Legislature(2007 - 2008)BELTZ 211

03/22/2007 09:00 AM Senate STATE AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 16 EXTEND REGULATORY COMMISSION OF ALASKA TELECONFERENCED
Heard & Held
+ HB 117 PROCLAMATION CALLING A SPECIAL SESSION TELECONFERENCED
Moved CSHB 117(JUD) Out of Committee
+= SB 33 DNA FROM PERSONS CHARGED WITH FELONIES TELECONFERENCED
Moved CSSB 33(STA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 92 LIMITED LICENSE IGNITION INTERLOCK
Moved CSSB 92(STA) Out of Committee
= SB 115 GIFT CARDS
Moved CSSB 115(STA) Out of Committee
          SB  16-EXTEND REGULATORY COMMISSION OF ALASKA                                                                     
                                                                                                                                
9:36:10 AM                                                                                                                    
CHAIR MCGUIRE announced  the consideration of SB 16.  This is the                                                               
first hearing and the bill would not move today.                                                                                
                                                                                                                                
SENATOR GENE THERRIAULT, Alaska  State Legislature, sponsor of SB
16, said the original bill  contained the auditor's suggestion of                                                               
an eight-year  sunset extension for the  Regulatory Commission of                                                               
Alaska (RCA),  but CSSB 16(CRA)  is before the committee,  and it                                                               
rolls the extension back to six  years and adds a two-year report                                                               
card.  The report  card would  not  be a  full-fledged audit  but                                                               
simply information  on the  RCA meeting  its timelines.  The two-                                                               
year  report card  makes it  important to  keep the  extension at                                                               
multiples  of   two.  He  noted  that   regulated  entities  have                                                               
requested changes to the RCA,  but he suggested extending the RCA                                                               
first.  Without the  RCA,  all  the issues  will  end  up in  the                                                               
legislature's lap. "We  do need to extend the RCA;  the bill that                                                               
is before you is that specific  policy call." He said he has been                                                               
working on the proposed changes,  and he hoped the administration                                                               
would support  a separate package of  changes to the way  the RCA                                                               
operated, but the administration is too  busy so he will look for                                                               
a sponsor.                                                                                                                      
                                                                                                                                
9:40:22 AM                                                                                                                    
SENATOR  THERRIAULT  said  there  is growing  consensus  to  make                                                               
changes  including  commissioner  salaries, adding  an  executive                                                               
director,  and  adding  statutory  timelines.  If  the  regulated                                                               
community doesn't get  too greedy, a package can  be created with                                                               
broad support.  He said  he is working  on that.  The legislature                                                               
may  want to  bundle the  two  issues together,  but keeping  the                                                               
sunset extension clean is his preference, he stated.                                                                            
                                                                                                                                
9:41:43 AM                                                                                                                    
SENATOR STEVENS  asked what the  two-year report does,  and asked                                                               
if changes can occur at that time.                                                                                              
                                                                                                                                
SENATOR THERRIAULT  said certainly the legislature  can introduce                                                               
a bill at any year if it thinks  the RCA has gone way off course.                                                               
The report card  provides that information to  the legislature to                                                               
indicate if something is going  astray, like missing timelines or                                                               
increasing   the  number   of  appealed   cases.  It   is  useful                                                               
information to  have before  the sunset,  he said.  The RCA  is a                                                               
quasi-judicial entity overseeing a lot of dollars, he noted.                                                                    
                                                                                                                                
9:43:37 AM                                                                                                                    
SENATOR STEVENS asked  if the report would just go  to the Budget                                                               
and Audit committee.                                                                                                            
                                                                                                                                
SENATOR THERRIAULT said it would be  done by the "audit shop" and                                                               
submitted to the legislature.                                                                                                   
                                                                                                                                
SENATOR STEVENS asked how it will arrive and who will see it.                                                                   
                                                                                                                                
SENATOR THERRIAULT  it would just  be a report that  is presented                                                               
to  the bodies  with the  secretary reading  it across.  He noted                                                               
that  anyone  in the  regulated  community  with a  concern  will                                                               
certainly bring it to the attention of legislators.                                                                             
                                                                                                                                
9:44:44 AM                                                                                                                    
SENATOR  FRENCH asked  why Sections  2  and 3  are repealers  and                                                               
reenactments, and what has changed or been lost.                                                                                
                                                                                                                                
KATE GIARD,  Chair, Regulatory Commission  of Alaska,  said there                                                               
was language  that changed a  reporting date. November 15  is far                                                               
timelier and gives auditors a chance  to look at it and report to                                                               
the  legislature  by  January.   There  was  also  language  that                                                               
required the  RCA to report  on things  that it did  not actually                                                               
do, including the  status of the development  of utilities, which                                                               
it has never done. Repealing that will clean things up.                                                                         
                                                                                                                                
9:46:57 AM                                                                                                                    
CHAIR MCGUIRE read the statute that is being eliminated. AS 42.05.211                                                           
currently states:                                                                                                               
                                                                                                                                
     The commission shall by February  15 of each year publish an                                                               
     annual report reviewing its work  and notify the legislature                                                               
     that  the  report  is available.  The  report  must  contain                                                               
     information and  data that  bear a  significant relationship                                                               
     to  the   development  and  regulation  of   public  utility                                                               
     services  in  the  state  and  include  an  outline  of  the                                                               
     commission's program  for the development and  regulation of                                                               
     public utility services in the forthcoming year.                                                                           
                                                                                                                                
MS. GIARD said  the RCA doesn't develop the  public utilities, so                                                               
it took  the language out.  "We've never  obeyed that law  in our                                                               
annual report," she explained                                                                                                   
                                                                                                                                
9:47:53 AM                                                                                                                    
SENATOR  FRENCH said  the language  has a  forward-looking aspect                                                               
about  plans for  the following  year. "It  certainly looks  like                                                               
that is being lost."                                                                                                            
                                                                                                                                
MS. GIARD  said this  year the  RCA annual  report shows  the new                                                               
cases that  were filed, and  that hasn't been done  before. There                                                               
is a great  amount of time that  goes by, she stated.  "We put it                                                               
in here because  the time was so different we  wanted you to know                                                               
what's happening today."                                                                                                        
                                                                                                                                
9:49:10 AM                                                                                                                    
MS.  GIARD  said the  RCA  regulates  approximately $1.5  billion                                                               
worth  of  commerce, and  decisions  can  impact one  entity  for                                                               
hundreds of  millions of  dollars. Its  decisions can  impact the                                                               
state's  economy,  as  well. If  the  Federal  Energy  Regulatory                                                               
Commission (FERC)  follows the decisions  of the RCA on  the TAPS                                                               
pipeline case, it  will have an impact of $818  million a year on                                                               
royalty  revenue,  so the  RCA  should  be held  accountable  and                                                               
transparent. She  appreciates that the legislature  checks on the                                                               
RCA. Since  Ms. Giard became chair  three years ago, the  RCA has                                                               
been working  with utilities to bring  deep institutional change.                                                               
The  effort requires  the help  of  the legislature  and the  RCA                                                               
going out to the utilities to  listen to complaints and fix them.                                                               
The companies  will not say they  love all of the  decisions, but                                                               
she hopes they will say that  the RCA is getting better. That was                                                               
said  in  the audit  report,  and  55  percent of  the  regulated                                                               
utilities and  pipeline carriers said  the RCA had  improved. She                                                               
said the RCA is comfortable  with the six-year extension. A four-                                                               
year  extension  is  too  short  and too  challenging  to  a  new                                                               
governor. "We  put in the  two-year audits because we  believe we                                                               
should be held accountable for  the transparency, and we're going                                                               
to put it in our annual report, and we want it audited."                                                                        
                                                                                                                                
9:53:45 AM                                                                                                                    
CHAIR MCGUIRE  said she would like  the committee to look  at the                                                               
information  and consider  rolling the  substantive changes  into                                                               
the sunset  bill. She said  she wants  to have time  to formulate                                                               
meaningful questions.                                                                                                           
                                                                                                                                
9:54:56 AM                                                                                                                    
SENATOR STEVENS asked  if the issues of concern  are addressed in                                                               
the committee packet.                                                                                                           
                                                                                                                                
MS.  GIARD  said  the  RCA provided  information  from  a  public                                                               
process that the  utilities participated in. It has  all of their                                                               
comments  of what  they  would  like see  changed.  The RCA  held                                                               
public  hearings, "and  then voted  on some  to bring  forward to                                                               
you."  She said  the governor's  office was  unable to  sponsor a                                                               
second piece  of legislation,  so she  combined what  she thought                                                               
the public wanted with SB 16 and  HB 209. She said it is balanced                                                               
and addresses  timelines, "and there's  conversations we  need to                                                               
have  about those.  I am  really excited  about shortening  those                                                               
timelines." Commissioner salaries are also addressed, she said.                                                                 
                                                                                                                                
9:57:12 AM                                                                                                                    
CHAIR  MCGUIRE  asked  committee   members  to  read  RO6-10  and                                                               
distinguish between  what the  public commented  on and  what was                                                               
included. This  committee could create  a bill  or add it  to the                                                               
current  one. It  is  incumbent on  the Senate  to  come up  with                                                               
concerns and the method to deal with them.                                                                                      
                                                                                                                                
GEORGE GORDON, Director, Regulatory  Affairs, Utility Services of                                                               
Alaska, said he  was once President and CEO  of College Utilities                                                               
Corporation and  Golden Heart Utilities  that provided  water and                                                               
waste water  service to Fairbanks.  He supports  the legislation,                                                               
and he  agrees with the  RCA on many  issues. It is  necessary to                                                               
reduce the statutory  time allowed for rate cases,  he said, from                                                               
16 months  down to 9 months.  It is important to  limit discovery                                                               
during  regulatory  matters.  He  said  the  RCA  is  considering                                                               
opening up  a rule-making docket  that would limit  discovery. It                                                               
is too open ended and not  in the public interest, he stated. The                                                               
salary  and qualifications  of the  RCA  need to  be raised.  The                                                               
commissioners  should earn  what superior  court judges  earn. He                                                               
supports having a  staff person to exercise staff  control and to                                                               
act as  a liaison to  utilities. He said  he doesn't care  if the                                                               
issues are addressed in the sunset bill or a separate bill.                                                                     
                                                                                                                                
10:01:09 AM                                                                                                                   
CHAIR MCGUIRE said visitors to  her office have made those points                                                               
to her.                                                                                                                         
                                                                                                                                
DEAN  THOMPSON, Attorney,  Alaska Power  Association (APA),  said                                                               
the APA is a trade  association for electric utilities throughout                                                               
Alaska.  The APA  has 39  member utilities,  and it  supports the                                                               
reauthorization of  the RCA. The  general perception is  that the                                                               
RCA has improved  significantly over the past few  years in terms                                                               
of  docket management  and seeking  input from  the industry.  He                                                               
said Chair Giard is doing a  good job of improving efficiency and                                                               
effectiveness, but there are further  improvements as promoted by                                                               
Mr.  Gordon. The  regulated entities  have to  interact with  the                                                               
RCA, so continuity and predictability  are important. He said the                                                               
APA has not  taken a position on the term  for the extension, but                                                               
it  doesn't oppose  CSSB 16(CRA).  Members of  APA might  support                                                               
some of the proposed changes but would like to see them first.                                                                  
                                                                                                                                
10:05:42 AM                                                                                                                   
CHAIR MCGUIRE  said she would like  to hear more detail  from the                                                               
APA next week.  She thanked Chair Giard.  Regarding public input,                                                               
she said, "What a difference a few years makes."                                                                                
                                                                                                                                
CHAIR MCGUIRE held SB 16 over.                                                                                                  
                                                                                                                                

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