Legislature(2021 - 2022)BUTROVICH 205
04/26/2021 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB110 | |
| SB125 | |
| SB113 | |
| SB59 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 110 | TELECONFERENCED | |
| *+ | SB 113 | TELECONFERENCED | |
| *+ | SB 125 | TELECONFERENCED | |
| *+ | SB 59 | TELECONFERENCED | |
| *+ | HB 79 | TELECONFERENCED | |
| *+ | HB 80 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 110-ELECTRIC UTILITY LIABILITY
3:34:04 PM
CHAIR REVAK announced the consideration of SENATE BILL NO. 110
"An Act relating to liability of an electric utility for contact
between vegetation and the utility's facilities; and relating to
vegetation management plans."
3:34:26 PM
SENATOR PETER MICCICHE, speaking as sponsor of SB 110, stated he
was carrying the bill by request. It is about an electric
utility's liability when something occurs that is outside its
control. He cited a forest fire as an example. He deferred to
Ms. Jackson for further introduction.
3:36:21 PM
SENATOR KAWASAKI joined the committee meeting.
3:36:34 PM
EMMIE JACKSON, Staff, Senator Peter Micciche, Alaska State
Legislature, Juneau, Alaska, introduced SB 110 reading the
following sponsor statement into the record:
Senate Bill 110 will protect Alaska's electric utility
ratepayers from increased rates by clarifying in
statute when electric utilities are and are not
legally liable for damages caused by contact between
vegetation and electric infrastructure.
Under the provisions in SB 110, a utility would not be
liable for damages caused by vegetation outside its
easement contacting electric facilities. For
vegetation inside an easement, a utility would be
liable for damages if the utility did not adhere to
its vegetation management plan.
SB 110 does not eliminate all liability from electric
utilities. Liability would still apply if a utility
was found to have failed to follow its own vegetation
management plan or if a utility causes vegetation
outside the easement to contact electric facilities.
The legislation better defines in statute when damages
are applicable, setting clear expectations that
utilities will implement and follow vegetation
management plans or face liability.
SB 110 protects electric utilities from being held
liable for the cost of damages caused by vegetation
that they either cannot control or were not permitted
to maintain. This also protects Alaska's electric
ratepayers from having to bear the brunt of those
costs through their rates, in a State where electric
utility service costs are already high
3:38:22 PM
CHAIR REVAK turned to invited testimony.
3:38:48 PM
CRYSTAL ENKVIST, Executive Director, Alaska Power Association
(APA), Anchorage, Alaska, stated APA is a statewide association
that represents electric utilities in Alaska. Member companies
provide power to more than 0.5 million Alaskans from Utqiagvik
to Unalaska, through the Interior and Southcentral, and down the
Inside Passage. On behalf of APA, she stated strong support for
SB 110, which will protect Alaska ratepayers from increased
costs. It provides clear rules about when utilities are liable
for damage caused by vegetation coming too close to electric
facilities.
MS. ENKVIST reported that utility lines are most often located
in easements or rights of way across private or public property.
They are wide enough to accommodate the lines and allow access
for maintenance and repairs, generally 15-20 feet. She opined
that wider easements would burden property owners and restrict
other uses of that property. She explained that utilities clear
vegetation inside these corridors to minimize contact with the
electric facilities. She pointed out that vegetation outside the
corridor can grow high enough to contact an electric utility's
facility, but if the utility cuts this tree or other vegetation,
it could be liable for treble damages to the property owner. She
described the vegetation outside the easement or right of way as
an uncontrollable risk to both the electric utility and its
ratepayers.
MS. ENKVIST said SB 110 clarifies that utilities are only liable
for vegetation outside the utility corridor if the utility
itself causes the vegetation to hit the power lines. They
control vegetation inside the utility corridor by following
their comprehensive vegetation management plan. Each is tailored
to the utility's unique circumstances. SB 110 also clarifies
that utilities are only liable for damages from vegetation
inside the easement or right of way contacting their facilities
if they do not have a vegetation management plan or do not
follow the plan. She restated the point to emphasize that SB 110
does not eliminate liability. She concluded, "As factors that
cause wild fires increase - hotter dryer summers, invasive
insects, and longer growing seasons, it is imperative that SB
110 pass to protect Alaska electric utility ratepayers."
3:43:02 PM
TRAVIS MILLION, Chief Executive Officer, Copper Valley Electric
Association, Glennallen, Alaska, delivered a presentation on
vegetation management and utility rights of way. He explained
that it is a utility's legal obligation to manage the vegetation
within the bounds of the utility right of way. Responsible
vegetation management helps to ensure the safety of the public.
A tree that comes in contact with a line may cause a wildfire or
sag the line to the ground in wintertime and become a hazard for
those driving on the rights of way on snow machines.
MR. MILLION directed attention to the graph on slide 3 and
explained that the width of the right of way is measured on
either side of the utility pole, and it is utility specific.
Distribution line rights of way are 15 feet on either side of
the center of the pole for three-phase lines and 10 feet on
either side for single-phase lines. The larger transmission
lines typically have a 50 foot right of way on either side of
the center line or pole. He clarified that the utility does not
own the land inside the right of way. Rather, the state,
federal, or private property owner has given the utility an
easement for access to the land. The utility cannot legally go
outside such easements.
3:45:36 PM
MR. MILLION directed attention to slides 4 and 5 that illustrate
the mechanical means typically employed to clear rights of way
in Alaska. These methods include the use of a bucket truck and
telescoping chainsaw that can be used to clear branches of trees
outside the right of way that encroach inside the right of way
and may contact the utility line. Copper Valley and other
utilities also use sky trims or drafts for clearing purposes.
These vehicles have a telescoping arm with a radial arm saw
blade at the end so limb trimming can be done from the ground.
Importantly, the utility easement allows clearing from ground to
sky so limbs inside the easement may be trimmed. Trees growing
outside the ROW cannot be cut down. An additional clearing
method is to use a brush hog to mow and chip all limbs and other
vegetation, which can then be left to cover the ground in the
right of way.
3:47:24 PM
MR. MILLION pointed to the image on the left side of slide 6
that shows a utility right of way that is very green. He said
wildfires are not the primary concern in these situations.
Rather, the risk is from trees outside the right of way and/or
people traveling in the right of way coming in contact with the
lines. He said the picture on the right shows a 100-foot
transmission line ROW that is cleared from ground to sky. All
vegetation in the ROW has been cut, chipped, and is used as
mulch. He directed attention to slide 7 and explained it is an
example of a 30-foot distribution ROW before, during, and after
clearing. He said the final slide shows a typical distribution
line after the vegetation has been cleared ground to sky within
the ROW. He said what is important to note is that any of the
80100-foot trees on either side just outside the ROW could fall
and easily contact the utility line.
3:50:04 PM
MR. MILLION began his prepared testimony. He stated strong
support for SB 110, which would clarify in statute that an
electric utility may not be held liable for property damage,
death, or personal injury that results from contact between
vegetation outside a utility's ROW and the utility
infrastructure. This protects ratepayers, which in Alaska most
often are the member owners of an electric cooperative that
serves a municipality. He emphasized that CVEA has been very
aggressive in the last five years to reestablish and maintain
their ROWs. This is legally and morally the utility's
responsibility, but it can be hard work in areas such as
Southeast and Valdez where the vegetation grows as fast as it is
cleared.
MR. MILION reported that CVEA has developed a comprehensive
vegetation management plan that describes the width of ROW that
can be cleared for both distribution and transmission lines, the
mechanical and hand methods to clear the ROW, and the rotation
and frequency for clearing feeders in any given year. He
reported that CVEA has reestablished nearly the entire length of
its 106-mile transmission line since 2016, despite it running
through some of the roughest terrain in Alaska. He opined that
if the utility is doing due diligence to follow its vegetation
management plan, it does not seem right to hold it responsible
if a tree outside the ROW were to come into contact with the
lines and cause a fire. The utility does not have the legal
right to remove such trees.
MR. MILION pointed out that remotely isolated utilities face the
risk of having to shut down the power system if a lawsuit were
to bankrupt the utility. In these situations, the member owners
have the most to lose, not the stakeholders like in a for-profit
electric utility. He maintained that without SB 110, there are
few cost-effective options for a utility to mitigate these risks
without passing the burden on to the member owners. He noted the
increasing risk of wildfires and urged the committee to pass SB
110 to protect Alaska electric utilities and their member
owners.
3:53:19 PM
SENATOR KAWASAKI asked if CVEA works with property owners to
mitigate the risk from leaning trees that are outside the ROW.
MR. MILLION answered CVEA has notified member owners that the
utility will clear dangerous trees free of charge that the
property owner has identified. Further, if the utility is in the
area and sees a tree that may endanger the line, they will work
with the property owner to remove the tree.
3:54:23 PM
JOHN BURNS, President and Chief Executive Officer, Golden Valley
Electric Association, Fairbanks, Alaska, stated GVEA is a not-
for-profit electric cooperative serving Interior Alaska
communities from Cantwell to Delta Junction, including Fairbanks
and North Pole. This 5,973 square mile service area has about
2,600 miles of right of way easement that the utility is
responsible for clearing. This is done on a 7-year rotating
cycle, so about 370 miles is cleared every season, consistent
with the established vegetation management plan. He reported
that GVEA spends about $3 million every year on these clearing
efforts.
MR. BURNS described SB 110 as vital to protect the interests of
all Alaska ratepayers from increased costs associated with
wildfires and other damages caused by vegetation outside the ROW
easements, and over which GVEA and other utilities have no
control. He said GVEA has some of the highest electric rates in
the Railbelt, and lawsuits for damages caused by vegetation
outside the ROW and outside GVEA's right to control would
further raise costs for ratepayers. He reiterated that SB 110 is
important to protect all electric ratepayers from bearing
additional costs resulting from lawsuits related to things
outside the utility's control. He confirmed previous testimony
that a utility is not allowed to enter property outside the
legal ROW without the consent of the property owner. Doing so
exposes the utility to liability for trespass. Reason dictates
that a utility should not be liable for that over which it does
not have control he said. It is neither fair nor just to impose
liability on an electric utility for damage caused by vegetation
outside the ROW that falls into or otherwise makes contact with
the utility infrastructure.
MR. BURNS said SB 110 clarifies in statute that electric
utilities would not be liable for damages caused by vegetation
outside the easement that contacts the utility facilities.
Inside the easement, the electric utility would only be liable
if it had not followed its established vegetation management
plan. Importantly, he said SB 110 does not eliminate liability
for electric utilities; it simply clarifies when liability does
and does not apply when damage arises from vegetation contacting
electric infrastructure. He described increased maintenance
challenges attributed to climate change and urged the committee
to pass SB 110 and provide electric utilities with a modicum of
protection.
3:59:58 PM
JIM BUTLER, Counsel, Homer Electric Association (HEA), Homer,
Alaska, said the previous testimony did a good job of outlining
the rational and importance of SB 110. He related that HEA is a
nonprofit electric utility that is governed by an elected board
that is held accountable by the paying members. HEA's service
area covers nearly 32,000 miles from east of Sterling, north to
Nikiski, and down to and across Kachemak Bay. The utility
represents 24,338 member owners.
MR. BUTLER reported that HEA has just over 2,700 miles of
energized line; there are about 1,400 miles of overhead
distribution line, 1,000 miles of underground distribution line,
and 300 miles of transmission line. In general, homeowners tend
to own the land under distribution lines and the state or
federal government owns the land below transmission lines.
MR. BUTLER said HEA has had a right of way management plan for
many years, and they value the input of landowners when clearing
the more than 1,500 miles of ROW. This maintenance is important
to prevent damage to the electric facilities and to ensure that
work crews are able to quickly and safely access lines that may
be down due to seasonal whether events or other causes and
restore power to the consumers.
4:02:45 PM
SENATOR BISHOP joined the committee meeting.
MR. BUTLER advised that HEA notifies member owners when they are
clearing the ROW and they have found that with the infestation
of spruce bark beetles, people are interested in HEA's support
to take down dangerous and dead trees. He clarified that HEA
works collaboratively with the landowners, but is not in the
position to assume the landowner's responsibility of monitoring
and managing hazardous trees on private property. He reported
that HEA spends from $1.2 million to $1.6 million each year to
implement its right of way management plan. The board is briefed
on the areas that will be cleared according to the revolving
plan and they support the expenditure when they approve the
annual budget.
MR. BUTLER echoed previously stated reasons to support SB 110
and added that it provides an incentive for utilities to adopt
best practices and develop ROW vegetation management plans that
are unique to the service area. Hopefully, landowners are also
incentivized to be aware that this is a shared responsibility.
He said it is also important to understand that more than
liability itself, the arguments over liability can cause a
utility to incur significant expense. He emphasized the
importance of clarifying the rules of engagement, incentivizing
best practices, and working with member customers to mitigate
hazards of not only fire but also for those who use rights of
way in the winter.
4:07:23 PM
CHAIR REVAK opened public testimony on SB 110.
4:07:46 PM
LYN ELLIOT, Assistant Vice President of State Government
Relations, American Property Casualty Insurance Association
(APCIA), Denver, Colorado, stated APCIA represents about 50
percent of the property casualty insurance market in Alaska as
well as family, communities, and businesses in the state. She
said APCIA appreciates the importance of having robust policies
on wildfire mitigation practices, but they have a concern with
granting immunity when the state does not have a specified
standard for vegetation management plans. She said APCIA sees a
need for compliance with such plans as a condition for partial
immunity. This will strike a balance that takes into account the
needs of the utilities, the property owners, and the insurers.
SB 110 does not achieve this balance, she said.
4:09:36 PM
CHAIR REVAK found no one else who wished to comment, and closed
public testimony on SB 110.
4:10:04 PM
SENATOR KIEHL mentioned the importance of having a robust
vegetation management plan and expressed interest in learning
what those standards look like. He also asked if homeowner's
insurance generally covers an [electrical] fire that is the
result of a tree falling on the house or if the homeowner would
be uncovered and without the utility to look to.
4:11:11 PM
ANDY LEMAN, General Counsel, Alaska Power Association,
Anchorage, Alaska, offered his understanding that the reason for
having homeowner's insurance is to cover property damage caused
by fires, whether it is vegetation in contact with a power line
or the myriad of things that can lead to a fire.
MS. ELLIOT agreed that insurance policies generally are in place
to protect the homeowner or business owner in the event of loss.
She said one concern with SB 110 is that without an established
standard for a vegetation management plan, the insurers could
lose their subrogation rights. She explained this is the ability
to recover costs on behalf of the homeowner or property owners
who are insured by an insurance company.
SENATOR KIEHL asked if the property owner is liable for damages
from any tree that is rooted on their property
4:13:41 PM
MR. BURNS answered that the property owner whose tree falls on a
neighbor's fence is responsible for that fence. Thus, the
homeowner would typically be responsible for damages from a tree
that falls into the utility line from outside the ROW. The
utilities' concern is being faced with defending against a
situation over which it had no control to begin with. This bill
does not shift responsibility to the property owner because the
property owner already has the responsibility of maintaining
their own property. SB 110 makes it very clear the circumstances
under which a utility would have liability and when it would not
have liability. He said it is a clear demarcation.
4:15:23 PM
SENATOR MICCICHE related the experience of his insurance company
saying the healthy tree on his property that fell during a
windstorm was an act of God. The insurance company said he was
not responsible for the tree but the damage it caused was not
covered.
He offered his view that SB 110 only clarifies what a utility is
responsible for when damage that occurs is beyond the utility's
control. He described this as a matter of fairness and said he
intended to reach out to Ms. Elliot and the other testifiers to
find a solution that fairly protects both property owners and
utilities.
4:18:26 PM
CHAIR REVAK announced he would hold SB 110 in committee for
future consideration.