Legislature(2007 - 2008)HOUSE FINANCE 519
05/07/2007 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB209 | |
| HB244 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 244 | TELECONFERENCED | |
| + | HB 209 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 7, 2007
9:00 A.M.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 9:00:58 AM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Richard Foster
Representative Les Gara
Representative Mike Hawker
Representative Mike Kelly
Representative Bill Thomas Jr.
MEMBERS ABSENT
Representative Reggie Joule
Representative Mary Nelson
ALSO PRESENT
Representative Kurt Olson; Eleanor Wolfe, Staff,
Representative Kurt Olson; John Bitney, Director,
Legislative Office, Office of the Governor; Kelly Huber,
Staff, Representative Nancy Dahlstrom;
PRESENT VIA TELECONFERENCE
Kate Giard, Commissioner, Chair, Regulatory Commission of
Alaska, Anchorage; Mark Johnson, Commissioner, Regulatory
Commission of Alaska, Anchorage; Virginia Rusch, Alaska
Association of Retired Persons (AARP), Anchorage; Ted
Moninski, Director, Regulatory Affairs, Alaska Communication
Systems (ACS), Anchorage; Robert Royce, Assistant Attorney
General, Department of Law, Anchorage
SUMMARY
HB 209 An Act relating to the chair of and the membership
of and qualifications of members of the Regulatory
Commission of Alaska; adding positions to the
partially exempt service; creating an
administrative law division and natural gas and
oil pipeline division within the commission;
amending the timeline requirements for a final
order of the commission; relating to the
commission's regulatory cost charges; and adding
to the duties of the Alaska Judicial Council as
they relate to the presentation of nominees for
consideration for appointment to the commission.
CS HB 209 (FIN) was reported out of Committee with
a "no recommendation" and with zero note #1 by the
Department of Commerce, Community & Economic
Development.
HB 244 An Act creating an Alaska Medal of Honor and
establishing criteria for awarding the medal.
CS HB 244 (FIN) was reported out of Committee with
a "do pass" recommendation and with a new zero
note by the Department of Military & Veterans
Affairs and a fiscal note by the Legislative
Affairs Agency.
9:01:51 AM
HOUSE BILL NO. 209
An Act relating to the chair of and the membership of
and qualifications of members of the Regulatory
Commission of Alaska; adding positions to the partially
exempt service; creating an administrative law division
and natural gas and oil pipeline division within the
commission; amending the timeline requirements for a
final order of the commission; relating to the
commission's regulatory cost charges; and adding to the
duties of the Alaska Judicial Council as they relate to
the presentation of nominees for consideration for
appointment to the commission.
REPRESENTATIVE KURT OLSON, SPONSOR, commented that HB 209
implements recommendations received from the Regulatory
Commission of Alaska (R.C.A.) to improve quality and
timeliness in their decision making process. The bill
requires the appointment of the Regulatory Commission's
Chair be made by the Governor; it clarifies the process used
in discovery and intervention.
Representative Olson provided a sectional analysis:
· Section 1 provides that the Governor shall designate
one member of the Regulatory Commission of Alaska to
serve as chair or to serve out the unexpired term of a
former chair.
· Section 2 is a technical amendment.
· Section 3 adds a new subsection to AS 42.05.175 to
express timelines for various Commission activities in
terms of days rather than months.
· Section 9 amends AS 42.05.175(f) to provide that the
Commission find good cause to extend a timeline only
when (i) a proceeding involves unusually complex and
question of law or public policy; (ii) a proceeding
involves an unusually complex and large factual record;
or (iii) the Commission identifies a compelling public
policy reason for an extension that is entirely
unrelated to workload, scheduling or administrative
convenience.
· Section 10 adds a new subsection to AS 42.05.175,
providing timelines for adjudicated docket matters that
are not otherwise subject to a timeline under the State
or federal law.
9:03:21 AM
Representative Crawford asked why the appointment function
was being returned to the Office of the Governor
appointment. Representative Olson said the intent is to
remove foreign politics and put it in conformance with other
commissions.
9:04:39 AM
VIRGINIA RUSCH, (TESTIFIED VIA TELECONFERENCE), ALASKA
ASSOCIATION OF RETIRED PERSONS (AARP), ANCHORAGE, spoke
against adoption of the House Judiciary Committee (HJC)
version of the legislation, unless Section 4 is amended to
preserve the 15-month period allowed for the Commission.
The reduction to 9-months does not allow the Regulatory
Commission of Alaska adequate time to carry out its
essential function of protecting utility ratepayers from
unjust and unreasonable rates.
Ms. Rusch noted that AARP has participated in the Regulatory
Commission of Alaska proceedings for several years because
of concerns over high utility rates, affecting the
membership as well as utility service consumers.
She stressed that the Commission has an important role in
protecting consumers from unreasonable utility rates and
practices. Consumers will be losers if the Regulatory
Commission is not allowed enough time to thoroughly review
utility proposed rate increases. The rate case process
would be shortened to 9-months. Section 4 begins with a
utility's filing, proposing a rate increase or change in
other terms of service. A utility is entitled to charge
rates sufficient to cover reasonable costs & provide an
adequate but no excessive returns on the investment.
However, the task of determining what the rates should be
requires that the Commission review the utility's complex
rate filing. The process begins with a 45 day preliminary
review, which the Commission determines if the filing is
approved or suspended for further investigation. The
provision is not in the interest of utility consumers who
expect and deserve adequate review of the rates they are
obligated to pay.
9:09:30 AM
Representative Gara asked what would happen to the
Commission by moving the rate making deadline. Ms. Rusch
thought it would automatically be granted.
Representative Gara asked about Section 7. Ms. Rusch
explained that an amendment was made to make applicable
matters under State, federal law or private settlement; that
language is not clear. She pointed out that the
Commission's responsibilities would expand.
Representative Gara requested more information on Section K,
registering his concerns with the bill.
9:12:18 AM
JOHN BITNEY, DIRECTOR, LEGISLATIVE OFFICE, OFFICE OF THE
GOVERNOR, advised there had been issues brought before the
Governor early in the Session. One addressing proposed
changes to the RCA statutes HB 209 attempts to pare down
those changes, including Section 7, different from the
original proposal. Additionally, Section 4, lowers the time
frame and that language was taken from the original docket.
The Governor's office supports the bill & Section 1, but
realizes it would be a legislative policy call.
Mr. Bitney noted there were other pieces of legislation
address the Regulatory Commission of Alaska, such as the
sunset language. He indicated support for the task force.
Co-Chair Meyer understood that the Governor was okay with
Sections 1, 4 & 7. Mr. Bitney requested clarification on
language inserted on Page 3, Lines 2-3.
9:16:34 AM
Representative Gara pointed out that the language in Section
4 was opposed by AARP. Representative Olson mentioned that
changes in Sections 4 & 7, originated in the House Judiciary
Committee (HJC) and that he did not have back-up information
from those committees.
Representative Gara asked if rate changes would include
phone rates.
TED MONINSKI, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,
REGULATORY AFFAIRS, ALASKA COMMUNICATION SYSTEMS (ACS),
ANCHORAGE, addressed the changes to Subsection K. In 2002,
the Legislature put that section on the books, to provide
timelines imposed on the Commission. He suggested the
provision was in the public's best interest. ACS advocated
an amendment in the HJC, the purpose of which was to close
the loop, to create a statutory timeline for cases coming
before the Commission.
Mr. Moninski continued, the timeline in the original version
is moved from 15 months to 9 months. ACS agrees it is
important that every case coming before the Regulatory
Commission, has a statutory deadline. ACS endorses the bill
as drafted.
Representative Gara asked what types of cases are addressed
in Section 7. Mr. Moninski responded, the purpose of that
change was to create language providing a statutory timeline
to any case coming before the Regulatory Commission.
Representative Gara asked if they were specific. Mr.
Moninski said that was what ACS understood.
Representative Gara pointed out that the timeline indicated
was the shortest possible. Mr. Moninski replied that ACS
had not proposed the timeline; it occurred in the original
House Labor and Commerce (HLC) Committee version. He
pointed out that "State" had been removed & that ACS had
encouraged retaining that language.
9:26:12 AM
KATE GIARD, (TESTIFIED VIA TELECONFERENCE), COMMISSIONER,
CHAIR, REGULATORY COMMISSION OF ALASKA, ANCHORAGE, offered
clarification on the timeline issues when public testimony
was closed.
PUBLIC TESTIMONY CLOSED
9:27:20 AM
Ms. Giard addressed the change from 15-months to 9-months
for timelines and rate cases. The original discussion on
modifying timelines took place in November 2006, regarding
changes needed to improve the regulatory climate in Alaska.
There was a proposal for modification of timelines
particularly the ones addressing rate cases & the timelines
addressing all matters not yet subject to a timeline. The
end result was a proposal to implement a one year timeline
on anything the Regulatory Commission did not currently have
timelines on, which is now Section 7. That section appeared
originally in the House Labor and Commerce (HL&C) version as
Section 15, then revised as Section 10 and now Section 7.
It provides a 6-month as compared to a 12-month timeline.
The 6-month timelines are reserved for matters that have no
likelihood of a hearing. In matters where there might be
contention & hearings are likely, the Regulatory Commission
advocates a 12-month timeline. The Regulatory Commission of
Alaska supports Section 7.
Ms. Giard referenced Section 4, noting that the RCA worked
closely with the water and utility groups in Fairbanks to
structure changes to rate cases over a period of time,
eliminating the regulatory lag. The concern in rate cases
is that rate payers pay regulatory cost charges, and end up
funding the Department of Law for the sole purpose of having
the public advocate representing them in proceedings. Over
the past three years, the public advocate has appeared in
over 35 of the Regulatory Commission of Alaska's public
dockets. She believed the public advocate should be
involved in many more dockets than are currently happening.
She recommended greater involvement; however, due to
resource constraints, there is not enough participation.
She voiced concern that Alaska rate payers continue to be
well represented by the public advocate.
Ms. Giard proposed moving the statutory timeline from 15-
months to 12-months and then after two years, changing it to
9-months, insuring Due Process.
9:33:45 AM
Representative Gara asked about the public advocate
function. Ms. Giard responded that there are cases where
the public advocate is not necessary to represent the
ratepayers. They are needed in highly adversarial
situations. She mentioned a fiscal note submitted by the
Department of Law.
Representative Gara inquired if there had been concern that
the public advocate position was no longer under the
jurisdiction of the Regulatory Commission. He asked about a
provision that would allow the Commission to order an
advocate's involvement. Ms. Giard noted that she was
pleased with the work done by the public advocate on behalf
of the Alaska ratepayers. She added concern if the function
had not been adequately funded.
9:36:43 AM
Representative Gara advised that Committee members did not
receive a fiscal note from the Department of Law for
additional help in the Public Advocates section. Co-Chair
Meyer noted one for four employees. Ms. Giard understood
that note was for the Regulatory Commission; there should be
a separate note for the Department of Law. Representative
Gara reiterated that note was zero.
Co-Chair Meyer stated the only application note was #1,
which is zero. Representative Olson pointed out that
Section 4 would not move into effect until July 1, 2008.
The task force will determine staffing issues.
9:38:45 AM
Representative Kelly hoped the legislation would address the
Commission's concerns for making a smooth transition.
Representative Gara pointed out that Section 4 would not be
reduced until 2008; given that information, assuming there
were no additional staff in the Department of Law, he asked
the recommended timeline involving hearings. Ms. Giard
stated that Section 4 cases would always have a hearing.
Generally, individual companies will protest a rate.
Section 7 offers to address that by 6-months. Under that
section, it is the preference of the Commission to go back
to ACS's original proposal - 12-months, only if all parties
have a hearing and there is Due Process. RCA is prepared
for shortening the timelines; however, there is concern that
Section 7, the Due Process, will be given the needed time to
work on the cases, needing a hearing.
Representative Gara asked if there are ever 6-month cases
receiving no public hearing. Ms. Giard responded that are
certain cases not needing a hearing but there is an order
filing in order to receive the Federal funding.
Representative Gara asked about the recommended timeline in
Section 4. Ms. Giard advised that RCA received a year lag
time from the House Judiciary Chair to implement the 9-month
timeline. She worried about the impact on the Department of
Law's ability to participate in those rates cases. The
Department is the only place within the State of Alaska,
which protects public interest. The work of Regulatory
Commission is to balance the need of the utilities & the
rate payers. If there is no one there to present cases fir
the rate payers, it becomes a difficult balance.
9:43:36 AM
Representative Gara asked the Commission's opinion on the
Section 4 timeline. Ms. Giard was not prepared to answer
that question; she thought it should be addressed by the
public advocate. She reiterated concerns of the resource
constraints & how that affects representation.
Representative Gara worried about the Regulatory
Commission's response. Ms. Giard noted, it is a policy call
to be made by the Alaska State Legislature regarding how
rate payer issues will be handled.
Representative Kelly asked if there was anything to prevent
a consumer from participating in the Commission's meetings.
Ms. Giard replied it would take "a sizeable bank roll" to
participate, representing an adversarial rate case hearing
before the Regulatory Commission. Representative Gara
understood that to mean, in order to be effective, an entity
would need "serious money" behind them.
9:47:26 AM
MARK JOHNSON, (TESTIFIED VIA TELECONFERENCE), COMMISSIONER,
REGULATORY COMMISSION OF ALASKA, ANCHORAGE, commented that a
company seeking a rate increase provides expert witnesses,
which is a very significant cost. Barriers to participation
are the costs associated with hiring an expert witness. It
is an adversarial process and the expenses are significant.
ROBERT ROYCE, (TESTIFIED VIA TELECONFERENCE), ASSISTANT
ATTORNEY GENERAL, DEPARTMENT OF LAW, REPRESENTING THE
REGULATORY COMMISSION OF ALASKA, ANCHORAGE, clarified he
does not represent the Public Advocate. He noted concern
with Section 7, Subsection (k). That language is contrary
to the Commission's statutory mandate to allow all documents
to be public. He explained that a private settlement is not
subject to the jurisdiction of the Commission. The
Commission only regulates utilities. The language would
provide an inconsistency in statute and recommended removing
it.
Representative Gara asked what would be considered public
record. Mr. Royce explained the concerns is that the entity
would be arguing a private settlement, not subject to the
jurisdiction of the Commission and that the Commission would
have no ability to rule.
9:52:18 AM
In response to a question by Representative Gara, Mr. Royce
observed that the RCA does not review private settlements.
The RCA only reviews publicly filed records or documents.
Ms. Giard noted the RCA has requested that language be
removed; nothing provided by a public utility is private.
She added, a contract between producers could be considered
private. She strongly recommended that the language be
removed, advising the policy goal could be achieved without
that language.
9:55:39 AM
Representative Olson was not aware of that request.
Representative Gara voiced concern with the consumer
functions, maintaining that phone rates have increased. The
RCA's function has been transferred to the Attorney
General's office, lacking sufficient staffing. He stated
his concerns could be addressed with a fiscal note, adding
funds for legal representation.
9:57:43 AM
Representative Kelly pointed out that the Governor has the
authority to propose changes within the budget and that he
did not support generating a fiscal note for the Department
of Law.
Co-Chair Meyer agreed. He noted recommendations from the
Department of Law to modify Line 3, Section 7, an addition
which had been made in the HJC. The Department suggested
removing the language: "or involve the review of private
settlements and contracts". Representative Olson noted he
had not reviewed that language.
Representative Gara maintained that the legislation has
fiscal impact on rate payers and consumers. He pointed out
that there has been no testimony received from the
Department of Law's consumer representative.
Co-Chair Meyer interjected that the bill needs to "keep
moving" if it is to make it though the Legislative process
this session. He thought that fiscal considerations had
been addressed. He encouraged that additional concerns be
addressed before the bill moves to the House Floor.
Representative Gara maintained that there are amendments
forthcoming because there will be fiscal impact to the
ratepayers.
Co-Chair Meyer noted that the bill would move from Committee
to the Senate. He asked that all concerns be addressed
before that time.
Representative Gara noted that he had amendments. Co-Chair
Meyer stated that the amendments were not presently before
the Committee and said he intended to move the bill at this
time.
Representative Gara disagreed, stressing that he has the
right to make an amendment. Co-Chair Meyer noted that any
amendments need to be before the Committee at this time.
Representative Gara argued that is not precedence. Co-Chair
Meyer reiterated that the amendments could be offered on the
House Floor.
Representative Foster MOVED to REPORT CS HB 209 (JUD) out of
Committee with individual recommendations and with the
accompanying fiscal notes. Representative Gara OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Stoltze, Thomas, Foster, Hawker, Kelly,
Chenault, Meyer
OPPOSED: Crawford, Gara
Representative Nelson & Representative Joule were not
present for the vote.
The MOTION PASSED (7-2).
CS HB 209 (FIN) was reported out of Committee with a "no
recommendation" and with zero note #1 by the Department of
Commerce, Community & Economic Development.
10:05:34 AM
HOUSE BILL NO. 244
An Act creating an Alaska Medal of Honor and
establishing criteria for awarding the medal.
Vice Chair Stoltze MOVED to ADOPT work draft #25-LS0904\M,
Kane, 5/6/07, as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
KELLY HUBER, STAFF, REPRESENTATIVE NANCY DAHLSTROM,
explained the changes made to the work draft. The name was
changed from the Alaska Medal of Honor to the Alaska
Decoration of Honor, to address the concern that the name
was too close to the U.S. Congressional Medal.
Additionally, there were concerns that those indicated on
the list had served their Country and State honorably.
Language on Page 2, Line 24 added Section (E), placing the
adjutant general in charge of determining & editing the
list. The other change provides the effective date of
st
January 1, 2000. These changes address Committee concerns
brought forward in the previous hearing on the bill.
10:08:16 AM
Representative Thomas asked about the 2000 date. Ms. Huber
understood the original intent was from 2000 forward and was
a legislative policy call. Representative Thomas commented
that all veterans from all wars have made sacrifices.
Representative Hawker noted that he represents a constituent
whose husband was awarded a Medal of Honor from Korea. She
encouraged that the name be changed so not to diminish all
the Congressional Medals of Honor. He applauded the
sponsor's intent.
10:12:02 AM
Representative Foster MOVED to REPORT CS HB 244 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS HB 244 (FIN) was reported out of Committee with a "do
pass" recommendation and with a new zero note by the
Department of Military & Veterans Affairs and a fiscal note
by the Legislative Affairs Agency.
ADJOURNMENT
The meeting was adjourned at 10:12 A.M.
| Document Name | Date/Time | Subjects |
|---|