03/10/2003 03:16 PM House L&C
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 10, 2003
3:16 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Bob Lynn, Vice Chair
Representative Nancy Dahlstrom
Representative Carl Gatto
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
Representative Norman Rokeberg
COMMITTEE CALENDAR
HOUSE BILL NO. 36
"An Act relating to electronic mail activities and making
certain electronic mail activities unfair methods of competition
or unfair or deceptive acts or practices under the Act
enumerating unfair trade practices and consumer protections."
- MOVED CSHB 36(L&C) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 20(FIN)
"An Act relating to the Board of Marine Pilots and to marine
pilotage; extending the termination date of the Board of Marine
Pilots; and providing for an effective date."
- MOVED CSSB 20(FIN) OUT OF COMMITTEE
HOUSE BILL NO. 111
"An Act extending the termination date of the Regulatory
Commission of Alaska; and providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 36
SHORT TITLE:ELECTRONIC MAIL
SPONSOR(S): REPRESENTATIVE(S)GARA
Jrn-Date Jrn-Page Action
01/21/03 0041 (H) PREFILE RELEASED (1/10/03)
01/21/03 0041 (H) READ THE FIRST TIME -
REFERRALS
01/21/03 0041 (H) L&C, JUD
01/27/03 0079 (H) COSPONSOR(S): FOSTER
02/12/03 0201 (H) COSPONSOR(S): HEINZE, MEYER,
MOSES,
02/12/03 0201 (H) KOOKESH, CROFT, CRAWFORD,
GUTTENBERG,
02/12/03 0201 (H) STEVENS, CISSNA, MCGUIRE,
KAPSNER,
02/12/03 0201 (H) GRUENBERG, WILSON, LYNN,
WEYHRAUCH
02/18/03 0232 (H) COSPONSOR(S): DAHLSTROM
02/19/03 (H) L&C AT 3:15 PM CAPITOL 17
02/19/03 (H) Heard & Held
02/19/03 (H) MINUTE(L&C)
03/10/03 (H) L&C AT 3:15 PM CAPITOL 17
BILL: SB 20
SHORT TITLE:BOARD OF MARINE PILOTS
SPONSOR(S): SENATOR(S) THERRIAULT, DYSON
Jrn-Date Jrn-Page Action
01/21/03 0019 (S) PREFILE RELEASED 1/10/03
01/21/03 0020 (S) READ THE FIRST TIME -
REFERRALS
01/21/03 0020 (S) L&C, FIN
02/06/03 (S) L&C AT 1:30 PM BELTZ 211
02/06/03 (S) Heard & Held
02/06/03 (S) MINUTE(L&C)
02/13/03 (S) L&C AT 1:30 PM BELTZ 211
02/13/03 (S) Moved Out of Committee
02/13/03 (S) MINUTE(L&C)
02/14/03 0185 (S) L&C RPT 4DP
02/14/03 0185 (S) DP: BUNDE, DAVIS, FRENCH,
SEEKINS
02/14/03 0185 (S) FN1: (CED)
02/20/03 (S) FIN AT 9:00 AM SENATE FINANCE
532
02/20/03 (S) Heard & Held
02/20/03 (S) MINUTE(FIN)
03/05/03 0353 (S) FIN RPT CS 6DP 1NR NEW TITLE
03/05/03 0353 (S) DP: GREEN, WILKEN, OLSON,
BUNDE,
03/05/03 0353 (S) STEVENS B, TAYLOR; NR:
HOFFMAN
03/05/03 0354 (S) FN1: (CED)
03/05/03 (S) FIN AT 9:00 AM SENATE FINANCE
532
03/05/03 (S) Moved CSSB 20(FIN) Out of
Committee
03/05/03 (S) MINUTE(FIN)
03/06/03 0416 (S) RULES TO CALENDAR 3/6/2003
03/06/03 0416 (S) READ THE SECOND TIME
03/06/03 0416 (S) FIN CS ADOPTED UNAN CONSENT
03/06/03 0416 (S) ADVANCED TO THIRD READING
UNAN CONSENT
03/06/03 0416 (S) READ THE THIRD TIME CSSB
20(FIN)
03/06/03 0417 (S) PASSED Y18 N- E1 A1
03/06/03 0417 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
03/06/03 0421 (S) TRANSMITTED TO (H)
03/06/03 0421 (S) VERSION: CSSB 20(FIN)
03/07/03 0459 (H) READ THE FIRST TIME -
REFERRALS
03/07/03 0459 (H) L&C, FIN
03/10/03 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 111
SHORT TITLE:EXTEND REGULATORY COMMISSION OF ALASKA
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
02/19/03 0250 (H) READ THE FIRST TIME -
REFERRALS
02/19/03 0250 (H) L&C, FIN
02/19/03 0250 (H) FN1: (CED)
02/19/03 0250 (H) GOVERNOR'S TRANSMITTAL LETTER
02/19/03 0250 (H) REFERRED TO LABOR & COMMERCE
03/10/03 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE LES GARA
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 36 and presented
Version V.
SENATOR FRED DYSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As cosponsor, presented CSSB 20(FIN),
urging the committee to extend the Board of Marine Pilots;
explained how a U.S. Coast Guard commander opposes granting a
exemption to foreign-flagged yachts.
RICK URION, Director
Division of Occupational Licensing
Department of Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Spoke in support of CSSB 20(FIN), noting
the bill addresses the recommendations of a recent audit by the
Division of Legislative Audit.
PAT DAVIDSON, Legislative Auditor
Division of Legislative Audit
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: In testimony on CSSB 20(FIN), discussed
drug testing and exemptions for foreign-flagged vessels, issues
raised in the recent audit of the Board of Marine Pilots.
KATE TESAR, Lobbyist
for Alaska Yacht Services and Provisioning Company
Juneau, Alaska
POSITION STATEMENT: Testified in support of CSSB 20(FIN) but
advocated for a conceptual amendment to exempt foreign-flagged
yachts from the bill.
CAPTAIN ROBERT WINTER, Marine Pilot
Southeast Alaska Pilots' Association
Juneau, Alaska
POSITION STATEMENT: Spoke in support of CSSB 20(FIN), praising
Alaska's marine pilotage law; suggested identifying ships by
length rather than tonnage.
CAPTAIN DALE COLLINS, President
Southeast Alaska Pilots' Association
Ketchikan, Alaska
POSITION STATEMENT: Answered questions about dispatching marine
pilots on yachts and described the exemption of Canadian
warships in CSSB 20(FIN).
AMY WACHMANN, Owner
Alaska Yacht Services and Provisioning
Fort Lauderdale, Florida
POSITION STATEMENT: Testified in favor of a waiver for yachts
in CSSB 20(FIN), describing the growth of the visiting yacht
industry in the past years.
GRAHAM HAYES, Yacht Captain
Seattle, Washington
POSITION STATEMENT: During the hearing on CSSB 20(FIN),
described how yachts spend large sums of money for provisions in
Alaska ports and are currently tracked by the U.S. Customs
Service and the U.S. Immigration and Naturalization Service.
DEREK SMITH, Safety Manager
Fraser Yachts Worldwide
Fort Lauderdale, Florida
POSITION STATEMENT: As manager of a yacht management firm,
testified during the hearing on CSSB 20(FIN) about the safety
standards of the yachting industry, yacht owners' desire for
privacy, and the awkward logistics of housing a marine pilot
during an Alaskan cruise.
NAN THOMPSON, Commissioner
Regulatory Commission of Alaska (RCA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 111.
WESLEY E. CARSON
Alaska Communications Systems (ACS)
Anchorage, Alaska
POSITION STATEMENT: Emphasized the importance of deferring any
action to re-authorize the RCA until the state has developed a
clear set of telecommunications policies to guide the
commission.
JIMMY JACKSON, Attorney
General Communications Incorporated (GCI)
Anchorage, Alaska
POSITION STATEMENT: Supported the four-year extension of the
RCA in HB 111.
KRISTI CATLIN, Director
Governmental Affairs
AT&T Alascom
Anchorage, Alaska
POSITION STATEMENT: Testified that AT&T Alascom could support
legislation extending the RCA for another 2-4 years only if the
RCA commits to regulatory reform.
JIM ROWE, Executive Director
Alaska Telephone Association (ATA)
Anchorage, Alaska
POSITION STATEMENT: Supported the extension of the RCA in HB
111 with reservations.
H.A. RED BOUCHER, Vice Chairman
Board of Directors
Chugach Electric Association, Inc.
Anchorage, Alaska
POSITION STATEMENT: Made four recommendations during the
hearing on HB 111.
EVAN J. GRIFFITH, General Manager
Chugach Electric Association, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 111.
ERIC YOULD, Executive Director
Alaska Rural Electric Cooperative Association (ARECA)
Anchorage, Alaska
POSITION STATEMENT: Expressed concerns with HB 111.
ACTION NARRATIVE
TAPE 03-18, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:16 p.m. Representatives
Anderson, Dahlstrom, Gatto, Crawford, and Guttenberg were
present at the call to order. Representative Lynn arrived as
the meeting was in progress.
HB 36-ELECTRONIC MAIL
Number 0065
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 36, "An Act relating to electronic mail
activities and making certain electronic mail activities unfair
methods of competition or unfair or deceptive acts or practices
under the Act enumerating unfair trade practices and consumer
protections."
Number 0083
REPRESENTATIVE LES GARA, Alaska State Legislature, sponsor of HB
36, reminded the committee that Representative Rokeberg wanted
to insure that the person sending out improper junk e-mail was
held responsible, not than the Internet service provider whose
equipment was used. He explained that this language has been
clarified in the proposed committee substitute (CS) on page 3
and 4.
Number 0223
REPRESENTATIVE CRAWFORD moved to adopt the proposed CS for HB
36, Version 23-LS0224\V, Bannister, 3/10/03, as the working
document. There being no objection, Version V was before the
committee.
REPRESENTATIVE GARA reiterated that Version V specifies that
only the person or business initiating the e-mail can be held
liable for sending out improper junk e-mail. In an earlier
version, there was language that could have been interpreted as
making an Internet service provider a liable party. On page 4,
line 5 of Version V, the bill refers to the person who initiates
the sending of an unsolicited e-mail; all the language relating
to the liability of Internet service providers was eliminated.
Referring to Version S, Representative Gara said that on page 3,
line 12, everything after the word "sender" was deleted [in the
later version]. Therefore, in Version V the Internet service
provider handling the e-mail bears no responsibility at all.
REPRESENTATIVE GARA reminded members that at the last meeting,
an assistant attorney opined that HB 36 is a valid approach to
regulating unwanted e-mail and would pass constitutional muster
as well.
Number 0456
REPRESENTATIVE DAHLSTROM moved to report the CS for HB 36,
Version 23-LS0224\V, Bannister, 3/10/03, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 36(L&C) was reported from the
House Labor and Commerce Standing Committee.
SB 20-BOARD OF MARINE PILOTS
Number 0516
CHAIR ANDERSON announced that the next order of business would
be CS FOR SENATE BILL NO. 20(FIN), "An Act relating to the Board
of Marine Pilots and to marine pilotage; extending the
termination date of the Board of Marine Pilots; and providing
for an effective date."
Number 0549
SENATOR FRED DYSON, Alaska State Legislature, cosponsor of
committee substitute (CS) for SB 20(FIN), presented his bill.
He explained that marine pilots with local knowledge are
required by law to board larger vessels when they enter Alaskan
waters. Marine pilots guide the ships and advise them about
anchorages, local tides, and local conditions. Every major
seaport in the world has a similar arrangement. This bill
continues the Board of Marine Pilots, which has been successful
and trouble-free.
SENATOR DYSON testified that the bill cleans up several items in
the marine pilotage law. It requires drug training and
screening for trainees, clarifies boundaries in the southern
part of Alaskan waters, and establishes a reciprocal
relationship with the Canadian Navy and the Canadian Coast Guard
Maritimes. Under the bill, if Canadian ships visit the southern
waters of Alaska, they can do so without a pilot, allowing a
reciprocal arrangement for U.S. government vessels. He
encouraged the committee to pass CSSB 20(FIN).
Number 0695
SENATOR DYSON said a group that favors waivers for large yachts
will be testifying today; he encouraged members to listen
closely to their testimony. He said it's nearly an
international standard that vessels over 300 tons carry a marine
pilot on board. A 300-ton vessel is a ship. He said those who
want large yachts exempted from carrying a marine pilot on board
argue that it inhibits wealthy travelers from visiting Alaska.
This requirement may indeed discourage people from spending
large amounts of money in Alaskan waters, he said. The
committee's bill packet includes a [March 6, 2003] letter from
J.W. Underwood, Rear Admiral, U.S. Coast Guard, Commander,
Seventeenth Coast Guard District. He said Admiral Underwood has
several good reasons for continuing the present requirement for
large yachts to have a marine pilot onboard. Some of those
vessels will have 20,000 to 100,000 gallons of fuel, and a spill
of that magnitude could cause significant damage. He noted that
Southeast Alaska has difficult passages such as the entrance to
Lituya Bay and Wrangell Narrows.
Number 0856
SENATOR DYSON noted that the U.S. Coast Guard ("Coast Guard")
has not supported an amendment to allow the exemption for these
large foreign yachts. In his conversations with Coast Guard
officials, Senator Dyson said he has recommended that yachts
carry a vessel tracking transponder on board, that they be
inspected by the Coast Guard, that criteria be established for
the knowledge and expertise of the skipper, and that possibly a
bond be required.
SENATOR DYSON related that Admiral Underwood anticipated that in
a year, even within three months, the scope of the threat from
international terrorists will be clearer. For the Coast Guard,
maritime security is extraordinarily important. Senator Dyson
said he doesn't believe that Alaska would be a target for
terrorists, but one can't be sure. In other locations, large
cruise ships have been attacked. Tankers moving through Alaskan
waters could be a target, and the large freighters that pick up
nitrates from Nikiski and that carry tons of diesel fuel have
the two ingredients needed for a very large bomb. Under the
Homeland Security Act, the Coast Guard is charged with port and
maritime security, and he said the agency is overwhelmed with
that responsibility in Alaska. In the future, Coast Guard staff
indicated they would be amenable to working out something with
the legislature more favorable for the large yachts.
Number 1017
SENATOR DYSON, replying to a question from Representative
Crawford, said the bill applies to all commercial vessels over
300 tons [including foreign-flagged yachts].
Number 1039
REPRESENTATIVE GATTO asked two questions about the addition of
the term "inside water of Southeastern Alaska", on page 2, lines
27-28. He questioned whether the term is defined and if it
includes waters three miles off the outer coast.
SENATOR DYSON replied that the term "inside water" is defined;
it means there is land on the ocean side and that the waters are
protected.
Number 1080
REPRESENTATIVE GUTTENBERG referred to the recommendations from
the Division of Legislative Audit report [Audit control number
08-20015-02] that addressed drug testing. One recommendation
concerned the inconsistency between the four pilots'
associations [that are responsible for administering the random
drug-testing requirements]. He pointed out new language
starting on page 1, line 14, "and for trainees and apprentices
seeking a license or endorsement under this chapter;" he asked
whether it corrects the inconsistency between the groups.
SENATOR DYSON said yes, that was his understanding.
Number 1126
RICK URION, Director, Division of Occupational Licensing,
Department of Community & Economic Development, said his
division supports extending the Board of Marine Pilots another
four years. He said the board has addressed the problems
identified in the recent legislative audit. He concluded that
the board performs a valuable service, and he urged the
committee to pass this version of SB 20.
Number 1159
REPRESENTATIVE GUTTENBERG asked about the uniformity of drug
testing [among the pilots' associations]. The Board of Marine
Pilots may delegate all or a portion of the drug-testing
programs. He asked how that system works.
MR. URION replied that the marine pilot coordinator who staffs
this board could answer questions on the drug-testing program.
Mr. Urion said he was assured that this issue has been
addressed.
Number 1219
PAT DAVIDSON, Legislative Auditor, Division of Legislative
Audit, Alaska State Legislature, answered the question by
Representative Guttenberg, noting that recommendation number 3
of the audit asked that the statutes be tightened to add both
trainees and apprentices to the drug-testing program. This bill
solves that problem, she said. Currently, the drug-testing
program has been delegated to the four pilots' associations, as
allowed in statute and regulation. The Board of Marine Pilots
also has the responsibility to review the bylaws of those
organizations. She said Legislative Audit is satisfied that the
drug-testing issues and recommendation number 3 have been
addressed in CSSB 20(FIN).
Number 1270
REPRESENTATIVE GUTTENBERG asked about audit recommendation
number 4, waiving pilotage on large foreign-flagged pleasure
crafts. He asked how this recommendation affects marine pilots
and whether these yachts are currently allowed in Alaskan waters
without marine pilots.
MS. DAVIDSON replied that the auditors found that either yachts
over a certain size were not coming into the waters, or they
were coming into the waters and not requesting marine pilots.
She said the 300 gross-ton limit does not easily translate into
a visual assessment of a ship's size because tonnage is not
particular to length. Therefore, these vessels are in Alaskan
waters, and there's no quick determination of whether they
require a marine pilot. This issue was also addressed in a
prior audit. This audit recommended that the board seek a
statutory waiver to address the problem. Senator Dyson
underscored some security issues which cannot be dismissed. She
added that it's important to look at what the marine pilots can
add to security issues.
Number 1384
KATE TESAR, Lobbyist for Alaska Yacht Services and Provisioning
Company, explained that this business, owned by Amy Wachmann,
assists yacht management companies and yacht owners with
bookings to bring yachts into Alaska. Ms. Tesar described her
12-year background in marine pilotage. She said her client
supports the legislation to extend the Board of Marine Pilots
and is very satisfied with the board's performance. Her client
supports the audit's recommendation number 4, which proposes a
statutory waiver allowing foreign-flagged vessels of over 300
tons to operate in Alaska without marine pilots onboard. Ms.
Tesar reported that her client learned through booking agencies
and yacht owners that pleasure crafts are not visiting Alaska
because of the current law. She asked the committee to take a
mandate off the books that has not being enforced since it was
passed in 1995, a mandate that only serves to obstruct commerce
in Alaska.
Number 1505
MS. TESAR explained that there was a major rewrite of marine
pilotage law in 1991, addressing many concerns that arose after
the Exxon Valdez oil spill. She said no one advocates taking
pilots off oil tankers or large cruise ships. Prior to 1995,
all pleasure craft, whether U.S.-flagged or foreign-flagged,
were exempted from having a marine pilot on board. In 1995, the
legislature mandated that a marine pilot be on board for these
foreign-flagged vessels over 300 gross tons. She said no one
foresaw the huge increase in the yacht cruising business in
Alaska. She said there have been no major legislative changes
relating to marine pilotage in the last eight years but
mentioned that there have been large changes in the industry in
the same time period. Ms. Tesar said she is pushing for this
waiver because the economic impact on Southeast communities is
huge.
Number 1600
MS. TESAR said she has provided committee members with
information about Washington state marine pilotage laws, which
have been in place for many years and have been working well. A
yacht planning to enter Washington waters applies for a waiver
from the state's marine pilot coordinator. The yacht pays a
fee; a determination is made based on information in the waiver
application; and the yacht goes on its way. She encouraged an
amendment that would do the same thing: give a waiver to yachts
of 200 feet or less or a waiver based on the weight of these
vessels. She said British Columbia also has a waiver system in
place for foreign-flagged yachts. Ships can cruise the waters
of the Pacific Northwest but are unable to come into Alaskan
waters without a pilot. In Washington, authorities decide,
based on the experience of the captain, whether they want a
marine pilot onboard for the first day of a voyage. Some 90
percent of the foreign-registered yachts are flagged in Great
Britain and have either American or British captains. There are
strict international licensing laws for these captains.
Number 1730
MS. TESAR said that many yachts do request marine pilots; they
must call 48 hours in advance to schedule a marine pilot. Many
yachts stay in Southeastern waters all summer, and family and
guests fly up and back. The major clients of marine pilots are
the cruise industry, for which the cruise ship schedule is known
months in advance. She said this problem of scheduling was
discussed in detail during the Senate finance committee hearing.
Number 1774
MS. TESAR explained that last year in Juneau, there were 430
dockings of large cruise ships. There are two pilots aboard
each vessel, and each vessel cruises for seven days. She said
this illustrates the huge volume of traffic that marine pilots
service. Ms. Tesar said she has been working the last few weeks
with the Coast Guard on security issues. Currently, she said,
the U.S. Customs Service ("Customs Service") and the U.S.
Immigration and Naturalization Service board each of these
foreign-flagged vessels the moment they come into U.S. waters.
Yachts have to get a cruising permit from the Customs Service if
they intend to stay in U.S. waters for any period of time. She
pointed out that the federal government has an application
process in place, and the Coast Guard is able to track these
vessels.
Number 1887
REPRESENTATIVE LYNN asked what flags these large foreign yachts
sail under and the origin of the crews.
MS. TESAR replied that the majority of the yachts are flagged
under Great Britain. The crews come from all over the world,
but about 90 percent are from Great Britain or the United
States.
MS. TESAR answered two questions from Representative Lynn,
saying she did not know how many foreign yachts come into
Alaskan waters but estimated two to three dozen a year. She
said she did not know if marine pilots have security clearances.
Number 1936
REPRESENTATIVE CRAWFORD questioned how a waiver for foreign-
flagged yachts would impact the existing number of marine
pilots. He asked if there was a waiver, would some pilots be
put out of work, and if the current law were enforced, would
there be a demand for more marine pilots.
MS. TESAR replied that no marine pilots would lose any jobs
because of this proposed waiver. The question about whether
there are enough marine pilots to serve this part of the
industry needs further discussion. She said people have
testified at hearings that pilots have been requested but were
unavailable.
CHAIR ANDERSON estimated that if three dozen yachts entered
Alaskan waters but had waivers from pilotage, 36 ships would not
use marine pilots.
Number 2007
REPRESENTATIVE LYNN asked why yachts aren't using marine pilots
now.
MS. TESAR replied the real reason is not the marine pilotage
fee, which can run several thousand dollars a day. She said
yachts are not using pilots because U.S. laws limit these
vessels to 12 passengers, and so a marine pilot on board for
many weeks might take a spot otherwise occupied by a family
member or a guest. Yacht owners object to having a person they
don't know on board for long periods of time, she noted. She
said the money is probably an issue, but it's not as great a
concern as privacy.
REPRESENTATIVE GUTTENBERG asked how many requests for marine
pilots on yachts went unfilled last year.
MS. TESAR said she has asked the marine pilot coordinator [with
the Board of Marine Pilots] but there is no way of knowing.
Number 2080
CAPTAIN ROBERT WINTER, Marine Pilot, Southeast Alaska Pilots'
Association, explained that he is a retired Coast Guard officer,
and has been going to sea for over 37 years, 25 of those years
in Alaska. Because Alaska has more coastline than the entire
United States combined, regulation of marine pilotage in Alaska
is an important responsibility. He said the Alaska State
Legislature has crafted a marine pilotage act that is second to
none in the country. Alaska marine pilots are on the cutting
edge of training and recurrent training, assuring that they
remain at the top of their profession. He said marine pilots
have an interest in the integrity of the system that governs
them. He said that CSSB 20(FIN) extends this proven system, and
on behalf of the Southeast Alaska Pilots Association, he urged
the committee to pass the bill.
REPRESENTATIVE LYNN asked his opinion about the increasing
number of yachts visiting Alaska.
Number 2139
MR. WINTER replied first with an explanation of gross tonnage.
He said gross tonnage is not a weight measure; it is a volume
metric measure; one hundred cubic feet is a gross ton. He used
the example of the Yorktown Clipper, which is 235 feet long and
99 gross tons. He explained that the ship is called a rule
beater [because at less than 100 tons, the ship is governed by
less stringent inspection standards]. He named several other
vessels around 200 feet in length that are less than 99 gross
tons. He opined that those ships are not little private yachts.
He said that marine pilots favor removing the gross tonnage
standard from the law, if the committee were to amend the bill.
He said he would be able to estimate the length of a boat and
make a good guess about whether it would require a pilot; now,
he said, there's no way to tell.
Number 2197
MR. WINTER said his job as a state-licensed pilot is to move
commerce safely on the waters of Southeast Alaska. He said he's
anxious about meeting a 300-foot ship without a pilot in
Wrangell Narrows in the fog, and he's certain that ferry
captains have the same concern. If a ship is a U.S.-enrolled
vessel, such as a ferry, it has a federal pilot on board.
Number 2241
MR. WINTER replied to a question from Representative Gatto about
the change in latitude on page 2, line 28. Mr. Winter said he
had noticed the typo and pointed it out to the bill's sponsors.
The change allows a ship to sail as far north as Skagway, and it
only applies to Canadian vessels.
Number 2266
REPRESENTATIVE DAHLSTROM asked whether there are enough pilots
available to handle the requests for yachts and about the number
of unfilled requests.
Number 2289
CAPTAIN DALE COLLINS, President, Southeast Alaska Pilots'
Association, said to his knowledge, there have been no unfilled
requests for marine pilots by yachts. He checked with his
office staff and with the Alaska Coastwise Pilots Association,
which recently merged with his agency. He said between the two
organizations, whenever there was a call for a pilot, one or the
other was able to fill the request in a timely manner. He said
he suspects yachts have entered Alaskan waters but have not
requested a marine pilot.
Number 2352
REPRESENTATIVE GUTTENBERG asked about the two different
assignments for marine pilots - whether they preferred the
prescheduled, weeklong work on a cruise ship or the unscheduled
assignment on a pleasure craft.
MR. COLLINS replied that a preference for one or the other
assignment depended on the pilot. Some pilots might prefer a
yacht as a break from being on a cruise ship. He explained that
usually, when a marine pilot goes on a yacht, the pilot stays in
the crew quarters; there wouldn't be a stateroom available as on
a cruise ship because of its much smaller size. He said he
personally likes being on yachts because they go on interesting
routes, visit interesting ports, and they're a nice break from
the cruise ships.
TAPE 03-18, SIDE B
Number 2395
MR. COLLINS explained that his association is required to keep
extra pilots for the 48-hour notice from cargo ships and yachts.
He said his agency does not get many calls for yachts.
REPRESENTATIVE GUTTENBERG asked whether the association could
handle as many as three dozen calls for marine pilots for
pleasure cruises.
MR. COLLINS replied yes, as long as the calls for marine pilots
were spread over a three-month period; if the requests all came
on the 4th of July, they would probably overload the system.
Tuesdays and Wednesday are peak days in Southeast Alaska when
the maximum number of pilots are out and the maximum number of
cruise ships are in. He said the association keeps four or five
marine pilots available for cargo and for the unexpected yacht.
Number 2328
REPRESENTATIVE LYNN asked why Canadian vessels are exempt from
the pilotage requirement on page 2, lines 25 and 26.
MR. COLLINS replied by describing the current practices of U.S.
and Canadian government ships. He said that U.S. Navy ships
visiting Alaskan waters are not subject to state pilotage but as
a matter of good seamanship, voluntarily take a pilot. It is
standard practice for U.S. ships to pick up a pilot in any port
that isn't a homeport.
MR. COLLINS said there is some interest in giving Canadian
government ships a waiver [on page 3, lines 5-7] if Canada were
to offer the same waiver for U.S. Navy ships. While some
Canadian ships would not take a pilot voluntarily, he
anticipated that many would take a pilot even if the statute
were amended. Some smaller Canadian ships, like minesweepers,
travel extensively in the Canadian inside waters and could sail
successfully in Southeast, while the larger frigates, light
cruisers, or destroyer would probably elect to take pilots.
Marine pilots have worked on small Canadian oil tankers, fleet
tankers, and frigates in the past, he said.
Number 2201
AMY WACHMANN, Owner, Alaska Yacht Services and Provisioning,
said she started her business two years ago; she has spent eight
years in the Alaska yachting industry and has worked on yachts
in the Caribbean, the Mediterranean, and the Pacific. She
explained that she has noticed more yachts coming through
Alaska. She said the amount of money they spend in port is
tremendous, a great opportunity for Alaskan communities.
MS. WACHMANN said yachts owners don't object to having pilots on
board; that's the procedure wherever they travel. She said that
[the problem is that] Alaska law requires the marine pilots to
be on board the entire time that the yachts are traveling in
Alaskan waters. If a yacht spends an entire summer visiting the
different bays and communities, it's very difficult for some of
these owners to accommodate a pilot for three months at a time.
That is why she is advocating for a waiver process similar to
those used by the State of Washington and Canada.
Number 2110
GRAHAM HAYES, Yacht Captain, explained that he has 15 years of
experience, with 6 summer seasons in Alaska on commercial ships
and 7 years on private yachts all around the world. He urged
the committee to consider an alternative to the requirement for
pilotage for foreign-flagged yachts over 300 tons. Presently
the yacht he's sailing is 171 feet and 680 gross tons. He said
this is a good size boat, but it's much smaller than a 600-foot
ship. He said it is difficult to gauge tonnage, a very limiting
factor.
MR. HAYES said his employer, the owner of the yacht, is not
planning on sailing in Alaska, even though he would like to go
there. The problem is the requirement that a pilot be on board
for the entire time the yacht is in Alaskan waters. He said the
yacht may sit in one spot for four days before it moves a few
miles away. The cost of the pilot and accommodating the pilot
are contributing factors to the yacht owner's decision.
MR. HAYES continued by saying that each year the yacht spends
nearly $1 million for items such as moorage, fuel, provisions,
parts, and hotels -- all items that are typically spent in the
area the yacht visits. There are additional operational
expenditures for the private jet and the helicopters that
sometimes serve a yacht. He said these yachts meet all safety
and environmental requirements and often exceed the industry
standards for a commercial ship. Every owner and guest clears
through U.S. Customs and the U.S. Immigration and Naturalization
Service. He said this excessive pilotage requirement denies the
local communities the economic benefits of visiting yachts. His
[employer's] yacht is foreign-flagged but American-owned, which
is very common, he said. Most of the crew are U.S. citizens or
British, and all speak English.
Number 2012
REPRESENTATIVE GUTTENBERG asked where a yacht takes on most of
its provisions.
MR. HAYES said yachts take on provisions in the area they are
visiting. For example, if yachts are in the Ketchikan area,
they take on most of their provisions there. In one case, a
yacht stopped at Elfin Cove and spent $15,000 on local artwork.
He said visiting yachts are a big business for communities
around the world.
Number 1975
MR. HAYES answered a question from Representative Crawford about
whether he had ever experienced delays in getting a marine
pilot. He replied that he has not operated a yacht of the size
that requires a marine pilot in Alaskan waters. When entering
ports in other areas, he has picked up pilots at a station or a
dock after 24-hour notice. He recommended doing pick-ups at a
pilots' station rather than where the yacht is anchored.
Number 1936
DEREK SMITH, Safety Manager, Fraser Yachts Worldwide, introduced
himself as an associate member of the Institute of Marine
Engineering, Science and Technology, an incorporated engineer,
and a small ship surveyor. Fraser Yachts Worldwide manages 30
yachts, about 15 of which are over 500 gross tons. The standard
of construction for yachts is covered by the Code of Practice
for Safety of Large Commercial Sailing and Boating Yachts
published by MCA, the United Kingdom's Maritime and Coast Guard
Agency. He said the standards and qualifications for the crew
are very high. Next year, the ISPS (International Ship and Port
Security) Code will also be implemented on yachts over 500 gross
tons and voluntarily on almost all of the other yachts in the
Fraser fleet.
MR. SMITH assured the committee that concerns over security may
be real but the threat from a yacht is small. Most of Fraser's
large yachts, when the principals are on board, will have
security guards. His company carries out background checks on
all the crewmembers, and said that some owners might request
that the marine pilot submit to a background check. He said the
money for employing marine pilots is not the issue; the problem
rises more in the principal's desire for privacy. There is a
problem with accommodating the pilot on board a yacht that has a
maximum of 12 guests and 12 crew. If the yacht only has 24 life
saving appliances, one of the crew has to get off the boat.
Owners don't stick to a schedule because they can go wherever
they wish. He explained that the position of a yacht is tracked
by satellite and other technologies. He noted that he would
like to submit written testimony.
Number 1777
CHAIR ANDERSON said written testimony can be submitted to the
House finance committee, the bill's next committee of referral.
There being no other witnesses, he closed the public hearing.
Number 1752
REPRESENTATIVE Lynn moved to report CSSB 20(FIN) out of
committee with individual recommendations and the accompanying
fiscal note. There being no objections, CSSB 20(FIN) was
reported from the House Labor and Commerce Standing Committee.
HB 111 - EXTEND REGULATORY COMMISSION OF ALASKA
Number 1733
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 111, "An Act extending the termination date of
the Regulatory Commission of Alaska; and providing for an
effective date."
Number 1715
NAN THOMPSON, Commissioner, Regulatory Commission of Alaska
(RCA), informed the committee that the RCA supports HB 111. She
explained that the RCA's mission is to protect consumer
interests by ensuring affordable and reliable utility and
pipeline services as well as ensuring that the utility and
pipeline infrastructures are adequate to support community
needs. The agency has come a long way since its creation in
1999 and has reduced the notorious backlog to a manageable open
caseload of several hundred cases. The RCA hopes to spend time
focusing on some of the important policy issues facing the
market. Ms. Thompson submitted her written comments to the
committee.
Number 1609
WESLEY E. CARSON, Alaska Communications Systems (ACS), stated,
"My reason for being here is to emphasize the importance of
deferring any action to re-authorize the Regulatory Commission
of Alaska until the state has articulated a clear set of
telecommunications policies to guide the commission." Mr.
Carson also provided the committee with his written testimony.
REPRESENTATIVE GUTTENBERG asked if Mr. Carson believes that the
RCA needs more guidance from the legislature.
MR. CARSON replied yes and related his belief that a lot of
discretion is afforded to the states under the
Telecommunications Act of 1996. As the RCA is charged with
implementing the law, there is an opportunity for the
legislature to clarify, by statute and policy, the direction for
the commission.
Number 1510
JIMMY JACKSON, Attorney, General Communications Incorporated
(GCI) informed the committee that he has worked with GCI for 10
years and for the 10 years before that he worked for the Alaska
Public Utilities Commission (APUC), the predecessor of the RCA.
Mr. Jackson related GCI's support for the four-year extension as
proposed in HB 111. He recalled that four years ago five new
commissioners were confirmed by the legislature when the RCA was
established. Recently, two of those commissioners have been
replaced and the current legislature has confirmed two new
commissioners. During last year's special session, the RCA
legislation amended timelines and time limits for the
proceedings. He related that GCI believes that it's now time to
trust the RCA to deal with the very complex issues before it and
for the legislature to allow the RCA to get on with its
business. Mr. Jackson said that it's not possible for the
legislature to become experts in the area of telecommunications
and electrical utilities.
Number 1450
MR. JACKSON estimated that the RCA has spent hundreds of hours
dealing with the issues about which ACS has complained. When
cases come before the RCA they are usually held in trial-like
settings and one of the parties often goes away disappointed.
Therefore, GCI isn't satisfied with all of the decisions the RCA
has made over the last few years. However, GCI understands that
the commissioners are doing their job in a professional and fair
way. Stability would be beneficial to the agency, and therefore
GCI supports the four-year extension.
Number 1371
KRISTI CATLIN, Director, Governmental Affairs, AT&T Alascom,
provided the following testimony:
As you know, AT&T Alascom, and before that, Alascom,
has a long history of providing telecommunications
services to the state of Alaska. In fact, it has the
longest history of any inter-exchange carrier in the
state today. It is from those very roots, and having
witnessed the broad changes in technology and market
shift over the years, that we would like to offer our
perspective and respectfully make some requests for
the legislature to consider.
We believe that both telecom service providers and
policymakers have a two-fold obligation to the
constituents of this state. Those are: ensuring that
basic telecom services remain affordable to everyone
in the state; and providing a regulatory environment
that fosters continued investment in the state telecom
infrastructure, thereby ensuring that advanced
services will reach to all parts of the state.
In the early days, Alascom was the only long distance
carrier in Alaska, and as such, a regulated monopoly.
Regulations were put in place to ensure that Alascom
did not misuse its monopoly power in pricing its
services to consumers. In addition, in 1991, when
intrastate long distance competition was initiated,
additional regulations were developed to ensure that
Alascom did not misuse its monopoly power to subvert
competition. At the same time, new entrants to the
long distance market were granted broad and
significant freedoms. And even though the market was
highly competitive in 1995 when AT&T bought Alascom,
for the most part, it bought a company regulated as
though it were a monopoly. As we all know, the
regulations governing utilities with a legal monopoly
work in two directions: first, they protect the
consumer from unreasonable prices on the one side of
the equation, and second, they ensure a reasonable
return for the regulated utility on the other side.
Without a reasonable return, companies do not invest
and services, therefore, do not advance.
Many of the regulations which restrict AT&T Alascom
today are vestiges of that monopolistic environment I
spoke of previously. However, in this highly
competitive marketplace, they do not serve as an
incentive for investment - they only serve to add cost
and thereby provide a disincentive for investment. As
far as protection of the consumer on prices, we have
almost 20 years of empirical evidence in the long
distance market in the U.S. to show that competition
serves the consumer well. In 1984, when AT&T was
first broken up, the average discounted corporate
minute was around $.45. Today, the average discounted
corporate minute is under [$.045]. That's a whole
order of magnitude swing. And yet, during the same
time period, the long distance industry went from
approximately $9-$10 billion to about $90-$110
billion. It was deregulation of the industry and the
management of competition that spurred investment.
And in 1995, when AT&T fell below 60 percent market
share in the Lower 48, the FCC ceased regulating AT&T
as the "dominant carrier" and deemed the market for
long distance as "competitive".
And yet, here in Alaska, where AT&T Alascom now has 42
percent of the long distance business and shrinking,
and our largest competitor, GCI, has 46-48 percent of
the long distance business and growing, AT&T Alascom
is still considered the dominant carrier, despite a
four-year attempt to get relief from this regulation
at the RCA. This regulation adds substantial to our
cost structure for tracking, journalization, and
reporting. It also adds regulatory process that our
competitors don't have that keeps us from being
competitive in the marketplace. The whole situation
begs the definition for "dominance". Additionally,
with the increased costs and inability to compete
effectively because of outdated regulations, our
ability to attract capital and invest in the network
is severely "hamstrung".
Number 1167
I believe that over the next 12-18 months, this state
must wrestle with some difficult issues of telecom
regulation. At stake is the very survival of an
infrastructure that's struggling to keep up with the
rest of the country. In a true free market, there is
less regulation, not more. And competition, not
regulation, becomes the force to shape the market.
I would ask you to carefully and thoughtfully consider
the market dynamics at work here, and the definitions
of broader market issues such as "dominance" and
"competition". I would also ask you to carefully
consider your role in mandating an environment that
has less regulation, not more, in order to create and
maintain incentives to invest in the modern
telecommunications infrastructure that all Alaskans
desire.
As you consider House Bill 111 reauthorizing the RCA,
please know that AT&T Alascom could support
legislation which would extend the RCA for another 2-4
years, however, as we stated last year - only if the
RCA is truly committed to bringing about regulatory
reform. Status quo is not an option if you intend to
have a healthy, competitive telecom market and
infrastructure in Alaska. We have drafted appropriate
language to assist the legislature in defining
"dominance", and are submitting it for your
consideration.
Number 1099
REPRESENTATIVE GUTTENBERG requested that Ms. Catlin expand on
the issue of disincentives for investment.
MS. CATLIN informed the committee that the current regulations
cost the company between $2-$5 million annually. The company
also has a difficult time due to the high costs of serving the
Bush regions of the state. It's difficult to attract investment
from AT&T unless [AT&T Alascom] is free from some of the costs
associated with the existing regulation, she said. One step
toward being free from some of the costs associated with the
existing regulation would be release from the "dominance"
regulation. Ms. Catlin pointed out that AT&T must keep separate
books for Alaska, which amounts to about $2 million a year.
REPRESENTATIVE GUTTENBERG asked what it would take to get the
RCA to respond to the market dynamics.
MS. CATLIN responded that she believes the RCA needs policy
direction from the legislature to [encourage] investment in Bush
Alaska.
Number 1007
REPRESENTATIVE CRAWFORD inquired about the "dominance"
regulation.
MS. CATLIN specified that [AT&T Alascom] is looking to be
relieved from an annual report filing, which is related to the
journalization issue. She explained that AT&T Alascom is
required to perform certain network reporting that the
competitors aren't required to do. She informed the committee
that AT&T Alascom is required to file a 25 percent outage report
daily as well as a quarterly report. Furthermore, if AT&T
Alascom wants to make any rate increases, it must file on 45
days notice to the public with cost justification. For example,
if the company had a $.15 per minute plan and AT&T eliminates
the plan, then [AT&T Alascom] would need to move its customers
to a $.14 per minute plan with a $4.99 monthly charge. She
explained that AT&T Alascom could end up in a proceeding that
could be protracted to answer the question as to whether it was
a rate decrease or increase, although it isn't necessary or to
the benefit of AT&T Alascom's consumers. Ms. Catlin said, "It
isn't really that we want to raise our rates, but we need the
flexibility in the marketplace to be competitive."
MS. CATLIN, in further response to Representative Crawford,
clarified that there are three things required under the
dominance regulation: journalization, competitive flexibility
with tariffs, and network reporting.
Number 0886
JIM ROWE, Executive Director, Alaska Telephone Association
(ATA), informed the committee that ATA is available to all the
incumbent local exchange carriers in the state. The members of
ATA are regulated utilities. Mr. Rowe said that in general, ATA
is in support of the four-year reauthorization of the RCA.
However, ATA does have some concern with the operation of the
RCA. He pointed out that with one term of the commissioner
expired, the government put forward two names for the commission
seat. Additionally, a recent executive order addressed the
staffing of the public advocacy section. He explained that
[ATA] believes that those actions demonstrate that the RCA has
the attention of the administration. In deference to Governor
Murkowski's attention, prudence dictates that the actions of
this commission be monitored. With regard to the staff
changing, there is the belief that other things might be
happening and ATA is waiting to see. Mr. Rowe stated that ATA
is concerned with some orders that have come out of the
commission. He recalled that an earlier witness testified that
some party before the commission is always displeased. However,
Mr. Rowe suggested that there are some parties that are more
regularly pleased than others and ATA's members are in the group
that is not as regularly pleased. Mr. Rowe said, "At this point
we're not anxious, Mr. Chairman, to say please go ahead and pass
this bill today, but we are concerned. We're watching very
carefully." He mentioned that ATA has particular interest in
investment and infrastructure.
Number 0730
H.A. RED BOUCHER, Vice Chairman, Board of Directors, Chugach
Electric Association, Inc., informed the committee that he is an
elected board member and responsible to the 60,000 member owners
of Chugach Electric, which is Alaska's largest provider of
electric energy. He noted that he is the chair of the
Government and External Affairs Committee and also the
Technology Committee. He explained that the committee should
have his written testimony. Mr. Boucher noted that from 1984-
1990 he served on the House Labor and Commerce Standing
Committee, and although the faces have changed, the issue
remains the same. He did note that one difference now is that
Alaska is competing in a global economy.
MR. BOUCHER recalled that in 1999 the Alaska Public Utilities
Commission (APUC) was reorganized under AS 46.42.04, AS
46.42.05, and AS 46.42.06 in order to improve it's efficiency.
The newly-formed RCA was charged with the responsibility to
ensure the furnishing of safe and adequate service to all public
utility patrons without discrimination and at reasonable rates,
consistent with the interest of both the public and the utility.
Last year Chugach Electric testified before the Senate Judiciary
Standing Committee about the effectiveness of the newly formed
commission in carrying out its mandates. He said that Chugach
Electric was concerned that the regulatory process takes too
long and if the additional staff was necessary, Chugach Electric
more than supported it. In fact, Chugach Electric contributes
$400,000 to RCA's budget. During the testimony [last year], the
Chugach Electric board president had recommended four
improvements. They included (1) the need for an oversight
committee to work with the RCA and utilities to seek best
practices and benchmark performance; (2) the need for the
commission chair to have a senior level staff person to help
carry the large workload; (3) the need for the RCA to lighten
its caseload; and (4) the need for a better method of resolving
disputes between parties.
Number 0374
MR. BOUCHER stated that these recommendations [have been
ignored]. He noted that the Joint Committee on Legislative
Budget and Audit (BUD) recommendation for an extension to June
30, 2005, points out the need for these [changes]. There is no
easy solution, he remarked. However, the RCA needs
commissioners and staff who fully understand the complexities of
rate regulation, the Alaska marketplace, and balance the
financial help of the utilities with the needs of their owners
and consumers. Mr. Boucher related that Chugach Electric
supports either approach, the governor's proposed four-year
extension of the RCA or BUD's June 30, 2005, extension. The
question isn't whether the legislature should extend the RCA,
because that's a matter of law. However, Chugach Electric
strongly recommends an amendment to [HB 111] providing for a
government-appointed panel of industry experts with the
authority and obligation to work jointly with the RCA and the
regulated community in order to improve the regulatory process.
Currently the Chugach Electric Board spends 50 percent of its
time dealing with regulatory matters. Mr. Boucher stressed that
Chugach Electric would like to get onto the business of building
an electric energy and transmission company that meets the
challenges Alaska will face in a globalizing economy. The
Murkowski administration and the legislature have emphasized the
need to expand Alaska's economy in order to face the state's
financial challenges. Mr. Boucher said Chugach Electric shares
that vision.
Number 0146
MR. BOUCHER, in response to a question from Representative Lynn,
confirmed that the recommendation was for a government oversight
committee of the RCA. In fact, there was supposed to have been
a committee appointed by the legislature so that this wouldn't
be an issue. However, that didn't happen and thus the
recommendation is suggested again, he added.
REPRESENTATIVE LYNN questioned how far such a recommendation
would be taken. If there's a panel to watch the RCA, should
there be a panel to watch the panel, he asked.
MR. BOUCHER emphasized that this type of issue can only be
debated during the RCA's sunset time period because the
utilities have no other forum in which to air their problems.
He pointed out that these types of problems can't be brought up
when an entity has a case before the RCA.
Number 0035
EVAN J. GRIFFITH, General Manager, Chugach Electric Association,
Inc., noted that the committee should have a handout from him.
He relayed Chugach Electric's view that the RCA must consider
the financial health and utilities in the process [tape ends
midspeech].
TAPE 03-19, SIDE A
Number 0012
MR. GRIFFITH referenced an opinion update from Moody's Investors
Service and highlighted the following statement: "This rate
case outcome is in contrast to largely supportive regulatory
treatment provided to Chugach in the recent past." He noted
that Standard & Poor has placed Chugach Electric on a credit
watch, which isn't good in the investment world. Standard &
Poor says that this rating action reflects the expected
financial impact on the utility of the latest rate order by the
RCA. In addition to substantially weakening debt service
coverage, the RCA's rate order signals heightened regulatory and
refinancing risks for the utility and may cause [Standard and
Poor] to apply more stringent guidelines in assessing Chugach
Electric's credit quality, he said. Mr. Griffith cited a letter
from David Rose, Chairman and CEO of Alaska Permanent Capital
Management Company, which expressed concern with regard to the
impact of the order on Chugach's bondholders. The RCA's latest
ruling has placed Chugach Electric in default on its bond
requirements for 2002. In fact, Mr. Griffith related that he is
preparing a report specifying that Chugach Electric has
sustained a $2 million loss in 2002.
Number 0112
MR. GRIFFITH emphasized that this was Chugach Electric's first
request for a rate increase since 1994. The order said that
Chugach Electric had done fairly well in the presentations.
However, the numbers didn't back up what was said and no rate
stability was achieved. He noted that Chugach Electric actually
ended up with a 1.5 percent rate decrease. Mr. Griffith related
the [company's] belief that there must be a balance of consumer
protection and solid economic base. Furthermore, he added, the
large businesses in the Railbelt have to be on solid financial
ground; otherwise the implications for economic development
aren't good.
Number 0219
ERIC YOULD, Executive Director, Alaska Rural Electric
Cooperative Association (ARECA), informed the committee that
members of ARECA generate approximately 90 percent of the
electricity throughout the state. He noted that Chugach
Electric, Alaska Municipal Light & Power, Golden Valley Electric
Association, and Homer Electric are members of ARECA as well as
many medium and smaller utilities. He has submitted written
comments and a resolution from ARECA's board of directors. Mr.
Yould commented that Mr. Boucher did a fine job in summarizing
much of the frustration that the [electric] industry has with
the RCA. He related that ARECA's board supports a one-year
sunset extension as well as significant changes that would
streamline the RCA's process.
MR. YOULD testified that when the RCA was reconstituted in 1999,
it inherited a tremendous backlog, some 700 cases. The RCA also
gained 14 new positions to address that backlog, which has been
reduced to about 200 cases. Mr. Yould pointed out that the
majority of the backlog reductions occurred only within the last
year to year-and-a-half, when the RCA was up for sunset review.
Therefore, Mr. Yould contended that if the RCA had not had its
"feet held to the fire" there would be an even larger backlog of
cases. The RCA has a serious problem with the amount of time
and money it takes to perform its work, he observed. One recent
case took more than two years and cost $5 million to adjudicate
between three utilities. That $5 million came out of everyone's
pocket in the Railbelt, he commented.
Number 0400
MR. YOULD pointed out that last year the legislature called for
a special subcommittee to propose changes to streamline the RCA.
Although the legislative subcommittee was never formed, the
electric utility industry assembled its own internal group to
review the statutes of the RCA. Mr. Yould noted that this list
of recommendations was originally submitted to the governor's
office. The governor's staff had indicated that it could make
many of the changes administratively, and if ARECA supported a
four-year sunset extension, the administration would fix the
RCA.
MR. YOULD recounted that ARECA had determined that there were
several elements of the RCA's statutes that required some
statutory changes. ARECA has submitted a paired-down list of
changes for the committee's consideration. Mr. Yould stated
that a four-year extension of the RCA will not result in any
efficiencies.
Number 0550
MR. YOULD concluded that ARECA could support a two- to four-year
sunset extension for the RCA only if there were first some
changes in the law that would streamline the process. Mr. Yould
said that should the legislature decide not to proceed with
these changes recommended today, he hoped that it would listen
to Mr. Boucher's recommendation to establish a blue ribbon
commission. Such a commission would enable all utility
industries to determine what streamlined changes should be made
in order to best serve the public.
CHAIR ANDERSON, upon determining there was no one else who
wished to testify, announced that HB 111 would be held over.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:04 p.m.
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