Legislature(2023 - 2024)BARNES 124

01/23/2024 10:15 AM House ENERGY

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Audio Topic
10:15:12 AM Start
10:17:27 AM HB227
10:42:53 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 227 ELECTRIC UTILITY LIABILITY TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
               HB 227-ELECTRIC UTILITY LIABILITY                                                                            
                                                                                                                                
10:17:27 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER  announced that the  only order of  business would                                                               
be  HOUSE BILL  NO.  227  "An Act  relating  to  liability of  an                                                               
electric  utility   for  contact   between  vegetation   and  the                                                               
utility's facilities."                                                                                                          
                                                                                                                                
10:18:08 AM                                                                                                                   
                                                                                                                                
RYAN MCKEE,  Staff, Representative George Rauscher,  presented HB
227  on behalf  of Representative  Rauscher, prime  sponsor.   He                                                               
provided  the  sponsor  statement   [included  in  the  committee                                                               
packet], which read as follows [original punctuation provided]:                                                                 
                                                                                                                                
     "An Act  relating to liability  of an  electric utility                                                                    
     for  contact  between   vegetation  and  the  utility's                                                                    
     facilities."                                                                                                               
     House  Bill 227  protects  Alaska's electric  utilities                                                                    
     and their  ratepayers from paying for  damage caused by                                                                    
     vegetation   that  falls   from  outside   an  electric                                                                    
     utility's legal  right-of-way and contacts  a utility's                                                                    
     electric facilities.  If HB  227 becomes  law, electric                                                                    
     utilities  would not  be liable  for  damage caused  by                                                                    
     vegetation outside their  easements contacting electric                                                                    
     facilities.                                                                                                                
     For vegetation  inside an easement,  electric utilities                                                                    
     could  still face  liability under  existing negligence                                                                    
     standards. In  cases where  the location  of vegetation                                                                    
     or the cause  of the damage is disputed,  a court would                                                                    
     have to  determine whether  the protection  provided by                                                                    
     this bill applies.                                                                                                         
     This  bill does  not  prevent  electric utilities  from                                                                    
     being sued.  It provides  a court with  clear direction                                                                    
     on  when  liability  does  and  does  not  apply  in  a                                                                    
     situation  where  vegetation   contacts  powerlines  or                                                                    
     other  electric  infrastructure.  HB  227  accomplishes                                                                    
     this by:                                                                                                                   
                                                                                                                                
     • making clear  in statute that electric  utilities may                                                                    
     not be  held liable for costs,  property damage, death,                                                                    
     or  personal  injury  resulting  from  contact  between                                                                    
     vegetation   and  the   utility's  facilities   if  the                                                                    
     vegetation  is   located  or  originated   outside  the                                                                    
     boundaries  of  the  utility's  real  property,  lease,                                                                    
     permit, easement, or right-of-way.                                                                                         
     • HB 227 also makes clear that  a utility is not liable                                                                    
     for  cutting,   girdling,  or  otherwise   injuring  or                                                                    
     removing  vegetation  if  part  of  the  trunk  of  the                                                                    
     vegetation is  inside the  boundaries of  the utility's                                                                    
     real  property, lease,  permit, easement,  or right-of-                                                                    
     way.                                                                                                                       
                                                                                                                                
     Importantly,   the  bill   does   not  preclude   civil                                                                    
     liability if  the utility  itself causes  vegetation to                                                                    
     contact the utilities' facilities.                                                                                         
     Alaska's electric  utilities diligently  maintain their                                                                    
     rights-of-way  to  prevent  damage  to  powerlines  and                                                                    
     other infrastructure.  Those electric  utilities should                                                                    
     not  be held  liable  for damage  caused by  vegetation                                                                    
     outside of their legal control.                                                                                            
     By passing  HB 227,  the Legislature will  help protect                                                                    
     Alaska  utilities and  their ratepayers  from potential                                                                    
     increases in rates  due to a situation  that is outside                                                                    
     the control of an electric utility.                                                                                      
                                                                                                                                
MR. MCKEE offered the HB 227 sectional analysis [included in the                                                                
committee packet], which read as follows [original punctuation                                                                  
provided]:                                                                                                                      
                                                                                                                                
     Section 1:  Amends AS  09.65 by  adding a  new section.                                                                    
     Ensures a  utility offering services to  the public may                                                                    
     not  be  held liable  for  property  damage, death,  or                                                                    
     personal  injury if  vegetation  outside the  utility's                                                                    
     right-of-way falls  onto a utility's  facilities unless                                                                    
     the  utility caused  the vegetation  to  fall. It  also                                                                    
     allows  a utility  to remove  vegetation  if the  trunk                                                                    
     straddles the right of way.                                                                                                
                                                                                                                                
     Section 2:  Amends the uncodified  law of the  State of                                                                    
     Alaska. This  section outlines that the  act will apply                                                                    
     to civil  lawsuits against electric utilities  filed on                                                                    
     or after the effective date.                                                                                               
                                                                                                                                
CHAIR RAUSCHER said the committee would hear invited testimony.                                                                 
                                                                                                                                
10:22:25 AM                                                                                                                   
                                                                                                                                
TRAVIS MILLION,  Chief Operating Officer, Golden  Valley Electric                                                               
Association, gave invited testimony in favor  of HB 227.  He said                                                               
that  Golden  Valley  Electric   serves  36,000  members  in  the                                                               
Interior  of Alaska  with  3,300  miles of  electric  lines.   He                                                               
reminded  the committee  of a  similar bill  that was  introduced                                                               
during the previous  legislative session.  He  said that electric                                                               
utilities  are  granted  easements from  property  owners,  which                                                               
dictates  how  wide  the  right-of-way  is  for  the  purpose  of                                                               
equipment  installation, operation,  and maintenance.   Utilities                                                               
are  not  legally authorized  to  remove  any vegetation  located                                                               
outside of  easements and should  not be held liable  for damages                                                               
caused by  the vegetation  outside the  easement.   He emphasized                                                               
that there is  a lack of cost-effective options  for utilities to                                                               
mitigate risks  without statute.   Most  utilities in  Alaska are                                                               
cooperatives or municipalities, and  cost burdens would be passed                                                               
onto member  owners.  He  urged the committee  to pass HB  227 to                                                               
protect Alaska electric utilities and their member owners.                                                                      
                                                                                                                                
10:25:47 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  PRAX  asked  about ensuring  robust  right-of-way                                                               
utility clearing policies.                                                                                                      
                                                                                                                                
10:26:06 AM                                                                                                                   
                                                                                                                                
ANDY LEMAN,  General Council, Alaska Power  Association, answered                                                               
that  HB 227  does  not  protect the  utilities.   Easements  and                                                               
rights-of-way  remain  the responsibility  of  the  utility.   He                                                               
noted  the potential  liability of  the utility  if rights-of-way                                                               
and easements are neglected.                                                                                                    
                                                                                                                                
10:27:07 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   PRAX  noted   the  difficulties   involved  with                                                               
removing hazards  across significant  miles of  rights-of-way and                                                               
easements.   He told a  personal anecdote and expressed  that the                                                               
root of  the problem is  not addressed by  HB 227.   He mentioned                                                               
the individual  responsibility of property owners  to remove fire                                                               
hazards on  their land and  the potential of  increased insurance                                                               
costs rather than electricity costs.                                                                                            
                                                                                                                                
10:29:07 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE ARMSTRONG asked  how HB 227 differs  from the bill                                                               
heard in the previous session  and how concerns with the previous                                                               
version are addressed in HB 227.                                                                                                
                                                                                                                                
10:29:43 AM                                                                                                                   
                                                                                                                                
MR. LEMAN answered that the  primary difference between the bills                                                               
concerned liability  standards for  vegetation inside  the right-                                                               
of-way being  dependent on  whether the  utility was  following a                                                               
vegetation management plan as opposed  to leaving it to a common-                                                               
law negligence  standard.   He noted  that HB  227 was  edited to                                                               
include  utility  responsibility;  if  the  vegetation  contacted                                                               
utility facilities, there would be no protection from liability.                                                                
                                                                                                                                
10:31:04 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PRAX asked whether there  is oversight to ensure a                                                               
robust vegetation management plan.                                                                                              
                                                                                                                                
10:31:40 AM                                                                                                                   
                                                                                                                                
MR. LEMAN  expressed that other Alaska  utilities take vegetation                                                               
management  plans seriously.   Almost  all  Alaska utilities  are                                                               
cooperatives  or  are  municipally  owned  and  are  exempt  from                                                               
regulation by  the Regulatory Commission of  Alaska (RCA) because                                                               
they are locally  owned and govern themselves.   He expressed his                                                               
confidence  that  Alaska  utilities  maintain  rights-of-way  and                                                               
easements prudently.  He suggested  inviting utilities to testify                                                               
and provide  more information  about their  vegetation management                                                               
plans.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  PRAX  asked  whether the  power  association  had                                                               
spoken with the Division of Forestry and Fire Protection.                                                                       
                                                                                                                                
MR. LEMAN  noted that discussions  about fire response  have been                                                               
about costs and not about HB 227 specifically.                                                                                  
                                                                                                                                
REPRESENTATIVE PRAX  expressed his desire to  address forest fire                                                               
prevention.                                                                                                                     
                                                                                                                                
10:35:15 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SCHRAGE asked why the bill is necessary.                                                                         
                                                                                                                                
MR. LEMAN  explained that  in the  absence of HB  227, if  a tree                                                               
falls on an electric facility and  the tree is outside the right-                                                               
of-way, fault for potential fire or  damage would be put upon the                                                               
utility   even   though  the   tree   was   not  considered   the                                                               
responsibility of the utility.                                                                                                  
                                                                                                                                
10:37:02 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SCHRAGE asked  if there were any  examples where a                                                               
court had found  a utility liable under  similar circumstances to                                                               
the hypothetical situation mentioned previously.                                                                                
                                                                                                                                
MR.  LEMAN responded  that there  have  been no  cases in  Alaska                                                               
relating  to these  claims.   To the  best of  his knowledge,  he                                                               
explained,  there have  been  lawsuits, all  of  which have  been                                                               
settled.   He alluded to  fires in  the Lower 48  where utilities                                                               
have been found  liable for fires that started  due to vegetation                                                               
found outside  of the right-of-way.   He  noted that this  is not                                                               
just a hypothetical risk.                                                                                                       
                                                                                                                                
REPRESENTATIVE  SCHRAGE sought  to understand  why a  court would                                                               
find a utility liable and  asked whether there were other factors                                                               
like negligence  or lack of  a well-funded  vegetation management                                                               
plan that would contribute to liability charges for a utility.                                                                  
                                                                                                                                
MR. LEMAN explained  that HB 227 attempts  to clarify uncertainty                                                               
in the legal language in situations concerning liability.                                                                       
                                                                                                                                
10:40:18 AM                                                                                                                   
                                                                                                                                
CHAIR   RAUSCHER  expressed   his   concern   about  the   recent                                                               
devastation in Hawai'i.  He  noted Alaska's bark beetle problems,                                                               
which  lead to  dry timber  forests and  could potentially  cause                                                               
devastation if wildfires are sparked.                                                                                           
                                                                                                                                
REPRESENTATIVE  PRAX  asked  if   the  insurance  industry  could                                                               
provide testimony about HB 227 and offered to get in touch.                                                                     
                                                                                                                                
REPRESENTATIVE SCHRAGE made note of the first House Special                                                                     
Committee on Energy meeting of the year and expressed his                                                                       
appreciation for the new committee members and the chair.                                                                       
                                                                                                                                
10:41:52 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER provided closing remarks.                                                                                        
                                                                                                                                
[HB 227 was held over.]                                                                                                         

Document Name Date/Time Subjects
APA Support House Bill 227.pdf HENE 1/23/2024 10:15:00 AM
HB 227
ElectricUtilityLiabilityInfo HB227 White Paper.pdf HENE 1/23/2024 10:15:00 AM
HB 227
HB 227 Sponsor Statement.pdf HENE 1/23/2024 10:15:00 AM
HB 227
HB 227 Sectional Analysis.pdf HENE 1/23/2024 10:15:00 AM
HB 227