Legislature(1999 - 2000)
03/31/1999 08:06 AM House URS
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON UTILITY RESTRUCTURING
March 31, 1999
8:06 a.m.
MEMBERS PRESENT
Representative Bill Hudson, Chairman
Representative John Cowdery, Vice Chairman
Representative Pete Kott
Representative Norman Rokeberg
Representative Brian Porter
Representative John Davies
Representative Ethan Berkowitz
Representative Joe Green (alternate)
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
APUC PROPOSED LEGISLATION
(* First public hearing)
PREVIOUS ACTION
No previous action to record.
WITNESS REGISTER
WALTER WILCOX, SR., Legislative Assistant
to Representative Bill Hudson
Alaska State Legislature
Capitol Building, Room 108
Juneau, Alaska 99801
Telephone: (907) 465-3744
POSITION STATEMENT: Presented a sectional analysis of the proposed
legislation.
PAT HARMAN, Legislative Administrative Assistant
to Representative Pete Kott
Alaska State Legislature
Capitol Building, Room 118
Juneau, Alaska 99801
Telephone: (907) 465-3777
POSITION STATEMENT: Discussed concerns of ex parte.
JIM POSEY, Commissioner
Alaska Public Utilities Commission
Department of Commerce and Economic Development
1016 West 6th Avenue
Anchorage, Alaska 99501-1963
Telephone: (907) 276-6222
POSITION STATEMENT: Discussed the proposed legislation.
SAM COTTEN, Commissioner/Chairman
Alaska Public Utilities Commission
Department of Commerce and Economic Development
1016 West 6th Avenue
Anchorage, Alaska 99501-1963
Telephone: (907) 276-6222
POSITION STATEMENT: Discussed the proposed legislation.
GINNY FAY, Legislative Liaison
Office of the Commissioner
Department of Commerce and Economic Development
P.O. Box 110800
Juneau, Alaska 99811-0800
Telephone: (907) 465-2503
POSITION STATEMENT: Discussed the proposed legislation.
JAMES ROWE, Executive Director
Alaska Telephone Association
201 East 56th Avenue, Suite 114
Anchorage, Alaska 99518
Telephone: (907) 563-4000
POSITION STATEMENT: Discussed the proposed legislation.
ACTION NARRATIVE
TAPE 99-11, SIDE A
Number 0001
CHAIRMAN BILL HUDSON called the House Special Committee on Utility
Restructuring meeting to order at 8:06 a.m. Members present at the
call to order were Representatives Hudson, Cowdery, Kott, Porter,
Davies, Berkowitz and Green (alternate). Representative Rokeberg
arrived at 8:07 a.m.
APUC PROPOSED LEGISLATION
CHAIRMAN HUDSON announced the only order of business today is
discussion on proposed legislation relating to the Alaska Public
Utilities Commission (APUC).
CHAIRMAN HUDSON indicated the committee will take up work draft,
I-LS0764\A, Cramer, 3/26/99. He called on Walter Wilcox, Sr. to
explain it.
Number 0119
WALTER WILCOX, SR., Legislative Assistant to Representative Bill
Hudson, Alaska State Legislature, came before the committee and
presented the following sectional analysis:
Section 1 changes the term "chairman" to "chair", and makes
the chair responsible for the administration of the commission
and its employees;
Section 2 removes the legislature's approval of the governor's
removal of a commissioner;
Section 3 changes the background requirements for
commissioners;
Section 4 adds a section that says no more than two
commissioners may be of the same political party;
Section 5 gives the chair more power by establishing offices
for the commission;
Section 6 gives the chair more power by being able to hire
temporary legal counsel when the attorney general is
representing the public's interest;
Section 7 gives the chair the ability to hire certain
employees and outside consultants;
Section 8 deals with the transition for members regarding
Section 3 and 4; and
Section 9 deals with the rights of existing members regarding
Section 2.
MR. WILCOX, SR. indicated that the proposed legislation does not
have an effective date. He stated a strong chair should be able to
deal with the timeliness concern. He also noted that Pat Harman
[Legislative Administrative Assistant to Representative Pete Kott]
will discuss the issue of ex parte or dual advocacy of key staff
within the commission.
Number 0485
REPRESENTATIVE BERKOWITZ said he doesn't like Section 4. He
wondered what would happen if a commissioner changed his/her party
affiliation in the middle of his/her service.
REPRESENTATIVE COWDERY said anybody can change his/her party
affiliation at anytime. He doesn't know how that can be addressed.
REPRESENTATIVE BERKOWITZ noted that the proposed legislation
doesn't say at the time of application. If there was a change, the
board could be in violation of this statute.
REPRESENTATIVE COWDERY said the positions are highly sought after.
REPRESENTATIVE BERKOWITZ said it seems that this section injects a
degree of partisanship that is not necessary. The legislature has
oversight over the commission and it should be concerned with
qualifications, not party affiliation.
Number 0641
REPRESENTATIVE PORTER stated that anybody who takes a position
where party affiliation is a criteria is expected to maintain
his/her affiliation. If for some reason a commissioner changed
his/her party affiliation, he thinks it would negate his/her
appointment. He cited the Joint Committee on Ethics as an example.
Number 0692
REPRESENTATIVE DAVIES said he didn't see this particular issue in
any of the reviews of the commission - the NRRI [National
Regulatory Research Institute] report or the legislative audit
report. It goes against finding the best person for the job.
Number 0765
CHAIRMAN HUDSON commented that the proposed legislation is a
composite of ideas that have been expressed to him and his staff.
Number 0797
REPRESENTATIVE GREEN said he agrees that changing a party
affiliation in mid-term is putting a commissioner's appointment in
harm's way. It would probably be good, however, for the sake of
trying to keep the commission neutral and balanced.
Number 0854
REPRESENTATIVE BERKOWITZ noted that the Joint Committee on Ethics
is involved in partisan politics while the APUC is not. He further
stated that 58 percent of Alaskans are not affiliated with either
major political party. The proposed legislation says that no more
than three people could be nonpartisan when that would be more
representative.
Number 0920
CHAIRMAN HUDSON commented that the majority of the people in Alaska
are nonpartisan. He is hesitant to inject partisanship as well.
Number 0951
REPRESENTATIVE GREEN noted that the nonpartisan group has
historically voted about the same for the two major parties;
therefore, it is not the case to say that they wouldn't be
represented. But it could be perceived as partisan to allow a
sitting governor and a majority of a single party ... A sense of
balance would bode well for an impartial tribunal trying to make
independent decisions.
Number 1017
REPRESENTATIVE PORTER said it seems that the unspoken issues are
between the Hickel appointments and the Knowles appointments.
That's pure party politics. He suggested eliminating the second
sentence from Section 4 as a compromise.
Number 1114
REPRESENTATIVE ROKEBERG said that the nonpartisan and undeclared
affiliations represent the largest pool of appointee; therefore, he
doesn't want to see an arbitrary barrier put in their way.
CHAIRMAN HUDSON noted, if those affiliations were removed, it would
be left wide open.
REPRESENTATIVE ROKEBERG said, if that's the intent, he would agree
with it.
Number 1197
REPRESENTATIVE PORTER recommended language to preclude the
appointment of someone who has changed his/her party affiliation in
the previous year.
REPRESENTATIVE BERKOWITZ suggested deleting Section 4 entirely.
Number 1342
PAT HARMAN, Legislative Administrative Assistant to Representative
Pete Kott, Alaska State Legislature, noted that the industry is
concerned about the dual role of staff as an advocate for
particular dockets. Staff is appointed when there is no opposition
or adequate opposition in order that the commissioners can hear
both sides of an issue. He is not aware of any misuse, but he is
aware of fear in both the electric and telephone industries. As a
result, it has been suggested to either separate the staff or to
use contractors to perform these types of functions.
Number 1447
REPRESENTATIVE DAVIES commented he has not heard that concern from
the industry. He asked Mr. Harman whether the industry brought
that concern to him directly.
MR. HARMAN replied at least ten people have brought that concern to
him. There is reticence to speak on it because they don't want to
offend the commission.
CHAIRMAN HUDSON wondered about language requiring an outside
advocate, if there was an internal problem with a sitting staff
member, for example.
Number 1564
REPRESENTATIVE DAVIES said there are several degrees of freedom in
choosing independent advocates. For example, there might be
concern that staff represents the consumer interests too well.
Number 1598
REPRESENTATIVE ROKEBERG said he thinks that the committee should
look at hiring independent counsel for the employees of the
commission who are not directly connected or beholden to the
attorney general. This is an independent commission and it should
have its own counsel. In addition, there is merit in discussing
the issue of each commissioner having his/her own counsel vis-a-vis
the rest of the executive and chairman's staff. It relates to the
issue of consumer protection and the need to provide a timely
response.
Number 1731
JIM POSEY, Commissioner, Alaska Public Utilities Commission,
Department of Commerce and Economic Development, testified in
Juneau. He noted that the commission plans to add the technology
recommendations made by the NRRI by the end of this year in order
to help get data in and out of the commission quicker. The
commission uses its web page to publish most of its orders. The
changes in the proposed legislation may be an overreaction to a
number of different comments. He's not sure, however, because he
hasn't been privy to all the comments. He noted that Alaska's
senators in Washington D.C. call on their commissioners for a
report on their caseload and complaints and how they are handling
them. He suggested looking at something like that rather than
trying to make substantive changes to the commission. He further
noted that it is very unpredictable to determine how a commissioner
will vote based on his/her party affiliation. A decision is really
based on a commissioner's knowledge. Politics may play a part of
interpersonal relations, but that will always be a problem. He
further noted that, if the legislature decides to go in the
direction of a strong chair, it might as well be a commission of
one commissioner because one commissioner will be making all the
decisions whoever the commissioner is. There have been some
complaints, but in general the overall working of the commission is
not impaired, especially when looking at its statistical record.
He cited there were 33 percent more orders issued last year than in
1997 mostly due to telecommunication restructuring. That is a
significant number. He commented that he has been working on
securing two hearing officers to help matters. In fact, most of
the things that the commission needs to do can be done internally
without any legislative changes.
Number 2036
REPRESENTATIVE GREEN noted that the chair of the commission has
indicated to the committee that personalities are a portion of why
there is delay in making decisions. He asked Mr. Posey whether
there is anything that can be done that would help to relieve the
real or perceived personality problems.
MR. POSEY replied he doesn't think that personality problems have
impeded the rate of getting decisions out. It may affect
interpersonal relations at times, but once at the table often times
the two people who disagree vote on the same side of the issue. He
further stated that the commission has hit snags before, but not to
the degree that it deserves substantive changes. If the commission
is going to be restructured, he suggested having NRRI take another
look at it in that context for recommendations. It is by far the
most qualified group.
Number 2233
REPRESENTATIVE GREEN asked Mr. Posey whether he feels that the
concept of a stronger chair to expedite things is not worth the
effort.
MR. POSEY replied the administrative workings of the commission are
done by the chair via a directive in the form of a letter from the
Governor. It works fairly well, and with two commissioners
rotating off this year things will go back to working seamlessly.
Number 2289
REPRESENTATIVE COWDERY asked Mr. Posey whether he said that the
present operations are efficient.
MR. POSEY replied, given the dynamics of a five-member commission,
it is as efficient as possible while remaining independent enough
to render good decisions.
Number 2306
REPRESENTATIVE COWDERY noted that the governor is strong in this
state and that a strong chair is not necessarily bad.
MR. POSEY said he doesn't necessarily agree. The chair is
appointed by the governor and already has a sufficient number of
things to do, especially for a quasi-judicial body.
Number 2362
REPRESENTATIVE COWDERY stated it seems that there is a lot of
conflict amongst the commissioners and chair. The proof is in the
letters that have been written and sent out.
Number 2379
REPRESENTATIVE DAVIES noted that one of the recommendations by the
NRRI was a strong chair. The proposed legislation calls for a
strong chair in the sense of administration, but not any stronger
in the sense of making substantive decisions. He asked Mr. Posey
whether strengthening the administrative functions of the chair
would overlap into regulatory decisions.
MR. POSEY replied giving additional powers to the chair to select
and make decisions that are intrinsic to the operation of the
commission without the other people having a say divides the group
even more over a period of time, especially given the fact that the
commission is a quasi-judicial body.
Number 2461
REPRESENTATIVE ROKEBERG asked Mr. Posey to comment on the
conversation that he had with him regarding legal counsel.
TAPE 99-11, SIDE B
Number 0001
MR. POSEY said, on certain issues, he has thought that there should
have been outside or independent legal counsel, otherwise the
attorney general is on two or three different sides of one issue.
He cited the state of Nevada uses full-time legal counsel who
answers only to their commission. Alaska has a strong
administration, governor and attorney general, which makes it more
difficult but not impossible. He has advocated hiring and using
outside counsel.
Number 0048
REPRESENTATIVE ROKEBERG asked Mr. Posey's opinion on the
commissioners having separate counsel.
MR. POSEY replied that is the way to go in the long-term. He noted
he was lucky to get a paralegal who has been very helpful to him.
Number 0073
REPRESENTATIVE GREEN asked Mr. Posey whether using subcommittees
would expedite the commission's workload.
MR. POSEY replied that's how the busiest of commissions do their
business. For example, a law judge renders an opinion which goes
to the full commission that either accepts or rejects it. He
reiterated that he has suggested two hearing officers so that there
would be at least two things going on at the same time. Right now,
four commissioners sit with one hearing officer and everything is
funneled through that person.
Number 0124
REPRESENTATIVE PORTER asked Mr. Posey how much the commission has
on its RSA [Reimbursable Services Agreement] with the Department of
Law.
MR. POSEY replied, he thinks, that the commission has two RSAs -
one legal assistant and two attorneys. The commission pays
approximately $250,000 to $290,000 for legal counsel.
Number 0168
CHAIRMAN HUDSON commented it was the personality issue that got the
legislature to the point of taking action. But, in the process,
the industry has expressed that one of the weaknesses of the system
is because nobody is in charge. He asked Mr. Posey whether the
commission has any interaction with the Department of Commerce and
Economic Development.
MR. POSEY replied no. The commission was set up under the
department so that there is a centerpiece for budgeting, traveling
and purchasing. There are no day-to-day workings with the
department.
Number 0329
CHAIRMAN HUDSON asked Mr. Posey whether he feels at the present
time that the legislature doesn't provide oversight.
MR. POSEY replied the legislature provides budgetary oversight, and
the commission provides an annual report every year to the
legislature, but that's not the same as answering questions in
person.
[THE RECORD REFLECTED THAT THE GAVEL WAS HANDED OVER TO VICE-CHAIR
COWDERY]
Number 0378
REPRESENTATIVE BERKOWITZ asked Mr. Posey whether there is any
blurring between policy makers and utility commissions. It seems
easy for the legislature to impose its views without completely
understanding an issue the way a commission might.
MR. POSEY replied there is always a concern of blurring, but if
it's properly structured ... It's no more than getting a call from
a legislator regarding his/her community and wanting the commission
to move quicker. [There was laughter]
Number 0465
REPRESENTATIVE BERKOWITZ asked Mr. Posey whether he sees reporting
back to the legislature as more of an operational oversight.
MR. POSEY replied yes.
Number 0474
REPRESENTATIVE DAVIES asked Mr. Posey how the legislature should
view the 33-percent increase in orders versus the number of
dockets. They seem to contradict each other.
MR. POSEY replied it seems contradictory, but numbers don't lie.
The commission has an overwhelming number of dockets. The
commission generally gets what it has to out in a timely manner.
There are some things that take a long analysis which requires
staff. The commission has been held up because of the hiring
freeze. That's not to say that it's all staff related, however.
"I will represent the numbers are there, but are we doing something
to help relieve that number? Yes. Do we have a plan? Yes."
number 0586
REPRESENTATIVE DAVIES asked Mr. Posey whether he is comfortable now
with the additional employees approved and the different ways of
looking at the structure of the work flow, such as the new
management information system. He wondered whether the trend would
be reversed in relation to the number of dockets opened and closed.
MR. POSEY replied he would like to make that promise, but it
depends on what the courts, the legislature, and the federal
government sends the commission's way.
Number 0664
REPRESENTATIVE GREEN asked Mr. Posey how long it takes a
commissioner to come up to speed.
MR. POSEY replied a citizen commission relies on experts and
practitioners. He takes home binders by the bag full to read. If
a commissioner reads and listens to presentations, a decision can
be made. When he was new, he was making decisions within the first
20 to 30 days.
VICE-CHAIR COWDERY asked Sam Cotten [Commissioner/Chairman of the
APUC] to comment on the discussion so far and the proposed
legislation.
Number 0774
SAM COTTEN, Commissioner/Chairman, Alaska Public Utilities
Commission, Department of Commerce and Economic Development,
testified via teleconference from Anchorage. He noted that there
has been activity on the part of the commissioners that is
traditionally left to an executive director. For example, there
was a motion passed to take away the ability to hire people from
the executive director and placed that ability with the division
heads. There was also a motion passed that said every promotion,
lateral transfer, or new hire has to be approved by the
commissioners. That means the executive director can't make simple
decisions without the consent of the commissioners. In his
opinion, that ought to be left to the executive director. It's not
a major problem, but it ends up occupying the time of the
commissioners when there are only so many hours in a day. He
agrees with Commissioner Posey in regards to the issue of internal
conflicts. They don't really filter down to the decisions made on
dockets. His point earlier was that long meetings on personality
conflicts take away from time and have the potential to detract
from the commissioners' abilities to focus on the important issues
in front of them.
Number 0941
REPRESENTATIVE BERKOWITZ asked Mr. Cotten whether partisanship
drives decisions.
MR. COTTEN replied it shows up in some areas, but he doesn't see a
partisan breakdown on decisions in areas like electric competition,
for example.
Number 0982
VICE-CHAIR COWDERY asked Mr. Cotten when his term is up.
MR. COTTEN replied his term expires in March of 1999 - now. [There
was laughter]
Number 0998
VICE-CHAIR COWDERY asked Mr. Cotten to comment on the issue of a
strong chair. It seems that a strong chair is appropriate.
MR. COTTEN replied he's not sure that the best thing is to give the
chair any more power. He's not sure that more administrative
authority would translate into leverage on decisions. At times,
this commission has occupied itself with minor details on
administrative matters when there is only so much time in a day.
Number 1079
REPRESENTATIVE PORTER asked Mr. Cotten whether the administrative
activities could be fixed statutorily.
MR. COTTEN replied he hopes a statutory fix wouldn't be necessary.
It's a policy call that the legislature needs to make, however.
Number 1136
GINNY FAY, Legislative Liaison, Office of the Commissioner,
Department of Commerce and Economic Development, testified in
Juneau in support of a stronger chair. It's not much different
than a chief justice she said. It helps to keep things flowing.
The department wants to hear that everything is going well with its
independent agencies. The department only really gets involved
when something is going wrong. The department supports the section
on the removal of commissioners. She is not prepared to comment on
Sections 3 and 4, but questions whether Section 4 is legal in terms
of freedom of affiliation.
REPRESENTATIVE ROKEBERG asked Mr. Rowe [of the Alaska Telephone
Association] whether he has had a chance to join forces with the
electric industry in presenting recommendations to the legislature
on this issue.
MR. ROWE, Executive Director, Alaska Telephone Association,
testified in Juneau. He replied he has not been able to meet with
Eric Yould on that matter.
MR. ROWE further stated he is concerned about Sections 3 and 4 of
the proposed legislation because the industry would like to see the
best candidates sitting on the commission. With the executive
branch nominating a commissioner, and the legislature approving
that nominee, he thinks, the industry has to have faith in the
system. He would hate to limit the best person because he/she
doesn't have some sort of artificial qualification. In relation to
the issue of ex parte, the Alaska Telephone Association has
discussed it with staff and committee members. The association is
concerned because staff of the commission can also be counsel to
the commissioners. It is difficult to separate items that can or
can't be talked about. He has not heard of any pressures from the
executive director or commissioners to do something a certain way;
he is concerned about human interaction and the opportunity for
that to happen. The association would like to see professional
counsel designated to the commissioners for a real clear
separation. The association would also like to see equally capable
people advocating the staff's position.
Number 1490
REPRESENTATIVE ROKEBERG said Mr. Rowe wisely didn't use the term
"independent counsel."
MR. ROWE explained he is talking about professional staff who can
review and gather information so that the commissioners don't have
to do it themselves.
Number 1524
VICE-CHAIR COWDERY indicated that the committee will work on the
proposed legislation again at the next meeting.
ADJOURNMENT
Number 1564
VICE-CHAIR COWDERY adjourned the House Special Committee on Utility
Restructuring meeting at 9:26 a.m.
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