Legislature(1995 - 1996)
03/09/1995 03:35 PM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SSTA - 3/9/95
SB 54 ELECTRIC UTIL & SOLID WASTE REMOVAL
CHAIRMAN SHARP calls the Senate State Affairs Committee to order at
3:35 p.m. and brings up SB 54 as the first order of business before
the committee. The chairman calls the first witness.
Number 018
JIMMY JACKSON, Attorney for GCI, testifying from Anchorage, states
GCI is in favor of competition, particularly in local exchange
telephone service. GCI was concerned that SB 54 would promote the
idea that competition was not viable other than in long-distance
telephone service. GCI has been working on adding intent language
to SB 54 saying the bill would apply only to electric utility
service, and in no way implies that any other utility has exclusive
service area. GCI supports such language, and with the addition of
such language, the bill would not affect GCI's interests' one way
or the other.
CHAIRMAN SHARP notes the committee does have a committee substitute
for SB 54 which would incorporate language.
Number 052
SENATOR DONLEY has questions about the bill that he wants answered
before the cs is adopted. He would like to know who requested the
legislation be introduced.
Number 075
DAVE HUTCHENS, Alaska Rural Electric Cooperative Association
(ARECA), states ARECA was the requestor of SB 54.
SENATOR DONLEY asks Mr. Hutchens why ARECA wants SB 54.
MR. HUTCHENS responds, "...several years ago there was legislation
enacted that attempted to accomplish much the same thing that was
introduced as a House Labor & Commerce Committee bill, chaired by
then Representative Donley. Unfortunately when the bill got to the
senate, there was an amendment put in that Section 2 uh, would,
would take out, and uh, then the Section 1 of the bill, uh excuse
me, in the cs it would be Section 2, that uh, it would, is the new
statement here to make it clear, just to clearly state the policy,
and so Section 3 would be the amendment to the legislation that
you, Representative Donley at that time, had sponsored, to get it
back to the original language of your bill."
SENATOR DONLEY again asks Mr. Hutchens why he wants SB 54.
MR. HUTCHENS says he will be glad to submit testimony at the
appropriate time.
CHAIRMAN SHARP states he would like to finish with the people on
teleconference first, then Mr. Hutchens can testify.
Number 112
SENATOR RANDY PHILLIPS asks Mr. Latcham if he has seen the latest
cs for SB 54.
MR. LATCHAM does not know if he has for sure.
Number 125
CHAIRMAN SHARP states there is a cs dated 3/7/95 by Cramer.
MR. LATCHAM responds he has that version.
CHAIRMAN SHARP informs Mr. Latcham that is the version the
committee is looking at; it has not been adopted yet, but it is the
result of the work that has been done so far.
RAY LATCHAM, President of Northern Eclipse, Incorporated,
testifying from Anchorage, states Northern Eclipse, Inc. is a
natural gas concern. Northern Eclipse, Inc. opposes SB 54, and has
sent a letter of opposition to the committee. Mr. Latcham believes
all committee members have received a copy of the letter. Mr.
Latcham states he was involved in the original legislation to which
Mr. Hutchens referred. Mr. Latcham thinks the electric utilities
are probably the most inefficient group of utilities, and they have
been very resistant to new technology. If SB 54 is passed, it will
preclude Northern Eclipse, Inc. from getting its' electricity from
an independent power producer. Electric companies do have the
benefit of economy of scale, and if they cannot compete with an
independent power producer, they have a problem.
SENATOR RANDY PHILLIPS asks Mr. Latcham if he has the cs in front
of him.
MR. LATCHAM responds he does.
SENATOR RANDY PHILLIPS asks Mr. Latcham if he still opposes SB 54
in that form as well.
Number 175
MR. LATCHAM replies he certainly does. The words, "and presently
or formerly served by" were part of the compromise worked out
several years ago. Now the electric companies are trying to un-do
the compromise.
Number 180
CHAIRMAN SHARP asks Mr. Latcham what stage the Point MacKenzie
development is at.
MR. LATCHAM responds the land has been acquired. It is a pilot
project; it is a 10,000 gallon a day liquefaction unit. Liquid
natural gas (lng) will be transported by truck to markets within
the state.
CHAIRMAN SHARP asks Mr. Latcham if his company has a gas source.
MR. LATCHAM responds it is Beluga River.
Number 210
MR. HUTCHENS states ARECA is interested in SB 54 because the
utility business is an inherent monopoly. The investment a utility
must have in a distribution system is not conducive to duplicate
facilities. However, the staff at APUC wants to encourage
regulated competition. Mr. Hutchens does not know how that could
be done. He wants a clean statement giving direction to the
commission, and that is what SB 54 would do.
Number 265
SENATOR DONLEY comments he is starting to remember the issues.
MR. HUTCHENS states the idea is to prevent a company from providing
power just to the most desirable customers. People could still
generate their own power, but a business couldn't just provide
power to the most desirable customers.
SENATOR DONLEY states he understands SB 54 now, and has no
objection to the cs.
Number 287
SENATOR LEMAN asks if a store owner who generates his own power
could sell power to eight other customers, and still be consistent
with SB 54.
MR. HUTCHENS responds, no, not if it is within a certificated
service area to a utility. The language "ten or more" applies to
all other kinds of utilities. Mr. Hutchens, in responding to Mr.
Latcham, states Mr. Latcham's company will be required to contact
Matanuska Electric and negotiate a rate. That rate would then have
to be approved by the APUC. Mr. Hutchens is confident Matanuska
Electric would be able to effectively compete with any independent
power producer. He does not think SB 54 would interfere with Mr.
Latcham's proposal.
Number 320
SENATOR RANDY PHILLIPS makes a motion to adopt the committee
substitute for SB 54.
CHAIRMAN SHARP notes that the cs adds the intent language that has
been worked out to satisfy the telephone companies concern that
somehow SB 54 would affect the telephone companies. There was also
an omission on line 10 which has been corrected, adding the word
"electric." The chairman, hearing no objection, states the
committee substitute for SB 54.
Number 348
SENATOR RANDY PHILLIPS makes a motion to discharge SB 54 from the
Senate State Affairs Committee with individual recommendations.
CHAIRMAN SHARP, hearing no objection, orders SB 54 released from
committee with individual recommendations.
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