
economically exempt.
Number 2352
MIKE MEATH, President of Star Sanitation in Fairbanks, came before
the committee to give his testimony. He said he believes a lot of
the points he was going to discuss have already been addressed,
particularly in Mr. Morino's testimony. Mr. Meath discussed the
history of the competition that has happened in Fairbanks. He said
it has been tried twice over the last decade. The first time there
was no economic regulation it resulted in both companies
experiencing losses to the point where one finally bought the other
out returning the area to a monopoly status. The second time his
company was involved. He said the competition became so intense
that the competitors were forced to provide services below cost
which resulted in huge losses for both companies. Mr. Meath noted
he has given committee members an APUC staff report that speaks to
that competition and what the financial situation of the two
companies involved were. Both companies were both placed in
jeopardy of failing to the point where there wouldn't be a refuse
provider for Fairbanks which would lead to health and safety
issues.
TAPE 97-18, SIDE A
Number 001
MR. MEATH continued, "...want multiple trucks with different
companies going down the same roads, unsafe, that haven't been
maintenanced, haven't been serviced, it becomes a serious safety
issue." Mr. Meath explained their competitor, Far North, who was
Star Sanitation's competitor, sold out to them. Star North is
currently the sole provider in a part of the Fairbanks area. He
noted there is competition in another part of the Fairbanks area
which filed for bankruptcy within the last year.
MR. MEATH explained reliable refuse collection is absolutely
critical to public health, safety and the environment. A gap of a
few days in which refuse isn't picked up could become a very
serious problem. Mr. Meath said those are some of the things that
could happen if there are multiple competitors. There will be
people out there with pick up trucks collecting trash. He said he
isn't convinced that a local government will do a better job than
the APUC. Mr. Meath said the issues of his company have been
resolved before APUC in a fairly timely manner. He said he thinks
we are jumping way too fast if the APUC were to be completely
deregulated.
MR. MEATH referred to there being unfairness to existing
certificate holders and said his company has proven their viability
and experience to APUC's satisfaction. He said they have an
obligation to service each and every customer in their certificated
areas and cannot deny service; therefore, they have had to buy the
equipment necessary to service all those customers thinking they
had some protection from the APUC. Mr. Meath informed the
committee his company has bought about seven trucks at a cost of
$140,000 to $150,000. He said, "Now we're going to deregulate it
and let someone come in, buy one truck, ten containers and go out
and cream skin the market, and here we are with this mass amount of
equipment." He noted there isn't much of a market for used garbage
equipment. He questioned how the equipment will be paid for. Mr.
Meath urged the committee to table HB 161 and look at other
alternatives.
Number 331
REPRESENTATIVE COWDERY asked Mr. Meath how many employees are
employed by his business. He also asked what their hauling
boundaries are.
MR. MEATH said there are about 15 employees including himself.
They service the whole Fairbanks North Star area except North Pole.
He noted he goes as far as Chena Hot Springs, up past Fort Knox
gold mine out to Skinny Dick's on the Parks highway and as far
south as the Tanana River.
REPRESENTATIVE COWDERY asked what their residential and commercial
rates are.
MR. MEATH said their commercial rate for three cubic yards is
$43.00 or $47.00 per ton. The tipping fee is $1.85 per yard. That
is multiplied by the size of the container times an average of 4.35
picks per month. He said that is a straight pass through. They
are not allowed to make money on the tipping fees. He noted the
weight is approximately 89 pounds to 92 pounds per yard.
Number 493
REPRESENTATIVE COWDERY asked if the summer and winter rates are the
same.
MR. MEATH indicated they are the same.
REPRESENTATIVE COWDERY asked what the residential rates are.
MR. MEATH responded residential rates are $12.12 for a three can
pick up once a week. He said if there is pack out service where
they walk into a driveway and pack out the cans, there could be an
additional $10.00 charge. Mr. Meath noted customers have an option
of renting a container from them.
REPRESENTATIVE COWDERY asked Mr. Meath how many trucks he has.
MR. MEATH responded they have five to six trucks that leave the
plant every day. There are back up trucks in case one breaks down.
In the summer, there are eight to ten trucks that leave the plant
every day. There is that much fluctuation from summer to winter.
Number 589
REPRESENTATIVE COWDERY asked if they service their own trucks.
MR. MEATH explained they have an approximately 30,000 square foot
shop where they manufacture containers and do truck repair and
maintenance.
REPRESENTATIVE COWDERY asked if their overhead is higher than what
it is in Juneau.
MR. MEATH responded that it is significantly higher.
Number 680
REPRESENTATIVE RYAN asked if the city of Fairbanks is indulging in
hauling trash.
MR. MEATH informed the committee the city of Fairbanks, Public
Works Department, does the residential service for households
within the city limits of Fairbanks.
REPRESENTATIVE RYAN said if the section that allowed municipalities
to engage in this trade were repealed and the city of Fairbanks had
to allow others come in, would that detriment his business. He
said he believes they charge about $12 to $14 per month.
MR. MEATH said they have what he would call a fairly cheap rate.
He noted the residents are allowed unlimited bags. During spring
clean up, a resident may have 35 bags. They have to pick it up.
He said he thinks the residents of Fairbanks are receiving a good
deal. He said if his company was able to do that work within the
city limits, they would analyze it. At this point, he couldn't say
they would.
Number 864
REPRESENTATIVE KUBINA asked if there is a section in the bill that
would require the city to get out of the business.
REPRESENTATIVE JAMES said that is not part of the bill.
REPRESENTATIVE KUBINA explained in Valdez, the garbage rate is paid
through the mill rate of their homes, which is also tax deductible.
Number 919
CHAIRMAN ROKEBERG referred to the case U94-19 and questioned what
case that was.
MR. MEATH said that is the staff report that talked about
competition when his business was competing with Far North
Sanitation. He noted the APUC didn't take action on that because
his company purchased Far North Sanitation a short time after the
staff report was issued.
CHAIRMAN ROKEBERG asked what the time frame was for the APUC to
issue the staff report from the time they held the hearing.
MR. MEATH explained he believes the report was a result of their
annual reports being filed. The APUC looked at the financial
conditions of the companies and they got nervous that the financial
status of both companies were in jeopardy.
Number 998
CHAIRMAN ROKEBERG said he would allow members of the APUC a chance
to make comments about the testimony that has been given.
Number 1018
MS. HANLEY said Representative James talked about the problem in
Healy with landfills. She said it is important to realize that the
APUC doesn't regulate landfills. The APUC addressed the problem in
Healy with the only certificated hauler there. The commission, a
couple of years ago, traveled to Healy and had a public input
hearing. While they were there, they made a ruling granting
temporary certificates to the two companies who were trying to
address the needs of the people in that area. Ms. Hanley said they
were charging nine customers and then were hauling for the rest of
the people for free because the certificated hauler was having some
problems and wasn't picking up the trash.
MS. HANLEY indicated the APUC hasn't received a filing from the
Mat-Su School District. She noted the APUC isn't familiar with the
filing or the situation Mr. Doyle described.
Number 1098
MS. HANLEY referred to the Fairbanks area and said the APUC
recently had a certificate transfer from Drake Sanitation to Mr.
Hite. Mr. Hite now has the North Pole refuse hauling business.
Ms. Hanley explained that the decisions involving certificates that
may change the amount of competition or the market structure are
more complicated than controversial. They do take longer than the
regular rate setting cases or a simple transfer of a certificate.
REPRESENTATIVE JAMES said she was curious how many little
complaints that the APUC gets. She asked if things are routinely
handled or if they handled in a timely fashion.
MS. HANLEY said as Chairman Cotten indicated, they haven't
addressed a few things in a timely fashion. She explained
sometimes other utilities take priority because public safety has
been involved in issuing new certificates. She said the commission
hasn't responded in a timely fashion they would like to and are
working to change that. Ms. Hanley said they occassionally receive
requests for clarification, particularly from Mat-Su. With the
competitive environment there, there is a very complex situation
about who can serve duplexes, triplexes, businesses, etc.
Number 1261
REPRESENTATIVE JAMES said as she understands the procedure, an
application for a certificate of convenience needs to accompanied
by information that would indicate the area that a company wants to
serve and their financial and physical abilities to serve the area.
A certificate of convenience does not, at that point in time,
regulate the charges. She asked if that is a second process after
a company receives a certificate of convenience or is it all done
together.
MS. HANLEY responded that not everyone who has a certificate is
required to be economically regulated. The statute says that they
do not economically regulate any garbage utility whose annual
revenues are under $300,000. Those companies do have a
certificate, but aren't economically regulated by the commission.
Number 1331
REPRESENTATIVE JAMES referred to companies that do have
certificates and asked what would be the process if they were not
maintaining health and safety issues in a proper way. She asked if
it would take a complaint from the public to the APUC against the
company's certificate.
MS. HANLEY said if there was a public complaint that a trash hauler
who has a certificate wasn't meeting their obligations, the APUC
would become involved.
REPRESENTATIVE JAMES pointed out that there was a long delay in the
Healy process.
MS. HANLEY said she believes the delay Representative James was
referring to was the issuing of the permanent certificates. She
said once they issued temporary certificates so the companies could
operate and the public needs were being met, the issuing of the
permanent certificates went to the bottom of the APUC's orders that
needed to go out.
REPRESENTATIVE JAMES said she remembers there being a long time
frame before the hearing was held for the temporary certificates.
Number 1470
CHAIRMAN ROKEBERG thanked everybody for their testimony. He asked
Mr. Cotten if he would forward results of surveys done by the APUC
on this issue to the committee.
CHAIRMAN ROKEBERG thanked Representative James for bringing the
issue forward. He said he would appoint a subcommittee on HB 161.
Representative Sanders was appointed as the chairman of the
subcommittee and Representatives Brice and Hudson were appointed as
members.
ADJOURNMENT
Number 1621
CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Committee
meeting at 5:20 p.m.
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