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
+ teleconferenced
= bill was previously heard/scheduled
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.
| Document Name | Date/Time | Subjects |
|---|