Legislature(1999 - 2000)
05/11/1999 02:00 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE May 11, 1999 2:00 P.M. TAPE HFC 99 - 125, Side 1 TAPE HFC 99 - 125, Side 2 TAPE HFC 99 - 126, Side 1 CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 2:00 p.m. PRESENT Co-Chair Therriault Representative Foster Co-Chair Mulder Representative Austerman Representative Kohring Representative Bunde Representative Moses Representative J. Davies Representative Williams Representative G. Davis Representative Grussendorf was absent from the meeting. ALSO PRESENT Senator Drue Pearce; Representative Jim Whitaker; Ginny Fay, Deputy Commissioner, Department of Commerce and Economic Development; Eric Yould, Executive Director, ARECA, Anchorage; Walt Wilcox, Staff, House Special Committee on Utility Restructuring. TESTIFIED VIA TELECONFERENCE Jimmy Jackson, Regulatory Attorney, GCI Electric; Bob Christenson, Chairman, Alaska Oil and Gas Conservation Commission; Mark Vasconi, Director, Regulatory Affairs, AT&T; SUMMARY HB 62 "An Act relating to the Alaska Public Utilities Commission; and providing for an effective date." HB 62 was heard and HELD in Committee for further consideration. HB 183 "An Act relating to the powers and duties of the chair of the Alaska Public Utilities Commission; relating to membership on the Alaska Public Utilities Commission; and relating to the annual report of the Alaska Public Utilities Commission." HB 183 was heard and HELD in Committee for further consideration. CSSB 133(RLS) am "An Act creating and relating to the Regulatory Commission of Alaska and transferring to it certain powers and duties of the Alaska Public Utilities Commission; repealing the Alaska Public Utilities Commission; relating to the powers of the chair of the Regulatory Commission of Alaska; relating to regulatory cost charges for public utilities and pipelines; relating to the appellate procedures of the Regulatory Commission of Alaska; relating to the Alaska Oil and Gas Conservation Commission; and providing for an effective date." CSSB 133(RLS) am was heard and HELD in Committee for further consideration. CSSB 134(RLS) "An Act authorizing the Alaska Oil and Gas Conservation Commission to determine the amount of and to collect a charge for operating wells subject to the commission's jurisdiction, and to allocate expenses of investigation and hearing; authorizing the commission to employ additional professional staff; repealing the oil and gas conservation tax; and providing for an effective date." CSSB 134(RLS) was HELD in Committee for further consideration. CS FOR SENATE BILL NO. 133(RLS) am "An Act creating and relating to the Regulatory Commission of Alaska and transferring to it certain powers and duties of the Alaska Public Utilities Commission; repealing the Alaska Public Utilities Commission; relating to the powers of the chair of the Regulatory Commission of Alaska; relating to regulatory cost charges for public utilities and pipelines; relating to the appellate procedures of the Regulatory Commission of Alaska; relating to the Alaska Oil and Gas Conservation Commission; and providing for an effective date." SENATOR DRUE PEARCE, SPONSOR testified in support of CSSB 133 (RLS) am. She read from the sponsor statement. Senate Bill 133 will accomplish several goals regarding the Alaska Oil & Gas Conservation Commission (AOGCC) and Alaska Public Utilities Commission (APUC). The APUC will be re- pealed and re-structured under the new title of the Regulatory Commission of Alaska (RCA). This new structure will be more capable of addressing the current expanding workload of the commission. Relocating to the same physical location as the APUC will strengthen the AOGCC. Long term efficiencies will be gained by utilizing a common building, sharing clerical staff and record keeping facilities. In addition, Legislative Budget & Audit (LB&A) will write a report during the interim, which will consider the functions of the two commissions and what structure would best serve the states interests. Senator Peace explained that HCS CSSB 133 (L&C) does not: 1. Does NOT combine the two commissions into one. 2. Does NOT de-regulate garbage. 3. Does NOT transfer pipeline regulation to the AOGCC. 4. Does NOT make any policy changes to either commission. 5. Does NOT transfer any function from one to commission to the other. 6. Does NOT alter the number of commissioners on either commission. SB 133 makes the following changes to the APUC: 1. Repeals the APUC and creates the Regulatory Commission of Alaska (RCA), effective July 1, 1999. All commissioners shall be either re-appointed or replaced. All staff shall remain. All regulations and pending matters before the commission shall be carried forward to the new commission. 2. The new commission will be composed of five commissioners. The five commissioners shall be members of the general public with no requirement for areas of specific expertise. I feel that requiring specific expertise is limiting and that the public interest would best be served by having maximum flexibility in acquiring qualified individuals from the general public. 3. SB 133 strengthens the position of the Chairman. The Chairman: a) Shall have limited authority over the other commissioners. b) Shall have oversight of all commission staff. c) Shall assign the work of the commission and staff. d) Shall set timelines by which a matter shall be resolved. e) Shall determine when advocacy staff is required given certain standards. 4. Streamlines the hearing process. a) The chair shall empanel three or more commissioners to a hearing panel to decide the case. This allows the Chairman to assign the applicable number of commissioners depending on the size of the case. b) Limited the appeals process to only be considered when a decision taken is contrary to commission precedent. c) Mandated that the commission promulgates timeliness standards, depending on the complexity of the docket, for the types of cases that come before the commission. These regulations shall be adopted by December 31, 1999. d) Provided for formal hearings to be held before an arbitrator in appropriate cases. e) Established within the commission a separate advocacy section to represent the public interest when necessary. 5. SB 133 instructs the commission to adopt a time management system to ensure accurate accounting for time billed to each aspect of the commission's functions. LB&A has been recommending a time management system for the APUC in every audit since 1979. To date, the APUC does not use industry or utility codes on payroll time sheets and therefore workloads are approximated using rough estimates. A time management system will provide improved accuracy when assessing regulatory cost charges to individual sectors of the utility industry. This will assist in assuring that the cost causer is the cost payer. SB 133 makes the following changes to the AOGCC: 1. The AOGCC will physically move to the same location as the RCA (APUC) as soon as possible, but not later than July 1, 2000. The two commissions will share record keeping facilities and clerical staff after that time. 2. The AOGCC shall have access to hearing officers at the RCA (APUC) following the effective date, July 1, 1999. SB 133 authorizes LB&A to prepare a transition report to be delivered to the governor and the Legislature on the first day of the second session of the 21st Legislature. The Governor shall appoint one commissioner from each commission to work with LB&A on the transition report. The report will address both commissions and their functions and shall make recommendations on changes that would serve the best interests of the state. SB 133 will improve our ability to protect the long-term public interest through increased functional efficiencies of both commissions. She noted that the Department of Administration is in the process of moving the AOGCC. The move is estimated to take place in September 1999. As soon as the commissions are in the same building they would be able to share record keeping facilities and clerical staff. The AOGCC would have access to a RCA hearing officer following the effective date of July 1, 1999. Senate Pearce observed that the bill was amended in the House Labor and Commerce Committee. PATRICK CARTER, STAFF, SENATOR PEARCE explained that the Regulatory Commission of Alaska would make available a hearing officer to the Alaska Oil & Gas Conservation Commission. The legislation adds a hearing officer to the Alaska Oil & Gas Conservation Commission. Mr. Carter reviewed proposed changes to the legislation. He referred to page 9, line 30. He explained that the APUC is authorized to act in the best interest of the state. "State" would be changed to "public" to clarify that the commission would act in the best interest of the public. Representative J. Davies observed that there is an attorney general's opinion on the difference between "state" and "public". Mr. Carter was not aware of the opinion. Mr. Carter observed that "inability to serve" would be inserted on page 2, line 20. He explained that this would allow the removal of a person who was incapacitated. Co-Chair Mulder asked if there is a statutory definition for "inability to serve". Mr. Carter pointed out that the governor would have to go through due process to remove a person that was unable to serve. Co-Chair Therriault asked that staff provide a clarification on the removal for cause process. He noted that currently members could be removed with the approval of the legislature. He thought that the current language requires a cause. Mr. Carter stated that AOGCC language was used when a preferred methodology could not be reached between the AOGCC and the APUC, because the AOGCC seemed to be operating more functionally. Mr. Carter explained that "Initial Terms of Members of the Regulatory Commission of Alaska would be change on page 12, line 7 to "Terms and Initial Appointments". He explained that there is some constitutional concern that the governor would not be able to appoint persons to a commission that does not exist. Appointments under this section would not take effect until after July 1, 1999. Co-Chair Therriault questioned how the fiscal note would reflect the change. Mr. Carter clarified that appointments would not take affect until July 1, 1999. He noted that AOGCC commissioners are paid slightly more than APUC commissioners are paid. Under the legislation all commissioners would be paid the same with the exception of the chairman. He pointed out that the chairman's duties have been increased. Senator Pearce added that the chairman would be paid at the current level of AOGCC commissioners. Mr. Carter observed that "administrative law judge" would be added on page 3, line 16, 18 page 4, line 20, and page 7, line 8. There would be a new section 4 to clarify that administrative law judges are partially exempt employees. Mr. Carter discussed proposed changes on page 4, line 29. He noted that there was lengthy discussion in the House Labor and Commerce Committee regarding a technical amendment. The statute citation for pipeline regulations, AS 42.06.140 would be added following "AS 42.05.171. He noted that "or if a hearing is not required to otherwise consider" would be added to address permit for right-a-ways, where a hearing is not needed. On page 5, line 3 "there is an allegation that " wold be would be deleted and replaced with "the". "If a decision of a hearing panel is not subject to appeal to the commission or if the commission denies an application to appeal, the decision of the hearing panel is a final decision for purposes of appeal to the courts" would be deleted and replaced with "If a decision of a hearing panel is not subject to appeal to the commission or if the commission denies an application to appeal, the decision of the hearing panel is a final decision for purposes of appeal to the courts." Senator Pearce explained it made sense to allow a smaller number of commissioners to be impaneled. The chairman can impanel any number of commissioners from three and up. She explained that the language allows an appeal to the full commission if the panel makes a decision contrary to prior decisions or the law has changed. The Commission has the right to turn down a request for appeal, in which case, the party could appeal to the courts. Co-Chair Therriault questioned if a commissioner could object if they felt that they were being excluded by the impaneling of three commissioners. Senator Pearce responded that the statute does not address objections. Mr. Carter noted that the hearing panels would be set up in an effort to streamline functions. A hearing panel can consist of an arbitrator, hearing officer, administrative law judge, or three or more members of the Commission impaneled. The full Commission has to ratify the decision in order for it to be an action of the Commission. In response to a question by Co-Chair Therriault, Mr. Carter clarified that the Commission only reviews records of the arbitrator's decision. No new information could be entered at that point. Representative J. Davies asked if the Commission is limited to procedural issues. Mr. Carter explained that the appeal has to be based on the decision being contrary to commission precedent or intervening law. If the appeal is granted the case is reheard. The arbitrator would make a recommendation. The full Commission would review the record and decide if the decision should be ratified. If the decision taken by the arbitrator were contrary to commission precedent then it would go through the appeals process as a new hearing. Vice-Chair Bunde questioned if the appeal is based on the process not the facts. Mr. Carter stated that a decision could be appealed if it is contrary to a proceeding decision made by the Commission. Mr. Carter discussed page 4, line 24. He pointed out that there was some discussion on a separate public advocacy section. He explained that it is not the chair's decision. He recommended the deletion of "when the chair believes that" and the insertion of "when participation is in accordance with a commission policy "It is in the public interest to do so" would be deleted and "the chair of the commission directs it to do so under AS 42.04.070(c) would be inserted. Co-Chair Therriault questioned why the public advocacy section should be restricted to when the Commission invites them to participate. Senator Pearce explained that, at this time, staff decides when to employ advocacy. The legislation would require that standards be developed to rule when the public advocacy is used. Co-Chair Therriault questioned if it would be better to leave it to the public advocate to decide when they should have input. Senator Pearce responded that the separate public advocacy section came out of a National Regulatory Research Institute (NRRI) study. The advisor and advocate would be separated. She emphasized that the public advocate would have the right of discovery. (Tape Change, HFC 99 - 125, Side 2) Senator Pearce emphasized the need for standards. The process can be protracted. The Commission has the right to contract out for specific expertise. Vice-Chair Bunde suggested that the public advocacy should remain separate. Senator Pearce observed concerns that there is no immediate control over the staff's concept of the public's interest and the specific direction that the advocacy can take. She noted that the advocacy staff must work for someone. There is no executive director. The legislation clarifies that the staff works for the Commission. It tells the Commission that they must adopt standards to direct the public advocacy section. She maintained that it is problematic that staff currently directs the Commission. Vice-Chair Bunde summarized that the chairman would apply the regulations adopted by the Commission. Senator Pearce added that the Commission adopts the policy through regulations. The chair makes decisions based on policy of the Commission. Vice-Chair Bunde questioned if the Commission can appeal the chairman's decision if it is misapplied. Mr. Carter stated that the issue is addressed on page 4, line 24. Representative J. Davies asked for further clarification of page 5, lines 22 and 23. Mr. Carter explained that "it is in the public's interest to do so" would be deleted and replaced by "the chair of the commission directs it to do so." In response to a question by Representative J. Davies, Mr. Carter pointed out that the chairman serves at the direction of the Commission. Mr. Carter reiterated that participation would be at the direction of commission policy. Senator Pearce stressed that members of the Commission do not have the time or expertise to put the record together. She observed that the Department of Law was not interested in added this function to their department. Contracting was not considered due to cost concerns. She stressed the desire for commission members to work as a team. Senator Pearce anticipated that testimony on proposed qualifications for commission members would be forthcoming. Representative G. Davis observed that staff members function as the public advocacy. He questioned if this function is being extended to full time. Senator Pearce responded that the Commission's personnel estimates that 50 percent of their work is on advisory functions and 50 percent is spent on advocacy. She noted that there is always advisory work. Commissioners need to receive orders in writing and have more access to staff. The Commission would determine the number of staff they need to deal with the workload on an annual basis. Advocacy staff would not do advisory work. There are currently enough decisions before the Commission to require a number of advocates. She could not anticipate the number of staff that would be needed for advocacy. She added that the Commission might hire an administrative manager to take care of on-going daily work that has to happen. She pointed out that the legislature reviews through the power of appropriation. She noted that the Commission would have the option to set up their own flow chart. Representative Foster observed that the position of executive director is deleted under the bill. He provided members with a letter from Alyce Hanley, dated 3/28/99 (copy on file). Senator Pearce observed that the present system is not working well. The executive director position would not be continued. The Commission could decide to hire the person who is currently in the executive director's position. The legislation clarifies that the staff works for the Commission. Vice-Chair Bunde noted that members are disqualified from having an official connection with a public utility. He questioned if Mr. Carter explained that the language is from existing statute. REPRESENTATIVE JIM WHITAKER provided information on SB 133. He expressed concern that the AOGCC and the APUC be given the opportunity and ability to protect the public's best interest in regards to oil and gas resources. He referred to a 1997 Attorney General's opinion. The opinion concluded that the AOGCC has the authority to consider revenue and engineering issues, not economic issues, in reservoir management and development. Once the companies have agreed amongst themselves and the commissioner of the Department of Natural Resources adopts the development plan the AOGCC has no right to review the plans to see if they protect the public's best interest in those fields. He maintained that independent review of the agreement is essentially blocked. Independent review is the reason the AOGCC was established. He urged the Committee to keep the powers of the AOGCC intact. He questioned how the AOGCC could make determinations without reservoir models. Co-Chair Therriault noted that his office has received a proposed committee substitute from Representative Whitaker. Representative J. Davies stressed that it is critical that the AOGCC has the capacity to understand reservoir models. He observed that they could develop their own models, but emphasized that it would be costly. Representative Whitaker stated that he is not trying to hinder the progress of the legislation. MARK VASCONI, DIRECTOR, REGULATORY AFFAIRS, AT&T testified via teleconference. He recommended changes to SB 133. He noted that AT&T has proposed four changes to the legislation. The first would occur on page 2, line 2. He stressed that there is an ambiguity of whether a new governor can appoint a new chairman prior to the expiration of the chair's four-year term. To balance the for cause removal provision and reduce politicization and enhance independence the new governor would have to wait till the current four year term expires before appointing a new chair. He suggested that "whenever the position becomes vacant" be added on page 2, line 2 to clarify that the governor would have to wait for the chairman to retire. The second amendment would occur in Sec. 42.04.020(a). He suggested that the following language be added: "To qualify for appointment as a commissioner, a person must be a member in good standing of the Alaska Bar Association or have a degree from an accredited college or university with a major in engineering, finance, economics, accounting, business administration, or public administration. Actual experience for a period of five years in the practice of law or in the field of engineering, finance, economics, accounting, business administration, or public administration is equivalent to a degree." The amendment would require that the commissioner be in good standing with the Alaska bar and have a degree in public administration. Commissioners could come from a broad background. Senator Pearce questioned if someone who had served at least five years as a member of the board of a regulated utility would qualify if their degree were in anthropology. Mr. Vasconi replied that person would qualify. Mr. Vasconi noted that the third suggested amendment applied to Sec. 42.04.080(b). He observed that AT&T Alascom continues to believe that the internal appeals procedure is unnecessary and should be deleted. It will add an additional layer to the decision making process, which will result in delays and add to the commissioners workload. He recommended that this section be deleted. The last suggested amendment pertained to Sec. 42.04.150. Mr. Vasconi noted that AT&T Alascom prefers the current system of designating a staff advocacy team on a case by case basis. He suggested that Sec. 42.04.150 be harmonized with Sec. 42.04.070(c) to assure that the chairman determines when it is appropriate to involve the public advocacy section. In the two sections of the act, the two should be the same so that there will not be potential disputes. JIMMY JACKSON, REGULATORY ATTORNEY, GCI, addressed the public advocacy section of the bill. He maintained that the current system works and now would not be a good time to change it. Presently, staff acts as a party to represent the public interest in cases of rate increases. The current system has been in place for many years and it works. SB 133 proposes to change this structure by creating an advocacy staff. It is a structure that is used by some other commissions. The change would require a significant increase in personnel. He did not believe that the change would work without an increase in cost that would be passed on to the utilities and their consumers. If the change were made, the present level of the regulatory cost charge (RCC) would have to be raised over 1%. He reviewed the current system. The Commission currently makes the decision to appoint staff in an advocacy role. Mr. Jackson maintained that it would be a bad idea to combine the change in the advocacy role at this time. Time will be needed to allow the new commission to get up to speed. He encouraged an amendment to maintain the existing role of staff. Co-Chair Mulder questioned the additional costs for the advocacy section. Mr. Jackson guessed that personnel would need to be increased by 50%. (Tape Change, HFC 99 - 126, Side 1) Senator Pearce explained that each staff member has a different expertise and that they all work 50/50 on advisory vs. advocacy issues. She disagreed that it would require a 50% increase in staff. She pointed out that it would take some time to develop additional expertise in some areas. She stressed that there is no consumer protection agency within the Department of Law. She reiterated that the NRRI report recommended that the attorneys that handle advisory and advocacy activities for the Commission be separated. Many states have separate public advocacy sections. She acknowledged that there would be separate costs but questioned if the cost would be as high as estimated. The Administration and utilities with the exception of AT&T and GCI support a separate public advocacy section. GINNY FAY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT spoke in support of the legislation. She maintained that the changes outlined by Mr. Carter are relatively minor technical adjustments. Co-Chair Therriault questioned the level of staffing and funding in the current budget. Ms. Fay stated that the NNRI recommendations have been reviewed. She emphasized that it is the sponsor's intent to improve public protection through the advocacy section by not having staff change back and forth between advocacy and advisory functions. The department's fiscal note identifies some cost savings through efficiencies in administrative functions. She noted that the legislation was originally crafted to contract out the public advocacy functions. She stressed that the administration felt that it was more appropriate to have in house advocacy staff. She acknowledged that it might be necessary to have a combination of in house expertise and contractual staff to meet demand. Co-Chair Therriault, Ms. Fay stated that the fiscal note reflects the Governor's request for the year 2000, which includes addition of staff. She recommended that adjustments be made after staff is shared. ERIC YOULD, EXECUTIVE DIRECTOR, ARECA, ANCHORAGE spoke in support of the legislation. He noted positive elements of the legislation. He emphasized that the legislation: 1. Adds a new time tracking system for staff; 2. A management information system that would be accessible through the Internet; 4. Expanded use of hearing officers and arbiters; 5. Timelines established by the commission for hearing dockets; 6. More authority for chair to exercise authority over staff; and 7. Allocation of RCC based level of effort by the industry sector and the development of the independent public advocacy section. He emphasized that the legislation would allow dockets to be issued in a timely manner. He noted that there would be transitions. In response to a question by Representative Williams, Mr. Yould stated that ARECA supports a separate public advocacy section within the APUC. He stressed that it needs to be properly funded and staffed. He felt that sufficient work exists to warrant full-time staffing. The APUC has nine vacant positions. He suggested that these positions, if filled, could take care of the advocacy staff. He suggested that the new commissioners could do their own internal audit to discern staff needs. CSSB 133 (RULS) was HELD in Committee for further consideration. CS FOR SENATE BILL NO. 134(RLS) "An Act authorizing the Alaska Oil and Gas Conservation Commission to determine the amount of and to collect a charge for operating wells subject to the commission's jurisdiction, and to allocate expenses of investigation and hearing; authorizing the commission to employ additional professional staff; repealing the oil and gas conservation tax; and providing for an effective date." SENATOR DRUE PEARCE, SPONSOR spoke in support of SB 134. She noted that SB 134 addresses the issue of funding for the Alaska Oil and Gas Conservation Commission (AOGCC) It appeals the existing Oil and Gas Conservation tax and institutes a stable funding source to assure that the Commission is capable of carrying out their objectives of protecting the public interest. The AOGCC's primary goal is to ensure that no hydrocarbons are wasted and that operations are conducted in manner that provides maximum recovery of the resource. The original intent of the Legislature was to have the oil & gas industry pay for the function of the Commission through the Oil & Gas Conservation Tax. While this system may have been adequate in the past, it is no longer sufficient to cover the costs associated with the operation of the Commission. The conservation tax is directly proportional to production with 4 mils per barrel fee rate. The work of the Commission, however, is not proportional to the production of oil and gas. Production is declining but the work of the Commission is not. SB 134 creates a program receipt system in which the regulatory cost charge is directly associated with the total volume of fluids produced or injected. This type of system more accurately reflects the factors directly associated with the workload of the Commission. SB 134 also contains a provision to provide for recovery of costs associated with an investigation or hearing. These costs would be allocated to the parties involved. Senator Pearce noted that the Commission experienced budget difficulties in the past, even when tax proceeds exceeded annual appropriations. The AOGCC is currently encountering budget difficulties that are directly related to the decline in oil production. Some members of the oil and gas industry have raised concerns about the program receipt budgets not being given the same level of scrutiny by the legislation as budgets based on the general funds. She felt that these concerns were unfounded. The AOGCC is strengthened by the addition of four staff. This addition would improve the level of institutional knowledge at the AOGCC. The bill creates a stable funding source that will enable the AOGCC to provide the monitoring services necessary to protect the future of Alaskan interests. Co-Chair Therriault asked how the additional new staff would increase the institutional knowledge. Senator Pearce observed that the current Commission is composed of three members. One member is required to be petroleum geologist, one is required to be a petroleum engineer and one is a public member. There is also technical staff. The legislation authorizes the Alaska Oil and Gas Conservation Commission shall to employ, in addition to currently authorized professional staff, one petroleum engineer, one reservoir engineer, one petroleum geologist, and one inspector in FY00 (section 8 page 4, line 30). Senator Pearce noted that the fiscal note accompanying SB 134 would fund the AOGCC for fiscal year 2000. The AOGCC is not funded in the House or Senate operating budgets. Representative J. Davies questioned why the language is specific to fiscal year 2000. Senator Pearce explained that since the additional personnel are not in the Senate or House operating budgets that the language is needed to carry the fiscal note in the conference committee. Vice-Chair Bunde recognized the need for increased staff and program receipts, but asked what would be the provision for downsizing. Senator Pearce observed that the regulatory cost charge would be brought to the Office of Management and Budget. The Office of Management and Budget would bring it to the legislature for approval. The budget can be reduced at any point in the process. She noted that the Division of Oil and Gas, Department of Natural Resources are showing increased production coming on line. Senator Pearce observed that industry came forward with some concerns regarding to the tax rate. Industry was interested in increasing the tax rate. The House Labor and Commerce Committee did not make a change in the tax rate. He maintained that funding should follow the level and type of work as opposed to a straight tax rate. The industry also asked if there could be some step in the process to allow review of the budget in order to prevent complaints about the way the money is being spent. Industry wanted to impanel a group to review the budget prior to submission to the legislation. She recommended that a letter be sent to those paying the RCC prior to the submission of the budget to the Office of Management and Budget. This would give those that pay the RCC an opportunity to make comments before the budget is submitted. Co-Chair Therriault reiterated concerns that the monitors on the wells do not lend themselves to the monetary charge. Senator Pearce observed that the Commission monitors the injection of the liquids. There has never been a metering of the cost charges. She observed that they do allow the testing of wells. She referred to the commingling of oil from facilities in Prudhoe Pay. A decision was made and placed in to regulations to allow testing of wells on an interim basis, so that oil would not have to be measured from each site on a daily basis. She maintained that accommodation could be found through averaging testing results. Co-Chair Therriault pointed out that a method was found to resolve the commingling issue. Senator Pearce gave further examples utilizing general testing. Representative J. Davies questioned what the fees would be and what share of the total cost of the Commission do they represent. Senator Pearce noted that the fee was based on the AOGCC's expectation of costs. A rebate could be given if there is excess or a reduction could occur in the subsequent year. Representative J. Davies noted that the RCC is in addition to the fee. Senator Pearce added that there is also a separate fee for the well permit that is considered as statutory designated program receipts. Co-Chair Therriault added that the fiscal note takes into consideration the statutory designated program receipts. Representative G. Davis clarified that the Senate did not fund the AOGCC. Representative J. Davies clarified that the fiscal note has $2.454 million dollars in the statutory designated program receipts category. Co-Chair Therriault explained that the funds could be taken out of the operating budget. BOB CHRISTENSON, CHAIRMAN, ALASKA OIL AND GAS CONSERVATION COMMISSION testified via teleconference in support of the legislation. He stressed that it would provide a more stable funding mechanism. He maintained that it is a fair system that takes into account the difference between Cook Inlet and the North Slope. In response to a question by Co-Chair Therriault, Mr. Christenson stated that fee system has been working. CSSB 134 (RLS) was HELD in Committee for further consideration. HOUSE BILL NO. 183 "An Act relating to the powers and duties of the chair of the Alaska Public Utilities Commission; relating to membership on the Alaska Public Utilities Commission; and relating to the annual report of the Alaska Public Utilities Commission." WALT WILCOX, STAFF, HOUSE SPECIAL COMMITTEE ON UTILITY RESTURCTURING provided information on HB 183. He noted that HB 183 is similar to SB 133, with the exception of a clause, which placed a limitation of no more than two commissioners from the same political party. He added that HB 183 did not deal with the AOGCC. House Bill 183 would have established ethics standards for members of the APUC. The advocacy issue was not addressed in HB 183. He maintained that the balance of HB 183 fits nicely into SB 133. In response to a question by Representative J. Davies, he also observed that HB 183 did not provide a raise for the chair. The general idea of accountability and responsibility is accomplished in SB 133. This was also a goal of the Utility Restructuring Committee. HB 183 was heard and HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 4:20 p.m. House Finance Committee 16 5/11/99 p.m.