Legislature(2011 - 2012)SENATE FINANCE 532
04/14/2011 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB105 | |
| HB24 | |
| HB126 | |
| HB119 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 105 | TELECONFERENCED | |
| + | HB 24 | TELECONFERENCED | |
| + | HB 126 | TELECONFERENCED | |
| + | HB 119 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR HOUSE BILL NO. 24(FIN)
"An Act extending the termination date of the
Regulatory Commission of Alaska; and providing for an
effective date."
9:16:16 AM
Co-Chair Hoffman proposed committee substitute, work draft
#27-LS0173/D, Kirsch/Kane, 4/13/11. Co-Chair Stedman
OBJECTED for purpose of discussion.
Co-Chair Stedman explained that the CS amended the sunset
date to June 30, 2012 and inserted intent language. The
Regulatory Commission of Alaska (RCA) provided the
legislature with a proposal to reduce the statutory
timeline for tariff filings. He stated that he was working
with Senator Thomas to correct the problem of excessively
long timelines and resolve late case filings. The
compromise was devised to provide RCA an opportunity to
address the problem internally and report to the committee
in January 2012. If the committee remained unsatisfied with
the proposal, the issue would be addressed in 2012.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
OBJECTION, it was so ordered. Version D was adopted.
9:17:49 AM
REPRESENTATIVE KURT OLSON introduced himself and his staff.
CONRAD JACKSON, CHIEF OF STAFF, REPRESENTATIVE OLSON,
explained the CS. The bill extends the Regulatory
Commission of Alaska sunset. The CS provided a one year
extension. He felt that the Regulatory Commission of Alaska
continued to serve the public interest. The Regulatory
Commission of Alaska provided continuity of utilities
balanced with the consumer's ability to pay a reasonable
price. He stated that the Regulatory Commission of Alaska's
job was to protect the public.
9:19:58 AM
Co-Chair Stedman mentioned one Senate Finance Committee
fiscal note reflecting the cost of $8,932,100 in program
receipts for a one year extension of the Regulatory
Commission of Alaska. The funding also existed in the FY12
operating budget.
Senator Thomas understood the problem that had arisen
including the opening of documents without addressing the
issue. He wished to address the issue with a plan from the
Regulatory Commission of Alaska. He acknowledged that much
of the issue involved consumer protection. He looked
forward to better understanding and resolution of the
problem.
9:21:05 AM
Senator Ellis expressed confidence in the current chair Mr.
Bob Pickett. He noted large improvement over the previous
leadership.
Representative Olson expressed concerns about promises made
three and four years ago. He wished to correct the problems
without eradicating the Regulatory Commission of Alaska. He
expressed confidence in Chair Pickett. He hoped to balance
past problems with the future Regulatory Commission of
Alaska.
9:22:41 AM
Senator McGuire appreciated the clean sunset bill.
9:23:15 AM
KRISTIN WINTERS, GOLDEN HEART UTILITIES (via
teleconference), testified in support of the legislation.
She supported the reduction of the statutory timeline for
rate filings. She informed that she was the director of
regulatory affairs for Golden Heart Utilities. She
explained that Golden Heart Utilities filed rate cases
annually beginning in 1999. She pointed out that she
continued to have increased operating, infrastructure, and
investment costs without a growing customer base. She noted
the need to file rate cases annually. The consequences of
regulatory lag resulted from excessively long statutory
periods to resolve rate case filings. She believed that the
reasonable time for the filing of a rate case was 9 months
and the process in use expanded to fill the available time.
The rate setting process in Alaska was outdated and failed
to reflect the changing nature of the utility industry or
the rapidly changing economy. She pointed out that 27
states were required to conclude rate cases in 9 months or
less. The lag means that the Regulatory Commission of
Alaska had not decided disputed issues prior to the
utilities filing their next rate case. Thus, subsequent
rate filings include the disputed issues, which led to more
disputed issues, inefficiencies, and increased cost as the
parties continued to debate the undecided issues. The
result was high rate case costs. She urged support of the
reduction in the statutory timeline. She advocated for the
commission to issue a final order for a tariff filing that
changed the utilities revenue requirement or rate design
from 450 days to 270 days.
9:29:09 AM
BOB PICKETT, REGULATORY COMMISSION, ALASKA CHAIRMAN, spoke
about the Regulatory Commission of Alaska's recent
legislative audit. He stated that the Regulatory Commission
of Alaska was at a critical point in its history and
confronted with large issues. He explained his work on a
procedural schedule offering Alaskan's the ability to
participate in solving the Regulatory Commission of
Alaska's issues. Part of the responsibility of the
Regulatory Commission of Alaska was to work with the Alaska
Energy Authority (AEA) on the administration of the Power
Cost Equalization program (PCE). The PCE was critical to
the health of the rural communities. Some of the rural
utilities were struggling. Capable, confident, and
committed staff was necessary to ease the struggles. He
expressed concern with the one year extension given the
fact that the Department of Administration (DOA)
classification study from last August resulted in the loss
of 100 percent of the tariff staff. Commissioners and staff
would interpret a one year extension as a wind down of the
commission and would make personal decisions accordingly.
9:34:52 AM
Co-Chair Stedman stated that he had no intent to move the
bill from the committee. He wished to provide adequate time
for Mr. Pickett to review the CS and allow for
communication.
Co-Chair Hoffman requested further dialog with the chairman
regarding water and sewer rates in rural Alaska. He did not
view the one year extension as intent to wind down and
terminate the commission.
9:36:34 AM
Co-Chair Stedman concurred that there was no intention of
winding down the Regulatory Commission of Alaska.
Senator McGuire echoed the comments of the chairman. She
commented on the viability of Regulatory Commission of
Alaska as discussed in years past. She complimented Mr.
Pickett on his leadership since 2008. She appreciated his
communication with the lawmakers.
Senator McGuire asked about South-central Alaska, where
many gas contracts were not approved by the Regulatory
Commission of Alaska. She stated that the contracts would
have provided a healthy supply of natural gas to the Cook
Inlet. The failure to approve the contracts contributed to
the situation of "rolling blackouts." She wondered about
action taken by Regulatory Commission of Alaska to improve
the situation.
9:38:57 AM
Mr. Pickett answered that five gas supply agreements were
approved in the last 26 months. The situation was tenuous
and deteriorating during the last 10 years. He admitted
difficulty approving capital expenditures and including
them into the rate base. He intended to hold a public
meeting with the utilities regarding the import of gas into
Cook Inlet. The area required a source of natural gas to
fuel the gas generation equipment. He stated that he could
not speak to the dynamics of past gas supply agreements. He
noted that the role of the attorney general and interveners
must be thought of in terms of system reliability. He
stated that the Regulatory Commission of Alaska was charged
to ensure just and reasonable rates for rate payers, along
with reliable utility service.
9:40:40 AM
Senator McGuire asked if the statute must be changed to
reflect the necessary balance.
Mr. Pickett responded that changes in the statutes lead to
conflicts. He opined that addressing the extension and
policy issues separately was a sound method of tackling the
problem.
Senator McGuire asked about the issue of renewable energy.
She stated the strong approach for adding renewable energy
as a portion of the portfolio of available energy supply.
She explained that the intention was not to supplant
hydrocarbons, but to provide an option. The
"incentivization" produced results. She credited Mr.
Pickett with excellent communication.
9:43:19 AM
Mr. Pickett stated that the role of the board was to review
the power sale agreement between the independent power
producer and the regulated utility. He mentioned that the
legislature created an exemption for Fire Island from
certification requirements. He noted that a power supply
agreement for Fire Island would be reviewed.
Senator McGuire asked about a conversation between
Commissioner Guierd and Armstrong Oil and Gas.
Mr. Pickett explained that he was not privy to the
conversation. He noted the great impact of the
conversation. He admitted to reading part of the
conversation transcript.
Senator McGuire requested a question and answer process
with Commissioner Guiard regarding the conversation. She
opined that the conversation provided a deterrent to
development in the state. She requested a written response
regarding the commissioner's response.
Mr. Pickett agreed. He informed the committee that the
commissioners on the panel worked diligently to achieve the
operating authority approved and he reported that gas is
flowing through the pipeline.
9:47:00 AM
PAT DAVIDSON, DIVISION OF LEGISLATIVE AUDIT, explained that
the evaluation of the Regulatory Commission of Alaska
identified no new recommendations. The division encouraged
the Regulatory Commission of Alaska to continue its
implementation of the prior audit recommendation, which was
to develop regulations that would enhance the transparency,
accountability, and efficiency of the decision making
process. She stated that the Regulatory Commission of
Alaska partially implemented the recommendation. The
portion that remained outstanding, was the work related to
developing regulations to establish standards for certain
aspects of discovery. The audit made a recommendation to
extend the Regulatory Commission of Alaska for eight years.
A new audit requirement states that the division of
legislative audit must review the accuracy and completeness
of Regulatory Commission of Alaska's annual report every
two years. The annual report required compliance with
statutory timelines. The audit requirement supplemented the
sunset review leading to the eight year recommendation.
Co-Chair Hoffman asked if the one year extension would
require an audit review.
Ms. Davidson responded that when a board or commission is
extended for one year, she consulted with the chairman of
the budget and audit committee to determine the type of
audit needed.
Co-Chair Hoffman asked about possible language in the
extension that deletes the requirement for an audit.
Ms. Davidson responded yes.
9:49:46 AM
HB 24 was HEARD and HELD in Committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSHB 126(FIN) Sponsor Statement.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 126 |
| HB 105 Transmittal.pdf |
HFIN 3/22/2011 1:30:00 PM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 AFA Letter of Support 1.12.2011.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 BOF Support Letter 4-1-11.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 Coffman Cove Letter of Support.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 JCB Letter of Support.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 Land Ownership and Mill Status.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 Parcel Maps 12.20.2010.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 RDC Letter of Support.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 SAF Letter of Support.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 Value Added 3.30.2011.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 Vicinity Map.pdf |
SFIN 4/13/2011 9:00:00 AM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB126 HFIN CS Changes.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 126 |
| HB24 Sponsor Statement ver B.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 24 |
| HB24 Supporting Documents - Leg Audit #08-20067-11 Summary.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 24 |
| HB24 Supporting Documents - Email Mike O'Meara 3-15-2011.pdf |
SFIN 4/14/2011 9:00:00 AM SFIN 4/16/2011 10:00:00 AM |
HB 24 |
| HB24 Supporting Documents - Leg Audit #08-20067-11.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 24 |
| HB24 Supporting Documents - Fax AARP 3-14-2011.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 24 |
| HB24 Supporting Documents - Letter GCI 3-15-2011.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 24 |
| HB126 BBH Auditor Cover Ltr.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 126 |
| HB126 BDE Auditor Cover Ltr.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 126 |
| SEAALASKA McDowell Group studies.pdf |
HRES 2/14/2011 1:00:00 PM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB 105 Public Briefing 1.24.2011.pdf |
HFIN 3/22/2011 1:30:00 PM SFIN 4/14/2011 9:00:00 AM |
HB 105 |
| HB126 BON Auditor Cover Ltr.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 126 |
| HB 119 - CSC CSHB119 Questions and Answers.pdf |
SFIN 4/14/2011 9:00:00 AM SFIN 4/15/2011 9:00:00 AM |
HB 119 |
| HB 119 - SCS CSHB119 Explanation of Changes.pdf |
SFIN 4/14/2011 9:00:00 AM SFIN 4/15/2011 9:00:00 AM |
HB 119 |
| HB 119 - SCS CSHB119 Sectional Analysis.pdf |
SFIN 4/14/2011 9:00:00 AM SFIN 4/15/2011 9:00:00 AM |
HB 119 |
| HB 119 - 1.21.11 Gov Transmittal LTR.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 119 |
| HB 119 - SCS CSHB119_Hearing_Information.pdf |
SFIN 4/14/2011 9:00:00 AM |
HB 119 |
| HB 24 - Letter from Kate Giard.PDF |
SFIN 4/14/2011 9:00:00 AM SFIN 4/16/2011 10:00:00 AM |
HB 24 |