Legislature(1995 - 1996)

03/09/1995 03:35 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 SSTA - 3/9/95                                                                 
          SB  54 ELECTRIC UTIL & SOLID WASTE REMOVAL                         
                                                                               
 CHAIRMAN SHARP calls the Senate State Affairs Committee to order at           
 3:35 p.m. and brings up SB 54 as the first order of business before           
 the committee.  The chairman calls the first witness.                         
                                                                               
 Number 018                                                                    
                                                                               
 JIMMY JACKSON, Attorney for GCI, testifying from Anchorage, states            
 GCI is in favor of competition, particularly in local exchange                
 telephone service.  GCI was concerned that SB 54 would promote the            
 idea that competition was not viable other than in long-distance              
 telephone service.  GCI has been working on adding intent language            
 to SB 54 saying the bill would apply only to electric utility                 
 service, and in no way implies that any other utility has exclusive           
 service area.  GCI supports such language, and with the addition of           
 such language, the bill would not affect GCI's interests' one way             
 or the other.                                                                 
                                                                               
 CHAIRMAN SHARP notes the committee does have a committee substitute           
 for SB 54 which would incorporate language.                                   
                                                                               
 Number 052                                                                    
                                                                               
 SENATOR DONLEY has questions about the bill that he wants answered            
 before the cs is adopted.  He would like to know who requested the            
 legislation be introduced.                                                    
                                                                               
 Number 075                                                                    
                                                                               
 DAVE HUTCHENS, Alaska Rural Electric Cooperative Association                  
 (ARECA), states ARECA was the requestor of SB 54.                             
                                                                               
 SENATOR DONLEY asks Mr. Hutchens why ARECA wants SB 54.                       
                                                                               
 MR. HUTCHENS responds, "...several years ago there was legislation            
 enacted that attempted to accomplish much the same thing that was             
 introduced as a House Labor & Commerce Committee bill, chaired by             
 then Representative Donley.  Unfortunately when the bill got to the           
 senate, there was an amendment put in that Section 2 uh, would,               
 would take out, and uh, then the Section 1 of the bill, uh excuse             
 me, in the cs it would be Section 2, that uh, it would, is the new            
 statement here to make it clear, just to clearly state the policy,            
 and so Section 3 would be the amendment to the legislation that               
 you, Representative Donley at that time, had sponsored, to get it             
 back to the original language of your bill."                                  
                                                                               
 SENATOR DONLEY again asks Mr. Hutchens why he wants SB 54.                    
                                                                               
 MR. HUTCHENS says he will be glad to submit testimony at the                  
 appropriate time.                                                             
                                                                               
 CHAIRMAN SHARP states he would like to finish with the people on              
 teleconference first, then Mr. Hutchens can testify.                          
                                                                               
 Number 112                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asks Mr. Latcham if he has seen the latest             
 cs for SB 54.                                                                 
                                                                               
 MR. LATCHAM does not know if he has for sure.                                 
                                                                               
 Number 125                                                                    
                                                                               
 CHAIRMAN SHARP states there is a cs dated 3/7/95 by Cramer.                   
                                                                               
 MR. LATCHAM responds he has that version.                                     
                                                                               
 CHAIRMAN SHARP informs Mr. Latcham that is the version the                    
 committee is looking at; it has not been adopted yet, but it is the           
 result of the work that has been done so far.                                 
                                                                               
 RAY LATCHAM, President of Northern Eclipse, Incorporated,                     
 testifying from Anchorage, states Northern Eclipse, Inc. is a                 
 natural gas concern.  Northern Eclipse, Inc. opposes SB 54, and has           
 sent a letter of opposition to the committee.  Mr. Latcham believes           
 all committee members have received a copy of the letter.  Mr.                
 Latcham states he was involved in the original legislation to which           
 Mr. Hutchens referred.  Mr. Latcham thinks the electric utilities             
 are probably the most inefficient group of utilities, and they have           
 been very resistant to new technology.  If SB 54 is passed, it will           
 preclude Northern Eclipse, Inc. from getting its' electricity from            
 an independent power producer.  Electric companies do have the                
 benefit of economy of scale, and if they cannot compete with an               
 independent power producer, they have a problem.                              
                                                                               
 SENATOR RANDY PHILLIPS asks Mr. Latcham if he has the cs in front             
 of him.                                                                       
                                                                               
 MR. LATCHAM responds he does.                                                 
 SENATOR RANDY PHILLIPS asks Mr. Latcham if he still opposes SB 54             
 in that form as well.                                                         
                                                                               
 Number 175                                                                    
                                                                               
 MR. LATCHAM replies he certainly does.  The words, "and presently             
 or formerly served by" were part of the compromise worked out                 
 several years ago.  Now the electric companies are trying to un-do            
 the compromise.                                                               
                                                                               
 Number 180                                                                    
                                                                               
 CHAIRMAN SHARP asks Mr. Latcham what stage the Point MacKenzie                
 development is at.                                                            
                                                                               
 MR. LATCHAM responds the land has been acquired.  It is a pilot               
 project; it is a 10,000 gallon a day liquefaction unit.  Liquid               
 natural gas (lng) will be transported by truck to markets within              
 the state.                                                                    
                                                                               
 CHAIRMAN SHARP asks Mr. Latcham if his company has a gas source.              
                                                                               
 MR. LATCHAM responds it is Beluga River.                                      
                                                                               
 Number 210                                                                    
                                                                               
 MR. HUTCHENS states ARECA is interested in SB 54 because the                  
 utility business is an inherent monopoly.  The investment a utility           
 must have in a distribution system is not conducive to duplicate              
 facilities.  However, the staff at APUC wants to encourage                    
 regulated competition.  Mr. Hutchens does not know how that could             
 be done.  He wants a clean statement giving direction to the                  
 commission, and that is what SB 54 would do.                                  
                                                                               
 Number 265                                                                    
 SENATOR DONLEY comments he is starting to remember the issues.                
                                                                               
 MR. HUTCHENS states the idea is to prevent a company from providing           
 power just to the most desirable customers.  People could still               
 generate their own power, but a business couldn't just provide                
 power to the most desirable customers.                                        
                                                                               
 SENATOR DONLEY states he understands SB 54 now, and has no                    
 objection to the cs.                                                          
                                                                               
 Number 287                                                                    
                                                                               
 SENATOR LEMAN asks if a store owner who generates his own power               
 could sell power to eight other customers, and still be consistent            
 with SB 54.                                                                   
                                                                               
 MR. HUTCHENS responds, no, not if it is within a certificated                 
 service area to a utility.  The language "ten or more" applies to             
 all other kinds of utilities.  Mr. Hutchens, in responding to Mr.             
 Latcham, states Mr. Latcham's company will be required to contact             
 Matanuska Electric and negotiate a rate.  That rate would then have           
 to be approved by the APUC.  Mr. Hutchens is confident Matanuska              
 Electric would be able to effectively compete with any independent            
 power producer.  He does not think SB 54 would interfere with Mr.             
 Latcham's proposal.                                                           
                                                                               
 Number 320                                                                    
                                                                               
 SENATOR RANDY PHILLIPS makes a motion to adopt the committee                  
 substitute for SB 54.                                                         
                                                                               
 CHAIRMAN SHARP notes that the cs adds the intent language that has            
 been worked out to satisfy the telephone companies concern that               
 somehow SB 54 would affect the telephone companies.  There was also           
 an omission on line 10 which has been corrected, adding the word              
 "electric."  The chairman, hearing no objection, states the                   
 committee substitute for SB 54.                                               
                                                                               
 Number 348                                                                    
                                                                               
 SENATOR RANDY PHILLIPS makes a motion to discharge SB 54 from the             
 Senate State Affairs Committee with individual recommendations.               
                                                                               
 CHAIRMAN SHARP, hearing no objection, orders SB 54 released from              
 committee with individual recommendations.                                    

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