Legislature(2005 - 2006)SENATE FINANCE 532

05/06/2005 09:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
+ SB 73 STATE VIROLOGY LABORATORY TELECONFERENCED
Moved CSSB 73(FIN) Out of Committee
+ SB 74 CRIMES INVOLVING MARIJUANA/OTHER DRUGS TELECONFERENCED
Scheduled But Not Heard
+ HB 98 NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT TELECONFERENCED
Heard & Held
+ HB 147 INSURANCE REGULATION TELECONFERENCED
Moved SCS CSHB 147(FIN) Out of Committee
+ HB 54 BAIL REVIEW TELECONFERENCED
Moved CSHB 54(FIN) Out of Committee
+ HB 286 VALUE OF ROYALTY ON GAS PRODUCTION TELECONFERENCED
Moved SCS CSHB 286(RES) Out of Committee
+ HB 218 PRIVATE HATCHERY COST RECOVERY FISHERIES TELECONFERENCED
Heard & Held
+= HB 275 TRANSPORTATION PROJECT BONDS TELECONFERENCED
Scheduled But Not Heard
<Pending Referral>
Bills Previously Heard/Scheduled
= SB 46 APPROP: CAPITAL BUDGET
Moved CSSB 46(FIN) Out of Committee
                                                                                                                                
     SENATE BILL NO. 157                                                                                                        
     "An Act relating to the maximum annual regulatory cost charge                                                              
     collected from certain regulated public utilities and pipeline                                                             
     carriers; and providing for an effective date."                                                                            
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green  noted that this legislation, which  was requested by                                                            
Governor Frank Murkowski,  would relate "to an Act pertaining to the                                                            
maximum  annual  regulatory  cost  charge   collected  from  certain                                                            
regulated public utilities."                                                                                                    
                                                                                                                                
Co-Chair  Wilken moved  to adopt  committee substitute  Version  24-                                                            
GS1138\F as the working document.                                                                                               
                                                                                                                                
There no objection,  Version "F" was  ADOPTED as the working  draft.                                                            
                                                                                                                                
10:07:02 AM                                                                                                                   
                                                                                                                                
KATE  GIARD,  Chairman,  Regulatory   Commission  of  Alaska  (RCA),                                                            
Department  of Commerce, Community  and Economic Development,  spoke                                                            
to the Regulatory  Commission and the reason for the  development of                                                            
this bill.  When she became  an RCA commissioner  in June 2003,  she                                                            
had  understood  "that  there were  a  lot of  challenges  that  the                                                            
public,  the utilities,  and the  Legislature had  with the  overall                                                            
functionality"  of  the Commission.  She was  elected  chair of  the                                                            
Commission in July 2004,  on a platform focusing on addressing those                                                            
issues.  Since  that time,  she  had held  discussions  with  public                                                            
utilities,  pipeline companies,  and Legislators  to determine  "the                                                            
issues that  were driving  some of" those  entities' major  concerns                                                            
about the RCA.                                                                                                                  
                                                                                                                                
Ms. Giard  stated that "the  overall goal  was to identify  and form                                                            
working groups  to work together to  address" those concerns  before                                                            
hearings  on  whether  to  terminate  or  continue   the  Commission                                                            
occurred  in  two  years'  time.  The  effort  would  be  considered                                                            
"successful"  were  the  forthcoming  hearings  to not  include  the                                                            
"plethora  of issues"  that  such  hearings have  had  in the  past.                                                            
"Strategies  and  plans"  have  been  formulated   in  this  regard,                                                            
including the  Regulatory Cost Charge  (RCC) rate increase  proposal                                                            
contained   in  this  legislation.   Other  efforts  would   include                                                            
addressing  regulations  and  encouraging  public  comments  on  RCA                                                            
activities. These processes  would continue over the next two years.                                                            
                                                                                                                                
10:09:40 AM                                                                                                                   
                                                                                                                                
Ms. Giard  explained that  this legislation  would increase  the RCC                                                            
rate "by two-tenths  of one-percent, from seven to  nine for a three                                                            
year  period." This  would  provide funding  through  which the  RCA                                                            
could  acquire  new  systems  to  improve  the  efficiently  of  RCA                                                            
operations.  RCA has not,  to this point,  invested in such  systems                                                            
and  is lagging  behind current  data  processing  trends. This  has                                                            
prevented the  RCA from completing its workload. To  this point, she                                                            
noted that,  due to a lack  of systems  and reporting capabilities,                                                             
she, as chairman,  is uninformed about  "the day-to-day activities"                                                             
of  RCA staff.  "That  translates  to  you hearing  that  we're  not                                                            
getting our  orders out  promptly, that utilities  don't know  where                                                            
things are in the process,  and that it takes an extremely long time                                                            
to get an order and answer from the RCA."                                                                                       
                                                                                                                                
Ms. Giard stated that the  Legislature has heard from many utilities                                                            
in regard "to the many  challenges" they have experienced in getting                                                            
information  from the RCA. Such issues  are not insurmountable;  the                                                            
RCA is capable of providing  the information, and the implementation                                                            
of updated systems would assist this effort.                                                                                    
                                                                                                                                
10:11:09 AM                                                                                                                   
                                                                                                                                
Ms. Giard stated that discussions  with utilities in regards to this                                                            
RCC funding  mechanism have transpired.  To alleviate their  initial                                                            
"discomfort"  with the idea,  the utilities  asked that an  advisory                                                            
group be developed. Thus  an advisory group, comprised of utilities,                                                            
was formed  in January 2005.  That group  reviewed the RCA  strategy                                                            
and helped formulate a  plan. As a result, the utilities have become                                                            
more comfortable  that RCA would update their system  to deliver the                                                            
services that  the utilities require,  including the system  ability                                                            
that  would  allow  the  utilities  to  transmit  data  to  the  RCA                                                            
electronically.  One  utility,  Chugach  Electric, had  to  manually                                                            
provide 65,000  documents pertaining  to a  recent rate case  to the                                                            
RCA. This RCC rate increase would serve to address these issues.                                                                
                                                                                                                                
Ms. Giard  explained that,  as specified in  State Statute,  the RCC                                                            
monies that  are collected  are deposited  into the RCA's  operating                                                            
fund rather than  its capital fund. RCC fees are collected  from the                                                            
utilities  and the pipeline  companies who  collect them from  their                                                            
ratepayers.  Were  RCA  to  not  spend  the  entirety  of  the  fees                                                            
collected in  a given year, this practice  would allow that  balance                                                            
to be reflected  in the operating  budget. That balance would  serve                                                            
to reduce the  amount of RCC fees that the ratepayers  would pay the                                                            
following  year.  In contrast,  depositing  the  fees  into the  RCA                                                            
capital fund account would  not have "that impact on the ratepayer".                                                            
Thus, any  money remaining  after  the purchase  of the new  systems                                                            
would serve  to reduce the  RCC rate the  following year. The  money                                                            
would not be used to hire additional staff or other expenses.                                                                   
                                                                                                                                
Ms. Giard noted that the  advisory group would continue to meet with                                                            
the RCA until the system upgrade concluded.                                                                                     
                                                                                                                                
Ms. Giard concluded  by commenting that she would  welcome Committee                                                            
questions about the RCA or the bill.                                                                                            
                                                                                                                                
10:13:45 AM                                                                                                                   
                                                                                                                                
Co-Chair Green voiced appreciation for Ms. Giard's testimony.                                                                   
                                                                                                                                
Ms. Giard pointed  out, for the record, the fact that  typically RCA                                                            
legislation is a point  of controversy. This legislation is contrary                                                            
to  the  norm  as the  efforts  in  its  regard  were  conducted  in                                                            
cooperation  with the utilities.  "We owe  any success that  results                                                            
from this  venture to those  pipeline companies  and utilities  that                                                            
did participate  and that did respectfully  say we support  this and                                                            
we are  going to not  move forward  and take  any advantage  of this                                                            
situation."                                                                                                                     
                                                                                                                                
Ms. Giard voiced her support  of an [unspecified] amendment that was                                                            
developed during the process  as she deemed it as being "good public                                                            
policy".  It did not  "have the  Christmas tree  affect" that  could                                                            
have happened.  She voiced appreciation  for the efforts  exerted by                                                            
the Legislature, the pipeline companies, and the utilities.                                                                     
                                                                                                                                
10:15:37 AM                                                                                                                   
                                                                                                                                
Co-Chair Green  commented that when  she initially heard  about this                                                            
legislation,  she thought  that  this "was  just  another method  by                                                            
which our  ratepayers"  would pay  more to the  utilities who  would                                                            
"pay more for something".  However, the volume of documents that the                                                            
RCA process entails  is expansive and the fact that  it is currently                                                            
conducted manually  is unacceptable in today's work  environment. In                                                            
addition  the RCA  is currently  unable to  change and  edit as  the                                                            
process unfolds.  She voiced her support of this legislation,  as it                                                            
would serve to update the process.                                                                                              
                                                                                                                                
Co-Chair  Wilken opined that  the title change  included in  Version                                                            
"F" appears  to be the result of language  included in Sec.  3, page                                                            
two, lines 15  through 22. That language would "appear  to indemnify                                                            
public utilities  for damages that  may or may not have been  caused                                                            
by operating a transmission line."                                                                                              
                                                                                                                                
10:17:02 AM                                                                                                                   
                                                                                                                                
Co-Chair  Wilken  asked whether  Ms.  Giard  was familiar  with  the                                                            
language in Sec. 3 regarding  "the prohibition on the ability of the                                                            
Regulatory  Commission  of Alaska  to  order electric  utilities  to                                                            
operate their systems different  than design or safety standards and                                                            
relieving  the utility of  liability in order  to operate in  such a                                                            
manner."                                                                                                                        
                                                                                                                                
Ms. Giard asked for further clarification of the question.                                                                      
                                                                                                                                
Co-Chair  Wilken stated  that his  question was  to whether she  was                                                            
"familiar with Sec. 3."                                                                                                         
                                                                                                                                
Ms. Giard replied that she was familiar with the section.                                                                       
                                                                                                                                
Co-Chair Wilken  then asked whether  it was her "understanding  that                                                            
the amendment  is directed at the  manner in which RCA is  requiring                                                            
that the 20-mile segment  of the transmission line that is owned and                                                            
operated by Matanuska Electric Association" [MEA].                                                                              
                                                                                                                                
10:17:42 AM                                                                                                                   
                                                                                                                                
Ms. Giard replied in the affirmative.                                                                                           
                                                                                                                                
Co-Chair Wilken  asked whether "the line at issue"  is "used as part                                                            
of the Alaska intertie  which is the major transmission line between                                                            
Anchorage utilities and the northern interior of the State."                                                                    
                                                                                                                                
10:17:56 AM                                                                                                                   
                                                                                                                                
Ms. Giard affirmed that it was.                                                                                                 
                                                                                                                                
Co-Chair Wilken asked how long that line has been in operation.                                                                 
                                                                                                                                
Ms.  Giard  responded that  that  line  has been  in  operation  for                                                            
approximately 20 years.                                                                                                         
                                                                                                                                
Co-Chair  Wilken asked  whether the  RCA had  conducted hearings  in                                                            
regards  to  "the manner  involving  the  manner  in which  MEA  was                                                            
intending to operate that line."                                                                                                
                                                                                                                                
Ms. Giard affirmed that hearings were held in that regard.                                                                      
                                                                                                                                
Co-Chair Wilken asked who had participated in those hearings.                                                                   
                                                                                                                                
Ms. Giard stated  that RCA had issued Order #4, Docket  No. U-03-100                                                            
[copy not  provided] in this  regard. The  parties involved  in that                                                            
proceeding were the Chugach  Electric Association, Inc.(CEA); Golden                                                            
Valley  Electric  Association,  Inc.  (GVEA);  the  Municipality  of                                                            
Anchorage  d/b/a  Municipal  Light  and  Power [MLP],  the  City  of                                                            
Seward, and MEA.                                                                                                                
                                                                                                                                
Co-Chair Wilken asked whether "experts" attended that hearing.                                                                  
                                                                                                                                
Ms.  Giard responded  yes;  it is  the norm  that  experts "on  both                                                            
sides" attend such hearings.                                                                                                    
                                                                                                                                
Co-Chair   Wilken  asked   whether  "the   designer  of  that   line                                                            
testified."                                                                                                                     
                                                                                                                                
Ms. Giard stated  that, "as this particular order  has been appealed                                                            
to the  Superior Court",  it would  be difficult  to delve into  the                                                            
details of that hearing.  However, she would be able to discuss Sec.                                                            
3 and provide its historical background.                                                                                        
                                                                                                                                
10:19:14 AM                                                                                                                   
                                                                                                                                
Ms. Giard informed the  Committee that the original Senate and House                                                            
of Representatives  companion  bills that  had been introduced  this                                                            
session  had simply  focused  on  the RCC.  Recently,  however,  MEA                                                            
raised concerns  about the aforementioned  order issued by  the RCA.                                                            
"MEA had proposed  initially that  they would like this order  to be                                                            
overturned. That  is a public policy issue, which  the RCA could not                                                            
support."  One of the primary  concerns raised  by MEA pertained  to                                                            
the RCA interconnection  order that utilizes approximately  20 to 26                                                            
miles of MEA  lines, called TLS lines.  Those 20 miles of  MEA's TLS                                                            
lines have been  under contract for the intertie transmittal  during                                                            
the  20  years since  the  inception  of  the  intertie,  as,  since                                                            
"funding was low",  utilizing the MEA TLS line was  deemed to be the                                                            
most efficient transmittal option.                                                                                              
                                                                                                                                
Ms. Giard continued  that MEA indicated  that they "would  no longer                                                            
be able to offer  that service to the intertie because  they weren't                                                            
able to negotiate  terms and conditions  MEA was comfortable  with."                                                            
RCA conducted  a hearing "and issued an Order stating  and requiring                                                            
MEA to interconnect." A copy of the Order could be provided.                                                                    
                                                                                                                                
10:20:57 AM                                                                                                                   
                                                                                                                                
Ms. Giard noted that MEA  had raised safety concerns about the line,                                                            
due to RCA ordering that  MEA "connect the line and run the transmit                                                            
kilowatts  at  138."  The  line  was  originally  designed  for  115                                                            
kilowatts  (KV). During  her recent  conversations  "with MEA  about                                                            
their concerns and their  desire to have the Order overturned within                                                            
the Legislative  process,"  she explained  that that  would be  "bad                                                            
public policy  because there is a  mechanism the Legislature  put in                                                            
place for MEA or any public  utility or pipeline to deal with orders                                                            
that they do  not like that are issued  from the RCA." That  process                                                            
would entail  appealing the RCA decision  to the Superior  Court and                                                            
then to the  Supreme Court. The Courts  would decide whether  or not                                                            
RCA had "done our job well."                                                                                                    
                                                                                                                                
Ms.  Giard  stated  that MEA  understood  the  public  policy  issue                                                            
concerns  and  chose  not "to  violate  them."  The  underlying  MEA                                                            
concern  was in regards  to "their  liability".  They have  provided                                                            
their service  to the State of Alaska,  however, were someone  to be                                                            
injured  with that line  being run  at a 138-kilowatt  voltage  "the                                                            
utility stands in place  of the intertie. The State of Alaska stands                                                            
in place  for the rest  of the intertie  through the" Alaska  Energy                                                            
Authority (AEA).                                                                                                                
                                                                                                                                
Ms. Giard communicated  that it would be deemed good  public policy,                                                            
and policy that  should have been enacted 20 years  earlier when the                                                            
MEA line was  originally used for  the intertie, "that if  this line                                                            
does cause liability  while it is being used as intertie,  and there                                                            
is some discussion underway  that it would only be used for the next                                                            
three to  five years under  this mechanism,  that it is good  public                                                            
policy  that this public  utility  not be held  more accountable  or                                                            
more liable  than other utilities  along the Railbelt." It  was then                                                            
necessary to communicate  this public policy to the  other utilities                                                            
connecting to that intertie including GVEA, CEA, and MLP.                                                                       
                                                                                                                                
Ms. Giard  continued that  in a matter  of the  last 48 hours,  this                                                            
information  had been conveyed  to the other  utilities. She  agreed                                                            
with the  other utilities  that this  issue would  have been  better                                                            
served  had  MEA  presented  their  concern  earlier.  However,  she                                                            
understood  MEA's position  that,  since the  Order  had been  under                                                            
appeal to the  Superior Court, it  would have been inappropriate  to                                                            
address it  earlier. This is a fair  account of what has  transpired                                                            
in  last  48  hours.  RCA  and  the  Office  of  the  Governor  have                                                            
determined that  the language changes included in  Sec. 3 of Version                                                            
"F" would be acceptable.                                                                                                        
                                                                                                                                
10:25:04 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green  asked  whether   the  Department  of  Law  and  RCA                                                            
attorneys  had  been  involved  in  the  discussions,  specifically                                                             
whether  those  entities   deemed  the  Sec.  3  language  as  being                                                            
"workable".                                                                                                                     
                                                                                                                                
10:25:24 AM                                                                                                                   
                                                                                                                                
Ms. Giard  assured that  the Attorney Generals  Office, AEA's  legal                                                            
representative,  the Department of Law, and the Legislative  Legal &                                                            
Research Division  were involved in  the recent discussions.  It has                                                            
undergone the appropriate review.                                                                                               
                                                                                                                                
10:25:58 AM                                                                                                                   
                                                                                                                                
Co-Chair Wilken  concluded therefore  that the language in  the bill                                                            
would  serve as  "an end  run around  the RCA  decision" and  "would                                                            
indemnify a certain  utility for their future actions  in regards to                                                            
operating  this asset."  To that  point, he  asked for confirmation                                                             
that neither  RCA nor Governor Frank  Murkowski had any concerns  in                                                            
regards  to the  language contained  in Sec.  3 and  were, in  fact,                                                            
"supportive of it."                                                                                                             
                                                                                                                                
Ms. Giard  expressed that  she had "strongly  and sternly spoken  to                                                            
MEA about the  'end run' issue." To that point, she  viewed end runs                                                            
as not being  "uncommon. It is probably  a normal part of  a process                                                            
that" she "was not particularly  familiar with". She stated that she                                                            
focuses on  the end result:  "is the end  result good public  policy                                                            
that the  Governors  Office stood  behind". The  determination  that                                                            
this was good  public policy was the  conclusion reached  at the end                                                            
of the  past 48 hours.  She would  be unable  to recommend that  the                                                            
Committee advance this action otherwise.                                                                                        
                                                                                                                                
Co-Chair Wilken acknowledged.                                                                                                   
                                                                                                                                
Senator Dyson  voiced having  "a different  perspective on  this; it                                                            
may indeed be 'an end run' in a way that I don't perceive."                                                                     
                                                                                                                                
10:28:15 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green interrupted  Senator Dyson's  comments to note  that                                                            
the  Committee,   in  its  questioning,   should  be  conscious   of                                                            
restrictions  that might be placed  on Ms. Giard and RCA  due to the                                                            
pending Superior Court decision.                                                                                                
                                                                                                                                
Senator Dyson  spoke in regards to the fact that RCA  was asking MEA                                                            
to transmit  138 KV on a line designed  to transmit 115 KV.  RCA had                                                            
determined  that the  line  was capable  of handling  the  increased                                                            
voltage. The owner  of the line viewed it as being  marginal; "it is                                                            
not the  recommendation of  the national  electric safety code."  He                                                            
understood "that that section  of line has had a considerable number                                                            
of outages."  Therefore,  it  would not  be unreasonable  in a  case                                                            
where a governmental  agency "forced"  an entity "to operate  on the                                                            
edges of good national  standards" ? "for that group to say hey over                                                            
our protest,  you are asking  us to do something  that's outside  of                                                            
what would  be normal recommended  practice, and we want  to be held                                                            
harmless  if  we do  what  we are  ordered  to  do that  outside  of                                                            
national  recognized  standards".   In  conclusion,  he  viewed  the                                                            
language  in Sec.  3 as  offering  "reasonable protection  for  this                                                            
utility".                                                                                                                       
                                                                                                                                
Senator Dyson  informed the Committee  that his background  included                                                            
working   as  a   construction  lineman   and   in  electric   power                                                            
maintenance. He  noted that arching between lines  and insulators is                                                            
an issue dependent "on  atmospheric conditions." He "suspected" that                                                            
while the line in question  is located in an area that is relatively                                                            
dry, "moisture  in and around the  dew point" could cause  problems.                                                            
This, combined  with other factors such as line age  and wind, could                                                            
be troublesome.                                                                                                                 
                                                                                                                                
10:30:50 AM                                                                                                                   
                                                                                                                                
Senator Olson  voiced being uncomfortable with the  fact that RCA is                                                            
requesting that a line  exceed its capabilities. He compared this to                                                            
an airplane  directed  to fly  with a  load exceeding  its  specific                                                            
design weight. While the  aircraft might be designed with margins on                                                            
its load,  being  directed to  do so  might result  in the  eventual                                                            
failure  of  the aircraft.  This  might  be the  situation  that  is                                                            
causing the power outages on that line.                                                                                         
                                                                                                                                
Senator Olson  noted that he had some  familiarity with power  lines                                                            
as his father  had operated a small  community's generator.  To that                                                            
point,  he  understood   that  there  were  methods,   such  as  the                                                            
installation  of transformers, through  which the voltage  of a line                                                            
could be increased  within the parameters  of the designed  voltage.                                                            
                                                                                                                                
10:32:14 AM                                                                                                                   
                                                                                                                                
Ms. Giard  stated that those  issues were  discussed at the  hearing                                                            
and with  MEA. Like  the Legislature,  the RCA  has the ability  "to                                                            
hear  a complete  record" of  an issue  "and weigh  and balance  and                                                            
decide" in  its regard. Some  decisions could  be "really good"  and                                                            
others could be  "really bad", and the process that  would allow RCA                                                            
decisions  to  be   heard  by  the  Superior  Court   would  be  the                                                            
determining factor in regards  to this RCA decision. MEA is aware of                                                            
this  process  and  the other  parties  understand  that  there  are                                                            
"mitigating  circumstances". All these  factors were weighed  in the                                                            
RCA decision.                                                                                                                   
                                                                                                                                
Ms. Giard  displayed a  thick binder containing  the transcripts  of                                                            
the hearing proceeding.  The Superior Court would decide whether the                                                            
RCA decision in this issue was right or wrong.                                                                                  
                                                                                                                                
Co-Chair  Green  asked  for  confirmation   that  the  other  public                                                            
utilities had been included in the discussions.                                                                                 
                                                                                                                                
Ms. Giard affirmed that  she and the Governor's Office have actively                                                            
communicated with  the other entities. She shared  the understanding                                                            
that  those entities  also viewed  the language  in  Sec. 3 as  good                                                            
public policy,  "but were disenchanted with the process".  The focus                                                            
should be on the  fact that the legislation being  offered today "is                                                            
good for the State of Alaska."                                                                                                  
                                                                                                                                
10:34:40 AM                                                                                                                   
                                                                                                                                
BRIAN  BJORKQUIST,  Senior  Assistant Attorney  General,  Labor  and                                                            
State Affairs  Section,  Civil Division  (Anchorage), Department  of                                                            
Law testified via teleconference  from an offnet site and noted that                                                            
he had just reviewed  Version "F". However, the language  in Version                                                            
"F"  is  missing  the intended  intent,  which  was  "to  limit  the                                                            
immunity from liability  to the extent that the damage was caused by                                                            
the operation  of  the line either  inconsistent  with its  original                                                            
design  standards   or  in  a  manner   that  was  a  violation   or                                                            
inconsistent  with the national  safety code."  As written,  Version                                                            
"F" would "provide  complete immunity to the utility  for any damage                                                            
that  might  be caused  by  the  operation  of the  utility  or  the                                                            
transmission  line regardless of whether  it would have anything  to                                                            
do  with  the  difference  or  the  inconsistency  with  the  design                                                            
standard or the national electric safety code."                                                                                 
                                                                                                                                
Mr. Bjorkquist stated that this would be a concern.                                                                             
                                                                                                                                
10:36:01 AM                                                                                                                   
                                                                                                                                
Senator  Dyson asked  Mr. Bjorkquist  for a  recommendation in  this                                                            
regard.                                                                                                                         
                                                                                                                                
Mr.  Bjorkquist  stated  that   he would   work  on  developing  the                                                            
appropriate language. "The  basic concept is that the public utility                                                            
would not be  liable for any damages  caused to the extent  that the                                                            
damage was  caused by the  operation of the  transmission line  at a                                                            
voltage  that  is  inconsistent  with  either  the  original  design                                                            
standards or the national  safety code; and also that the Regulatory                                                            
Commission of Alaska would be ordering that."                                                                                   
                                                                                                                                
10:37:09 AM                                                                                                                   
                                                                                                                                
Senator  Dyson deferred  to Mr.  Bjorkquist's  judgment even  though                                                            
Senator Dyson  thought that the concern  was sufficiently  addressed                                                            
in Sec. 3.                                                                                                                      
                                                                                                                                
10:37:28 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green asked that  RCA confer with  Mr. Bjorkquist  and the                                                            
Administration in this regard.                                                                                                  
                                                                                                                                
Ms. Giard concurred.  The issue would be readdressed  and be brought                                                            
back to the Committee.                                                                                                          
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                
[NOTE: This  legislation is readdressed  at Time Stamp 4:37:15  PM.]                                                            
                                                                                                                                
10:38:06 AM                                                                                                                   
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 157                                                                                                        
     "An Act relating to the maximum annual regulatory cost charge                                                              
     collected from certain regulated public utilities and pipeline                                                             
     carriers; and providing for an effective date."                                                                            
                                                                                                                                
                                                                                                                                
This bill was again before the Committee.                                                                                       
                                                                                                                                
Co-Chair  Green stated  that  the questions  that  had been  brought                                                            
forward earlier  by the Attorney Generals Office in  regards to Sec.                                                            
3 of Version "F" would be addressed.                                                                                            
                                                                                                                                
Senator  Stedman moved  to adopt  committee substitute  Version  24-                                                            
GS1138\Y as the working document.                                                                                               
                                                                                                                                
Co-Chair Green objected for explanation.                                                                                        
                                                                                                                                
4:38:24 PM                                                                                                                    
                                                                                                                                
BRIAN  BJORKQUIST,  Senior  Assistant Attorney  General,  Labor  and                                                            
State Affairs  Section,  Civil Division  (Anchorage), Department  of                                                            
Law testified via teleconference  from an offnet site and noted that                                                            
language has been revised  in Sec. 3, page two, lines 14 through 22,                                                            
in order  to clarify the  limitation on liability  for the  owner of                                                            
the transmission  line.  The  intent of  this language  would be  to                                                            
specify that  the transmission  line owner  "would not be liable  to                                                            
the extent  of the damage  caused by the  operation of that  voltage                                                            
that  exceeds  the  original  design standards  or  if  the  voltage                                                            
violates the  applicable standards  of the national electric  safety                                                            
code".                                                                                                                          
                                                                                                                                
KATE  GIARD,  Chairman,  Regulatory   Commission  of  Alaska  (RCA),                                                            
Department  of Commerce,  Community and  Economic Development  noted                                                            
that she had no further testimony.                                                                                              
                                                                                                                                
Co-Chair  Green voiced appreciation  for the  efforts that  had been                                                            
exerted to correct the Sec. 3 language conflict.                                                                                
                                                                                                                                
[NOTE: While  Co-Chair Green did not  formally remove her  objection                                                            
to the adoption  of the Version "Y"  committee substitute,  that was                                                            
the implied intent.]                                                                                                            
                                                                                                                                
Senator  Stedman  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no objections,  SC  SB  157 (FIN)  was  REPORTED  from                                                            
Committee with $1,300 fiscal note #2 dated April 7, 2005 from the                                                               
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
4:40:29 PM                                                                                                                    
                                                                                                                                
AT EASE: 4:40:46 PM/ 4:41:25 PM                                                                                             
                                                                                                                                

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