Legislature(1995 - 1996)
03/01/1995 03:08 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 17 - OFFICERS OF UTILITY COOPERATIVES Number 577 JEFF LOGAN, LEGISLATIVE ASSISTANT TO REPRESENTATIVE JOE GREEN, testified on behalf of Representative Green on CSHB 17 (STA). He stated under Section 1. LEGISLATIVE INTENT, the legislature believes that an electric co-op is authorized to expand the types of utility services it offers. He referred to Subsection (b), and said it was the intent of the legislature that the certificates to operate be exclusive as to service areas, rather than permitting electric cooperatives to enter into competition with another provider of the same service. Section 2, subsection (6), expands the list of services that electric coops are able to provide. He said this is dealt with Chapter 10, the Corporations Code. This is not a list of what the Alaska Public Utilities Commission (APUC) would permit or not permit, this is a list of when an electric cooperative is formed, it falls under the corporations code, this is what it can do according to statute. Mr. Logan explained that for many years, cooperatives in rural Alaska have relied on the Federal Rural Electrification Administration (REA) for low interest loans to build facilities to generate and transmit electricity. Last fall, the federal government reorganized the REA and combined it with other agencies and renamed it the Rural Utilities Service (RUS). The new RUS provides loans for water, sewer, electric and telephone facilities. RUS is encouraging electric companies to provide sewer and water services where it's needed in their service areas. Mr. Logan said the problem was Alaska could not take advantage of the new federal changes without this statutory change. TAPE 12, SIDE B Number 000 MR. LOGAN referred to Amendment 1 and said what they did was take "direct satellite television" out of subsection 6, line 29, and create a new subsection 7, including direct satellite television, the effect being that the APUC will not have to approve with the Certificate of Convenience and Necessity but the electric cooperative could still offer that service. REPRESENTATIVE GENE KUBINA queried that direct T.V. wasn't available in Alaska yet, and asked why a utility would need to provide this service. MR. LOGAN replied that Dave Hutchens would respond to that during his testimony. Continuing with the bill, Mr. Logan explained that Section 3, simply states that the cooperative can call the presiding officers of their board any title they want. Section 4 states that if a cooperative accepts both ballots by mail and at a general meeting, the member can vote at one or the other. Number 144 REPRESENTATIVE ROKEBERG asked if utilities, such as Golden Valley and Chugach Electric Association, would be authorized by the legislation to sell water, sewer and satellite services in their jurisdictions. MR. LOGAN stated that they would be authorized by law, not necessarily approved to do so by the APUC. Number 161 DAVID HUTCHENS, EXECUTIVE DIRECTOR, ALASKA RURAL ELECTRIC COOPERATIVE ASSOCIATION, testified via teleconference in support of HB 17. He reiterated that this expands the powers of electric cooperatives in the authorization section of electric co-ops, give local option on the by laws of titles to be used for the officers of electric and telephone cooperatives, and it makes it clear the articles of incorporation can be amended by a vote by mail. Number 203 REPRESENTATIVE ROKEBERG asked if RUS provides federal loans for rural sewer and water. MR. HUTCHENS answered yes. He stated that there was a substantial amount of money available for investment in sewer and water plants through that program. Number 228 REPRESENTATIVE ROKEBERG commented that in Alaska Mr. Hutchens wanted to develop natural gas distribution and production, also direct satellite T.V., he asked why that was the case. MR. HUTCHENS replied that Naknek Electric is convinced there is natural gas in the area, not enough to interest major companies but enough to provide local service to turn their generators. Number 248 REPRESENTATIVE ROKEBERG asked what the impact would be on the certifications process with APUC, in certain urban areas like Mat- su that have some gas services, and Anchorage, that has Enstar service. MR. HUTCHENS said there wouldn't be competition with Enstar. This would be within their corporate powers, but does not mean they would be authorized by the APUC to engage in that business. He explained that there first would have to be a need for it. Enstar is already providing service, and there wouldn't be a showing of a need for Chugach to go into competition. The situation with the satellite is that the electric cooperatives have access to the National Rural Telecommunications Cooperative (NRTC), which is partner with Hugh's, that provides Direct T.V., Alaska cannot receive this satellite broadcasting system. He said because of the NRTC, the electric cooperatives have access to the programming packages, in effect the cooperatives would simply be the middleman in providing local billing services. Number 300 REPRESENTATIVE ELTON asked if electric co-ops could offer direct television services to communities already being served by cable companies. MR. HUTCHENS answered that was not their intent, they would add to that, "in outside areas certificated to cable television." REPRESENTATIVE ROKEBERG asked the existing status in the state of Alaska on satellite (indisc.--paper shuffling). MR. HUTCHENS responded that the APUC certificates the cable company as to the service area. They presently don't certificate anyone for direct satellite TV service. They do not want anything in statute that APUC certification was necessary to provide that service. CHAIRMAN KOTT inquired as to the amount of time it would take to receive a Certificate of Cconvenience authorizing them to expand services into water, sewer and gas operations. MR. HUTCHENS replied that it generally takes six months to fix this. MIKE MONAGLE, DIVISION OF BANKING, SECURITIES AND CORPORATIONS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, stated that the department had a proposed amendment purely administrative. He said that they administer (indisc--coughing) under Title 10, which includes other types of cooperative corporations under Chapter 15, Non-Profit Corporations; under Chapter 20, Business Corporations under Chapter 6. All those chapters under Title 10 require that corporations file with the state, on a biannual basis, a report listing the officer's names and addresses for public record. REPRESENTATIVE KUBINA asked if this was currently practiced. MR. MONAGLE answered yes, this being the only chapter that does not file currently. REPRESENTATIVE KUBINA asked what type of fee they would charge. MR. MONAGLE stated that it would be a $60 fee with a $10 late fee. This based on current fees paid by cooperatives under Chapter 15. REPRESENTATIVE KUBINA commented that cooperatives change their officers every year, why have a biannual report. MR. MONAGLE explained that was the purpose for the Alaska post section, providing statutory requirement that in the off year, they file a notice with the division any changes in officers. CHAIRMAN KOTT asked why the filing date was July 2. MR. MONOGUL stated that was the filing cycle all other co-ops under Chapter 15 are on. Number 428 CHAIRMAN KOTT stated the department's amendment would be Amendment 2. REPRESENTATIVE GREEN suggested that the committee adopt Amendment 1, which lists satellite television as another service utilities can provide but does not say it should be regulated by APUC. REPRESENTATIVE ELTON made a motion to move Amendment 1. CHAIRMAN KOTT asked if there were any objections. Number 464 REPRESENTATIVE ROKEBERG objected. He expressed concern that they had not heard testimony from the cable, gas, and satellite representatives. REPRESENTATIVE GREEN asked if his concern was that APUC would allow or provide competition with existing utilities. He explained that the concept behind this was for only those areas that either have failed utilities or don't have utilities at all, why not piggy back them onto a rural electrification system that has the wear with all to make it successful. It's not in any way intended to be competition. Number 510 REPRESENTATIVE ROKEBERG pointed out that he was talking about gas and satellite, not sewer and water. He reiterated that he was concerned about an electrical cooperative which, to a degree, has that ability to be subsidized via grants and federal tax dollars, getting into businesses that can compete directly with private enterprise. REPRESENTATIVE GREEN stated that the gas industry had no problem with this and he could provide a letter stating this if need be. He also stated that the REA system is not a federally subsidized program. The federal government makes loans, those loans are repaid, they are not subsidies. REPRESENTATIVE ROKEBERG stated that he was looking for jurisdictional boundaries. CHAIRMAN KOTT asked for a roll call vote. Voting for Amendment 1 were Representatives Elton, Sanders, Masek, Kubina and Kott. Representative Rokeberg voted against the amendment. Amendment 1 was adopted. CHAIRMAN KOTT stated that Amendment 2, brings into conformity what is being done in other areas. If this were adopted though, he felt the bill might require a title change as well. REPRESENTATIVE KUBINA added that we might need to relook at the fiscal notes since, the Department of Commerce and Economic Development would be doing some of the work. CHAIRMAN KOTT noted that they would address the fiscal notes in a moment. He announced that they have Amendment 2 before them. REPRESENTATIVE SANDERS made the motion to move Amendment 2. CHAIRMAN KOTT asked if there were objections. Number 549 REPRESENTATIVE KUBINA objected. He didn't feel the state needed to build up more reports, and the electrical users needed to spend $2,000 to give it them. CHAIRMAN KOTT felt that it did offer some continuity to what's currently being done. REPRESENTATIVE ELTON commented that he would like to hear from either the bill sponsor or the affected cooperatives. REPRESENTATIVE GREEN stated that he had no problem with this amendment as this is currently being done anyway. REPRESENTATIVE ELTON requested to hear from Mr. Hutchens that he didn't have a problem with the amendment. MR. HUTCHENS stated this was a new issue that hasn't been before the board, so they have no formal position on it, but he would be surprised if any members would object to it. REPRESENTATIVE GREEN clarified that this was filed with APUC, it is not currently filed with the Department of Commerce. CHAIRMAN KOTT asked for a roll call vote on Amendment 2. Representatives Elton, Sanders Rokeberg, Masek and Kott voted in favor of the amendment. Representative Kubina voted against the amendment. CHAIRMAN KOTT stated that the committee had before them the CS for HB 17 (STA). He said since the committee adopted Amendment 2, the fiscal note dated January 24, 1995, was no longer applicable. Number 607 REPRESENTATIVE KUBINA noticed in his packet that there was a Senate Bill as a companion, yet it had a fiscal note for the APUC done by the Department of Commerce, of $76,000. TAPE 95-13, SIDE A Number 000 MR. LOGAN stated that there were differences in the House and Senate versions. The reason we don't have a fiscal note is because they hadn't been given one. The information before the committee is the best available information at this time. Number 031 REPRESENTATIVE SANDERS shared Representative Rokeberg's concerns that no one had testified from the satellite television industry. He stated that he would feel better about the bill if it were to be held over until March 3, and try to get someone to address those questions. REPRESENTATIVE ELTON commented that the bill were held over, he would also like to hear from APUC regarding $76,000. Number 056 REPRESENTATIVE KUBINA interjected that a question he has is if the gas line were to be built, are we giving utilities up and down the line an advantage on being a distributor of that gas. CHAIRMAN KOTT pointed out that there are a lot of people tracking this legislation and none had voiced any opposition on this piece of legislation. Number 097 REPRESENTATIVE ELTON asked if the addition of $1,100 fiscal note meant that this need a committee referral to Finance. CHAIRMAN KOTT agreed, it would. He then asked the sponsor if any of these concerns and issues brought up here were addressed in the State Affairs Committee, that being the first committee of referral. REPRESENTATIVE GREEN replied that no, they didn't indicate any concern. There was some discussion on monopolism, but that was in areas where no one else was providing, or wanted to provide the service. If the committee wanted to draft a letter to the Finance Committee saying these issues should be discussed, he had no problem with that. CHAIRMAN KOTT recommended that they pass the bill out of committee with an attached letter of transmittal to the Finance Committee indicating the specific concerns the committee has. He said he would notify the Speaker that HB 17 had picked up a fiscal note and would need a Finance Committee referral. Chairman Kott entertained a motion. REPRESENTATIVE KUBINA made a motion to move the bill with individual recommendations. CHAIRMAN KOTT said the is a motion to move CS for HB 17(STA) out of committee with individual recommendations and accompanying fiscal notes with a letter of transmittal indicating the committee's concerns. CHAIRMAN KOTT asked if there were objections. Hearing none, the motion passed.
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