Legislature(1993 - 1994)
02/24/1994 02:20 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATOR KELLY returned SB 213 (ALASKA PUBLIC UTILITIES COMMISSION EXTENSION AND REGULATORY COST CHARGE) sponsored by the Senate Labor and Commerce Committee, and announced the committee would be looking at some potential amendments. SENATOR KELLY proposed to adopt a working draft from the amendments being proposed and return with a committee substitute another time. SENATOR KELLY invited DON SCHROER, Chairman of the Alaska Public Utilities Commission to make some proposed amendments, and he said he would like to make some comments. Number 349 MR. SCHROER said he would review the Proposed Amendments for SB 213 as presented by the committee. He began by noting the words, liberally construed, which ARECA has asked to have removed from the statutes, but he reminded the committee the language has been discussed by the supreme court in HEA v. City of Kenai, which he reviewed. MR. SCHROER asked if there has ever been any abuses by the commission of the public, persons, or a utility in the use of "liberally construed." He told the committee the commission could work with any statutes the legislators introduce, but he believed it would affect the ability of the commission, and he gave a couple of examples, the first being the problems in the cellular linkup with Barrow. SENATOR KELLY suggested the committee take each of the proposed amendments and discuss them in order. Amendment #1 - Replace the powers of the commission shall be liberally construed to accomplish its stated purpose in AS 42.05.141(a)(1) with the powers of the commission shall be those specifically conferred by the legislature or necessarily implied from those specific grants of authority. SENATOR KELLY asked who wanted to speak in favor of Amendment #1, and DAVID HUTCHENS, Director of the Alaska Rural Electric Cooperative Association,(ARECA) testified in support of amending the statute, because he has seen a number of instances where the commission in the past has broadened its power beyond any legislative history. He gave examples involving campaign contributions, lobbying expenses, environmental externality, and the Healy Clean Coal project. SENATOR KELLY said he didn't want to spend too much time on each of the amendments, because today's decisions won't be final until the committee looks at the proposed committee substitute at another meeting. SENATOR SHARP proposed Amendment #1 saying to leave the words in the bill would allow them to do as they wished, and he suggested it was a loaded gun. Number 401 MR. SCHROER explained legislation would be required whenever the court finds a gap, and he believed the APUC was established because the legislature did not want to deal with these decisions each time. Amendment #1 was not adopted on a 2 - 2 vote. SENATOR KELLY read the second amendment, which was proposed by the auditor and ARECA and opposed by APUC and ATA. Amendment #2 - Adjust the allocation of the Regulatory Cost Charge (RCC) (AS 42.05.253): MR. SCHROER opposed the amendment to keep the system simple and the costs down. RANDY WELKER, the Legislative Auditor, defended the amendment by explaining there were some basic time keeping systems that could be implemented at APUC, which would help in the rate setting process but also provide valuable management information on the work load and staff management. SENATOR KELLY proposed Amendment #2 to the committee. There being no discussion, the amendment was adopted. Next, SENATOR KELLY proposed Amendments #3 and #4, which were both adopted. Amendment #3 - Delete automatic repeal of RCC. (Proposed by Auditor. Supported by APUC.) Amendment #4 - To prevent RCC over-collection, amend AS 42.05.253 and 42.06.285 to ensure that over-collection does not lapse into the general fund, but rather would apply to the subsequent year thus reducing that year's RCC rate. (Proposed by APUC. Supported by ARECA.) SENATOR KELLY proposed Amendment #5 to the committee. Amendment #5 - Amend AS 42.05.711 to make it easier for utility consumers to opt in or opt out of economic regulation. (Proposed by Auditor.) MR. WELKER, the legislative auditor, explained the limits that were set awhile back haven't been changed, and it was felt the limits should be changed to make it easier for consumers to take part in the election process. He recommended that petition and election requirement should be modeled after AS 42.05.712. There was no opposition to Amendment #5, and the following amendment was adopted with no opposition, also. Amendment #6 - Stagger the terms of the APUC member's terms. Commissioners are appointed for a six year term. (Proposed by the Auditor. Supported by APUC and ARECA.) SENATOR KELLY proposed Amendment #7 to the committee. Amendment #7 - Amend the procurement code, AS 42.015.141, to provide an exemption for the APUC when procuring expert witnesses for cases. (Proposed by APUC and supported by ATA.) Number 453 SENATOR SHARP spoke in opposition to Amendment #7, commenting that when this has been done in the past, it has come back to bite us. SENATOR KELLY questioned MR. SCHROER as to the restrictions placed upon him in the procurement code to get expert witnesses. MR. SCHROER explained it was mainly time consumed by the procedure in getting the witness, time that was needed by the staff to collect the information needed for the case before the decision deadline. SENATOR SHARP said he had never seen a rate case expedited to the point of not allowing time to hire a consultant, since the hearing date was usually extended. SENATOR LINCOLN questioned the actual obligation of the provision, and she asked if it had been considered by the auditor. MR. WELKER said it was not an issue raised in the audit process, and he was not aware of how long it was a concern of the commission, but he conceded the audit was a bit dated. SENATOR LINCOLN expressed some concerns, and she asked for more examination by the auditors before the bill is passed from committee. She asked if the amendment could be held for another time. MR. SCHROER said there was no problem, since it is the way the commission has been operating, but he explained it would make it easier to operate. He said that SENATOR SHARP was correct in asking for extensions, but it delays the process. SENATOR LINCOLN pressed for an answer to how many times has there been a delaying factor in procuring expert witnesses, and MR. SCHROER gave an example of one with the Anchorage Telephone Utilities. SENATOR KELLY announced Amendment #7 died for lack of support. SENATOR KELLY introduced Amendment #8 to the committee and read the proposal by ATA: "The Alaska Telephone Association asserted that given the tremendous changes in technology within the telephone industry, the APUC doesn't have the ability to train their staff on a timely basis for such specialized knowledge, while waiting on a list of people to be hired within the State." Number 502 MR. SCHROER said the subject has not been discussed by the commission, and he described going through the requirements of hiring people on the register. He explained it was difficult to get personnel for technical positions, but the commission has not formally taken a position on the amendment. He thought someone from Anchorage might want to testify on the amendment. SENATOR KELLY checked the Anchorage teleconference, but found only observers. He brought the debate back to committee. MR. SCHROER said it was difficult and explained the commission had gone through three registers before finding someone qualified to handle the work, and he admitted it was difficult under the present code, but he stressed they had no official position on the code. SENATOR KELLY proposed Amendment #8 to committee as an idea worth exploring. Amendment #8 - Provide a waiver for the APUC from the state's hiring practices. (Proposed by ATA.) SENATOR LINCOLN opposed Amendment #8, saying she found it scary not to have some kind of a hiring practice. She expressed concerns that persons in Alaska, or local hire, would not get the first opportunity and would open the door to possible abuse. MR. SCHROER suggested there could be reasonable changes in the hiring practices. SENATOR KELLY admitted to being swayed by SENATOR LINCOLN'S comments and asked MR. FINK to get some restrictive language on Amendment #8. It was agreed the waiver might be for technical positions. The amendment was held for further action. Number 552 MR. WELKER asked for clarification on all of Amendment #3, since he had offered a solution and ARECA had proposed another one. There was some discussion on the proposals, and MR. WELKER said he would like to see the cost based on a reasonable approximation of the work that generates the costs using some kind of a time keeping system. SENATOR KELLY asked MR. FINK to come up with language to answer MR. WELKER'S suggestion. SENATOR SHARP suggested a formula be devised to fit part A of Amendment #2, and he thought part B explained how the dollars were collected from the utilities. SENATOR KELLY led the committee in adopting the following two proposals: (A) The APUC should periodically adjust the RCC factors to reflect workload on an industry by industry basis utilizing a timekeeping system, and (B) adjust the gross electric revenues by deleting the cost of power for electric utilities before the RCC is calculated." SENATOR KELLY announced there was a working draft for SB 213, which would be brought up at a future meeting.
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