Legislature(1999 - 2000)
05/12/1999 03:27 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 185 - SMALL WATER UTILITIES EXEMPT FROM APUC Number 0109 CHAIRMAN ROKEBERG announced that the next order of business before the committee is HB 185, "An Act exempting certain small water utilities from regulation by the Alaska Public Utilities Commission." [Before the committee was CSHB 185(URS). Under discussion were Sections 2 and 3, added by an amendment, and an amendment to that amendment, in the previous committee. Section 2 read: "This Act does not apply to utilities with open dockets before the Alaska Public Utilities Commission until those dockets are closed." Section 3 read: "This Act takes effect July 1, 2000."] Number 0147 DAVID STANCLIFF, Legislative Assistant to Representative Scott Ogan, Alaska State Legislature, came forward on behalf of the sponsor. He noted that the amendments to HB 185 made in the House Special Committee on Utility Restructuring ("URS Committee") created conflict between Sections 2 and 3 in terms of the purposes of the bill. He indicated that Representative Ogan had discussed the possibility of removing that conflict. This bill represents a compromise, he said. Noting that two parties in the valley are in a dispute before the Alaska Public Utilities Commission (APUC), Mr. Stancliff advised members that the URS Committee had felt they didn't want to do anything to interrupt resolution of that dispute. He told members that assurance had been received from the APUC that a resolution is forthcoming. MR. STANCLIFF then stated, "However, on the merits of the bill, Representative Ogan felt that, like electric and telephone utilities that do under $50,000 of business a year, it would be not in the state's best interests to involve small water utilities. There's approximately 700 of them in the state, and when disputes occur and the APUC gets involved, it drags them away from much more important issues with regard to tariff and larger sums of money and policy questions. So, he proposed that we exempt - as we have done for telephone and electric in existing statute - small water utilities. MR. STANCLIFF continued, "The effective date of July 1, 2000, basically was an amendment that Representative Ogan agreed to, to give the APUC to that point to resolve this conflict; and they have assured him that that will be the case. ... Amendment Number 2 would be Section 2, that basically undoes the effect of Section 3, because ... they wouldn't be under any incentive to ever address the docket, because it is presently open, and the effective date wouldn't have any effect on a docket that is open. So, he felt that the effective date giving them additional time was probably - and Representative Hudson felt that that was - a reasonable compromise. So, he would prefer that Section 2 be removed, Mr. Chairman." Number 0341 REPRESENTATIVE HALCRO referred to related correspondence, the file, and testimony from the URS Committee. He asked if the APUC only gets involved with this type of situation when someone has a consumer question or complaint. MR. STANCLIFF affirmed that. REPRESENTATIVE HALCRO stated his understanding that the APUC's workload is not all that heavy. MR. STANCLIFF answered that with regard to disputes such as this, Representative Halcro is correct. Unfortunately, this case has dragged on for a year, and 46 property owners in the subdivision can't sell their homes because of the clouded title. Mr. Stancliff stated, "APUC had not decided that they even had jurisdiction, and now they're going to make that decision, since the legislature's gotten involved. However, it was not Representative Ogan's intent to get the legislature involved in swaying the decision, but merely on a public policy call, after he looked at other utilities, to not get them in these kind of disputes in the future." Number 0421 REPRESENTATIVE CISSNA expressed her understanding that if the APUC doesn't hear a case like that, the option is that it goes to court. MR. STANCLIFF said he wishes that were the case, but it is not. The court will simply wait until the APUC takes it up because they do not consider the administrative remedies resolved. This could be in limbo for a long time, he added. REPRESENTATIVE CISSNA clarified that she was asking, if this bill passes, would the parties in similar cases go to court instead of going to the APUC. MR. STANCLIFF said that is correct. Number 0486 REPRESENTATIVE CISSNA noted that countries have gone to war over water issues. Unlike with telephone service, where people look for increasing opportunities to connect with others, there is a finite amount of water. She asked why the APUC would be important to people who have water problems. MR. STANCLIFF replied that one concern of the APUC is that being dragged into a situation where two people are feuding offers opportunities for others to take the same route. "They have not been in this type of dispute before, but they do intend to make a decision," he added, pointing out that the policy call for legislators is whether the APUC should be involved in this level of dispute in the future. Number 0602 REPRESENTATIVE HALCRO asked when Mr. Mellish first filed a complaint with the APUC. MR. STANCLIFF said it was approximately last spring. REPRESENTATIVE HALCRO noted that it had been a year. CHAIRMAN ROKEBERG added that Mr. Mellish was the subsequent owner and had bought into the development; the situation regarding Phase II had already been established. MR. STANCLIFF said the good news is that both parties want resolution; therefore, anything the legislature does to speed that up will be helpful to both parties. CHAIRMAN ROKEBERG asked if the parties are talking to each other now. MR. STANCLIFF said he believes the attorneys are talking, at least. REPRESENTATIVE HALCRO, noting that the committee had dealt recently with two APUC-related bills, expressed concern about the APUC's state of limbo. He suggested retaining Sections 2 and 3; if something happens and the APUC doesn't render a decision in the next year, he wants to ensure that this docket is addressed since the person has been in the process in the last year. CHAIRMAN ROKEBERG asked Mr. Stancliff to respond, noting that an amendment had been requested. He remarked that he doesn't see where this is entirely in conflict with Sections 2 and 3, but that perhaps it would become so after July 1, 2000. Number 0730 MR. STANCLIFF said that is exactly right. He explained that Representative Hudson, Chairman of the URS Committee had conferred originally with both parties, and Section 3 was the agreed-upon amendment. These titles shouldn't be clouded any longer than that, and everyone wants a resolution. MR. STANCLIFF noted that Section 2 was an amendment in the URS Committee, and Section 3 was an amendment to the amendment. There had been confusion about whether the sections would conflict. Furthermore, Representative Cowdery, believed that taking Section 3 as an amendment to the amendment would do away with Section 2. Mr. Stancliff concluded, "This does create confusion, and it does take away the effect ... of the two years' span of time here, if we leave Section 2 in. And I think these property owners are entitled to relief, as is Mr. Mellish, but I think taking over two years is unreasonable, Mr. Chairman." REPRESENTATIVE HALCRO commented that they had heard from some "industry folks" who said it has taken four or five years to get a decision from the APUC. Going through the documentation and considering what is at stake, he agreed that timely resolution is important. However, his concern is that with so much up in the air with the APUC now, if something happens and this case falls through a crack, this person will be left out simply because of the transitional status of the APUC. Number 0848 CHAIRMAN ROKEBERG responded that it isn't clear why they wouldn't want to get rid of the July 1, 2000, effective date, as opposed to Section 2, if the intention is to keep the heat on the specific parties and to remove the APUC's jurisdiction. He asked whether or not the desire is to keep the APUC involved. MR. STANCLIFF said there is a good argument either way, adding, "Mr. Chairman, I know Representative Ogan would defer to your judgment in this matter." CHAIRMAN ROKEBERG indicated that allowing open dockets to be closed makes common sense, as does providing for a period of time in which those dockets can be closed, and other dockets are not taken. He said he doesn't find them at odds. REPRESENTATIVE HALCRO responded that if the sponsor's intent is to relieve the APUC from dealing with water utilities that gross under $50,000 annually, this will direct them to stop doing so. He stated, "Fine. But we want to protect those that already have open dockets. So, the effective date, to me, ... reading this, you're going to give people another year to file with APUC and create an open docket." CHAIRMAN ROKEBERG said that seems right, if the primary intent is to change the jurisdiction. Number 0990 MR. STANCLIFF specified that the agreement reached in the URS Committee was the language in Sections 1 and 3. Section 2 was an add-on, and he believes it confuses things. CHAIRMAN ROKEBERG suggested that Representative Halcro's question is: Why not have the Act take effect more quickly? He noted that open dockets are covered now by the transitional provision. REPRESENTATIVE CISSNA asked if the suggestion was elimination of Section 3, rather than Section 2. CHAIRMAN ROKEBERG said they could eliminate Section 3 or change the date to 1999. MR. STANCLIFF responded, "That would be a favorable, logical solution, from our perspective." He indicated they would have the APUC communicate with Representative Halcro about their intent in terms of handling it, if that would alleviate his discomfort. CHAIRMAN ROKEBERG asked if Mr. Stancliff had attended the two URS Committee hearings on this bill. He said he isn't sure that he recalls the APUC testifying on this legislation. MR. STANCLIFF replied that he was at the second hearing. The APUC didn't testify, but Representative Hudson had indicated he had spoken with them. In addition, Representative Ogan had spoken with them about their ability and intent to take this matter up, which the APUC had affirmed. Number 1128 REPRESENTATIVE CISSNA asked whether anyone from the APUC had said how they feel about this particular bill. MR. STANCLIFF explained that the APUC has been very careful not to speak specifically on the bill, or to indicate how they might rule in this case or their feelings about it. When queried as to how much longer it would be, or whether they felt they could get to this for some type of resolution, however, the APUC had been more candid, but that was through personal calls and contacts with the offices of Representatives Hudson and Ogan. Mr. Stancliff added that he doesn't believe that the APUC was asked to testify. CHAIRMAN ROKEBERG noted that the APUC was not on teleconference that day. REPRESENTATIVE CISSNA commented that it seems there might be some real concern about the water issue. She asked, "Do we want them in court?" CHAIRMAN ROKEBERG responded that the policy issue, as stated by Mr. Stancliff, is whether the APUC should have jurisdiction to try to resolve small consumer complaints over community water systems, or whether those should go directly to court. Chairman Rokeberg said he tends to think there is an issue over whether this is correct, but he wants to move the bill. REPRESENTATIVE HALCRO referred to correspondence from Mr. Mellish and his law firm. Noting that the APUC's engagements with small utilities are few and far between, he agreed that there is a question about whether it is worth having them. However, he is concerned that Mr. Mellish's case will somehow fall through the cracks. CHAIRMAN ROKEBERG requested a motion to either amend Section 3 to July 1, 1999, or delete it. Number 1313 REPRESENTATIVE HALCRO made a motion to amend line 11, changing the year "2000" to "1999". There being no objection, it was so ordered. REPRESENTATIVE HALCRO asked about the appeal process, inquiring whether the docket would still be considered open. CHAIRMAN ROKEBERG said yes, noting that the appeal process now in the APUC is to the courts. Number 1351 REPRESENTATIVE HALCRO made a motion to move CSHB 185(URS), as amended, out of committee with individual recommendations and the attached zero fiscal note. There being no objection, CSHB 185(L&C) moved out of the House Labor and Commerce Standing Committee.
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