03/10/1994 01:45 PM Senate L&C

 SENATOR KELLY announced  SB 213  (APUC EXTENSION AND REGULATORY COST     T    
 CHARGE) to be up for consideration.  He said his aide, Josh Fink,             
 had been working on a proposed CS.                                            
                                                                               
 MR. FINK explained that the first section would make the four                 
 section heads partially exempt, a proposal from the Alaska                    
 Telephone Association.                                                        
                                                                               
 Section two increases the regulatory cost charge from .61% to .8%.            
 That change is because of section 3 which allows electric utilities           
 to subtract the cost of power from their gross revenues before the            
 RCC applies.  If that happens, APUC had indicated that RCC rates              
 would rise 35%.  The .61% cap would not allow them to grow or meet            
 their budget in future years.  He said they are currently not                 
 charging the full .61%.                                                       
                                                                               
 Number 200                                                                    
                                                                               
 BOB LOHR, Executive Director, Alaska Public Utilities Commission              
 (APUC), said the current rate is .4% of the jurisdiction's gross              
 revenues.  He said if the RCC rates have to rise by 35%, an                   
 estimate based on preliminary figures, they would have to raise the           
 cap to .8%.                                                                   
                                                                               
 SENATOR KELLY said in response to Eureka who feels they are paying            
 too much of the load of the APUC through their RCC charges, it                
 looks like the bill would reduce theirs and redistribute it to the            
 other utilities to balance out the load.                                      
                                                                               
 DON SCHROER, APUC, said that everyone's rate would adjust.                    
                                                                               
 SENATOR SHARP said he didn't see how they needed an authorization             
 increase, since rates would have to go up more than 50% in order to           
 reach the .61% cap.                                                           
                                                                               
 SENATOR RIEGER said it looks like they are saying because they are            
 taking so much out of the base, that .8% of the new base is as much           
 as .61% of the old base.                                                      
                                                                               
 Number 227                                                                    
                                                                               
 DAVE HUTCHINS, Executive Director, Alaska Rural Energy Cooperative            
 Association, agreed with Senator Rieger's analysis.  The reason is            
 based on the study done by the legislative auditor showed that at             
 the present time the workloads that electrics bring the APUC is 30%           
 and declining and the financial support through RCC, that the                 
 electrics have to pay for the APUC, is 42% and increasing.  They              
 think there is a flaw in the present formula and SB 213 is a simple           
 way to correct it.                                                            
                                                                               
 MR. FINK said the 35% figure he gave was based on the definition in           
 section 3 of cost of power.  According to the APUC if they went               
 with the broader definition, they would be increasing RCC rates for           
 everyone else 45%.                                                            
                                                                               
 Number 274                                                                    
                                                                               
 Section 4 explains that when the RCC charges are collected for the            
 4th quarter, the fiscal year has ended so that money does not lapse           
 into the general fund.  Instead, it lapses as program receipts into           
 the following year, MR. FINK said.                                            
                                                                               
 Section 5 - 10 all are a result of a conceptual amendment adopted             
 at the recommendation of the auditor that makes it easier for                 
 utility consumers to opt in or opt out of economic regulation.                
 Currently 25% of the utility subscribers have signed a petition to            
 do either one.                                                                
                                                                               
 SENATOR LINCOLN asked if all of the language in section 8 of                  
 version K would move over into the J version.  SENATOR KELLY noted            
 that was the understanding.                                                   
                                                                               
 MR. FINK said that section 13 is an extension until 1998 of the               
 Board that sunsets this year.  Section 14 repeals the sunset on the           
 regulatory cost charge, because that can be looked at at the same             
 time as the sunset for the Board.                                             
                                                                               
 Section 15 is at the recommendation of the auditor and would                  
 stagger the terms of the two commissioners that are about to                  
 expire.                                                                       
                                                                               
 Number 346                                                                    
                                                                               
 SENATOR KELLY asked if section 11 affected Alyeska?  MR. FINK said            
 he thought it would.  MR. LOHR said that it would apply to all TAPS           
 carriers, but only for the intrastate portion of their revenues               
 which is less than 5% of their gross revenues from the entire                 
 system.                                                                       
                                                                               
 SENATOR LINCOLN asked for clarification on 1999 in section 15.  MR.           
 FINK explained that the extension of the commission is 4 years and            
 in section 15 the reason they use 1999 is because it's the first              
 time they can do it without affecting current members.                        
                                                                               
 MR. LOHR said it appears to be about $500,000 and $600,000 worth of           
 all RCC revenue from all jurisdictional pipeline carriers,                    
 including TAPS.                                                               
                                                                               
 SENATOR KELLY said he wanted to make certain they were not opening            
 up a big increase just on Alyeska.  MR. ROWE said they would get              
 the same increase attributable to any other utility affected by the           
 exclusion of a portion of electric revenues.                                  
                                                                               
 DENNIS GEARY, Alaska Public Employees Association, supported SB 213           
 in that it extends the APUC.  They do object to proposed section 1            
 which excludes certain supervisory unit employees from the                    
 classified personnel system.  He said the employees in the APUC act           
 in a different capacity than other state agencies that have                   
 commission staff and professional staff.  He said no one now has              
 the designation of "section head" so it's unclear who it would                
 apply to.  In other state agencies, the professional staff carries            
 out the desires of the commissioned staff.  In the APUC that                  
 doesn't happen.  There the staff actually acts as a part of an                
 independent group from the commissioned staff.  Removal of the                
 employees from the professional staff from the classified service             
 makes those employees not bound by the laws and regulations of the            
 state of Alaska, but more to the political agenda in the arena at             
 the time.  This is not something that would be beneficial to the              
 state, to the employees, or to the consumers.                                 
                                                                               
 MR. LOHR responded that they want that section in the bill and the            
 four people are not identified in the bill, but their positions are           
 identified on their work cards.  He said it,s hard to move people             
 around with current statute.                                                  
                                                                               
 SENATOR KELLY said it wasn't his intention to move the bill today.            
                                                                               
 Number 448                                                                    
                                                                               
 SENATOR LINCOLN noted a statement in a letter from APUC that says             
 the chairman of the APUC informed APEA that APUC did not request              
 that the section heads be excluded from the classified service.               
 MR. LOHR said he thought ATA proposed that the whole APUC be                  
 partially exempt.  Knowing that wouldn't pass, the second choice              
 was section heads.                                                            
                                                                               
 JIM ROWE, Alaska Telephone Association (ATA), said the language               
 they put into section 13 was to facilitate the APUC with sufficient           
 staff, sufficient expertise, particularly with all the changes                
 coming with telecommunications.                                               
                                                                               
 SENATOR KELLY announced that they would drop the amendment from the           
 CS and adjourned the meeting at 2:20 p.m.