Legislature(1995 - 1996)
04/13/1995 02:55 PM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 54
An Act relating to exclusive service areas for
utilities certificated to provide electric utility
service and to the definition of 'general public' for
utilities furnishing electric service.
Co-chairman Halford directed that SB 54 be brought on for
discussion and noted prior (4-12-95) adoption of Amendments
1 and 2 to CSSB 54 (L&C). He further noted a request for
exemption of APUC expert witnesses from the Procurement
Code.
DAVE HUTCHENS, Alaska Rural Electric Cooperative
Association, came before committee. Co-chairman Halford
noted that the requested exemption is similar to one
provided to the Dept. of Law for similar experts. Senator
Sharp MOVED to amend the bill to allow APUC to hire expert
witnesses without Procurement Code restrictions. Senator
Rieger asked if the cost of the expert witness would be
borne by the regulated utility. Senator Sharp voiced his
understanding that the utility is assigned the total cost of
regulatory hearings. Senator Rieger suggested that the
commission already has authority to declare that the service
is unique and will thus not be put out to bid. He noted
that budget detail indicates that expert witness fees are
"really high," and he expressed concern that the exemption
might create a blank check. Senator Phillips concurred in
that concern.
Senator Zharoff voiced his understanding that the
procurement code has caused problems in securing expert
witnesses in a timely manner. Similar problems have been
noted by ASMI in association with advertising contracts. He
then voiced support for the judgment of the commission,
stating that failure to do so may result in undue costs to
utilities and consumers.
Senator Sharp advised that tariff cases in which he was
involved had a substantial amount of lead time from the time
the tariff was filed and a hearing was set by the
commission. These cases continue for six months to a year.
Procurement under the code can be obtained within a shorter
period of time.
BOB LOHR, Executive Director, Alaska Public Utilities
Commission, spoke via teleconference from Anchorage. He
explained that the commission has run into problems
procuring expert witnesses in a timely manner. Docket
deadlines often do not allow sufficient time for a
successful bidder to be put in place unless the proceeding
is delayed 90 to 120 days to allow for the normal
procurement process. The choice is delay of regulatory
decisions while complying with procurement requirements or
an expedited means of getting consultants in place. It is
only in this special instance, rather than day-to-day
procurement, that the commission seeks an exemption.
Senator Sharp inquired concerning the normal time lag for
setting a docket on a tariff filing, giving public notice,
hearing, etc. Mr. Lohr said it would vary with the
complexity of the proceeding. The commission generally
issues a notice and allows 30 days for public comment.
While that is happening, the commission is preparing a
procedural order to set a schedule for the hearing. Actual
deadlines in the schedule vary with the complexity of the
proceeding and the time needed by the utility to prepare.
Once the utility deadline is set, the commission must file
its reply testimony 30 days thereafter. That is the time
when the work result from expert witnesses is needed.
Contractors cannot be performing the necessary work while
the procurement process is ongoing.
Senator Rieger asked who pays for expert witnesses. Mr.
Lohr explained that the regulatory cost charge is collected
from utilities and passed through to customers. That
includes the cost of expert witnesses. There is, however, a
provision that would allow the commission to assign those
costs to other parties to a proceeding that might not be
paying the regulatory cost charge.
Senator Rieger asked if billings from most expert witnesses
total less than $25.0. Mr. Lohr responded negatively,
saying that the typical expert witness contract is
considerably higher, ranging from $35.0 up to a maximum of
$150.0. Senator Rieger acknowledged that small procurements
could not be used for those amounts but asked why the
commission does not utilize 36.33.010, emergency
procurements. Mr. Lohr answered that the situation does not
constitute an emergency, although it can be a major
inconvenience to both the utility and conduct of the case.
The commission is placed in a difficult position in wanting
to expedite the proceeding and "get the decision made."
That in itself does not constitute impracticability in the
eyes of state procurement officers. Senator Rieger advised
that he was unsure whether he would be comfortable with a
blanket release from the procurement act. Mr. Lohr said
that the commission had discussed emergency procurement
provisions with the chief procurement officer and the Dept.
of Administration and considered various options that might
be available to achieve temporary relief in order to secure
witnesses more timely. Impracticability was not one of the
options suggested.
Senator Zharoff asked if exemption from the procurement code
would result in a cost savings. Mr. Lohr advised that there
may be a financial incentive. He described the current
method which requires expert witnesses to work quickly and
expedite their work once they are hired. That means that
commission staff and the project director have to do the
same. That type of crunch would be much more manageable if
there was more time. The primary purpose of the exemption
is to get the job done right and place the best possible
evidence before the commission.
Co-chairman Halford called for a show of hands on the
amendment to exempt commission hire of expert witnesses from
the procurement code. The motion failed on a vote of 2 to
3.
Co-chairman Frank MOVED to remove Sec. 3, the prohibition on
garbage deregulation. That would maintain the status quo.
The Co-chairman advised that he saw no reason for a special
exception for refuse collection. Co-chairman Halford voiced
concern regarding what municipalities might do in light
thereof. Co-chairman Frank advised of his belief that
problems would be handled at the local level.
JERRY REINWAND, representing the Alaska Refuse Utilities
Association, came before committee. He explained that the
amendment was added in Senate Labor and Commerce. He voiced
a preference for repeal of 07.11 (d) entirely, "for
everybody." That portion of the statute says that the
commission can do whatever it wants in the way of exemptions
at any time, if it deems the action to be in the public
interest. The public policy issue on deregulation should be
decided by the legislature rather than the commission. The
above-cited statute, in effect, gives the commission
legislative authority. That is wrong. The only reason
language in Sec. 3 was narrowed to refuse utilities was that
the commission opposed total repeal of 07.11(d). Mr.
Reinwand explained that while the commission has taken no
stance on the exception for refuse, Chairman Schroer said it
was personally acceptable to him.
DON SCHROER, Chairman, Alaska Public Utilities Commission,
next spoke via teleconference from Anchorage. He voiced a
preference for retaining 07.11(d) within statutes. Were it
to be eliminated, it would greatly impact commission ability
to function. He agreed that if solid waste collection is to
be deregulated, it should be done legislatively.
Senator Randy Phillips referenced page 1 of CSSB 54 (L&C)
and inquired concerning lack of a definition for "public
interest." Mr. Schroer said that he had not raised that as
an issue of concern. The commission was opposed to the
initial bill as introduced.
Co-chairman Halford called for a show of hands on the motion
to delete Sec. 3 (the prohibition on a regulatory exception
for refuse utilities). The motion failed on a vote of 2 to
4.
Senator Sharp MOVED that CSSB 54 (Fin) pass from committee
with individual recommendations and the accompanying fiscal
note. No objection having been raised, CSSB 54 (Fin) was
REPORTED OUT of committee with a zero fiscal note from the
Dept. of Commerce & Economic Development (APUC). Co-
chairman Halford and Senator Sharp signed the committee
report with a "do pass" recommendation. Senators Phillips,
Rieger, and Zharoff signed "no recommendation." Co-chairman
Frank signed "Do not pass without amendments."
ADJOURNMENT
The meeting was adjourned at approximately 3:30 p.m.
| Document Name | Date/Time | Subjects |
|---|