Legislature(1999 - 2000)
02/17/1999 08:05 AM House URS
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HB 62 - ALASKA PUBLIC UTILITIES COMMISSION CHAIRMAN HUDSON announced the first order of business is HB 62, "An Act relating to the Alaska Public Utilities Commission; and providing for an effective date." CHAIRMAN HUDSON further announced it is not his intention to move the bill out of committee today. It is his intention to hear from the prime sponsor of the bill and chairman of the Alaska Public Utilities Commission (APUC). He called on Representative Gene Therriault, sponsor of the bill. Number 0200 REPRESENTATIVE GENE THERRIAULT, Alaska State Legislature, noted that HB 62 is brief in scope, but purposely has a very broad title. He read the following sponsor statement into the record: Under AS 42.05 and 42.06, the Alaska Public Utilities Commission regulates public utilities by certifying qualified providers of public utility and pipeline services. It is designed to ensure that utilities provide safe and adequate services and facilities at reasonable rates. The five-member commission also determines the eligibility and the per kilowatt-hour support for electric utilities under the Power Cost Equalization program (AS 42.45) The Alaska Public Utilities Commission is set to expire on June 30, 1999 under AS 44.66.010, 'Termination of state boards and commissions.' If the legislature does not act to extend the commission, it would have one year, until June 30, 2000, to conclude its affairs. House Bill 62 will extend the commission for another four years. The title has intentionally been left broad enough to allow leeway for discussion of several issues of concern that have arisen during the past four years of the commission's existence. Number 0312 REPRESENTATIVE THERRIAULT referred to the commission's annual report dated February 11, 1999 and noted that a provision in the mission statement is misleading - " ... the commission does this by making timely decisions that balance the competition interests of various parties fairly, while keeping red tape to a minimum." He cited in Fairbanks either constituents or local governments have complained about the lack of timeliness on decisions and referred to a letter signed by the Interior delegation dated in June of 1997. The letter asked for help in getting to a decision on a pending solid waste permit costing hundreds of thousands of dollars if not millions of dollars. Number 0450 REPRESENTATIVE THERRIAULT further noted that he is not sure the commission should be extended. He would leave it up to the committee, however, to consider any structural changes and/or policy changes to the commission before it is extended. REPRESENTATIVE THERRIAULT further stated that an internal report notes that steps must be taken as early as possible to bring the backlog under control and address the issue of speedy processing. The report also addresses the issue of timeliness, problems with communication between commissioners, and leadership. In addition, the report addresses the issue of a shift towards policy making and away from fact finding in traditional rate cases - an issue that needs to be addressed because the legislature is the appropriate body for policy making. The report also indicates that the commission does not work well for "future oriented establishment of policy." Finally, the report notes that the discontent of the commission is higher than in the past with a variety of carriers. The stakeholders are not looking for radical changes, but there is a growing discontent with the way the commission works. REPRESENTATIVE THERRIAULT stated, in conclusion, that he hopes the committee views the bill as a means to address some of these issues, not just an extension of the sunset date. He announced that there will be a sunset audit review by the legislature made available soon that will also be helpful. CHAIRMAN HUDSON called on Sam Cotten, chairman of the Alaska Public Utilities Commission. Number 0909 SAM COTTEN, Chairman, Alaska Public Utilities Commission, Department of Commerce & Economic Development, announced that he brought annual reports from other states as well for a comparison and noted there are a lot of similarities between states because of the Telecommunications Act of 1996. The APUC's annual report describes the nuts and bolts of the commission: staffing, membership, budget and significant events. The commission has excellent staff that consists of many professionals who are often named a party to a case when necessary. The commission employees engineers, certified public accountants, communication specialists, tariff analysts and many others. In spite of the many distractions and the increasing workload, he feels that the staff is able to focus on the tasks at hand. The issue of timeliness and a heavy workload, is a reoccurring theme in many other states as well. The commission recognizes that it needs to do a better job. It needs to be more timely and better able to handle the new issues presented as a result of the changes in the utility industry. A management audit by the National Regulatory Research Institute (NRRI) and legislative auditors suggest a management information system (MIS), bench-n-bar approach, and a formal identification of the backlog as means of improvement. The commission is working on an RFP (request for proposal) for a management information system. A bench-n-bar approach is an interaction with the industry on a more informal basis to help get rid of the red tape. It is the intention of the commission to have these meetings on a regular basis. The biggest suggestion from the NRRI and the legislative auditor is an increase in staff because the workload has doubled over the past five years. Last fall, the commission recommended adding nine new staff members and proceeded to recruit and hire when the hiring freeze was effected. The commission, he noted, does not rely on general fund dollars and its assets cannot be converted to general fund dollars. For example, money left over at the end of the year means payments to consumers who fund the budget will go down the following year. Number 1352 CHAIRMAN HUDSON asked Mr. Cotten, for clarification, whether the funds do or do not continue over. MR. COTTEN replied it depends upon the legislature. The legislature can appropriate carry-forward funds. The commission cannot make that decision itself. MR. COTTEN continued. The commissioners should and can take more individual responsibilities for the speed and quality of their work. There are five commissioners and the work is divided according to the docket. A commissioner is responsible for following all the motions and hearings of a docket. Paralegals and hearing officers help produce the orders that correspond to the motions. The workload has increased and every commissioner has an extensive portfolio. MR. COTTEN further stated that each of the states has a utilities commission and it makes sense to continue it here in Alaska. He recognized that there are policy issues the legislature may choose to decide itself and it is not a problem with the commission. MR. COTTEN further stated, in reference to the legislative audit report mentioned earlier, the commission will respond to it when it is released formally. In reference to policy issues mentioned earlier, the commission is faced with a lot of policy calls because of new acts such as the Telecommunications Act of 1996. The Act delegates a lot of decisions to the state commissions. He cited a recent example of a policy decision related to the length of a transfer between providers. The commission decided it should take seven days after hearing both sides, touring the facilities, and trying to understand what it actually takes to switch a customer. Those types of "policy decisions" may or may not be suitable for a legislative resolution. Number 1566 REPRESENTATIVE DAVIES asked Mr. Cotten to explain the difference between the definition of the word "policy making" and "rule making". The NRRI report refers to the term "policy making" when it seems more like the term "rule making". Number 1602 MR. COTTEN replied with an example of the electric restructuring issue. The statutes right now power the commission to determine whether there should be competition in electricity. If an entity wants to compete in the electrical markets, it is required to come to the commission and apply for a certificate. The commission is suppose to determine whether the entity is fit, willing and able; the public deems it as a necessity; and it is affirmatively consistent with the public's interest. An example of a policy decision that would have to be made with the legislature, is changing the law to say that there "should" or "must" be competition. Nevertheless, with the Telecommunications Act of 1996 and other new things coming, the commission is often called upon to make decisions that often result in a policy call. Number 1660 REPRESENTATIVE DAVIES asked Mr. Cotten whether his example of determining the length of a transfer is considered a policy making decision. MR. COTTEN replied it is a matter of definition, but he considers it a policy decision. Number 1684 REPRESENTATIVE COWDERY asked Mr. Cotten how big the backlog is with the commission. MR. COTTEN replied he can't give a good answer right now. For example, there are probably 25 decisions made by the commissioners that have not been written by the hearing officer. There is only one hearing officer, and the commission has asked for another one that will help with the backlog. The commission is probably a couple of months behind and with more staff the backlog could be moved up. He reiterated the commission is in the process of formally identifying the backlog. Number 1815 REPRESENTATIVE COWDERY asked Mr. Cotten whether he is saying that the commission will never get caught up. MR. COTTEN replied yes. REPRESENTATIVE COWDERY asked Mr. Cotten the time frame for a decision made by the commission. MR. COTTEN replied there is no average decision. There are routine decisions that are turned around in a relatively short period of time, such as the resale of telecommunication services. There is not an average number; it is a factor of how often a request comes in. There are other decisions that are lengthier requiring filings and hearings. The commission keeps a weekly report of the number of orders and he would be willing to get and provide those numbers. Number 1908 REPRESENTATIVE COWDERY asked Mr. Cotten whether there is a solution to the commission's dilemma, such as more commission members or privatization, for example. MR. COTTEN replied he doesn't think that there needs to be more commissioners and there has been some success with contracting services from the private sector. He cited the administrative law judge is on contract and the arbitrator is paid by the utilities. REPRESENTATIVE COWDERY asked Mr. Cotten whether it has been productive. MR. COTTEN replied there have been some success, but there have also been some complaints. REPRESENTATIVE COWDERY asked Mr. Cotten what issue has been before the commission the longest and how long. MR. COTTEN replied he doesn't know exactly. There have been a few issues around for a long time that deal with the Public Utility Regulatory Policy Act of 1978 (PURPA), a federal law that allows an entity to sell electricity to an existing utility. There is a lot of confusion surrounding the federal law and two cases have been before the commission for a couple of years now. Number 2032 REPRESENTATIVE ROKEBERG expressed his appreciation to Mr. Cotten in regards to the self-assessment of the commissioners mentioned earlier. He asked Mr. Cotten whether the commission believes that competition in local telephone service is in the public's interest and whether the commission is ready to take up the issue based solely on the technical grounds of the Telecommunications Act of 1996. MR. COTTEN replied he needs to be careful in his response because the commission is called upon to make objective decisions after an application has been made. Last year an application was made in Fairbanks and Juneau and, as a result of the guidance given by the federal law, the commission said "no" to remove the rural exemption request mostly due to current regulations that envision a monopoly. The commission has changed the regulations since then and is expecting another application to remove the rural exemption. Number 2141 REPRESENTATIVE ROKEBERG asked Mr. Cotten whether the commission is waiting on the case in the superior court to take up the issue or waiting for another application. MR. COTTEN replied it is out of the hands of the commission now. GCI appealed the commission's decision to the superior court. Since the appeal, however, the U.S. Supreme Court has made a decision that overturned the 8th Circuit Court of Appeals. There has been a suggestion that the commission committed a procedural error. It is not known for sure. The Federal Communications Commission (FCC) said that the states have to place the burden of proof on the incumbent local exchange carrier, the 8th Circuit Court of Appeals said that the states have to decide themselves, and the commission said that the burden of proof had to be on the competitor. It appears that the U.S. Supreme Court is in agreement with the FCC. Therefore, the superior court may remand that decision to the commission, but no one has petitioned for it yet. Number 2197 REPRESENTATIVE ROKEBERG asked Mr. Cotten how quickly would the commission take a remand up. There are bills pending in the legislature that would be moot if it was taken up on a remand. MR. COTTEN replied if it is sent back on remand, the commission would immediately have a pre-hearing conference and set a procedural schedule to deal with it. Number 2215 REPRESENTATIVE ROKEBERG asked Mr. Cotten to explain an advertisement that he saw in a newspaper calling for the establishment of an Alaskan universal service fund. MR. COTTEN replied the Telecommunications Act of 1996 instructed the state commissions to remove implicit subsidies. Alaska receives between $50 million and $70 million a year in universal service funds as subsidies to phone companies. For example, the Matanuska Telephone Association (MTA) receives about $20 million per year because Alaska is considered a high-cost area. The subsidies in question are the access charges, the funds that long-distance companies pay to local companies to terminate a call on their equipment. The commission, according to law, has made it an explicit subsidy making it an identifiable target to investigate/question. Number 2305 REPRESENTATIVE ROKEBERG asked Mr. Cotten whether it goes into a fund administered by the state or a federal universal service fund. MR. COTTEN replied it goes into a state fund. REPRESENTATIVE ROKEBERG asked Mr. Cotten whether it is a separate fund from the federal fund. MR. COTTEN replied yes. REPRESENTATIVE ROKEBERG asked Mr. Cotten whether it is a new fund. MR. COTTEN replied yes. REPRESENTATIVE ROKEBERG asked Mr. Cotten whether there is a risk of losing federal funding. MR. COTTEN replied not because of that. The Telecommunications Act of 1996 also said that there will be subsidies for rural health care providers, schools and libraries. There is some fear that it will compete with the universal service funds that Alaska enjoys benefits from now. Number 2343 REPRESENTATIVE ROKEBERG asked Mr. Cotten whether the $20 million received by MTA is in jeopardy of being phased out because of FCC rulings. MR. COTTEN replied it is always potentially in jeopardy, but not because of anything that the state or commission has done. There is the possibility that Congress could change the rules on how the funds are distributed or who is eligible to receive them. There is strong support for the fund, however, from the Alaskan congressional delegation. Number 2368 REPRESENTATIVE BERKOWITZ asked Mr. Cotten why and how the APUC was developed, and what went on before it. MR. COTTEN replied, in general, utility commissions came about in exchange for a monopoly. Utilities had to submit to a regulation of rates, the primary reason why utility commissions came into existence. Since then, there have been other reasons and functions that the commissions have fulfilled. Number 2409 REPRESENTATIVE BERKOWITZ asked Mr. Cotten how a "utility" is defined and how has the commission evolved over time. MR. COTTEN replied state law defines a public utility. REPRESENTATIVE BERKOWITZ explained that he is more interested in the characteristics of a utility rather than an itemization. For example, he wondered whether the issue of Internet access could be construed as a utility. MR. COTTEN replied a good example is cable television. It is considered a utility, but it is dealt with differently. The commission does not regulate cable television unless a community requests so. Juneau is the only city that has made the request so far. Other functions that carry forward the idea of a regulatory commission are defined in AS 42.05.141, "General powers and duties of the commission." The requirements for obtaining a certificate are outlined in AS 42.05.221, "Certificates required." There are also regulations that further define the statutes. Another function besides rate regulation is to ensure that an entity is fit, willing and able .... TAPE 99-3, SIDE B Number 0021 REPRESENTATIVE BERKOWITZ asked Mr. Cotten what would happen if the APUC went away. MR. COTTEN replied, if the APUC went away, the legislature would have to examine Title 42 and decide who should perform those functions, if anybody. CHAIRMAN HUDSON announced the presence of Representative Joe Green. Number 0055 REPRESENTATIVE GREEN asked Mr. Cotten if he was the chief executive officer of a corporation and got a report card from a division director that said slow, unreliable, meddlesome, argumentative and burdensome, what would he do under those circumstances. MR. COTTEN replied as a chief executive officer he would have different choices available to him. Obviously, it would have to be taken very seriously. The commission's job is to serve the public and avoid disruption, distraction and concentrate on the business at hand. He reiterated the commission has outlined the things that it is doing to address the situations it faces. Number 0114 REPRESENTATIVE GREEN stated there have been indications and/or outright accusations of turmoil among the members of the commissioners delving far too deep into the activities that staff is suppose to do impeding the progress and slowing the activities. MR. COTTEN responded it is no secret that there has been less than unanimity on how the administration of the commission should be handled. It is difficult to discuss without finger pointing, but there is potential for improvement in the near future. Number 0191 REPRESENTATIVE GREEN asked Mr. Cotten the salary of the commissioners. MR. COTTEN replied they are equal to a Range 26, Step C in accordance to statute, about $72,000 a year. There are five commissioners. REPRESENTATIVE GREEN asked Mr. Cotten what the cost is for the staff. MR. COTTEN replied the commission's budget is under $5 million. There are now 41 people on staff and the commission has been authorized for 56. There are five vacant positions and nine new positions. In addition, there are contractual funds and other expenses that are outlined in the annual report. The commission is also assigned to the Department of Law for legal advise. Number 0225 REPRESENTATIVE GREEN asked Mr. Cotten whether he is aware of the varying testaments on the cost of delayed decisions to the utilities. MR. COTTEN replied yes. In the case of Fairbanks, mentioned by Representative Therriault earlier, the commission was regularly reminded of the disposition of the utility by the city. REPRESENTATIVE GREEN asked Mr. Cotten whether the additional costs become part of the rate base, or do the utilities eat it. MR. COTTEN replied it could become part of the rate base. However, in the case of Fairbanks, the city informed the commission of its lost money, but the utility didn't suffer any rate-based elements. Number 0285 REPRESENTATIVE GREEN asked Mr. Cotten, in relation to the turmoil and accusations of the commission, whether there is any merit to sun setting the commission and starting over. He noted, however, that in a monopolistic utility regulation is needed. MR. COTTEN replied, "It's a policy call." He reiterated the commission is making steps toward improvements. He believes that the commission can get there and will get there. It is hard to be objective about it from his position, but it would be a drastic step and he does not believe it is necessary. REPRESENTATIVE GREEN asked Mr. Cotten whether it is personalities. MR. COTTEN replied it is some of that. Number 0382 REPRESENTATIVE PORTER asked Mr. Cotten, referring to a conversation about a year ago regarding additional staff, whether the commission has been able to do any expansion in the last year. MR. COTTEN replied some paralegals have been hired. Paralegals start at a Range 13 and after a year they can go to a Range 16. The last two people hired had law degrees and were looking for better jobs. He noted it isn't easy to keep people at that pay range. The other employees hired deal with the administrative functions. The commission now is asking for professionals. Number 0433 REPRESENTATIVE PORTER asked Mr. Cotten how long the nine positions have been available. MR. COTTEN replied those positions were just recently authorized by the Office of Management and Budget when the hiring freeze hit. Number 0450 REPRESENTATIVE PORTER asked Mr. Cotten whether the commission has asked for an exception to the hiring freeze. MR. COTTEN replied yes. Most people understand that the commission does not affect the general fund, but the legislature still has to answer to the total number of employees requiring caution even from agencies that are not funded from the general fund. Number 0491 REPRESENTATIVE PORTER stated, looking from the outside, it seems that some of the backlog is the result of a few major decisions being held off an inordinate length of time. MR. COTTEN responded that sounds logical. The internal decision making process is probably a little more unusual than most people realize. The commission deliberates in an adjudicatory setting in private, and there are times when it is difficult to arrive at a decision. Number 0579 REPRESENTATIVE PORTER asked Mr. Cotten whether he is aware of another system that would avoid those kinds of problem. MR. COTTEN replied he is convinced that the management information system will be a major help in identifying the categories of work ahead. As chairman, it will make his job easier and prevent things from falling through the cracks. Number 0636 REPRESENTATIVE PORTER asked Mr. Cotten whether the management information system would help a lot or would a change of commissioners help. MR. COTTEN replied the commission is about to issue an RFP for a management information system. He is unsure about answering the second part of the question. REPRESENTATIVE PORTER asked Mr. Cotten what future events is he has referring to that would help the backlog. MR. COTTEN replied there could be some turnover that might assist the commission. He doesn't want to make any negative comments about anybody, however. Number 0694 REPRESENTATIVE KOTT applauded the efforts of the commission and recognized that it is not an easy job. He asked Mr. Cotten whether the legislative audit report recommended increasing the commission's staff. MR. COTTEN replied the audit recommendations have not been delivered; they are still being formulated. However, an initial response from an audit that was contracted out indicated the commission needs more resources. It is his understanding that the legislative auditors have been more cautious about recommending more staff, perhaps they are more politically sensitive. Number 0759 REPRESENTATIVE KOTT stated the NRRI study indicated there are internal problems across the board and the commission should follow an administrative model allowing the commissioners greater access to staff experts. According to his understanding, there appears to be a rigid wall between the commissioners and the technical experts. MR. COTTEN responded that the commission often has to name its staff a party to a case as an advocate. In those cases, the staff named are off-limits, otherwise it would be an ex parte communication. Before he was on the commission, the entire staff was named an advocate. Now, only part of the staff is named and the rest is available to advise the commissioners. It is a matter of choice, however, to take advantage of the expertise that is available. Number 0911 REPRESENTATIVE KOTT referred to a resolution passed recently by the commission titled, "Structural Changes, Redefinition of Roles, and Altering Lines of Responsibilities". It appears that there is a greater degree of control over the executive director as supervisor of Agnes Pitts. MR. COTTEN noted that is correct. REPRESENTATIVE KOTT stated the resolution indicates the executive director will not have any contact with the news media, unless directed by the majority of the commissioners, yet Ms. Pitts is not under the same constraints. MR. COTTEN replied it doesn't make any sense to him either. REPRESENTATIVE KOTT asked Mr. Cotten whether the resolution was passed via a vote. MR. COTTEN replied it passed by a vote of 3-2. REPRESENTATIVE KOTT noted the resolution suggests that there are still some internal personnel issues. MR. COTTEN explained a commissioner was unhappy about a personnel matter that occurred earlier with a difficult employee. The commissioners went into an executive session to discuss the matter with the executive director after which the motion showed up on the agenda at the next public meeting. In his opinion, the resolution is a displeasure of how the executive director handled that employee situation. Number 1055 REPRESENTATIVE KOTT asked Mr. Cotten, in regards to the issue of electric utility restructuring, whether the commission's position would be in front of the legislature, aligned with the legislature, or would the commission wait for the legislature for guidance. MR. COTTEN replied the commission has worked with the legislature on this issue. The APUC put up $200,000 to fund a study to learn more about electric restructuring. Aurora Power (Aurora), the company proposing a pilot project, has an application before the commission now and a schedule for filings and hearings has been made. The commission and all parties involved expect to benefit from the study. He doesn't have an opinion on it right now because as a commissioner he is suppose to wait and hear the parties involved before making a decision. The commission is suppose to determine whether a person is fit, willing and able, and whether the public's interest requires a utility to operate. Until an entity comes before the commission and applies to provide electricity in a service area that already has electricity, the commission won't face the question. When it is faced with the question, the commission will require the entity to show why it would be in the public's interest. For example, what would happen to the stranded investments - the same question(s) the study will address. Number 1336 REPRESENTATIVE KOTT asked Mr. Cotten whether the commission will render a final decision regarding Aurora's application before the independent study has been completed and provided. MR. COTTEN replied the hearing will take place in November and a decision should be made soon afterwards. However, it is his understanding that the commission will be able to enjoy the study beforehand. Number 1425 REPRESENTATIVE DAVIES asked Mr. Cotten whether there is an application now or has there ever been an application before the commission for an electrical utility to compete in the service area of another electrical utility. MR. COTTEN replied not to his knowledge. Number 1449 REPRESENTATIVE ROKEBERG asked Mr. Cotten whether the commission has had dockets before it asking for one utility to sell power in another service area. MR. COTTEN replied Chugach Electric Association Inc. (Chugach) and Municipal Light & Power (ML&P) have been disagreeing on whether Chugach has the inherent right to compete, but no application has come before the commission. The ML&P complained to the commission that Chugach was attempting to sell power to its customers. Chugach argued that it had a right without the permission of the commission and now the issue is in superior court. Number 1496 REPRESENTATIVE GREEN asked Mr. Cotten whether the disputed lines between Chugach and ML&P in the 1980's was decided by the APUC or was it cooperatively arrived at between the two parties. MR. COTTEN replied there was legislative involvement and the APUC played a role, but he cannot give a better answer because he wasn't with the commission at that time. CHAIRMAN HUDSON opened the meeting up to the teleconference network. Number 1559 GEORGE GORDON, President and Chief Executive Officer, College Utilities Corporation and Golden Heart Utilities, noted that the regulated industry doesn't want to cause difficulties with the people who regulate it as well as the people who legislate it. The legislature has a strong role in providing possible solutions to some of the difficulties experienced at the commission. He urged the legislature to exercise its oversight authority since the commission is a quasi-judicial agency. The content review process is the only opportunity to provide help to the commission at this juncture. College Utilities Corporation has been in business and regulated by the commission for over 30 years. Its relations are good with the APUC. Golden Heart Utilities, recently acquired by the city of Fairbanks, is struggling to provide services in an efficient and cost-effective manner, and needs good and efficient regulations. He referred to the NRRI report and the timeliness issue and suggested streamlining procedures so that the simple and non-contested issues are not weighed the same as the extensive issues. He urged the committee members to read the comments found in the appendix of the NRRI report regarding delays and noted some result in higher costs to the rate payers and those costs are sometimes hidden in the consumer rates. Furthermore, even though the budget is being cut, it shouldn't affect the APUC because it is in essence funded by utility rate payers. The hiring freeze mentioned earlier probably should not apply to the commission. It is apparent that the commission doesn't have the resources necessary to tackle the problems, especially when it appears that there will be more demands on it because of the continuing issues associated with telephone utilities and the pending potential competition issue with electric utilities. He noted that the commission is run by a committee which poses difficulties and urged the legislature to take a strong role in scrutinizing an appointment to ensure that they are hard working and good. It is also appropriate that the legislature consider giving more authority to the chairman to exercise more control over the staff and the workings of the commission itself. Number 2068 REPRESENTATIVE ROKEBERG asked Mr. Gordon if the chairman was elected by the commissioners rather than the governor would that create a natural level of authority. MR. GORDON replied he is not sure, but the chairman needs to have more authority over staff, rules and regulations, not decisions. Number 2130 CHAIRMAN HUDSON noted that the issue needs to be articulated in statute. Somebody needs to be held accountable. It is something that this committee needs to take a look at. Number 2214 MARK VASCONI, Director, Regulatory Affairs, AT&T Alascom, stated that Alascom supports the extension of the sunset date and HB 62 as written. Alascom also supports the commission's request for more resources given the backlog of cases. While the rate payer is the ultimate source of funding, Alascom has never received a complaint from customers regarding the level of the regulatory cost charge and commended the commission for keeping it at a reasonable level. Number 2304 REPRESENTATIVE ROKEBERG asked Mr. Vasconi whether he thinks the APUC is within its statutory authority to set up an Alaskan universal service fund. MR. VASCONI replied according to an opinion rendered by the Department of Law it is a close call but on legal grounds. Number 2376 REPRESENTATIVE ROKEBERG asked Mr. Vasconi whether AT&T is one of the largest payers of universal service and access charges for subsidized rates. He also asked whether AT&T has a corporate policy for universal services. MR. VASCONI replied AT&T's corporate policy is to ensure that universal services continue. Yes, AT&T is the largest payer of all long-distance companies in the state. He is not sure, however, if it is the largest of local exchange carriers. Number 2480 JIM ROWE, Executive Director, Alaska Telephone Association, stated the association supports HB 62 in its present form. TAPE 99-4, SIDE A Number 0001 MR. ROWE continued. In reference to sun setting the commission mentioned earlier, he is afraid of the industry spending too much time on the bill instead of servicing its customers. He commended the staff of the APUC and reiterated that the commission should be re-authorized earlier rather than later in session. Number 0128 CHAIRMAN HUDSON announced it is not his intention to let the bill lie around until May. Number 0140 REPRESENTATIVE ROKEBERG stated that the legislature is looking at the bill as an opportunity to reform the APUC to better serve the utilities and asked Mr. Rowe whether he has any suggestions. MR. ROWE replied he appreciates the fact that there is a special committee dedicated to utility restructuring, and that there is a bill taking up the issue early in session. He agrees that timeliness is a key issue with the APUC, but also noted that the industry is always going to complain because it will always want timely service. He said, "Timeliness is very important, but rushing to make the wrong decision is devastating to the industry." He appreciates that the commission looks at issues and listens to the multitude of sides before making a decision. Number 0309 REPRESENTATIVE GREEN asked Mr. Rowe whether he is suggesting that taking longer makes a better decision or whether there is an avenue for streamlining the process for some decisions. He cited a decision that should have been made by the time the legislature reconvened this year. MR. ROWE replied he is not aware of the decision Representative Green is referring to. REPRESENTATIVE GREEN noted that is has to deal with HB 416 from last year. The commission said it would have an answer before the legislature reconvened. MR. ROWE replied it is his understanding that the Lieutenant Governor has signed the final regulations regarding HB 416. Number 0448 REPRESENTATIVE KOTT asked Mr. Rowe whether it is fair to assume that he would rather see the bill pass in its current form than to attach other issues to it risking it from passing. He further asked what would the reaction be within the industry. MR. ROWE replied, yes, he would like to see the bill passed so that the industry knows there will be a commission, not a perfect commission, but one that will deal with issues relating to the telephone industry. If the commission needs tweaking there is a committee established to address those issues. Number 0529 REPRESENTATIVE DAVIES noted that most of the solutions are outside a statutory fix such as the issue of staffing. However, the suggestion of realigning the duties of the chairman relative to staff is a statutory fix. He asked Mr. Rowe whether that is something he would support. MR. ROWE replied that is a very appropriate item for this committee to look at. Number 0600 REPRESENTATIVE COWDERY asked Mr. Cotten when the APUC will vote on the purchase of ATU. MR. COTTEN deferred the question to Mr. Lohr of the APUC. ROBERT LOHR, Executive Director, Alaska Public Utilities Commission, Department of Commerce & Economic Development, said he does not have the exact date, but it is coming up and the municipality has insisted on closing in April. The commission will have to decide before then. MR. COTTEN noted that it involves five dockets and is on an expedited schedule. Number 0680 REPRESENTATIVE THERRIAULT referred to the management information system mentioned earlier, and read from a report indicating that a computer cannot set priorities and that the equipment available to the APUC should not be directly blamed. The commission is up to date on computer quality and speed, an issue that the Department of Commerce & Economic Development finance budget subcommittee will have to consider. Number 0792 REPRESENTATIVE THERRIAULT referred to the issue of sun setting mentioned earlier, and suggested looking at a shorter sunset extension tied to some structural changes. There has also been a suggestion of reducing the commissioners from five to three or sub-panels of three, for example. A report also illustrated a number of comments regarding the absence of commissioners at meetings which needs to be looked at as well. He suggested asking for attendance records to determine the validity of those statements. The rate payers are paying for a decent salary and should expect that the commissioners are showing up for work. The committee should also get involved in selecting and recommending any replacement of new commissioners. Number 0868 REPRESENTATIVE ROKEBERG stated that he would also like to look at vacation times of the commissioners in response to comments from the public relating to the inability to make decisions because of their in availability. He asked Representative Therriault his opinion on the hiring freeze in relation to positions funded by program receipts. Number 0941 REPRESENTATIVE THERRIAULT replied the Governor indicated that it is not an absolute hiring freeze. The Governor would look at allowing hiring while at the same time remaining sensitive to the total state employee count. The Administration also indicated that the quasi-judicial or quasi-private entities should also be sensitive to the state's fiscal policy and be frugal in their requests. Number 1000 REPRESENTATIVE ROKEBERG stated that he hopes the legislature and the Governor do not indulge themselves in a general body count when allocating monies and positions. "We shouldn't be making decisions based on numbers. We should be making decisions based on need and so forth," he stated. Number 1027 REPRESENTATIVE THERRIAULT responded he doesn't disagree and has cautioned the majority members to be careful when using just body count figures. There needs to be a better understanding of what is behind the numbers. Number 1041 CHAIRMAN HUDSON noted, in accordance to the public's best interest, the commission needs additional staff. He hopes that the House Finance Committee will take that into consideration. He requested the chairman put in writing the commission's need for additional staff for this committee to look at and other committees down the line. Number 1080 REPRESENTATIVE GREEN asked that the chairman also include the streamline procedures in its report. MR. COTTEN indicated that he has communicated with the commissioner of the Department of Commerce & Economic Development on the need for additional staff and can get that information immediately. Number 1134 REPRESENTATIVE DAVIES noted that this is an example of being careful when looking at just body count numbers. All general fund spending isn't bad. Some spending actually promotes the general welfare of the state, the interest of business, and improves the economy. Number 1200 REPRESENTATIVE ROKEBERG asked Mr. Cotten to bring forward recommendations to the committee about enhancing his position and management changes that might need statutory authority. CHAIRMAN HUDSON indicated that the bill will be held over for further consideration.
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