Legislature(2001 - 2002)
04/16/2002 02:14 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 333
An Act extending the termination date of the Regulatory
Commission of Alaska; and providing for an effective
date.
Co-Chair Mulder explained the committee substitute would
extend the termination date for the Alaska Regulatory
Commission (ARC) to 2006. It would also provide deadlines
for the Commission to take action on the petitions.
NAN THOMPSON, CHAIRMAN, ALASKA REGULATORY COMMISSION, spoke
in support of the legislation. She commented that the bill
was the product of discussion between herself and the
member's of industry who expressed concerns before the House
Labor and Commerce Committee. She stated that it was a good
effort and fairly represents the productive changes made to
the bill.
Ms. Thompson stated that the committee substitute sets
deadlines for prosecuting different types of cases. It
would allow for exemptions or exceptions to the rule
requiring the agency to explain the exceptions when the
deadlines are not met. She indicated that would provide
more predictability for the industry and accountability for
the agency.
She added that with those tools, the arguments raised in
support of the two-year extension would be weakened. She
claimed that the Legislature would be able to get
information from the Legislative Budget and Audit (LBA)
Committee regularly regarding performance. She noted that
the Regulatory Commission should be spending their time
working on cases.
Ms. Thompson voiced concern having a shorter extension,
which prohibits the agency from being able to hire and
keeping good staff to work. She applauded the four-year
extension recommended by the committee substitute.
Ms. Thompson provided the Committee with the auditor's
updated recommendations. The audit report was approved for
public release in January 2002 and recommends that the
agency be continued for four years. Auditors found that
most of the consumer complaints had been resolved within
thirty days and that most of the tariff filings were
processed within the required forty-five days.
She noted that the Regulatory Commission has begun the
important transitions to the MIS system as requested by the
Legislature. It has been extension successful.
The auditor did have three recommendations:
· The Regulatory Commission should provide small
water and sewer utilities to be certificated or
exempt. The Commission addressed that item at a
recent meeting and asked for industry comments
regarding the scope of exemptions. The industry
has been working on an application to make the
process easier. She noted that they hope to
expand and institutionalize the regulations.
· Adoption of regulations on the roll of the Public
Advocacy section, which was newly created in 1999.
The Commission has regulations that were submitted
by that section and the Commission voted at a
public meeting to put them out for comment. That
process will be concluded after the notice period
has expired.
· Better monitoring publications and notices. She
noted that was a complicated process as the
regulations require that the Commission notice,
however, sometimes the utilities place the notice.
The Commission is working on a way to be able to
keep better track of the notices in the future.
Ms. Thompson offered to answer questions of the Committee
and urged passage of the committee substitute.
Representative Davies referenced Pages 1 & 2, the list of
specific applications. He recommended that "any
application" be inserted.
Ms. Thompson acknowledged that the application terminology
could be confusing. The intent of that section was to grant
applications for renewing utility service and that she would
not object to deleting them. She recommended consulting Mr.
Yould.
Representative Davies pointed out that the substance was
included in the first four sections.
Ms. Thompson explained that the new application would
transfer the amendment. An application requiring a
controlling interest would be similar to a transfer and that
she would not object to deleting #4 & #5.
Representative Davies referenced Page 3 and asked about the
language that had been added.
Ms. Thompson explained that those standards identify whether
the settlement has rates that are "just and reasonable".
The Commission has the obligation to guarantee that the
rates are not discriminatory. Reference to those statutes
requires application of the same general rule.
Representative Croft commented on whether or not to
eliminate #5.
Ms. Thompson responded that deleting #5 would be best as
there are other items that are processed and handled that
could be characterized as applications. That section was
intended to address the authority to offer new service, if
competition was expanded. The alternative to delete, as
recommended by Representative Davies, would be the best.
Representative Croft mentioned that current language leaves
it open to the unintended consequences and that it needs to
be fixed. He pointed out that Page 3, Section 2, would
allow them the opportunity to approve a settlement, which
meets certain legal standards without having to base it on
recorded facts.
Ms. Thompson acknowledged that was true, however, the
sponsors of the amendment are attempting to allow more
flexibility for the Commission. The complaints are that
they would have to go through the same "standards of proof"
that they would at a hearing in order for it to be approved.
In the course of settling, sometimes they compromise and if
they were forced to put in the evidence, they could not be
able to agree. She pointed out that would undermine the
terms of the settlement. The concern of the Commission is
that there is enough for the record that would not undermine
their efforts for settlement. It is important to have
enough of a record to use as a basis. The language
represents a compromise that would allow the Commission to
do what it needs to do in order to decide things that are
important.
Representative Croft agreed that concern was valid, however,
asked if it was fair to the other unrepresented public
parties.
Ms. Thompson agreed commenting on the difference between the
Commission and the Court when the settlements are approved.
Often what occurs happens is a conflict between two
utilities. It is the work of the Commission to look at the
interest of the industry and the public so that both are
protected. That is why it is important that the Commission
not approve just any settlement. The Court could have
different interests. It is important that the settlement be
consistent with the statute which protects other interests.
Vice-Chair Bunde MOVED to ADOPT committee substitute #22-
LS1289\F, Craver, 4/16/02, as the draft before the
Committee. There being NO OBJECTION, it was adopted.
ERIC YOULD, EXECUTIVE DIRECTOR, ALASKA RURAL ELECTRIC
COOPERATIVE ASSOCIATION (ARECA), ANCHORAGE, testified in
support of the legislation. He noted that all of the
utilities associated with ARECA work closely with the Alaska
Regulatory Commission (RCA). In 1999, the Legislature
changed the regulatory Commission of Alaska and through SB
133, the Legislature recreated the current form. At that
time, when the statutes were moving through the Legislature,
ARECA took it seriously. He acknowledged that the current
form of the bill is significantly better than it was before.
Mr. Yould voiced his concern with how long it takes to "get
things done". He pointed out the caseload backlog, which is
frustrating to the industry. He pointed out that the
Legislature had authorized nine new positions to the
Commission to address that backlog. A year later, five new
positions were authorized. As of January 2002, with all the
new cases coming in, there still remains 608 that are
unaddressed.
He added that the time-lines that have been proposed are
achievable. At the same time, the current time-lines
provide a standard that RCA can work with. He reiterated
that ARECA supports the proposed time-lines. The only thing
that ARECA does not agree with in the bill is the portion
that extends the sunset of 2006. He added that ARECA's
Board of Directors believe that it is important to bring
them back before the Legislative Body in 2004.
Representative Davies referenced Page 2, Line 3, and asked
if Mr. Yould would object to deleting that language.
Mr. Yould agreed that it was appropriate to delete it.
DANA TINDALL, SENIOR VICE PRESIDENT OF REGULATORY AFFAIRS,
GCI, ANCHORAGE, testified in support of the legislation.
She noted that GCI was active in the legislation that
created RCA. Ms. Tindall stated that no utility is in favor
of letting the Commission sunset. Once an order is issued,
the industry is free to appeal to a higher court. The four-
year sunset extension would be a compromise. She mentioned
that GCI would like to see the sunset extended to 2010.
Every sunset provides an opportunity for amendments. Ms.
Tindall voiced support for the committee substitute.
TAPE HFC 02 - 86, Side A
Ms. Tindall noted the importance for the State to have a
Regulatory Commission. Without RCA, there would be no one
to enforce consumer issues, pointing out that in the
telephone industry, there are many consumer issues.
Competition creates many issues that need to be negotiated
by RCA. Without that entity, the consumers will suffer.
In response to a question by Representative Davies, Ms.
Tindall noted that GCI supports the Committee substitute and
the reauthorization of RCA. She urged that the bill be
passed from Committee. She added that GCI does not object
to the deletion of subsection 5.
JIM ROWE, EXECUTIVE DIRECTOR, ALASKA TELEPHONE ASSOCIATION
(ATA), ANCHORAGE, testified in support of the legislation.
He commented that the Commission was comprised of ethical
individuals and is a professional group of people. This
year, telephone companies in the State received around $72
million dollars for services. Each year, there should be a
State Commission to declare that the companies requesting
the funding are eligible tele-communication carriers. They
also have to declare that the companies are utilizing that
funding in a way that it should be utilized. He spoke in
support of the committee substitute.
Representative Croft asked when the expiration date should
be.
Mr. Rowe responded that he would like to see a four-year
sunset date.
Representative J. Davies MOVED an amendment to Page 2, Line
3, deleting the language "(5) any other application required
or permitted under this chapter." There being NO OBJECTION,
the amendment was adopted.
Representative J. Davies MOVED an amendment to Page 1, Line
3, inserting "to June 30, 2006", after the word "date".
There being NO OBJECTION, the amendment was adopted.
Representative Foster MOVED to report CSHB 333 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 333 (FIN) was reported out of Committee with a "do
pass" recommendation and with fiscal note #1 by Department
of Community & Economic Development.
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