Legislature(2017 - 2018)BUTROVICH 205
03/20/2017 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing: Big Game Commercial Services Board | |
| SB58 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 58 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 20, 2017
3:29 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator John Coghill, Vice Chair
Senator Bert Stedman
Senator Shelley Hughes
Senator Kevin Meyer
Senator Bill Wielechowski
MEMBERS ABSENT
Senator Natasha von Imhof
COMMITTEE CALENDAR
CONFIRMATION HEARING
Big Game Commercial Services Board
Henry Tiffany
- CONFIRMATION ADVANCED
SENATE BILL NO. 58
"An Act relating to the Department of Law public advocacy
function to participate in matters that come before the Federal
Energy Regulatory Commission."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 58
SHORT TITLE: DEPT OF LAW: ADVOCACY BEFORE FERC
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/13/17 (S) READ THE FIRST TIME - REFERRALS
02/13/17 (S) RES, JUD, FIN
03/20/17 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
HENRY TIFFANY, representing himself
Ester, Alaska
POSITION STATEMENT: Governor's re-appointee to the Big Game
Commercial Services Board.
SAM ROHRER, President
Alaska Professional Hunters Association
Kodiak, Alaska
POSITION STATEMENT: Supported Mr. Tiffany's re-appointment to
the Big Game Commercial Services Board.
ED SNIFFEN, Assistant Attorney General
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Presented SB 58.
ACTION NARRATIVE
3:29:41 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:29 p.m. Present at the call to
order were Senators Stedman, Hughes, Coghill, Meyer, and Chair
Giessel.
^Confirmation Hearing: Big Game Commercial Services Board
Confirmation Hearing: Big Game Commercial Services Board
3:30:24 PM
CHAIR GIESSEL said the first order of business today would be
the confirmation hearing for Henry Tiffany to the Big Game
Commercial Services Board (BGCB). He was first appointed in 2013
and fills one of the seats on the board for registered guides.
She invited him to tell the committee why he wanted to remain on
the board.
3:31:02 PM
HENRY TIFFANY, representing himself, Ester, Alaska, said it is
an honor to serve on the Big Game Commercial Services Board and
this will be the 29th year he has been a professional guide in
Alaska. He is a lifelong Alaskan and guiding has provided him
with a way of life that is part of his core; one that he hopes
to be able to pass on to his children. Serving on the board is a
way to give back to an industry that has been so fulfilling and
wonderful to him. Many others preceded him and did an admirable
job, and he felt the time was right for him to step in to carry
their burdens forward.
MR. TIFFANY said being on the board had been a very enlightening
experience; interesting, and educational. Now that he has four
years under his belt, he can be of equal or greater benefit to
the board, the governor, and the state in helping to regulate
this industry.
3:33:07 PM
SENATOR WIELECHOWSKI joined the committee.
CHAIR GIESSEL asked committee members for questions.
SENATOR COGHILL thanked Mr. Tiffany for being willing to serve
and asked how he personally looked at the issue surrounding
flying in for sheep.
MR. TIFFANY replied that that issue was out of their board's
purview and was the domain of the Board of Game. Personally, as
a hunter and lifelong Alaskan outdoorsman, he had witnessed many
instances of airplanes being improperly used by both residents
and guides on enough of a basis that it became very frustrating
during the sheep season to have aircraft buzzing both him and
the sheep. He prefers not having anyone tell him how to run his
business and he tries to not tell others how to run their
business, but there are certain ethical sportsman-like rules
that are considered the cornerstones of sport hunting. One of
them is that aircraft should not be used to locate specific
animals and harass them. He has witnessed this happening in the
Brooks Range over the years. So, when proposal 207 came before
the Board of Game he was in full support of it.
MR. TIFFANY said he is not anti-aircraft; they are a valuable
tool in his operation. It's only when they are misused that
problems come up, and unfortunately a small percentage of the
population sometimes chooses to misuse that tool and other
tools, as well. Based on his observation in the field since it
became law, airplane activity in the areas he hunts has
significantly decreased. Former chair of the Big Game Commercial
Services Board, Paul Johnson, gave him what he called the 85/15
rule, which is whatever the rule, law, or regulations is, 85
percent of the people will try to adhere to it even if they
don't really like it, and 15 percent of the population will
disregard or disobey that same regulation. So, he thought
proposal 207 was serving its purpose well. It does not appear to
have decreased the amount of success hunters have experienced
and has created better hunting experiences for those who are on
the ground.
SENATOR COGHILL said most of them heard the debate after the
fact and it's nice to get his perspective. Does he have ideas
the board could do to make it more transparent or credible for
transporters?
MR. TIFFANY answered that is a big subject that he would try to
address succinctly. In Alaska, transporters are licensed through
the Division of Occupational Licensing and air taxis are
certificated through the Federal Aviation Administration (FAA).
There is a clear distinction in regulation between what a
licensed transporter in the state of Alaska can do versus an air
taxi. Some of the benefits a transporter have is they can
advertise hunter services however they choose, they can advise
hunters where they might want to go, and they can charge a
different fare for hunting services versus sightseeing.
An air taxi is like a taxi cab. You tell them where you want to
go; it doesn't matter and they charge a flat amount. It doesn't
matter if you are sightseeing or hunting moose. The problem is
that many air taxis may not understand the distinction between
themselves and transporters, and they advertise and offer
suggestions of where to go and charge different prices. So, that
is an understandable conflict. The transporters, because they
are licensed through the Division of Occupational Licensing and
regulated by the Big Game Commercial Services Board, are held to
more regulations and their licenses are more expensive.
3:42:43 PM
MR. TIFFANY supposed they could require anyone in the state that
flies commercially to become a transporter, but that is much
easier said than done. They could also just eliminate the
transporter license category and everyone becomes an air taxi,
but that also has some negative effects. So, they are trying to
begin to monitor air taxis and make sure they are complying with
what they can and cannot do.
The board has been developing ways to have transporters pay more
for their licenses and the privileges it brings. But with that
they should get something in return; they do, but it's abused by
some air taxis.
MR. TIFFANY said he wants the board to make good decisions about
the best path forward rather than make quick decisions.
CHAIR GIESSEL opened public comment.
3:44:35 PM
SAM ROHRER, President, Alaska Professional Hunters Association,
Kodiak, Alaska, supported Mr. Tiffany's re-appointment to the
BGCSB. Mr. Tiffany has done a great job as a board member these
last four years, he said. Mr. Tiffany is well respected in the
guide industry and is committed to the board process. He is a
strong advocate for fair chase hunting and for ethical business
practices. In additional to this, Mr. Tiffany is committed to
seeing the licensing program operate in the black by keeping a
watchful eye on the division's spending and investigations, and
when necessary, increase license fees like last year.
CHAIR GIESSEL, finding no further comments, closed public
testimony, and finding no further questions from the committee,
said in accordance with AS 39.05.080, the Resources Committee
reviewed the following and recommends the appointment be
forwarded to a joint session for consideration: Big Game
Commercial Services Board: Mr. Henry Tiffany, IV, Ester, Alaska.
This does not reflect an intent by any of the members to vote
for or against the confirmation of the individual during any
further sessions.
3:46:36 PM
At ease
SB 58-DEPT OF LAW: ADVOCACY BEFORE FERC
3:47:25 PM
CHAIR GIESSEL called the meeting back to order and announced
consideration of SB 58. She said this bill was sponsored by the
Rules Committee at the request of the governor, with the
Department of Law (DOL) as the bill manager. She said the DOL
has its attorneys representing the interests of the consumers,
that being the Alaska public, in proceedings before both the
Regulatory Commission of Alaska (RCA) and the Federal Energy
Regulatory Commissioner (FERC). How that representation is paid
for and will continue to be paid in the face of lower general
fund amounts is the subject of this bill. She welcomed Mr. Ed
Sniffen.
3:48:15 PM
ED SNIFFEN, Assistant Attorney General, Department of Law (DOL),
presented SB 58. As background, he said all public utilities in
Alaska and pipelines that operate in Alaska are regulated by the
RCA; they regulate their rates, terms of service, and a host of
other things. To pay for that regulation, the legislature has
established a regulatory cost charge that is billed to the
utilities and the pipelines, the entities that benefit from the
regulation. It is then generally passed on to customers. That
money pays for the staff of the RCA, all their analysts, and
administrative functions of regulating the utilities and the
pipelines.
The Department of Law has a role in that process. It appears in
matters before the RCA to protect the public's interests. For
example, they represent the ordinary consumer to make sure the
rates are just and reasonable when Enstar wants to raise its
bill. The department's efforts are also paid for through that
same regulatory cost charge.
3:49:54 PM
MR. SNIFFEN said to understand the impact of this bill it is
important to understand what the regulatory cost charge does,
which is the subject of his presentation.
What is the regulatory cost charge (RCC)?
The RCC is a fee assessed on public utilities and
pipelines that are regulated by the Regulatory
Commission of Alaska (RCA). It is created by AS
42.05.254 and AS 42.06.286.
Who Pays RCCs?
Utilities and pipelines that are regulated by the RCA,
including over 125 public utilities and about 20
common carrier pipelines with in-state deliveries.
These utilities and pipelines may pass the charge onto
customers that benefit from RCA regulation. Each year,
the RCA assesses RCCs to utilities and pipelines based
on the amount of work required for each industry
sector. For example, if they are spending most of
their time on electric cases one year, the electric
utilities may pay a little more. It is based on where
their efforts are being focused.
3:51:21 PM
What does the RCC pay for?
The money collected in the RCC provides funding for
the Regulatory Commission of Alaska (RCA), which is
responsible for the economic regulation of public
utilities and intrastate common carrier pipelines in
Alaska, and the Regulatory Affairs and Public Advocacy
(RAPA) section in the Department of Law, which is
charged with advocating for the public interest in
matters related to the economic regulation of public
utilities and pipelines.
The total RCC is capped by the legislature at 0.87 percent of
the adjusted gross revenue (derived from operations in Alaska)
of the regulated utilities and pipelines. That is split between
the RCA and the DOL; 0.7 percent of the adjusted gross revenues
are used to pay the RCA's budget and 0.17 percent is what the
DOL gets.
The Regulatory Affairs and Public Advocacy's (RAPA) section of
the DOL budget for 2017 was $2,333,700. The cap is $2,374,390;
so they are pretty close to the cap. They are not asking to grow
the cap, but the slice of the pie that is spent on pipelines
right now is about 7 percent ($162,591) of the total pie. SB 58
will allow them to just increase the size of the slice of pie.
So, if they are spending more time doing pipeline stuff, they
want the authority to be able to charge to matters that are
coming before the FERC, which authority they do not have right
now.
3:53:09 PM
What would SB 58 change?
This bill does not change the .17 percent RCC cap. It
doesn't create a new authority for the DOL. It just
allows some costs incurred by the department in
matters before FERC (TAPS pipeline tariffs) in the
pipeline to be charged to the RCC.
The actual dollar impact to the different shippers:
If they wanted to burden the pipelines with another
$100,000 of RCC costs, based on most recent
information that would increase the pipeline RCC
surcharge by about .041 percent ($4.10 per $10,000).
Not huge. If that slice were increased by $200,000 it
would be $8.20.
3:54:13 PM
Why now?
There are some suspicions the bill trying to do
something other than what they intend it to do. But
for over 30 years, outside counsel has represented the
state on FERC pipeline matters. That has been an
incredibly expensive contract. To reduce costs, DOL is
developing the necessary expertise and bringing more
of this work in-house. As part of doing that they
found this mechanism to offset some of those costs,
because it's the pipelines that are benefiting from
their work.
3:55:11 PM
This won't impact AKLNG, Mr. Sniffen said. That's an exclusively
FERC regulated pipeline. There is no joint jurisdiction with
RCA. It's a gas pipeline regulated under the Natural Gas Act
unlike TAPS which is regulated under the Interstate Commerce
Act. This is not related to the gas pipeline at all.
3:55:37 PM
Is there a check on the RCC spending? The answer is yes.
1. RCCs to fund RAPA cannot exceed the 0.17 percent
cap.
2. RAPA's budget is submitted annually to the RCA for
review of RAPA's certified costs in a public docket
where any interested party can comment.
3:56:25 PM
SENATOR MEYER asked how much unrestricted general funds (UGF) is
spent by DOL annually for FERC work.
MR. SNIFFEN replied outside council has been paid $90 million in
30 years for FERK work on TAPS tariff issues. Some years are a
lot higher when litigation is going on. This year an in-house
assistant attorney general is focused on doing this work but
still relying a little bit on outside counsel (their historical
knowledge is not easily replaced) and they might spend $700,000.
SENATOR MEYER asked if this bill passes will it cause a
reduction in UGF.
MR. SNIFFEN said yes, but it would be a small one.
SENATOR MEYER said he didn't see that reflected in the fiscal
note.
SENATOR MEYER asked how much the DOL currently receives in RCC
for RCA work.
MR. SNIFFEN answered their budget for 2017 was $2,333,700.
3:59:01 PM
CHAIR GIESSEL asked if the Department of Law has the expertise
to completely take over this kind of oversight.
MR. SNIFFEN answered no, but they are getting closer and big
chunks of that work has already been taken over in-house. FERC
work is very specialized and the department hasn't done it for
30 years. When the state had money, it wasn't an issue. Spending
has been reduced by hundreds of thousands of dollars already
this budget year. He added that FERC matters happen in
Washington, D.C. and outside counsel will probably still be
retained an advisory role.
CHAIR GIESSEL asked if this bill would simply allow the
department to do that in a more robust way.
MR. SNIFFEN answered yes; it gives them more flexibility with
using their budget.
4:00:36 PM
SENATOR STEDMAN asked if a previous administration terminated a
long standing relationship with FERC attorneys the state used
back in the early Palin days. Didn't they shift gears to a
different firm?
MR. SNIFFEN said he wasn't aware of any shift. The department
has used different firms for FERC work: Morrison Forrester,
which they currently contract with, and Greenberg Traurig, which
is working on other projects for the state.
SENATOR STEDMAN recalled the later company was the one he was
thinking of and asked if he knew Bob Loeffler.
MR. SNIFFEN answered yes; Bob Loeffler is partner with Morrison
Forrester, who recently retired.
4:01:46 PM
SENATOR WIELECHOWSKI asked what percent of the costs incurred
for this work comes from the general fund (GF) and what percent
is incurred by the people who are being regulated.
MR. SNIFFEN answered right now they are spending at least 90
percent GF money for FERC work, and to the extent they have
direct RCA proceedings that involve a FERC matter they can also
bill to RCCs. Their statute only allows them to recover money
for work before the RCA for the FERC.
SENATOR WIELECHOWSKI asked how much that costs.
MR. SNIFFEN guessed about $500,000 - $700,000 year.
4:03:19 PM
SENATOR WIELECHOWSKI asked if they would have to adjust the bill
to get the companies to repay 100 percent of the costs and how
much has been recovered over the years on these regulatory
matters.
4:03:47 PM
MR. SNIFFEN answered they had recovered over $230 million in the
last several years in direct deposits to the Constitutional
Budget Reserve (CBR) and the General Fund (GF) from work on
pipeline matters involving TransAlaska Pipeline System (TAPS)
tariff rates.
To his first question: what it would take to cover that gap in
completely funding all their work. They gave it some thought and
have to grow the statutory .17 percent statutory cap to .23
percent. That would provide an additional $700,000 and pay in an
average year for all their FERC work.
4:04:43 PM
SENATOR MEYER asked if the statutory formula would have to be
changed from .17 percent to .23 percent.
MR. SNIFFEN answered yes; but just in rough terms. If the state
wanted to recover an additional $700,000 - $750,000 through this
mechanism that cap would have to increase by about .06 percent.
CHAIR GIESSEL asked why that isn't proposed.
MR. SNIFFEN said they didn't want to be greedy, and the
department is still gaining more experience before adjusting
billing.
CHAIR GIESSEL opened public testimony. Seeing none, closed
public testimony.
CHAIR GIESSEL said SB 58 would be held in committee.
4:07:01 PM
CHAIR GIESSEL adjourned the Senate Resources Committee meeting
at 4:07 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Agenda-3-20-17.pdf |
SRES 3/20/2017 3:30:00 PM |
|
| 1. Big Game Commercial Services Board Fact Sheet.pdf |
SRES 3/20/2017 3:30:00 PM |
Big Game Commercial Services Board |
| 2. Big Game Comm Serv Board - Resume - Tiffany.pdf |
SRES 3/20/2017 3:30:00 PM |
Big Game Commercial Services Board |
| 3. SB 58 - Version A.PDF |
SRES 3/20/2017 3:30:00 PM |
SB 58 |
| 4. SB 58 - Transmittal Letter from Governor.pdf |
SRES 3/20/2017 3:30:00 PM |
SB 58 |
| 5. SB 58 - Summary Document.pdf |
SRES 3/20/2017 3:30:00 PM |
SB 58 |
| 6. SB 58 - Hearing Request to Senate Resources Committee.pdf |
SRES 3/20/2017 3:30:00 PM |
SB 58 |
| 7. SB 58 - Fiscal Note - Dept Law Civil Division - 2 - 13 - 17.PDF |
SRES 3/20/2017 3:30:00 PM |
SB 58 |
| 8. SB 58 - Presentation to Senate Resources - 3 - 20 - 17.pdf |
SRES 3/20/2017 3:30:00 PM |
SB 58 |
| 9. Big Game Comm Serv Board - Support for Tiffany - Kelly Vrem - 3 - 20 - 17.pdf |
SRES 3/20/2017 3:30:00 PM |
Big Game Commercial Services Board |