02/20/2002 03:25 PM House L&C
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 20, 2002
3:25 p.m.
MEMBERS PRESENT
Representative Lisa Murkowski, Chair
Representative Andrew Halcro, Vice Chair
Representative Kevin Meyer
Representative Norman Rokeberg
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
Representative Pete Kott
COMMITTEE CALENDAR
HOUSE BILL NO. 276
"An Act relating to nursing, nurses, and nurse aides."
- MOVED CSHB 276(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 333
"An Act extending the termination date of the Regulatory
Commission of Alaska; and providing for an effective date."
- MOVED HB 333 OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 276
SHORT TITLE:REGULATION OF NURSING
SPONSOR(S): REPRESENTATIVE(S)WILSON
Jrn-Date Jrn-Page Action
05/08/01 1722 (H) READ THE FIRST TIME -
REFERRALS
05/08/01 1722 (H) L&C, HES
02/20/02 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 333
SHORT TITLE:EXTENDING THE REGULATORY COM. OF ALASKA
SPONSOR(S): FINANCE
Jrn-Date Jrn-Page Action
01/16/02 1981 (H) READ THE FIRST TIME -
REFERRALS
01/16/02 1981 (H) L&C, FIN
02/13/02 (H) L&C AT 3:15 PM CAPITOL 17
02/13/02 (H) Scheduled But Not Heard
02/20/02 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE PEGGY WILSON
Alaska State Legislature
Capitol Building, Room 409
Juneau, Alaska 99801
POSITION STATEMENT: Testified as sponsor of HB 276.
DOROTHY FULTON, Executive Administrator
Board of Nursing
3601 C Street, Number 722
Anchorage, Alaska 99503
POSITION STATEMENT: Testified that HB 276 updates the statutes
to allow nurses to delegate duties to an unlicensed person in
the care of a chronic, stable patient.
CATHERINE REARDON, Director
Division of Occupational Licensing
Department of Community & Economic Development
PO Box 110806
Juneau, Alaska 99811-0806
POSITION STATEMENT: Testified on HB 276 and answered questions.
CAMILLE SOLEIL, Executive Director
Alaska Nurses Association
2207 East Tudor Road, Number 34
Anchorage, Alaska 99507
POSITION STATEMENT: Testified in support of HB 276.
NANCY SANDERS, Member
Board of Nursing
4830 Kalenka Court
Anchorage, Alaska 99502
POSITION STATEMENT: Testified on HB 276.
PATRICIA SENNER, President
Alaska Nurses Association
PO Box 102264
Anchorage, Alaska 99510
POSITION STATEMENT: Testified in support of HB 276 on behalf of
the Alaska Nurses Association.
NANCY DAVIS, Chief
Nursing Section
Division of Public Health
Department of Health & Social Services
PO Box 110611
Juneau, Alaska 99811-0611
POSITION STATEMENT: Testified in support of HB 276 on behalf of
the Department of Health & Social Services.
DENNY DEWITT, Staff
to Representative Eldon Mulder
Alaska State Legislature
Capitol Building, Room 507
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 333 to the committee on behalf
of the sponsor, the House Finance Standing Committee.
NAN THOMPSON, Chair
Regulatory Commission of Alaska (RCA)
Department of Community and Economic Development
701 West Eighth Ave, Suite 300
Anchorage, Alaska 99501
POSITION STATEMENT: Testified on HB 333, and said over the last
two and a half years the RCA has made significant progress on
the backlog of cases.
DANA TINDELL, Senior Vice President
Legal and Regulatory Affairs
General Communications Incorporated (GCI)
2550 Denali Street
Anchorage, Alaska 99503
POSITION STATEMENT: Testified in support of HB 333, and said
GCI believes the commission is doing well in terms of what the
legislature has asked it to do.
ERIC YOULD, Executive Director
Alaska Rural Electric Cooperative Association (ARECA)
703 West Tudor Road Number 200
Anchorage, Alaska 99503
POSITION STATEMENT: Testified on HB 333.
KRISTI CATLIN, Director
Government Relations
AT&T Alascom
210 East Bluff Drive
Anchorage, Alaska 99501
POSITION STATEMENT: Testified in support of HB 333 and urged
the committee to pass the bill unamended.
JIM ROWE, Executive Director
Alaska Telephone Association
201 East 56th, Number 114
Anchorage, Alaska 99518
POSITION STATEMENT: Testified in support of HB 333.
REPRESENTATIVE ELDON MULDER
Alaska State Legislature
Capitol Building, Room 507
Juneau, Alaska 99801
POSITION STATEMENT: Testified as co-chair of the House Finance
Standing Committee, sponsor of HB 333.
ACTION NARRATIVE
TAPE 02-20, SIDE A
Number 005
CHAIR LISA MURKOWSKI called the House Labor and Commerce
Standing Committee meeting to order at 3:25 p.m.
Representatives Rokeberg, Crawford, Hayes, and Murkowski were
present at the call to order. Representatives Halcro and Meyer
arrived as the meeting was in progress.
HB 276-REGULATION OF NURSING
Number 010
CHAIR MURKOWSKI said the first order of business would be HOUSE
BILL NO. 276, "An Act relating to nursing, nurses, and nurse
aides."
Number 017
REPRESENTATIVE PEGGY WILSON, Alaska State Legislature, sponsor,
presented HB 276 to the committee. She explained that HB 276 is
a "simple bill" that just brings the nursing statutes current in
three areas. One area gives licensed nurses the authority to
delegate duties to other personnel. This legislation also
increases the length of time for a temporary nursing license
from four to six months, due to the length of time required to
do a criminal background check. The third area changes the
wording regarding the licensure by endorsement and basically
brings the statutes into compliance with what is already being
done.
Number 041
CHAIR MURKOWSKI asked Representative Wilson if it is her
intention for the committee to adopt the proposed committee
substitute (CS).
REPRESENTATIVE WILSON responded in the affirmative.
Number 044
REPRESENTATIVE ROKEBERG moved to adopt the proposed CS for HB
276, version 22-LS0979\J, Lauterbach, 1/24/02, as the working
document. There being no objection, Version J was before the
committee.
CHAIR MURKOWSKI asked Representative Wilson if she knew to whom
a nurse might delegate certain functions, and what kind of
functions these are.
Number 066
REPRESENTATIVE WILSON said that would cover a lot different
areas." She drew on her experience as a nurse in the school
system and offered an example of a disabled child who had to be
catheterized every eight hours. Since it was a school of 4,000
students, it was very difficult for her to get there once a day
to do that. However, she'd taught the classroom aide how to do
it. If a nurse spends the time to ensure that the person knows
how to do a specific procedure and has practiced it, then a
nurse can delegate to that person, with supervision, on how to
do a certain thing. This could take place in a hospital,
nursing home, long-term care setting, or many other settings.
CHAIR MURKOWSKI asked if this could involve administering
prescription medication.
REPRESENTATIVE WILSON said no.
Number 100
REPRESENTATIVE ROKEBERG stated that the language in HB 276 makes
him nervous because basically it allows the department, by
regulation, to allow any licensed practitioner to delegate those
duties that are encompassed in that license. He asked who is
responsible for that person to whom the duty has been delegated
as far as liability is concerned.
REPRESENTATIVE WILSON deferred to Ms. Fulton, who was waiting to
testify via teleconference.
Number 119
REPRESENTATIVE ROKEBERG asked Representative Wilson if there are
current regulations for anything like this.
REPRESENTATIVE WILSON responded that there are statutes and that
the Board of Nursing has its own regulations, which are very
specific regarding what can and cannot be done.
REPRESENTATIVE ROKEBERG asked if those regulations relate to the
scope of delegation.
REPRESENTATIVE WILSON responded in the affirmative.
Number 135
DOROTHY FULTON, Executive Administrator, Board of Nursing,
testified via teleconference, noting that she is also a nurse.
She explained that a nurse is responsible for what he/she
delegates and will only delegate duties that can be delegated.
Some nursing duties can't be delegated. She said the board will
develop those regulations when the statute changes. She told
the committee that nurses have always delegated; the licensed
practical nurse (LPN) position was developed because it was a
person to whom a registered nurse (RN) could delegate. She
added, "It's an unwritten part of nursing duties - is to
delegate. And we've always delegated." She said it came up
that nurses have the statutory [purview] to do so. She
explained that nurses have the regulatory authority to regulate
duties for assisted living homes, but not for any other setting.
REPRESENTATIVE ROKEBERG said that scares him because the nurses
have regulatory authority, but no statutory authority for
nursing homes.
MS. FULTON mentioned the assisted-living setting. She then
explained that the Board of Nursing has "another position
statement, if we ... determined that we didn't have the
regulatory authority to delegate, ... that ... is not legal and
binding." The nurse is responsible for what she delegates. The
condition of a patient whose care can be delegated has to be
chronic and stable, and not in the acute-care setting. The
nurse has to do the assessment and has the full responsibility
for what duties are delegated, to whom the duties are delegated,
and the training that should occur between the nurse and the
unlicensed individual.
Number 178
MS. FULTON mentioned that the [Board of Nursing] has had a lot
of support from communities, hospitals, and other facilities for
nurses to be allowed to delegate some duties to unlicensed
people. It needs to be controlled, however, which is why it is
being requested [through HB 276].
REPRESENTATIVE WILSON emphasized that this isn't different or
unusual, but is something nurses do all across the United
States, in every state. [Alaska's] statutes don't currently
allow for this, and [the Board of Nursing] wants to make sure
they do.
Number 196
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Community & Economic Development, testified before
the committee. She said, "First, it was requested by the Board
of Nursing, as strongly supported by the division." Delegation
is the most significant part of the legislation for the board,
whereas other matters [in HB 276] are more of a "cleanup." She
agreed that delegation has occurred throughout time by nurses.
The Board of Nursing had begun what she thought was a very
valuable process of trying to write regulations, and to explain
to nurses and the community what could be delegated and how it
could be done safely and correctly.
MS. REARDON explained that as the Board of Nursing worked on
those regulations over the past few years, it came up against
the response from the Department of Law - which has to approve
regulations - that while this is great public policy, there
isn't statutory authority to write such regulations. That
triggered coming to the legislature to request statutory
authority.
Number 225
MS. REARDON, in response to Representative Rokeberg's question,
noted that a statute gives the authority just for assisted
living homes. When assisted living home legislation passed a
few years ago, there was reference to the ability to delegate as
long as the delegation is in accordance with board regulations.
Therefore, under that statutory authority, the board was able to
adopt [regulations] governing assisted living homes. She
continued:
But for the rest of the nursing world, there
apparently is not the statutory authority to write
regulations. ... Several years ago [the Board of
Nursing] issued advisory opinions - appendices that
are in ... our little statute and regulation booklets
- that give guidance on delegation in other settings
that aren't assisted living settings.
But those advisory opinions or guidelines don't have
any force of law, and so a nurse looking at them can't
be comfortable that if they follow them, they're ...
doing the legally right thing. And, also, it is
difficult to discipline someone for not following
them, because they ... don't have any legal authority.
Thus the effort to actually put things in
[regulation], go through a public comment period, and
... have that official process.
MS. REARDON mentioned that the [Board of Nursing] has continued
to work on what it would like to have in regulation if this
statute passes. The proposal that it has been working on sets
out those things that cannot be delegated because too much
expertise is needed to do them. Other things can be delegated
under very specific circumstances, but only to specific people,
not just to any employee who fits a certain category. She said
she thinks this is really positive because currently delegation
is occurring and "that's how the health care industry works."
MS. REARDON continued by stating that even if [HB 276] doesn't
pass, delegation without any kind of structure will continue to
occur. She offered that if the legislature were to decide that
no delegation is allowed, hospitals and facilities all across
the state would have to find about five times as many nurses to
hire, because there is a nursing shortage.
Number 270
MS. REARDON explained that since she isn't a nurse, she has
tried to learn about this [issue] by listening over the years.
What she believes the Board of Nursing views as a nursing
function - and what requires the nursing education - is the
decision-making process, not just the physical care. Therefore,
defining nursing, and eliminating the things nurse aides might
do, isn't a way around the statutory problem. For example, when
washing a patient, the nursing part is deciding whether that is
an appropriate patient to wash in that manner. So while it is
important to allow people who aren't RNs to do things such as
wash [patients] or change dressings, it should be under the
delegation of a nurse who has decided it is appropriate.
MS. REARDON explained that the time when everybody in the
hospital had an RN by his/her side all the time [is gone], and
the Board of Nursing is trying to find a responsible way of
establishing those rules. She added, "It would be the board,
not the department."
Number 303
REPRESENTATIVE HALCRO asked how the delegation issue coincides
with the attempt to improve telemedicine in rural Alaska, for
example. He asked if this actually helps deliver that service.
MS. REARDON replied, "I think that it helps in that some entity
is given the ability to establish the rules." She explained
that there are community health aides in a lot of villages who
have a different status. She said she thinks [the community
health aides are] granted through other federal and state laws,
about which she is not very knowledgeable. She stated, "Whether
they have to receive delegation from nurses, or whether they're
able to operate under other authorities, we don't license them."
Number 320
REPRESENTATIVE ROKEBERG asked why the provisions for the
criminal safety check of the Federal Bureau of Investigation
(FBI) were removed from the original bill.
MS. REARDON said since [HB 276] was introduced, it was found
that the board had authority to do that through regulation. She
explained that through a Department of Public Safety (DPS)
statute "we were able to meet the FBI's threshold through
regulation," and it no longer was necessary to put it in the
bill. The board has adopted regulations requiring fingerprints
for initial licensure; those regulations have made it through
the first level of Department of Law review - the agency
attorney - and still has to pass through the regulations
attorney. She offered her expectation that very soon it will
"make it through all the way, and into effect."
REPRESENTATIVE ROKEBERG asked if it wouldn't be faster to just
put it in statute now.
MS. REARDON explained that since this can be done through
regulations, they can be more flexible and be adjusted over
time.
Number 347
CAMILLE SOLEIL, Executive Director, Alaska Nurses Association,
testified via teleconference, saying the reason [the Alaska
Nurses Association is] supporting [HB 276] is that it clarifies
the boundaries of delegation for RNs. She reported that many
nurses have complained of pressure to delegate duties to
personnel in facilities when they are unaware of the personnel's
training or experience. She explained that a nurse who feels
uncomfortable delegating to someone can refer to the board's
regulations that say the nurse shouldn't be delegating in this
situation.
Number 365
NANCY SANDERS, Member, Board of Nursing, testified via
teleconference. She said the unlicensed personnel are being
supervised by the nurses, and it doesn't change the
accountability of the nurse for the delegated tasks.
Number 376
PATRICIA SENNER, President, Alaska Nurses Association, testified
via teleconference, noting that she is also a registered nurse.
She explained that the Board of Nursing has been looking at
revising its regulations regarding delegation because the old
regulations were unclear. She offered that the [Alaska]
Pioneers' Home nurses were a classic example in that their
employers were forcing them to delegate tasks they did not feel
comfortable with, and they had no control over the individuals
that they were being asked to delegate to. She stated, "So we
are highly supportive of this bill."
Number 386
NANCY DAVIS, Chief, Nursing Section, Division of Public Health,
Department of Health & Social Services, testified before the
committee. She reported that she did participate in analyzing
[HB 276] and that the department is supportive because it thinks
the overall issue is consumer protection, in addition to
clarifying nursing practice. She said there are public health
nurses all over the state who work in village situations where
it's critical to apply judgment and be able to delegate
functions and tasks that can be delegated. She explained that
it is also important to have statutory authority behind that so
that a nurse can decide not to delegate when that's in the best
interest of the patient. She stated, "So our department is in
support of this bill."
CHAIR MURKOWSKI asked Ms. Davis to address Representative
Halcro's concern about how [HB 276] might impact telemedicine.
MS. DAVIS explained that the development of telemedicine in
rural Alaska has been done primarily through "the community
health aide and tribal agencies." Public health nursing is a
partner in the development of telemedicine, and [the Department
of Health & Social Services] participates with them. She stated
that the authority for community health aide practitioners to
practice comes through the tribal health corporations, and "at a
certain level of training, they can become federally certified
and they don't fall under state certification rules." She
offered that the [Department of Health & Social Services] works
with community health aide practitioners, who provide primary
care at the village level, on a daily basis. She stated:
I think that the regulation development will be an
interesting one, especially for public health nursing
staff in how it addresses the relationship between
registered nurses licensed in Alaska and community
health aide practitioners who are governed through the
tribal health system.
Number 426
REPRESENTATIVE ROKEBERG asked if deleting Section 1 of the
original bill, which was the public safety check and the
fingerprinting, is the only difference between Version J and the
original bill.
REPRESENTATIVE WILSON highlighted the changes: the new wording
of the title makes it tighter and more specific; the fingerprint
section was deleted [because] the Department of Law decided the
Board of Nursing had the statutory authority [to do this]; the
temporary-permit wording was changed from four to six months; a
few unnecessary words were deleted in the last two sections; and
"it was mentioned, from the division staff, ... the effective
date."
Number 439
REPRESENTATIVE WILSON, in response to a remark from
Representative Rokeberg, explained that the Department of Law
wants what is in the appendix of the regulations of nursing to
be in statute.
MS. REARDON added that the appendices are those advisory
opinions on delegation she'd referred to earlier. The
Department of Law indicated several years ago that those
advisory opinions aren't regulations and have no force of law.
She explained that when the board went to try to make
regulations, they were told they couldn't. The regulations that
the board was able to do were the fingerprint regulations, not
because of any reference to fingerprinting in Title 8, but
because the nursing statutes give the board the authority to
deny people for certain things in their backgrounds. The FBI,
in order to run fingerprint checks, requires that there is a
state statute that mandates it, because it wants to control or
limit the number of fingerprints it is sent by states.
MS. REARDON said she believes the wording in the public safety
statutes that allows for fingerprinting is "for interested
persons". Part of the definition of interested persons is
people who work with vulnerable populations. She added,
"Through that whole chain, there was enough statutory authority
to satisfy the FBI, and therefore we didn't need to have it in
... here."
Number 465
REPRESENTATIVE ROKEBERG said, "It costs a lot ... [to] move a
bill through this legislature, but it costs a lot of money to
help promulgate regulations too."
CHAIR MURKOWSKI asked if [the Board of Nursing] would still be
promulgating its regulations with the [adopted] fingerprinting.
REPRESENTATIVE ROKEBERG said, "You would have to. You have a
statute. You wouldn't have to promulgate regulations, but there
could be other regulations that are attached."
CHAIR MURKOWSKI asked, "Don't you have to do the regulations
with regard to the delegation?"
MS. REARDON replied in the affirmative, adding that the
regulations would have to be promulgated anyway to adopt new
regulations for the charge for each fingerprint check.
REPRESENTATIVE ROKEBERG commented, "It's the old thing: who
runs the shop here, the legislature or the executives? So it's
a separation-of-powers issue on who's doing what. It's
regulations versus the statute."
Number 477
REPRESENTATIVE MEYER moved to report CSHB 276, version 22-
LS0979\J, Lauterbach, 1/24/02, out of committee with individual
recommendations and the accompanying zero fiscal note. There
being no objection, CSHB 276(L&C) was moved from the House Labor
and Commerce Standing Committee.
HB 333-EXTENDING THE REGULATORY COM. OF ALASKA
CHAIR MURKOWSKI announced that the next order of business would
be HOUSE BILL NO. 333, "An Act extending the termination date of
the Regulatory Commission of Alaska; and providing for an
effective date."
Number 489
DENNY DEWITT, Staff to Representative Eldon Mulder, Alaska State
Legislature, presented HB 333 to the committee on behalf of the
sponsor, the House Finance Standing Committee. He said this is
a process each agency goes through after the legislative auditor
has reviewed the agency. The Division of Legislative Audit
published its report in November of 2001. He said the report
concluded that the Regulatory Commission of Alaska (RCA)
operates in a reasonably efficient and effective manner and
should continue to regulate the public utilities and pipelines.
He asked that the committee extend the life of the RCA to June
30, 2006.
Number 502
MR. DEWITT mentioned that there were three items in the audit
report that the auditor raised as issues to be addressed. He
said [Representative Mulder's office] has discussed this with
the RCA, and it has either resolved those issues or has in place
a process moving towards the accomplishment of those issues. He
stated, "Thus we think it's appropriate to extend the life of
the commission."
REPRESENTATIVE MEYER asked how the length of time for the
extension was chosen.
MR. DEWITT referred to AS 44.66.010(c), which reads, "A
commission scheduled for termination under this chapter may be
continued or reestablished by the legislature for a period not
to exceed four years." He said the date could be sooner than
four years; for it to be longer, however, there would need to be
a change in statute.
Number 519
NAN THOMPSON, Chair, Regulatory Commission of Alaska (RCA),
Department of Community and Economic Development (DCED),
testified on HB 333. She mentioned that the RCA is the agency
formerly known as the APUC [Alaska Public Utilities Commission].
In 1999, the agency was sunsetted and reformed with some
different statutory operating authority and specific directives
from the legislature about how the operations of the agency were
expected to improve. She offered that over the last two and a
half years the RCA has made significant progress.
MS. THOMPSON said the inherited case backlog has been reduced by
hundreds of cases, and is down to a much more manageable level.
Most important, all the new cases received have been processed
within statutory guidelines. The number of substantive
decisions the RCA has issued has increased significantly. She
said the RCA is working on the hard cases, instead of avoiding
them, and trying in that process to build a fair record and to
learn what's needed to make a good decision and issue a written
decision.
MS. THOMPSON mentioned that over the last two and a half years
the RCA has been designing a management information system (MIS)
that's set to go online later on [in February]. She explained:
It's been a difficult process because we face, as an
agency, the choice of institutionalizing the way the
agency was doing its work through an MIS, or using the
analysis we had to do, to design that system, to think
about how we could do things better and, as a result,
make that part of the process as well. We chose the
latter course.
It's taken longer than we would've liked to, but I
think we're doing it the right way. We're going to
end up with a better process. ... We made some
progress in the interim - in terms of putting all of
our orders online, making them accessible to the
public, [and] putting the calendar online - that I
think are significant responses ... to the
legislature's request two years ago to make our
process more open to the public and members of
industry.
MS. THOMPSON reported that the auditor had looked very carefully
at the RCA's responsiveness to consumer complaints. Most
complaints get answered quickly, with 80 to 90 percent resolved
within 30 days - a good track record for any public agency.
Regarding the appeal record, she said:
We, as an administrative agency, don't make the rules;
we apply the rules that this body and the Congress set
about how we're to regulate the utility industry. And
the test of whether or not we're doing our job right
comes from the court system. If either party doesn't
like a decision we make, they've got a right to appeal
to a court, and they do.
Of the appeals from our decisions that have been
issued in the two and a half years since we've
started, we prevailed. We may not hold that track
record forever, but ... utilities are free to ...
challenge our applications of the rules. ... The
courts are the ones that are supposed to tell us if
we're doing our job wrong. In the appeals so far,
they haven't told us that. There are, of course,
appeals still pending, but so far we're doing okay.
So, in general, I'm pleased and proud that ... the
changes that the legislature made in 1999 have ... had
some positive result for the public and for industry.
Number 553
MS. THOMPSON mentioned that there are three specific
recommendations in the auditor's report, none of which [the RCA]
disagree with. She said, "They were all good recommendations,
and we've made efforts on all three of them to resolve them."
MS. THOMPSON addressed the first recommendation, which related
to uncertificated water and sewer utilities. The auditor noted
there are 130 water and sewer utilities, most of which are in
single communities, that are currently uncertificated. This
affects about 65 communities. The statute requires the RCA to
certificate every utility that offers services to ten or more
customers. She explained that the RCA doesn't economically
regulate all utilities, but is supposed to do a review when a
utility starts business to make sure it's fit, willing, and able
to offer that service to the public. She said for reasons that
pre-date the RCA, most of these utilities in this category are
owned by local government in rural areas. These systems were
built through either state or federal government grants but have
escaped certification. She stated that when the RCA learned
that this was a problem, it expedited work that was already in
progress of making the application process simpler. She said,
"When we looked at the backlog we inherited, one of the big
groups was rural utilities, smaller ones."
MS. THOMPSON said the RCA's application process was designed to
review the "fit, willing, and able" criteria for larger
utilities, and some of the other requirements were inappropriate
for rural utilities. She offered that the RCA is trying to
redesign the process, and have it completed by April or May of
2002, so it's more appropriate for some of the smaller
utilities. Then these 130 utilities will be invited to apply
under the new process. That certification process should be
relatively quick because most of these utilities were built -
and had engineering reviews done - by another state agency.
These utilities just haven't undergone the utility certification
process.
Number 574
MS. THOMPSON mentioned that another issue raised by the auditors
is a specific policy for small systems. There are many small
water systems that are not necessarily in rural areas, both
outside of and inside of city limits. Many of these systems are
in homeowners' associations. She said the policy question is
whether or not those systems should be exempt from regulation.
Through a series of cases, the RCA has exempted many of these
systems. She mentioned that the homeowners' association is a
good place to explain that example. She explained:
We have done it in cases where the ratepayers will
have some control over their rates. What we're
concerned about in economic regulation is that the
consumer is paying fair rates. Well, if [they],
through a homeowner's association board, have the
ability to vote and decide what their rates are
anyway, there's adequate protection and we don't need
to economically regulate them.
MS. THOMPSON noted that the auditor suggested the RCA develop
some clear guidelines in its regulations so that when developers
are putting in new systems, they will have a clear idea about
whether or not they would be subject to economic regulation.
She mentioned that over the last couple of years the RCA has
seen several cases, and that this is a good idea. She said,
"For purposes of informing the public about what our policy is
and for efficiency in handling those, if we can deal with those
issues through a regulation rather than an [adjudication]
process, that's a good recommendation. And we're working on
that one as well."
Number 587
MS. THOMPSON mentioned that the second recommendation suggested
that the RCA adopt regulations to clarify the role of the public
advocacy section. The public advocacy section (PAS) was created
by the statutory changes in 1999 to represent the public
interest. She said, "We agree that regulations are a good
idea."
TAPE 02-20, SIDE B
Number 590
MS. THOMPSON continued, "We've had general discussions about
what they'll include." She said it would be helpful if the role
of the public advocacy section within the RCA were clarified.
She elaborated:
Whether they have a right to ask to be assigned to
cases that they haven't been assigned to by the chair,
and whether or not they have the right to ask to be
relieved of responsibility in a case where they don't
feel there's a public interest issue, again, these are
things that have happened as a practical matter in the
two years, but they're not written down in regulation.
... There's been cases where the PAS has asked to be
unappointed ... by motion, and we granted it. And
[there are] cases where they've suggested that they
wanted to be appointed and we've appointed them. ...
It's a good idea to make these policies
institutionalized in the form of regulation so that
when there's different leadership, ... the commission
and the PAS ... will continue.
MS. THOMPSON also said the public advocacy section's right to
appeal should be clarified. It hasn't appealed any of the RCA's
decisions, and it isn't clear whether it can. She remarked, "If
it's adopted in the form of regulations, industry will have a
chance to comment on it and we'll make a decision on to our
regulatory process." She reported that the public advocacy
section has told her it is going to propose regulations by March
[2002].
MS. THOMPSON explained that like all other regulations, the
proposed regulations will be discussed in a public meeting to
give industry and the public enough time to comment on them, and
then will be brought back to another public meeting where
changes and the adoption of the regulations will be voted on.
Sometimes another public comment period is needed. She said if
the proposed regulations are received from the public advocacy
section before the deadline - which is by March - this process
should be completed. She explained that a deadline to complete
this process by the end of the year is a reasonable expectation,
depending on the comments received and with the [attorney
general's] cooperation.
Number 570
MS. THOMPSON said the third recommendation dealt with notice.
The auditors noted that the RCA, within the agency, didn't have
a record of all the notices required to be published. In some
cases the utility is required to give public notice, and in
other cases the RCA is. She said, "We've already corrected
internally the problem they've identified of not having a
record, proof of publication, on all of those notices." She
mentioned that this has brought another issue to the forefront:
what effective public notice is. Many notices are published in
the back of a newspaper, and it isn't clear how many consumers
read those. She said:
We put some of them on our web page, and we've talked
about whether we should do that more. We've allowed
utilities, instead of printing public notices, ... to
put them on the bill, because the customer might
actually read them if it's right above the line of how
much they have to pay. So we're looking at other
options to try and improve public notice, because I
think making the public aware is an important part of
what we do.
Number 559
CHAIR MURKOWSKI noted that a comment in the audit mentions the
possibility of a natural gas pipeline. Recognizing the RCA's
backlog of cases, she asked what the advent of a gas pipeline
would do to the RCA's workload.
MS. THOMPSON said that depends on the ultimate result of the
legislation; the most recent draft she'd seen had [the RCA]
participating with the Federal Energy Regulatory Commission
(FERC) on a joint board to set in-state rates. She pointed out
that the RCA currently regulates oil pipelines within the state;
the RCA has worked concurrently with FERC on some of those
cases, and on its own on others. She said the pipeline workload
within the agency is pretty uneven. One engineer works pretty
much full-time on pipeline cases, and other staff either get
assigned or unassigned to cases, depending on the status of that
case. She mentioned that the RCA has been able to hire outside
expertise on a couple of the pipeline cases because it was a
relatively short and intense need.
MS. THOMPSON said the answer to Representative Murkowski's
question is that it depends on how intense the RCA's role is.
She explained that the RCA is equipped within the agency to
handle some pipeline cases, but if a case ends up being a huge
responsibility for a short time, the RCA can reassign it in-
house and hire contract help. She said, "If it's a longer-term
problem, we may be back asking for help by this body next year,
after the federal legislation is passed."
Number 538
CHAIR MURKOWSKI, in looking at the number of filings the RCA
has, said it's very apparent that the bulk of the filings are
coming from the telecommunications world. She asked if there is
some kind of a triage approach to prioritizing cases,
recognizing that one of the complaints historically about the
RCA, and its predecessor the APUC, was the timeliness of the
process.
MS. THOMPSON responded, "The quick answer is, it depends on what
type of filing it is." Things fit into a couple of large
categories in the agency. Anytime a utility wants to change the
rates or terms and conditions of service, it's required to file
a tariff action notice. She mentioned that there's a procedure
now in statute for the RCA to handle those within a specific
timeframe, and at the end of that timeframe the RCA has a choice
to say "yes" or "no" or to suspend it, if it needs further
investigation. She added, "Things that come in under that
timeline we handle within that timeline."
MS. THOMPSON mentioned that other processes in the agency also
have deadlines in the regulations; an example is certification
of new applications for a Certificate of Public Convenience and
Necessity. She said the RCA makes sure things get done within
those deadlines. Contested cases can come in the form of either
a complaint from a consumer or a complaint by one utility
against another. When these complaints are received, the RCA
first assesses how to best handle the case.
MS. THOMPSON noted that the legislature gave the RCA some
flexibility in 1999 to use hearing examiners, mediators, or
anybody else the RCA believes could help solve the problem.
When assessing the case, she said the RCA looks to see if there
are contested issues of fact, if a hearing will be needed, or if
this is a case wherein the parties need to file legal briefs to
be decided on a written record. She explained that a case could
be assigned to a hearing examiner to build a record on a
specific point and read the recommended decision. It also could
be a "case that we're all going to have to sit up on the bench
... in a hearing in order to resolve [it]." She said the RCA
has tried to resolve things as efficiently as possible,
depending on the type of case. If there are more parties or
lots of contested facts, it takes more time because of the need
to build a complete record in order to make a decision.
MS. THOMPSON reported that the only other big category of cases
within the RCA's workload is regulatory dockets. She explained:
Those are when we're making policy and implementing
through regulations. We're constrained in that case
by the law. The law tells us that if we're going to
... take action on something that affects statewide
policy, and we need to do it in a public meeting, we
need to give notice and allow parties the opportunity
to comment. ... Then, of course, we get to go
through the Attorney General review at the end of the
process. Our ability to move quickly on those dockets
is restricted by the law. ...
If we've been directed to issue regulations, we'll do
that. If it's something that we think is going to
save us time overall in terms of agency operations,
allow us to refocus our efforts more efficiently,
we'll do that. If it's an area where we've gotten a
lot of complaints - so there's a lot of public
interest - we'll do that. So, basically, we try and
assign or tailor our energies to fit with where the
greatest need is, as expressed either through
complaints or direction from the legislature or the
public.
CHAIR MURKOWSKI offered that it's not a simple question. The
RCA has so many different types of filings, and isn't just
taking them chronologically.
MS. THOMPSON said taking cases chronologically works too. Some
cases can be resolved in a month, whereas others take more than
a year; it depends on the case.
Number 491
REPRESENTATIVE HALCRO, in regard to the concern about
uncertified sewer and water utilities, asked if the RCA is
working with the Denali Commission as it upgrades and improves
some of these systems.
MS. THOMPSON answered in the affirmative. She said it has been
a good exercise. She mentioned that she is in a couple of
different workgroups, and recently the Denali Commission
appointed the energy advisory committee. These workgroups are
focused on the policy question of what happens to the water and
sewer utilities that are being built in rural Alaska when the
capital grant money is depleted and they still need to operate.
She asked, "How can we make sure that [they] ... continue to
operate in a safe and efficient manner, and ... are they going
to be able to support one of these operations through rates, or
... going to need some other kind of mechanism?"
MS. THOMPSON offered that she sees an even broader question:
that rural utilities in general under the PCE [power cost
equalization] program have been hotly contested and debated over
the years, but that the program is very important to a lot of
rural Alaska. She said if continuing to support those utilities
is the policy decision that is made, then the RCA can be
consistent in the policy on rural water and sewer. She
explained:
I don't want the one to be so expensive that they
can't afford their other utility bill. And a lot of
the expertise that exists in any of the utilities that
operate in rural areas can be translated to help
support these other, newer utilities as well.
Number 472
REPRESENTATIVE HALCRO acknowledged that a big topic in the local
Anchorage telephone market is access and deciding who is
responsible for maintaining the hardware. He asked, "Do you see
this coming before [the RCA], or is it in the process before
your commission as far as ... taking a look and making sure that
we ... maintain the integrity of the system?"
MS. THOMPSON responded in the affirmative and said a couple of
pending cases fit the description Representative Halcro had
cited. She began:
We have an open docket. We had a hearing last Friday
on what's called the "uni-rates" in the phone world,
which is basically the amount that a competing carrier
has to pay the incumbent to use ... part of their
facilities to deliver service. So we were asked last
year to review that issue. It's a complicated one.
We're working on that.
There's also an open case that has to do with local
rates in Anchorage. Recently, if you're an Anchorage
consumer, you were aware that one utility asked for an
increase. We granted it on an interim basis because
they were able to demonstrate need for an interim
increase. But the final decision will be made after a
full record's developed, and that hearing's scheduled
to start at the beginning of March. So those are two
very active cases right now.
Number 456
REPRESENTATIVE HALCRO referred to the case where the RCA had
determined there was a need and gave a temporary "bump" to a
utility. He asked if the utility had to prove a financial need.
MS. THOMPSON said yes. That [temporary bump] was made on an
interim and refundable basis. If, after the record is fully
developed and the RCA makes a final decision that [the utility
wasn't] entitled to it, customers will get refunds.
Number 449
REPRESENTATIVE ROKEBERG, in reference to the temporary increase,
asked, "Did you allow them to charge the other non-incumbent
carrier the additional cost for using their infrastructure?"
MS. THOMPSON replied, "Different case and different question."
She explained:
We did recently grant a [union] increase, as well, but
actually that came earlier, I believe. ... The rates
which the incumbent phone company charges its
customers is ... set in a different way than the rates
that they charge the other competitors. And it has to
do with federal telecommunications law and state law;
they're different standards. But increases were
granted on both fronts within the last couple of
months.
Number 438
REPRESENTATIVE ROKEBERG mentioned that there was a bill before
the legislature in the last couple of years to exempt some of
the small water and sewer utilities from economic regulation or
any regulation. He offered that he didn't think the bill
passed, and asked, "Do we need something like that?"
MS. THOMPSON said she didn't think the bill passed either, and
said she thinks "it's a question that we can, based on your
comments, address by regulation, and that's what we're planning
on doing." She said the policy question is, "When will a
consumer's right to fair rates be adequately protected by other
means?" In the current statute, utilities owned by local
governments aren't economically regulated unless they fit in one
of the exceptions, and generally they're not [regulated]. She
offered that this is because citizens have a right through the
political process to make sure they're being charged fair rates.
If the same type of protection exists for ratepayers on a
homeowner's association, there may be good policy reasons to
make them all exempt too. She emphasized that it's important to
look at both sides of the question, and that's what the RCA is
trying to do.
Number 425
REPRESENTATIVE ROKEBERG said, "I do believe that some of those
should be exempt from regulation." He explained that there is a
backlog and that it would help lower the workload. He said,
"You should probably let us thrash out who ... should be and who
shouldn't be covered by this." He inquired about the size of
the tariff that requires the RCA to take action.
MS. THOMPSON responded that a utility that serves more than ten
customers is supposed to have a certificate. If a utility is
not owned by local government, if there hasn't been a
deregulatory action, or if it doesn't fit in one of the other
exemptions, then it's economically regulated. She said she can
think of two small homeowners' associations that the RCA has
ruled on, in the last couple years, where they've come in early
on in the process of forming and were exempted. She said, "We
granted their certificate and exempted them from economic
regulation." She noted that the auditor had raised a policy
question, that if the RCA is going to decide all those cases in
that way, it should just put those standards in regulation so
that developers will know where they stand. This will also make
it easier for the RCA. She added, "That's something we hope to
do ... this spring. It's on the list, close to the top."
REPRESENTATIVE ROKEBERG asked Ms. Thompson if she believes that
a municipally owned utility should be able to petition to be
exempt from non-economic regulations.
MS. THOMPSON asked Representative Rokeberg if he was asking
whether or not municipally owned utilities should be exempt.
REPRESENTATIVE ROKEBERG said yes.
MS. THOMPSON answered that it's a tough policy question. One
side is that through the local government process, the
ratepayers can be assured they're paying fair rates. On the
other side, some local, government-owned utilities in smaller
communities are having a hard time and want to be economically
regulated because "they live down the street from all these
ratepayers, saying, 'We have a hard time recovering enough'."
The RCA will look at their books and say, 'Gee, you're not
recovering enough to replace capital when you're going to need
to, or you're not setting aside any reserves." The utilities
respond, "We had a reserve account, [but] the assembly spent it
on playground equipment or something, so we'd rather be
economically regulated." She summarized that it cuts both ways,
and she thinks that the current statute allows local,
government-owned utilities to be subject to a regulation if they
ask to be economically regulated.
REPRESENTATIVE ROKEBERG commented that it also allows them to
opt out rather easily.
MS. THOMPSON agreed with Representative Rokeberg.
Number 379
DANA TINDELL, Senior Vice President, Legal and Regulatory
Affairs, General Communications Incorporated (GCI), testified in
support of HB 333. She said GCI had participated in the sunset
of the Alaska Public Utilities Commission and was fairly vocal
at that time regarding what it saw as problems with the APUC's
not making decisions or taking action. She offered that for a
utility, the worst of all worlds is if no decisions are being
made, for better or for worse, because there's nothing to appeal
and nowhere one can go.
MS. TINDELL offered that [GCI] had participated in that process
not really knowing how the new commission would come out. She
said she thinks the commission is doing well in terms of what
the legislature has asked it to do. The RCA is making
decisions, and GCI doesn't like all of the decisions. She
explained:
We didn't like the interim uni-rate increase, for
example. But, then, we are free to go appeal those
decisions, which is a big step forward - as is anyone
else participating in the process. And there have
certainly been a lot of appeals, and I think the
record is that the [RCA] has been upheld in an appeal
every time. So, this commission is doing the work.
As a utility, you're not always happy with the
decisions. I guess you probably shouldn't be. Some
are good from your perspective, some aren't. But
decisions are being made, and I think that that's
what's important.
Number 353
MS. TINDELL said a lot of decisions that the RCA makes,
particularly in telecommunications, are simply implementing
federal law. She explained that the federal law on
telecommunications today is quite explicit on what the policy of
the nation is, and it is competitive. How that policy will be
carried out, to the point of laying out how rates are set, is
another issue. Referring to the competition, she said, "It's
the federal law that they need to get changed if they're going
to change anything."
MS. TINDELL reported that the RCA, as an expert body, is a
better forum for dealing with the day-to-day regulatory
decisions that have to be made. She said GCI, as a regulated
entity, literally deals with the RCA every day, for example, to
file tariffs. She emphasized that everything [GCI does] is
regulated in some aspect or another. Without passage of [HB
333], the RCA goes into wind-down and goes away after a year,
leaving a tremendous workload that falls into a void. She said
she isn't sure where one would go to get those decisions made,
for example, to a court, or the legislature. She stated,
"Certainly I think it's in the public interest to have a
regulatory commission, and quite necessary."
MS. TINDELL offered that GCI does support the four-year term.
Number 327
CHAIR MURKOWSKI restated GCI's opinion that the RCA is doing a
good job of what the legislature has asked it to do, and asked
Ms. Tindell if there is more the legislature should ask the RCA
to do.
MS. TINDELL said she believes the legislature has asked the RCA
to be an expert body in utility matters and to make decisions.
In her opinion, that's all the legislature needs to ask the RCA
to do. She offered her experience that every time one of these
issues comes before the legislature, without any intent on the
part of the legislature, it develops into what's termed a "phone
war." She suggested these issues need to be kept before the
expert body to the extent that the legislature can, as long as
the expert body is functioning well. In order to do that, the
legislature has to give the RCA "kind of broad powers and say,
'Look, we want you to be the experts. We want you to make
decisions. And if you're not making decisions, and if we're
getting a lot of complaints, then we'll review it.'" She
explained that the area the RCA covers is so broad that it would
be very difficult to detail specifics because some cases would
be missed, which would be a problem. She added, "It would be
GCI's preference if this legislation [HB 333] passed unamended."
Number 300
REPRESENTATIVE HALCRO asked Ms. Tindell if she fears that down
the road there might be an effort to short-circuit the RCA's
ability to rule on pending matters by changing the law.
MS. TINDELL responded that her biggest fear is if the RCA is
sunsetted, because it will go into wind-down, won't be able to
take up any new issues, and will go away after a year. In
telecommunications, the presence of the RCA is required to force
interconnection among the networks. She explained, "If the
networks aren't interconnected, and if the incumbent or ... a
competitor refuses to interconnect, then my customers can't call
your customers, which is not in the public interest." This is a
possible situation in a deregulatory environment. She mentioned
that there is federal law to address that, and someone would
either have to go to the FCC [Federal Communications Commission]
or to federal court, but that takes a lot of time. She added,
"You don't have an expert body to enforce the law right there,
and it would be fairly chaotic."
MS. TINDELL offered that she has thought about ways GCI - which
is essentially competitive telecommunications - could be
affected by amending HB 333. She said it's difficult because
the federal law is so detailed. One of her concerns would be if
a incumbent telephone company, not municipally owned, would seek
to be deregulated because that would accomplish the same
purpose. She said, "There's definitely things that ... we're on
the lookout for."
Number 268
REPRESENTATIVE ROKEBERG asked, "Has GCI participated with the
RCA with any of the ... alternate dispute-resolution methods we
granted in the last bill to help expedite some resolution of
conflicts?"
MS. TINDELL replied in the affirmative. She further explained
that according to federal law, the interconnection contract
between an incumbent carrier and a competitive local telephone
company is negotiated. When a negotiation doesn't result in a
full contract, it is then arbitrated under the regulatory
commission by federal law.
MS. TINDELL explained that the local telephone company business
is an incredibly complicated business, with hundreds of
different transactions that have to take place between the
incumbent carrier and the competitive carrier. She said when
GCI went into competition in the long-distance business, it was
easier because the local telephone company was an unbiased third
party that handled all of the transactions. She said that to
change carriers, one had to just "unplug one customer" and plug
that customer in [another place], and it was a smooth operation.
She said:
In local telephone company competition, it is
literally the incumbent carrier that has to carry out
the transactions and switch their customer to the
competitive carrier. We do all the databases, put in
new lines - all the hundreds of things that have to be
done. ... There's a lot of issues that come up ...
in those hundreds of transactions that take place
between the incumbent and the competitive carrier, and
those are all eligible for alternative dispute
resolution. So, from our perspective, alternative
dispute resolution has been, and is, critical to
keeping as many of these disputes out of the public as
possible.
Number 224
ERIC YOULD, Executive Director, Alaska Rural Electric
Cooperative Association (ARECA), testified on HB 333. He said
when the old public utilities commission was in place, everybody
agreed in 1999 that changes needed to be made to speed up the
process and to get decisions moving and - subjectively - to
perhaps get even better decisions moving also. He said at that
time, ARECA participated in the process and was a strong
supporter of the reconstitution of the old APUC and of the new
RCA. He said ARECA had suggested changes that could be made
that would speed up the process within the RCA.
MR. YOULD said he thinks ARECA was smart in coming before the
legislature and recommending the changes that represent the RCA
today. A number of new tools were given to the RCA to allow it
to expedite the process. In addition, the RCA itself has taken
steps to expedite the process. For example, the RCA has
instituted weekly meetings of the commission, whereas sometimes
the APUC met monthly. Many interpersonal problems of the old
APUC have been pretty much resolved. He said ARECA thinks the
interpersonal relationships of the RCA are quite good, and that
as a general rule, decisions are "of good caliber." He said,
"We're not here to discuss the quality of the decisions that are
made, nor are we even suggesting that the RCA should be
sunsetted, although I would have to say that some of my members
might suggest that perhaps they should not be subject to the
rigorous regulation of the RCA."
Number 191
MR. YOULD explained that the concern of the electric utility
industry is the same as discussed when the RCA was being
reconstituted, which is the timeliness of the dockets - how long
it takes to get the dockets through the system. He said:
And as a matter of fact, we even proposed amendments
to the statutes at that time that would hardwire
certain timeframes that would be in place, that would
require the RCA to move dockets through the system in
a timely fashion. This committee right here
considered that, and ... the decision was made that
the RCA should be allowed to make up its own
regulations on how it handled its dockets, rather than
a hardwired "thou shalt do it this way" system. ...
As a result of that, my members do not feel that the
dockets are being cleared through the system in a
timely fashion. Even ARECA itself has one docket that
went before the RCA two years ago, and, frankly, we
don't know when it's going to come out the other end.
MR. YOULD stated that ARECA's board of directors and members get
together annually to try to establish its legislative positions
for the upcoming year. He mentioned that a resolution was
adopted at the annual meeting, and that the committee members
should have received a copy of that resolution. He read a few
operative sentences:
Resolution 219. A resolution supporting the
legislation to ... conditionally extend the life of
the Regulatory Commission of Alaska for one year.
Since its establishment, the RCA continues to struggle
with its workload. The RCA has created an additional
load of work for itself by initiating dockets and
inquiries without having first cleared the backlog of
old matters. The RCA must work to resolve cases
decisively and finally. ARECA supports the extension
of the life of the RCA for only one additional year,
contingent on explicit legislative requirement that
the RCA complete the activities described below. And
a few of those activities are: number one, establish
a dialog with the regulatory utilities or the
regulated utilities to discuss reform of the
regulatory process. Prepare a report to the
legislature addressing the following: How the RCA
will reduce the [backlog] of the cases, and other
matters pending before it, and among other things,
recommend areas of regulatory oversight that may be
eliminated.
MR. YOULD said he thinks it was a good thing to reconstitute the
RCA. He added, "It's a good group of people; they're diligent,
they're working hard. But, frankly, the process is extremely
slow, and that's what my members are concerned with."
Number 144
CHAIR MURKOWSKI asked, "Is there a concern, Mr. Yould, that ...
as an industry you are overshadowed by what's happening in the
telecommunications world ... in an effort to accommodate the
number of cases that are coming in?"
MR. YOULD said that's a valid observation. He offered that
before the telecommunications industry was deregulated, he
believes ARECA represented close to half the RCA's workload,
whereas today it's 17 percent. He said this "tells you
something about whether or not a deregulated industry is truly
deregulated or not." Mr. Yould said he doesn't know what the
answer is - whether it's the proper allocation of RCA recourses
to electric utility industry issues, or whether the process
needs revamping and restreamlining.
MR. YOULD said the RCA comes in from time to time for additional
staff. He stated:
I know that the legislature appropriates those staff
as a result of ... the funds for that staff being paid
for by consumer charges, as opposed to straight out of
the general fund. But, nevertheless, it is part of
the budgetary process and the executive budget act,
and so you do try and make sure that it doesn't get
out of hand. But despite the fact that additional
positions were provided when the RCA was
reconstituted, and more positions were provided even
last year, there is still a very strong frustration
within my group that the dockets are just going
through way too slow.
Number 114
CHAIR MURKOWSKI said she is assuming it is [ARECA] - and not Mr.
Yould individually - that supports extending the life of the RCA
for just one additional year. She asked what the reasoning is
for choosing one year versus two or three.
MR. YOULD replied, "I think the reasoning is ... that so long as
you keep the RCA's feet to the fire, ... we can continue to work
with them." He added that if the RCA gets extended for four
years with the hopes that during the interim it will try to
streamline the process, he doesn't think ARECA's members feel it
would truly get that accomplished. He stated, "Even though
we're saying extend them for only one year, it's still
contingent upon some self-assessment with the industry taking
place." He told the committee that it could very well extend
the RCA for four years, but should also ensure that within the
first year this dialogue and this self-assessment will take
place and that the process is streamlined.
Number 093
REPRESENTATIVE HALCRO, referring to the backlog of cases, asked
Mr. Yould if he feels that the board isn't getting to his issues
because they are complex, or if it just a staffing situation.
MR. YOULD replied that he thinks the issues are sometimes
complex, but also the public due-process procedure is extremely
cumbersome or perhaps the dockets "kind of drop off the radar
screen." He offered that he thinks once a process has taken
place, if the docket manager doesn't continue to push for a
"resolve" on a particular docket, staff aren't going to work on
it, because they have something else to start working on.
Number 075
MR. YOULD said one thing [ARECA] did in 1999 was require that a
management information system (MIS) be put in place. The reason
was because [ARECA] wanted to be able to see a diagram of the
dockets projected into the future that would establish when
certain things would take place. He explained:
This would be on the Internet so that ... my people
would be able to dial up and find out when their
docket's going to take place. And if, for instance,
one docket is just put in sort of limbo status, at
least it gives us something to question and shoot at.
And I think that the MIS system will help to solve the
problem, but I'm not sure. I haven't seen the MIS
system that's to be put in place, and, frankly, I
thought that it had a timeframe long before now within
which it was supposed to have been put in place.
Commissioner Thompson is indicating that she's
certainly going for quality, and I appreciate that and
I hope so. I hope it also helps address this timeline
for each docket so that they know when they have to
continue to work on it as well. But I do think that
sometimes they get put in limbo because something
comes up and all of a sudden it's six months later and
somebody says, "Hey, shouldn't we start working on
that docket again?" Well, that's not right.
Number 052
CHAIR MURKOWSKI, referring to the APUC overhaul, said it seems
that when the committee was talking about deadlines for
adjudication, the compromise was the implementation of the MIS
in order to do the tracking. She asked Mr. Yould if she was
recalling correctly that he kind of backed off and said the set-
in-stone deadlines aren't necessary if there is some kind of a
tracking system.
MR. YOULD responded, "I think you're partially recalling
correctly." He offered that ARECA certainly backed away because
it noticed a sincere and strong desire by the committee to
proceed forward, and there was a lot of resistance to the set-
in-stone deadlines. He further explained:
I think that was part of the language. I wouldn't
even propose today what that language should look
like, because I think that now that we do have this
new commission in place, it would be good to get their
thoughts and their ideas as well. And I think
irregardless of whether you extend the commission for
one year ... or four years, I think that ... this
commission is dedicated to trying to solve the
problem. And I hope that they start a meaningful
dialog with the ... utilities that will help address
some of these problems, irregardless of what happens
with the sunset. We're certainly not recommending
that sunset take place.
Number 025
CHAIR MURKOWSKI asked Mr. Yould if she'd heard him correctly
that he doesn't have all the answers as to how the process
should be revised, but would be willing to sit down with the RCA
and work through, from his industry's perspective, how things
could be changed.
MR. YOULD replied in the affirmative. He added, "Frankly, I've
had some very good dialog with Commissioner Thompson within the
last two days, and I think she's committed to that too."
Number 017
REPRESENTATIVE ROKEBERG recalled that [the legislature] had
authorized nine new positions last year. He asked Mr. Yould if
any of the new people are working on his case.
MR. YOULD said he didn't know.
TAPE 02-21, SIDE A
Number 006
KRISTI CATLIN, Director, Government Relations, AT&T Alascom,
testified via teleconference in support of HB 333 in its current
form. She emphasized, with all respect to Mr. Yould, that AT&T
Alascom would urge the committee and the legislature to pass HB
333 without amendments. She suggested that any efforts to
modify or reverse the [jurisdiction] of the RCA should be
considered separately.
Number 036
JIM ROWE, Executive Director, Alaska Telephone Association,
testified via teleconference. He explained that he represents
incumbent local-exchange carriers in Alaska that are regulated.
He said it's necessary for incumbent local exchange carriers to
have a state regulatory body to be able to go before. He said:
Universal service funding is very critical to the
rural customers in the state of Alaska. And without a
state body, we would have a very hard time going
before the Federal Communications Commission and
getting certified as eligible telecommunications
carriers. And there's a requirement that annually a
state body gives a report that we are using these
universal service funds in the appropriate manner for
which they've been dedicated. We do need a regulatory
body here, and we support the reauthorization of the
RCA.
CHAIR MURKOWSKI asked Mr. Rowe if, in terms of getting his
filings through the process in a timely manner, it's not enough
of an issue that he would object to the sunset of the RCA.
MR. ROWE replied, "We do not want the RCA sunsetted." He said
there are times [the Alaska Telephone Association has] asked the
RCA for extensions of time. He offered that he thinks [the
Alaska Telephone Association has] worked well with the RCA when
there are extensions to possibly gather more information needed
for a decision. He said:
It might be for other reasons, but I think they've
done a respectful and cooperative [job] on our request
for extensions on time when that's necessary. And at
times I feel like they extend them as well, perhaps
for the public to give more comments or for notice
periods, and I think that's appropriate, as well as
keeping a clock that you show everything goes in the
most expeditious manner.
Number 088
CHAIR MURKOWSKI requested that Ms. Thompson respond to a couple
of the points Mr. Yould had mentioned. In particular, she asked
to hear some discussion on "this idea of dialog with the ...
various utilities on how we might make the process work better."
MS. THOMPSON responded that she thinks it's a good idea, and has
had the opportunity to talk with Mr. Yould over the last couple
of days about that. She said it's a dialog the RCA has had with
members of other industries. The RCA can't talk about open
dockets with the members of industry, but is happy to talk about
the process. She stated, "Last month, we had the first of what
we call the bench and bar." There were a lot of concerns from
utility representatives from different industries about better
understanding of the process. She explained that the RCA had
all of the hearing examiners and attorneys that represent the
RCA available to explain procedures and answer questions. At
the end of the hearing, the RCA asked the audience how they
would like the RCA to continue this process. The suggestion was
made that next time the commissioners be available for
questions. She said the RCA is happy to do that.
MS. THOMPSON restated that the RCA can't ever talk about open
dockets, and said if there's a question about whether utilities
are treated fairly or if there is an idea about how the process
can be improved, it's important for the RCA to know. She
explained, "Theirs is a different perspective than ours, and
it's important that we take time to listen to them and
understand why it is they don't think they're being treated
fairly, and how they think we can do a better job."
Number 115
REPRESENTATIVE HALCRO asked Ms. Thompson what her response would
be to ARECA's concerns that some of its dockets seem to slip
below the radar screen, and if those are incredibly complex
cases that demand staff time.
MS. THOMPSON replied that it's difficult to respond without
knowing which cases [ARECA is] talking about. Generally, when a
case gets filed or a docket is opened, it gets assigned to both
a commission docket manager and a staff docket manager. These
two people are the team that makes sure the case moves through
the system as expeditiously as possible. She said she doesn't
know which specific cases Mr. Yould is referring to, and if
there's one in particular, she offered to look it up and find
out where it got stuck.
MS. THOMPSON said, "I can't tell you honestly that no case ever
gets stuck in the process, but I can't respond any more
generally than that." She explained that the RCA counts on the
commissioners and certain tools, like the MIS system that Mr.
Yould mentioned, to help [track the progress of cases] more.
She mentioned that when she'd started, she couldn't even get a
list of all the open dockets that the commission had in one
place. That situation has been remedied, however. Over the
past two years, she has tried to put some management tools in
place to help herself and everybody else within the agency
understand which cases are where, and to help the RCA meet
different deadlines.
Number 141
REPRESENTATIVE HALCRO asked Ms. Thompson when she expects the
implementation of the MIS system to occur.
MS. THOMPSON responded that part of the system is already in
place, but hasn't gone public because it is in the process of
being tested. She said, "We want to make sure it works
internally before we open the system up." She mentioned that
she isn't sure Mr. Yould is going to be able to get all the
information he thinks he's going to be able to get out of the
MIS. From her perspective, it's important for [the industries]
to know where cases are in the system. However, letting members
of the industry know which commissioner and which commission
docket manager have it - and when it's on the next adjudication
meeting - opens folks to pressure or lobbying one way or
another. She explained that adjudication meetings are those
previously mentioned at which [the RCA] discuss cases.
MS. THOMPSON explained, "I'm protective of our decision-making
process in order to keep it fair." On the other hand, she is
aware of the right of the public and utility to know that the
RCA is actually working on things. She thinks the MIS system
appropriately strikes that balance. She offered that the
industry needs to know that their cases are moving forward, but
it takes a lot of staff time to answer questions from industry,
and that's time away from working on the substantive cases.
MS. THOMPSON explained that making the information available to
the industries over the [Internet] allows them to look up the
answer without calling and taking up staff time. It also lets
them be assured that the RCA is working on things and allows
some expectation about when a decision might be made. She
explained that applications had been taking an inordinate amount
of time, but now, with deadlines in the regulations, those go
through [quickly]. She said:
Other cases, it's harder to categorize. ... Do I put
them in one pot if there's two parties, and another
pot if there's three? ... How many statutes are
cited in the complaint? It's hard to ... fit cases
into boxes ... and put them in timeframes, which is
why we've continued to ask for the discretion that we
have to process things as quickly as we can, using the
tools we have.
Number 180
REPRESENTATIVE ROKEBERG offered that a very large part of [the
RCA's] constituency is coming forward with substantial
complaints, and yet the auditors missed it entirely. Referring
to the nine new positions [instituted] last year, he asked Ms.
Thompson to speak to Mr. Yould's concerns regarding the new
positions working on electric industry-related cases.
MS. THOMPSON explained that there isn't an electricity section
in the RCA. Rather, there is an engineering section, an
economist, a consumer protection section, and a tariff section.
All sections respond to and work on cases that have to do with
the electric utility industry. The new positions - such as the
economist, the engineer, and the consumer protection position -
have worked on several electric industry cases; some of the new
positions have gone into the public advocacy section and dealt
with some electric cases as well.
Number 205
REPRESENTATIVE ROKEBERG asked how many old dockets on electric
issues still exist that the RCA inherited from the APUC.
MS. THOMPSON said she doesn't know for certain, but can find out
and report back to Representative Rokeberg in the morning.
REPRESENTATIVE ROKEBERG asked if the implementation of an MIS is
completed yet.
MS. THOMPSON replied that the RCA has set the end of this month
as the kickoff date. She offered that this isn't the kind of
system that can be switched on and it works. The RCA has been
gradually instituting some parts of it. She explained that the
RCA is currently in the process of training folks and doing some
final testing on some parts of the system, and the public should
see it next month.
Number 220
REPRESENTATIVE ROKEBERG asked if the RCA has a requirement to
report to the legislature periodically.
MS. THOMPSON replied that she doesn't recall a specific
reporting requirement. The RCA reports annually by filing an
annual report, which has statistics on pending, processed, and
handled cases that might be helpful.
REPRESENTATIVE ROKEBERG said he was disappointed to [hear of]
ARECA's resolution, and it caught him by surprise.
Number 233
MS. THOMPSON explained that the resolution was passed before the
audit report was released. She said, "In fairness to the board,
they didn't have the benefit of looking at the numbers the same
way the auditors did when they passed the resolution."
Number 238
REPRESENTATIVE ROKEBERG expressed that the numbers being
discussed are all in particular dockets and cases. He remarked,
"Numbers wouldn't affect the level of frustration."
MS. THOMPSON agreed with Representative Rokeberg. She said, "It
might have helped them better understand the frustration in the
context." She mentioned that members of the electric industry
and Mr. Yould did talk to the auditor, and some those comments
are reflected in the [auditor's] report. She said the auditors
talked to people from all different industries and balanced the
comments together when they did the report.
Number 248
CHAIR MURKOWSKI said as she understands it, in the past year the
RCA opened 172 new dockets, closed 285, and currently has 418
pending cases. She said, "You're making progress. You're down
21 percent, which is a heck of a lot better than 98 when things
were pretty miserable." She expressed that on average over the
past four years, it looks as though the RCA is opening about 200
new dockets a year. She asked, "Will you ever get ahead? Will
you ever be able to ... address the backlog? ... Do you have
the resources to do what it is that we're telling you we want
you to do, which is get caught up?"
MS. THOMPSON replied that she doesn't know if she is ever going
to get ahead. She added, "That's not the nature of the beast."
The RCA doesn't have control over the workload to the extent
that the RCA is [governed] by both state and federal statutes
for handling cases that are filed, and doesn't decide when cases
are filed.
MS. THOMPSON offered that the numbers to look at in terms of
progress are how many cases were pending when the RCA was
created. There were over 700. In two and a half years,
however, the caseload has been reduced substantially, although
she acknowledged "there's probably a case or two out there that
should have been closed six months ago." Noting that the RCA is
going to continue to work on it, she said:
I'd love to be ahead, too, but I don't know if that's
ever going to be a reality, and I don't know if you'd
want us to be ahead because then you'd be arguing
we're overstaffed. The workload has changed, too,
over ... the years, and the priorities. ... The
reality I face is, there's always going to be more
work than I'm going to have time to do. So I have to
look and decide what is most important for me to do
and where I can devote resources. ... We are to
serve the public. What areas do we get the most
complaints in, and what can I do to resolve those
complaints? What issues does it take staff devoting
time to, now that [they] don't really have a very big
public impact? And what can I do to change that?
Number 284
MS. THOMPSON offered an example of a docket that's going to be
on the RCA's next public meeting. She said:
We're trying to change the regulations to lower the
regulatory oversight of ... phone card providers,
because right now, when a new one enters the market,
they're subject to the same level of review as any
other utility. They don't serve many customers. As
long as they're financially fit -- and they're bonded
to protect their customers. ... We don't have to
know as much about them as we do about a Chugach
[Electric] or ML&P [Municipal Light & Power] or some
of our other customers. ...
So right now the regulations require us to do the same
level of review. [There are] proposed regulations
coming up at our next public meeting to change that.
In other words, that's a way to get rid of some of our
workload ... so we can better devote our time and
energy to things that are really more important to the
public.
One of the things the auditor looked at - and I can't
speak for them in terms of why they weighted
complaints differently - is if you look at the
complaints we get from the public, the vast majority
of them - I thinks it's over 70 percent of the public
interest we get - [are] about telecommunications. ...
Eric Yould was right when he was kind of laughing when
we say [what] deregulation means. I think all state
commissioners across the nation would agree with me
that the concept of deregulation working us out of a
job was quite foolish.
In fact, when you're going ... [to an] unregulated
industry, there's been a lot more work along the way
to make it work right. I'm hoping that doesn't last
forever, but at least now we're at the high end of
that curve. And I think it's important ... for a
public agency to be responsive in how we devote our
resources to the issues that are most affecting most
members of the public.
Number 306
CHAIR MURKOWSKI inquired if the RCA has considered having a
telecommunications division because that is where the highest
number of filings are.
MS. THOMPSON responded that the RCA does [have one], and it is
in its statute now. There's an exception created by statute
that's called common carriers, which is kind of ironic because
many utilities are common carriers, but basically it's a
telecommunications section. She said, "Since I've been there,
that section has grown to try and be responsive." She mentioned
that there are tariff filings as competitive carriers try to
file and be responsive to changes in the market, and try to
respond to each other.
MS. THOMPSON said, "So now there's somebody in that section that
just [does] telecommunications tariffs." There's are a lot more
policy issues because that's an area subject to federal law, and
the RCA must pay attention to what the FCC is doing and
implement its directives, for example, certification of
eligibility for universal service support. She explained that
if the RCA isn't paying attention to the FCC's directive, then
the phone companies in Alaska could be cut off from an important
source of revenue.
Number 326
CHAIR MURKOWSKI next addressed the public advocacy component of
the RCA and asked if it is functioning independently, the way
the legislature intended.
MS. THOMPSON responded that she doesn't know what the
legislature intended, but the public advocacy component is
independent in all respects except for the budget; it is part of
the RCA's budget. She offered that one could argue that it's
not independent in the sense of which cases [it gets assigned],
however. She explained:
The statute says that the chair's supposed to decide
when they're appointed or not. But as I noted
earlier, there's cases where they've wanted to ... be
appointed that they told us, and one where we
appointed them and they didn't [want to], and we
respected their wishes there. They're certainly
independent in terms of developing positions and
cases. They're just like any other party in a case,
and they come in and present witnesses and we have no
control over which issues they're going to identify.
That's [the public advocacy section's] job to
represent the public interest, to look at issues. We
appoint them in cases like a utility rate filing [or]
a request for an increase where there aren't other
parties, in order to represent the public interest ...
and tell us which issues are going to have the most
impact on the public that we should pay attention to.
I think ... policywise they're very independent. The
only area with regard to them not being completely
independent is budgetwise. And, again, I don't tell
them how to spend their money, but their budget is
part of my agency's budget.
Number 350
CHAIR MURKOWSKI mentioned that the wastewater utility gave four
recommendations that were within the RCA's jurisdiction to deal
with: amending statutes to create incentives for utilities to
opt into regulation; drafting financial measures of
sustainability at the utility level; establishing a simplified
form for uniform accounting to gather consistent data; and
reviewing the "fit, willing, and able" criteria. She asked Ms.
Thompson to address these issues, except the "fit, willing, and
able" criteria that she'd already addressed.
MS. THOMPSON first spoke about the simplified accounting
procedures. She said the RCA is trying to make it easier for
utilities, new water and sewer utilities, and some of the rural
electric utilities to comply with the filing requirements they
have, either to receive PCE credit or to be certified. She
mentioned the RCA has worked with RUBA [the Rural Utility
Business Advisory Program, under the Department of Commerce and
Economic Development] and a number of the other agencies that
have been installing new water and sewer systems, to give them a
standardized form of accounting system. She explained, "We've
been working with all the different groups that have their
separate system in trying to get the group to reach consensus on
one method that works the best so that we're all operating with
the same basic information." This will give the RCA a better
idea statewide of what the costs of providing these services
really are.
Number 376
MS. THOMPSON next addressed the issue of financial measures of
sustainability at the utility level. She mentioned that the
Denali Commission Sustainability Group has been working on this.
She said the question really is, "What standards do we need to
enforce in a utility's operation to make sure that they've got
the money they need available to maintain the ... utility plant
so it continues to function?" By working off a standardized
accounting system, she said the RCA is hoping to come up with a
set of standards so it can look and judge the financial health
of a utility's operation and provide training and support if
needed. She explained that this is something the RCA does now
on an individualized basis, either in a rate case or in other
filings.
Number 387
MS. THOMPSON next spoke on the issue of incentives to opt in [to
regulation]. She explained that the theory is that new
utilities could benefit from some of the RCA's expertise in
review, in terms of determining that they're doing the right
thing and setting aside maintenance and operating funds. She
said there isn't a specific recommendation the group has been
willing to endorse, but it's an issue that the sustainability
group is going to need to talk about.
Number 0398
REPRESENTATIVE ROKEBERG moved to adopt conceptual Amendment 1,
on page 1, line 5, to change the 2006 date to 2004. He said he
would also have a subsequent amendment to have the RCA come back
next year and report to the appropriate committees in the
legislature about what they're doing about some of these issues.
REPRESENTATIVE HAYES objected to Amendment 1. He said the
Division of Legislative Audit did its job and recommended
extending the RCA because it thought the board was working in an
efficient and timely manner. He offered that a four-year
extension seems warranted because the RCA is required to produce
an annual report and it has 400 backlogged cases. Reporting
back to the committee next year seemed excessive to
Representative Hayes.
Number 415
REPRESENTATIVE MEYER agreed with Representative Hayes and said
the RCA is definitely making progress on the backlog. Most of
the affected companies have been satisfied with the RCA's
performance thus far, and one will never get 100-percent
agreement from all parties.
REPRESENTATIVE ROKEBERG reiterated his discomfort with the
resolution coming from ARECA. He remarked, "It's clear to me
that the Division of Legislative Audit finally blew one badly."
He said it appears the backlog and work process aren't
proceeding in an appropriate manner. That is a huge complaint.
He explained that his amendment keeps the RCA out of the mind's
eye a year and extends it two years; then next year the RCA
would be asked to appear before this committee and the Senate
Labor and Commerce Standing Committee to report on its progress
with the backlog. He said it's simple and something the
legislature has done before. He concluded by saying this is a
unique circumstance, and although the RCA has done a "really
marvelous job," it doesn't mean there [can't be improvements].
He cited the addition of nine personnel last year as an example.
Number 445
CHAIR MURKOWSKI asked Representative Mulder if the RCA has
missions and measures.
REPRESENTATIVE ELDON MULDER, Alaska State Legislature,
testifying as the co-chair of the House Finance Standing
Committee, sponsor of HB 333, replied in the affirmative. He
added, however, that it would be a stretch to say the RCA is
meeting every measurement to the exact level the legislature
would like. He explained:
I think [Ms. Thompson] would say that there are
challenges they're having, but I think they're making
progress. I put the bill in at four years because, by
and large, [if] you look at the bigger picture, you've
got to analyze where we've been, to where we're at,
and where we're going. And I think stability is an
important point.
REPRESENTATIVE MULDER said he doesn't think the Division of
Legislative Audit blew it. He explained that the resolution by
ARECA was put forward because two of the larger utilities that
are members of ARECA - Chugach [Electric] and ML&P - had a
problem.
REPRESENTATIVE MULDER told the committee he wouldn't be opposed
to having a letter of intent attached to HB 333 saying it is the
legislature's intent to resolve the issues in the licensed
electrical issues. He suggested that would send a strong
message. He expressed concern that going with the two-year
[extension] would "make this a political football, again, that
is ... doing [the RCA] a disservice."
Number 463
REPRESENTATIVE ROKEBERG said this is the first time that this
issue and the commission have been back before the committee
since the RCA was established. He suggested that was probably
an error because the legislature could have helped the RCA if it
knew more about what was going on.
REPRESENTATIVE HALCRO agreed with Representative Rokeberg's
concern. He said he doesn't see that the system would be
improved by amending the sunset date to 2004. He stated a
concern that the legislature doesn't need to push this process
along for the RCA. Looking at the numbers, he noted that the
RCA has been making some progress. He said he doesn't see
anything wrong with the chair of the House Labor and Commerce
Standing Committee having an overview once a year, if the
concern is that the legislature loses contact. He said he hoped
Ms. Thompson would be willing to give the committee an update.
Number 491
CHAIR MURKOWSKI noted that Representative Halcro makes a good
point that there are things in the legislative process to
provide a little bit of oversight if that's what people think
would be helpful. She said an oversight hearing is easy enough.
She stated, "With the missions and measures that are in place,
you've got that ... accountability factor there that you've got
to deal with on an annual basis anyway."
Number 498
REPRESENTATIVE ROKEBERG withdrew Amendment 1. He stated his
support for an annual overview of the RCA in the House Labor and
Commerce Standing Committee.
MS. THOMPSON said she would be happy to do that.
CHAIR MURKOWSKI told Ms. Thompson perhaps the committee could
submit a list of questions to her, in advance, listing what
members would like to have addressed.
MS. THOMPSON said she would be happy to do that.
Number 507
REPRESENTATIVE ROKEBERG moved to report HB 333 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 333 was moved from the
House Labor and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:35 p.m.
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