Legislature(1999 - 2000)

05/05/1999 08:10 AM House URS

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE SPECIAL COMMITTEE ON UTILITY RESTRUCTURING                                                                              
                    May 5, 1999                                                                                                 
                     8:10 a.m.                                                                                                  
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Bill Hudson, Chairman                                                                                            
Representative John Cowdery, Vice Chairman                                                                                      
Representative Pete Kott                                                                                                        
Representative Brian Porter                                                                                                     
Representative John Davies                                                                                                      
Representative Ethan Berkowitz                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Representative Norman Rokeberg                                                                                                  
Representative Joe Green (alternate)                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
HOUSE BILL NO. 81                                                                                                               
"An Act relating to the provision of electric service in the state;                                                             
and providing for an effective date."                                                                                           
                                                                                                                                
     - MOVED CSHB 81(URS) OUT OF COMMITTEE                                                                                      
                                                                                                                                
HOUSE BILL NO. 185                                                                                                              
"An Act exempting certain small water utilities from regulation by                                                              
the Alaska Public Utilities Commission."                                                                                        
                                                                                                                                
     - MOVED CSHB 185(URS) OUT OF COMMITTEE                                                                                     
                                                                                                                                
COMMITTEE DISCUSSION:                                                                                                           
POLICY DIRECTION, LETTER OF INTENT ON COMPETITION TO APUC                                                                       
                                                                                                                                
HOUSE BILL NO. 174                                                                                                              
"An Act relating to personal services contracts for certain                                                                     
employees of electric cooperatives."                                                                                            
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
*HOUSE BILL NO. 169                                                                                                             
"An Act relating to including the costs of expansion activities and                                                             
political activities in rates of electric cooperatives."                                                                        
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HB  81                                                                                                                    
SHORT TITLE: ELECTRIC CONSUMER'S BILL OF RIGHTS                                                                                 
SPONSOR(S): REPRESENTATIVES(S) ROKEBERG, Dyson                                                                                  
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/05/99       144     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 2/05/99       144     (H)  URS, L&C                                                                                            
 2/16/99       228     (H)  COSPONSOR(S): DYSON                                                                                 
 4/21/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
 4/21/99               (H)  HEARD AND HELD                                                                                      
 4/21/99               (H)  MINUTE(URS)                                                                                         
 4/23/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/23/99               (H)  <BILL POSTPONED TO 4/30>                                                                            
 4/28/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
 4/28/99               (H)  HEARD AND HELD                                                                                      
 4/28/99               (H)  MINUTE(URS)                                                                                         
 4/30/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/30/99               (H)  <PENDING REFERRAL> <BILL CANCELED>                                                                  
 5/05/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
                                                                                                                                
BILL: HB 185                                                                                                                    
SHORT TITLE: SMALL WATER UTILITIES EXEMPT FROM APUC                                                                             
SPONSOR(S): REPRESENTATIVES(S) OGAN                                                                                             
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 4/09/99       702     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 4/09/99       703     (H)  URS, L&C                                                                                            
 4/21/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
 4/21/99               (H)  HEARD AND HELD                                                                                      
 4/21/99               (H)  MINUTE(URS)                                                                                         
 4/28/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
 4/28/99               (H)  SCHEDULED BUT NOT HEARD                                                                             
 4/30/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/30/99               (H)  <PENDING REFERRAL> <BILL CANCELED>                                                                  
 5/05/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
JANET SEITZ, Legislative Assistant                                                                                              
     for Representative Rokeberg                                                                                                
Alaska State Legislature                                                                                                        
Capitol Building, Room 24                                                                                                       
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-4968                                                                                                      
POSITION STATEMENT:  Reviewed the changes encompassed in HB 81,                                                                 
                     version I.                                                                                                 
                                                                                                                                
ROBERT WILKINSON, Chief Executive Director                                                                                      
Copper Valley Electric Association (CVEA)                                                                                       
P.O. Box 45                                                                                                                     
Glennallen, Alaska  99588                                                                                                       
Telephone:  (907) 822-8340                                                                                                      
POSITION STATEMENT:  Testified on HB 81.                                                                                        
                                                                                                                                
BOB LOHR, Executive Director                                                                                                    
Alaska Public Utilities Commission in Anchorage                                                                                 
Department of Commerce and Economic Development                                                                                 
1016 West 6th                                                                                                                   
Anchorage, Alaska 99501                                                                                                         
Telephone:  (907) 276-6222                                                                                                      
POSITION STATEMENT:  Answered questions.                                                                                        
                                                                                                                                
ERIC YOULD, Executive Director                                                                                                  
Alaska Rural Electric Cooperative Association (ARECA)                                                                           
703 West Tudor Road                                                                                                             
Anchorage, Alaska 99503                                                                                                         
Telephone:  (907) 561-6103                                                                                                      
POSITION STATEMENT:  Answered questions.                                                                                        
                                                                                                                                
RANDY CORNELIUS, Director                                                                                                       
Electric Utility, Sitka City and Borough                                                                                        
P.O. Box 1253                                                                                                                   
Sitka, Alaska  99835                                                                                                            
Telephone:  (907)  747-2661                                                                                                     
POSITION STATEMENT:  Testified on HB 81.                                                                                        
                                                                                                                                
DAVID STANCLIFF, Legislative Assistant                                                                                          
     for Representative Ogan                                                                                                    
Alaska State Legislature                                                                                                        
Capitol Building, Room 128                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-3878                                                                                                      
POSITION STATEMENT:  Testified on behalf of Representative Ogan,                                                                
                     Sponsor of HB 185.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-21, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIRMAN BILL HUDSON called the House Special Committee on Utility                                                              
Restructuring meeting to order at 8:10 a.m.  Members present at the                                                             
call to order were Representatives Hudson, Cowdery, Kott, Porter                                                                
and Davies.  Representative Berkowitz arrived at 8:15 a.m.                                                                      
Representatives Rokeberg and Green (alternate) were not present.                                                                
                                                                                                                                
HB  81-ELECTRIC CONSUMER'S BILL OF RIGHTS                                                                                       
                                                                                                                                
CHAIRMAN HUDSON announced that the first order of business would be                                                             
HOUSE BILL NO. 81, "An Act relating to the provision of electric                                                                
service in the state; and providing for an effective date."                                                                     
                                                                                                                                
JANET SEITZ, Legislative Assistant, Representative Rokeberg, Alaska                                                             
State Legislature, informed the committee that she was working from                                                             
the work draft labeled LS0191\I, Cramer, 5/3/99.  She reviewed the                                                              
changes encompassed in version I.  New language was inserted on                                                                 
page 1, line 6:  "As part of any general proceeding to investigate                                                              
electric industry restructuring,"; on page 1, line 8:  "for those                                                               
utilities subject to economic regulation by the commission,"; page                                                              
1, line 14:  "electric service providers" replaces "electric                                                                    
suppliers, aggregators, and distributors"; page 3, line 12:                                                                     
"including service connect or disconnect fees,"; and page 3, line                                                               
13:  "that meets generally accepted industry standards".  The                                                                   
definition for "electric service provider" is found on page 4, line                                                             
14.  A new subsection was inserted, subsection (i) on page 4, lines                                                             
18-20.  With regard to Chairman Hudson's question, Ms. Seitz                                                                    
explained that subsection (i) was desired by ARECA for those                                                                    
utilities that have opted out of economic regulation.  She agreed                                                               
that this would be relevant to the testimony from Sitka and Copper                                                              
Valley.                                                                                                                         
                                                                                                                                
Number 0491                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAVIES said that the change on page 1, line 8 is                                                                 
actually dealt with on page 4, lines 18-20.  He believed that the                                                               
insertion of that language has an unintended consequence; HB 81                                                                 
would then only apply to utilities that are subject to economic                                                                 
regulation.  The intent is to apply to competitive market place                                                                 
situations where there is no economic regulation.  Representative                                                               
Davies moved to strike that insertion on page 1, line 8, which                                                                  
reads, "for those utilities subject to economic regulation by the                                                               
commission."                                                                                                                    
                                                                                                                                
MS. SEITZ said that the sponsor's intent is that any utility in a                                                               
competitive market be subject to these consumer protections.  In                                                                
response to Representative Cowdery, Ms. Seitz pointed out that                                                                  
there is a definition of competitive on page 4, line 11.                                                                        
                                                                                                                                
REPRESENTATIVE PORTER recalled the testimony from Copper Valley, "I                                                             
thought one of the problems they had was the private individual                                                                 
providers with individual generation systems coming in and                                                                      
competing.  And the reason they opted out was so that they could be                                                             
responsive to that competitive environment.  If that then would                                                                 
make them subject to a competitive environment, I would agree that                                                              
they've got consumers like everybody else that should be protected                                                              
and I would agree then that that should come out."                                                                              
                                                                                                                                
CHAIRMAN HUDSON announced that he would like to hold action on                                                                  
Representative Davies' motion until Representative Rokeberg,                                                                    
sponsor, is present.  He indicated agreement with Representatives                                                               
Davies and Porter.                                                                                                              
                                                                                                                                
Number 0632                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOTT  moved to adopt the committee substitute (CS)                                                               
labeled LS0191\I, Cramer, 5/3/99  as the working document before                                                                
the committee.  There being no objection, it was adopted.                                                                       
                                                                                                                                
ROBERT WILKINSON, Chief Executive Director, Copper Valley Electric                                                              
Association (CVEA), testified via teleconference.  He noted that he                                                             
had not reviewed version I and therefore, cannot make any specific                                                              
comments.  He also noted that he has provided the committee with                                                                
additional testimony.  Upon Chairman Hudson's request, Mr.                                                                      
Wilkinson spoke generally to the legislation.  He noted that the                                                                
legislation did create a number of new suppliers, aggregators, and                                                              
distributors which seemed to be tightened in version I.  He                                                                     
expressed the need for these suppliers to be subject to the same                                                                
requirements as other public electric utilities as opposed to a new                                                             
restriction in the form of licensing.  These suppliers should be                                                                
required to have a certificate of public convenience and necessity                                                              
as required by AS 42.05.  Mr. Wilkinson believed that rural                                                                     
cooperatives that elected to be exempt should not be placed back                                                                
under economic regulation which seems to be addressed in the new                                                                
subsection (i).  He noted that Representative Porter was correct                                                                
that Copper Valley's attempts to deregulate from APUC was purely                                                                
competitive.  Mr. Wilkinson commented that he remained confused                                                                 
with regard to whether there is a "cherry picking" situation in the                                                             
Copper River Valley, Valdez.  He wondered whether Copper River                                                                  
Valley will be placed back under economic regulation or subject to                                                              
the requirements of HB 81.                                                                                                      
                                                                                                                                
Number 0891                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAVIES said that he did not believe that Copper                                                                  
Valley should be classified nor is it a competitive market under                                                                
the terms of HB 81.  There was an unfortunate delay with the APUC's                                                             
response with regard to that situation, but he did not believe the                                                              
APUC intended for there to be a competitive retail service in that                                                              
area.  With regard to subsection (i), that language as well as                                                                  
committee discussion is clear that there is no intention to bring                                                               
utilities that have opted out of economic regulation back under                                                                 
economic regulation.                                                                                                            
                                                                                                                                
REPRESENTATIVE PORTER read this language to mean that any certified                                                             
electrical provider would fall under the requirements of HB 81.                                                                 
However, if there is the possibility of "cherry picking," there is                                                              
a loop hole.  He believed that to be competition.                                                                               
                                                                                                                                
REPRESENTATIVE DAVIES reiterated that in the situation being                                                                    
referred to the APUC did not act quickly enough to resolve the                                                                  
issue.  The APUC did not give that entity the ability to enter and                                                              
compete.  Representative Davies recalled that the situation                                                                     
resolved itself.  He stressed that the APUC did not give that                                                                   
company a certificate to operate within that territory and                                                                      
therefore, he believed that company should not have been able to                                                                
compete in that area, except in the wholesale power provision.                                                                  
                                                                                                                                
REPRESENTATIVE PORTER asked then if there should be language                                                                    
included that would require such a company to be certified in order                                                             
to avoid such.                                                                                                                  
                                                                                                                                
REPRESENTATIVE DAVIES stated that is the circumstance currently.                                                                
Therefore, every utility is under APUC regulation with regard to                                                                
its territory.                                                                                                                  
                                                                                                                                
REPRESENTATIVE PORTER posed the scenario in which there is an                                                                   
uncertified maverick generator provider who wants to enter the                                                                  
Copper Valley.  He inquired as to what enforcement mechanism                                                                    
currently in place would preclude such.                                                                                         
                                                                                                                                
REPRESENTATIVE DAVIES indicated that the APUC would take that                                                                   
provider to court.                                                                                                              
                                                                                                                                
Number 1148                                                                                                                     
                                                                                                                                
BOB LOHR, Executive Director, Alaska Public Utilities Commission in                                                             
Anchorage, Department of Commerce and Economic Development,                                                                     
testified via teleconference from Anchorage.  He added that under                                                               
the Public Utility Regulatory Policies Act of 1978, (PURPA), a                                                                  
provider can operate without the benefit of an APUC certificate if                                                              
the provider qualifies as a qualifying facility (QF) under the                                                                  
federal law.  Mr. Lohr believed that was an issue in the case being                                                             
discussed and he further believed that there was not a ruling on                                                                
that point by the commission.                                                                                                   
                                                                                                                                
MR. LOHR stated, in response to Representative Porter, that PURPA                                                               
has made it simple to qualify as a QF.  This qualification is                                                                   
almost a self certification, although there is a filing with the                                                                
Federal Energy Regulatory Commission (FERC).  He said this is                                                                   
essentially on the applicant's initiative and is not subject to                                                                 
state commission review.                                                                                                        
                                                                                                                                
REPRESENTATIVE DAVIES indicated that a QF is essentially a                                                                      
wholesale provider.  In other words, the customer is not allowed to                                                             
choose their provider.  The QF puts there power on line and the                                                                 
certificated entity must utilize that power and pay for it.                                                                     
                                                                                                                                
MR. LOHR agreed that would be one possibility.  However, Mr. Lohr                                                               
believed that the QF could serve as a retail provider and co-locate                                                             
on the premises of the customer as he indicated happened in                                                                     
Glennallen.                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAVIES inquired as to how that would be different                                                                
from any customer providing his/her own power by co-generation or                                                               
a diesel generator.                                                                                                             
                                                                                                                                
MR. LOHR indicated that Representative Davies was correct.                                                                      
However, state law provides that if there are 10 or more customers                                                              
or if the total amount of power sold is in excess of $50,000, the                                                               
entity would fall under state restrictions and require a                                                                        
certificate.  The interplay of that and the federal law was unclear                                                             
in the case being discussed.  He agreed that the case took too                                                                  
long.  Mr. Lohr believed that case has not yet been closed, and he                                                              
had no knowledge of any substantive order.                                                                                      
                                                                                                                                
Number 1359                                                                                                                     
                                                                                                                                
ERIC YOULD, Executive Director, Alaska Rural Electric Cooperative                                                               
Association (ARECA), explained that in this case, under PURPA, an                                                               
individual can provide their own generation.  However, there are                                                                
restrictions against the individual also becoming a retailer and                                                                
providing power from that facility to other co-located entities or                                                              
entities in the area, unless the entity falls under the threshold                                                               
mentioned by Mr. Lohr.  In this case, Alaska Power Systems came                                                                 
into the service territory and did not request a license and let it                                                             
be known that they would serve anyone willing.  Therefore, the                                                                  
electric utility industry presented this to the APUC who suggested                                                              
filing a formal complaint.  There was a complaint filed and much                                                                
money spent.  Although this entity fell under Alaska's APU statutes                                                             
and was required to prove it was financially capable to be a                                                                    
utility, the entity ultimately went bankrupt.  The docket still                                                                 
remains.  This case is an example of PURPA which Congress is                                                                    
looking to repeal.  Congress is also looking to repeal PUCA (ph).                                                               
Mr. Yould pointed out that the two clauses suggested by ARECA                                                                   
accomplish different things.  The last clause would ensure that                                                                 
Copper Valley Electric, for example,  will not be subject to                                                                    
economic regulation as a result of passage of this law.  However,                                                               
passage of the first clause would not allow these clauses to be                                                                 
imposed on those utilities that are presently not subject to                                                                    
economic regulation.                                                                                                            
                                                                                                                                
REPRESENTATIVE DAVIES reiterated his rationale to strike that                                                                   
language.  If a municipality or utility who has opted out is                                                                    
providing service in a competitive retail market, why would we not                                                              
want such entities to be subject to these consumer protections.                                                                 
                                                                                                                                
MR. YOULD stated that the majority of his members would agree with                                                              
Representative Davies.                                                                                                          
                                                                                                                                
REPRESENTATIVE PORTER commented that he was hesitant to pass                                                                    
legislation that "in effect, is shooting in the dark."                                                                          
                                                                                                                                
REPRESENTATIVE DAVIES said he believed that deleting the phrase of                                                              
page 1, line 8 makes it very clear that the legislation applies to                                                              
every utility in the state which offers retail, competitive                                                                     
service.                                                                                                                        
                                                                                                                                
REPRESENTATIVE PORTER asked then what was the situation when the                                                                
now defunct company in the Copper River Valley was "cherry                                                                      
picking."                                                                                                                       
                                                                                                                                
REPRESENTATIVE DAVIES responded that was wholesale competition.                                                                 
                                                                                                                                
MR. YOULD interjected that it was supposed to be wholesale                                                                      
competition, but the provider was attempting to enter retail                                                                    
competition which was the point of objection.  If this legislation                                                              
had been in place, there may have been some additional protection                                                               
against that entity entering that service territory.  Mr. Yould                                                                 
indicated agreement with Representative Davies that deletion of the                                                             
language would apply to virtually every utility in Alaska.                                                                      
                                                                                                                                
Number 1686                                                                                                                     
                                                                                                                                
RANDY CORNELIUS, Director, Electric Utility, Sitka City and                                                                     
Borough, testified via teleconference from Sitka.  He commented                                                                 
that he did not want to fall under dual regulation which seems to                                                               
be accomplished in subsection (i).  Mr. Cornelius emphasized that                                                               
he supported a customer bill of rights.                                                                                         
                                                                                                                                
MS. SEITZ commented that she believed Representative Rokeberg would                                                             
not object to Representative Davies amendment because his intent                                                                
was to bring all utilities in a competitive market under this                                                                   
consumer bill of rights.                                                                                                        
                                                                                                                                
CHAIRMAN HUDSON restated that the amendment before the committee,                                                               
Amendment 1, would on page 1, line 8 delete the following language:                                                             
"for those utilities subject to economic regulation by the                                                                      
commission,".  There being no objection, Amendment 1 was adopted.                                                               
                                                                                                                                
Number 1764                                                                                                                     
                                                                                                                                
REPRESENTATIVE PORTER moved to report CSHB 81, LS0181\I, Cramer,                                                                
5/3/99, out of committee with individual recommendations and the                                                                
accompanying fiscal notes.                                                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ objected.  He said this is a step in the                                                               
right direction, but indicated the need to extend consumer                                                                      
protection to all consumers not just those in a competitive market.                                                             
Representative Berkowitz withdrew his objection.                                                                                
                                                                                                                                
CHAIRMAN HUDSON announced then that there being no objection, CSHB
81(URS) was reported from committee and forwarded to the House                                                                  
Labor & Commerce Standing Committee.                                                                                            
                                                                                                                                
HB 185-SMALL WATER UTILITIES EXEMPT FROM APUC                                                                                   
                                                                                                                                
Number 1841                                                                                                                     
                                                                                                                                
CHAIRMAN HUDSON announced that the next order of business would be                                                              
HOUSE BILL NO. 185, "An Act exempting certain small water utilities                                                             
from regulation by the Alaska Public Utilities Commission."                                                                     
                                                                                                                                
DAVID STANCLIFF, Legislative Assistant for Representative Ogan,                                                                 
Alaska State Legislature, understood that the committee may                                                                     
consider an amendment.  The amendment has been discussed with                                                                   
Representative Ogan who is amenable to that amendment.                                                                          
                                                                                                                                
Number 1887                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ moved Amendment 1 which reads as follows:                                                              
                                                                                                                                
     Page 1, following line 8, insert,                                                                                          
     "Sec.2. This Act does not apply to utilities with open                                                                     
     dockets before the Alaska Public Utilities Commission                                                                      
     until those dockets are closed."                                                                                           
                                                                                                                                
CHAIRMAN HUDSON objected.                                                                                                       
                                                                                                                                
REPRESENTATIVE BERKOWITZ explained that he wanted to ensure that                                                                
the committee's actions are based on good public policy not based                                                               
on a special interest.  He expressed concern that this could                                                                    
interrupt pending dockets or pending litigation.  There may be                                                                  
elements of the decision which some would find acceptable.                                                                      
Therefore, he indicated his preference to separate this policy                                                                  
decision from anything pending.                                                                                                 
                                                                                                                                
CHAIRMAN HUDSON asked Mr. Stancliff if Representative Ogan had                                                                  
reviewed Amendment 1.  If so, how does he view Amendment 1?                                                                     
                                                                                                                                
MR. STANCLIFF informed the committee that Representative Ogan has                                                               
not reviewed Amendment 1, but he is willing to provide the Alaska                                                               
Public Utilities Commission (APUC) with additional time to act on                                                               
this matter and break the deadlock on the conflict.  Amendment 1                                                                
would possibly maintain the conflict in limbo for a time longer                                                                 
than Representative Ogan would prefer.  Amendment 1 would seem to                                                               
not be acceptable.                                                                                                              
                                                                                                                                
CHAIRMAN HUDSON noted that he maintained his objection.  He                                                                     
informed the committee that another amendment would be offered                                                                  
which would insert an effective date of July 1, 2000.  The home                                                                 
owners do not object to that amendment.  He explained that the                                                                  
notion was not to make it applicable to an ongoing case.  That                                                                  
amendment has been discussed with Representative Ogan who felt                                                                  
satisfied with that amendment.  Chairman Hudson said that amendment                                                             
should probably take the committee out of the ongoing turf war.                                                                 
                                                                                                                                
REPRESENTATIVE PORTER moved that the committee adopt the amendment                                                              
regarding the insertion of a July 1, 2000 effective date to                                                                     
Amendment 1.  There being no objection, the amendment to Amendment                                                              
1 was adopted.                                                                                                                  
                                                                                                                                
CHAIRMAN HUDSON clarified that the committee now had Amendment 1 as                                                             
amended before it.                                                                                                              
                                                                                                                                
REPRESENTATIVE COWDERY objected.                                                                                                
                                                                                                                                
Upon a roll call vote, Representatives Berkowitz, Davies, Kott,                                                                 
Porter and Hudson voted in favor of the adoption of  Amendment 1 as                                                             
amended.  Representative Cowdery voted against the adoption of                                                                  
Amendment 1 as amended.  Representative Rokeberg was not present.                                                               
Therefore, Amendment 1 as amended was adopted with a vote of 5-1.                                                               
                                                                                                                                
Number 2093                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAVIES moved to report CSHB 185 out of committee                                                                 
with individual recommendations and the accompanying fiscal notes.                                                              
There being no objection, CSHB 185(URS) was reported out of                                                                     
committee.                                                                                                                      
                                                                                                                                
POLICY DIRECTION, LETTER OF INTENT ON COMPETITION TO APUC                                                                       
                                                                                                                                
CHAIRMAN HUDSON announced that the final order of business before                                                               
the committee is the Letter of Intent on Competition to the Alaska                                                              
Public Utilities Commission (APUC).  This letter would tell the                                                                 
APUC that the legislature holds the right to make a decision with                                                               
regard to competition as a purview of the legislature.  Chairman                                                                
Hudson said that there are a number of options.  The committee                                                                  
could do nothing and leave it up to the APUC entirely which will                                                                
very likely be changed appreciably.  He suspected that there would                                                              
be an entirely different commission between now and next year.                                                                  
                                                                                                                                
REPRESENTATIVE PORTER announced that Commissioner Hanley retired                                                                
Friday.                                                                                                                         
                                                                                                                                
Number 2239                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAVIES agreed with the text of the letter, but                                                                   
wondered whether the letter should be sent or not.  He asked if                                                                 
there is the intent for the APUC to receive the letter as if it                                                                 
were from the entire legislature.  If so, then there should be a                                                                
resolution.  Representative Davies wondered if the letter is                                                                    
procedurally the correct path.                                                                                                  
                                                                                                                                
CHAIRMAN HUDSON commented that he felt strongly that the letter                                                                 
should bear the signature of the President of the Senate and the                                                                
Speaker of the House which was how the letter was originally                                                                    
contemplated.  However, the President of the Senate did not feel                                                                
that she had the voice of the Senate on this matter.  Chairman                                                                  
Hudson considered this committee as the direction for utility                                                                   
issues in Alaska.                                                                                                               
                                                                                                                                
REPRESENTATIVE PORTER agreed with Representative Davies that coming                                                             
from the entire legislature would provide more clout.  However, the                                                             
APUC should recognize that this committee has importance in this                                                                
area and in this regard, the letter would be worth sending.                                                                     
                                                                                                                                
REPRESENTATIVE DAVIES expressed the need to clarify that the letter                                                             
is from this committee and that there is no intent to speak for the                                                             
entire legislature.                                                                                                             
                                                                                                                                
Number 2381                                                                                                                     
                                                                                                                                
CHAIRMAN HUDSON stated that he did not feel comfortable sending                                                                 
this letter with only his signature.  Without all the signatures of                                                             
the committee members, this letter would not be worth very much.                                                                
                                                                                                                                
REPRESENTATIVE COWDERY pointed out that the letter clearly                                                                      
specifies at the onset that, "It is the findings of the House                                                                   
Special Committee on Utilities Restructuring,".  The last paragraph                                                             
of the letter further conveys that the committee feels that the                                                                 
legislature should determine when retail competition should be                                                                  
addressed.  Representative Cowdery supported the letter.                                                                        
                                                                                                                                
TAPE 99-21, SIDE B                                                                                                              
                                                                                                                                
REPRESENTATIVE KOTT recalled that Commissioner Cotten's comments                                                                
seemed to indicate that the APUC would act independent of                                                                       
legislative direction, if there was not any direction.  Therefore,                                                              
Representative Kott believed this to be the appropriate vehicle,                                                                
although he tended to agree with Representative Davies regarding                                                                
the use of a resolution.                                                                                                        
                                                                                                                                
CHAIRMAN HUDSON interjected that there is not adequate time for a                                                               
resolution.                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ stated that he would like to review Judge                                                              
Murphy's opinion on this matter.  He indicated that opinion would                                                               
probably contain language that would provide stronger direction.                                                                
                                                                                                                                
REPRESENTATIVE PORTER commented that he would have some suggestions                                                             
regarding the language of the letter.                                                                                           
                                                                                                                                
CHAIRMAN HUDSON announced that his staff would take suggestions                                                                 
from committee members and a new letter would be drafted and issued                                                             
to each member.  Those in agreement can sign the letter.                                                                        
                                                                                                                                
CHAIRMAN HUDSON announced that HB 174 and HB 169 will be left on                                                                
the table.  Also there is an ambitious proposed summer schedule and                                                             
at the very least he would like to have one or two essential                                                                    
meetings in the Anchorage area.  He noted the need to meet                                                                      
regarding the final report from CH2M HILL.                                                                                      
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Utility Restructuring meeting was adjourned at                                                             
9:04 a.m.                                                                                                                       
                                                                                                                                

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