Legislature(2003 - 2004)
02/27/2004 03:25 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 27, 2004
3:25 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Carl Gatto, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 505
"An Act relating to importing beer or wine for personal
consumption and a liquor license for that purpose, and to taxes
on beer or wine imported for personal consumption."
- HEARD AND HELD
HOUSE BILL NO. 453
"An Act exempting from regulation under the Alaska Public
Utilities Regulatory Act wholesale agreements for the sale of
power by joint action agencies and contracts related to those
agreements, and joint action agencies composed of public
utilities of political subdivisions and utilities organized
under the Electric and Telephone Cooperative Act."
- HEARD AND HELD
HOUSE BILL NO. 450
"An Act providing for a special deposit for workers'
compensation insurers; relating to the board of governors of the
Alaska Insurance Guaranty Association; relating to covered
workers' compensation claims paid by the Alaska Insurance
Guaranty Association; stating the intent of the legislature, and
setting out limitations, concerning the interpretation,
construction, and implementation of workers' compensation laws;
relating to restructuring the Alaska workers' compensation
system; eliminating the Alaska Workers' Compensation Board;
establishing a division of workers' compensation within the
Department of Labor and Workforce Development and assigning
certain Alaska Workers' Compensation Board functions to the
division and the Department of Labor and Workforce Development;
establishing a Workers' Compensation Appeals Commission;
assigning certain functions of the Alaska Workers' Compensation
Board to the Workers' Compensation Appeals Commission; relating
to agreements that discharge workers' compensation liability;
providing for hearing officers in workers' compensation
proceedings; relating to workers' compensation awards; relating
to an employer's failure to insure and keep insured or provide
security; providing for appeals from compensation orders;
relating to workers' compensation proceedings; providing for
supreme court jurisdiction of appeals from the Workers'
Compensation Appeals Commission; providing for a maximum amount
for the cost-of- living adjustment for workers' compensation
benefits; providing for administrative penalties for employers
uninsured or without adequate security for workers'
compensation; relating to assigned risk pools and insurers; and
providing for an effective date."
- BILL HEARING POSTPONED
PREVIOUS COMMITTEE ACTION
BILL: HB 505
SHORT TITLE: ALCOHOL LICENSING: CONNOISSEUR LICENSE
SPONSOR(S): REPRESENTATIVE(S) KOTT
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) L&C, FIN
02/27/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 453
SHORT TITLE: JOINT ACTION AGENCIES
SPONSOR(S): REPRESENTATIVE(S) HEINZE
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) L&C, FIN
02/27/04 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
SUE STANCLIFF
House Majority Office
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 505 on behalf of
Representative Kott, sponsor.
BOB BAILEY
Alaska Wine and Spirits Wholesalers Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 505.
MATT JONES
Anchorage, Alaska
POSITION STATEMENT: Testified against HB 505, saying it gives
the consumer fewer choices.
DOUG GRIFFIN, Chairman
Alcoholic Beverage Control Board
Department of Public Safety
Anchorage, Alaska
POSITION STATEMENT: Answered questions on HB 505.
REPRESENTATIVE CHERYLL HEINZE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 453.
JON BITTNER, Staff
to Representative Cheryll Heinze
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 453 on behalf of
Representative Heinze, sponsor, and answered questions.
JOE GRIFFITH, Chief Executive Officer
Chugach Electric Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 453.
TOM LOVAS, Chief Executive Officer
Four Dam Pool Power Agency
Anchorage, Alaska
POSITION STATEMENT: Gave background information on joint action
agencies and answered questions.
JIM POSEY, General Manager
Municipal Light and Power
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 453.
TUCKERMAN BABCOCK, Manager
Government and Strategic Affairs
Matanuska Electric Association
Palmer, Alaska
POSITION STATEMENT: Testified in opposition to HB 453.
MARK JOHNSON, Commissioner
Regulatory Commission of Alaska
Department of Community and Regional Affairs
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 453.
ACTION NARRATIVE
TAPE 04-20, SIDE A
Number 0001
VICE CHAIR GATTO called the House Labor and Commerce Standing
Committee meeting to order at 3:25 p.m. Representatives Gatto,
Dahlstrom, Crawford, and Guttenberg were present at the call to
order. Representatives Anderson, Lynn, and Rokeberg arrived as
the meeting was in progress.
HB 505-ALCOHOL LICENSING: CONNOISSEUR LICENSE
VICE CHAIR GATTO announced that the first order of business
would be HOUSE BILL NO. 505, "An Act relating to importing beer
or wine for personal consumption and a liquor license for that
purpose, and to taxes on beer or wine imported for personal
consumption."
Number 0089
SUE STANCLIFF, House Majority Office, Alaska State Legislature,
introduced HB 505 on behalf of Representative Kott, sponsor.
She explained that the bill would require individuals who import
beer and wine for personal consumption to acquire a license from
the Alcoholic and Beverage Control Board ("ABC Board") prior to
importing wine and beer, and to pay the alcoholic beverage tax,
the excise tax, on those imports through the Department of
Revenue.
MS. STANCLIFF said the Twenty-first Amendment [to the federal
constitution] grants states the authority to regulate taxation,
distribution, and sale of alcoholic beverages; the key provision
in that amendment reads: "The transportation or importation
into any State, Territory, or Possession of the United States
for the delivery or use therein of intoxicating liquors, in
violation of the laws thereof, is hereby prohibited."
Number 0207
MS. STANCLIFF noted that the majority of states require
consumers to purchase alcoholic beverages from retailers
licensed by the state. This "three-tiered system" is what
Alaska adopted at statehood and has used successfully for nearly
half a century. However, technology, primarily in the form of
direct purchasing of alcohol over the Internet, threatens the
system in Alaska. An estimated $1 billion-plus in alcohol is
illegally shipped to consumers in the U.S., thereby avoiding
state taxation and state laws that prohibit the sale of alcohol
to minors. This bill would establish a framework for control of
alcohol sales via the Internet and to attempt to avoid some
problems identified in the Lower 48 with the sale of alcohol.
Number 0324
MS. STANCLIFF, in response to a question from Representative
Dahlstrom, said enforcement would fall to the ABC Board. She
acknowledged the difficulty of enforcement and indicated the
intention isn't to spend a lot of money on enforcement. She
related that other states with similar laws use it as a
deterrent, a notification to the public that this type of
activity is illegal. Ms. Stancliff offered her belief that
minors are purchasing alcohol via the Internet.
REPRESENTATIVE DAHLSTROM asked how a customer provides proof of
age for an Internet transaction.
MS. STANCLIFF replied that it is often necessary to fax a copy
of identification to the seller. An Alaskan who traveled to
California and returned with a case of wine wouldn't be in
violation of this proposed law, since the product wouldn't have
been shipped in. She specified that the purpose of this bill is
to gather shipping revenues through taxation and licensing. In
this bill the two-year connoisseur license for wine carries a
fee of $100.
Number 0616
REPRESENTATIVE DAHLSTROM asked: If a California winery wanted
to ship a case of wine, would that transaction be covered by
this bill?
MS. STANCLIFF said she believes, but isn't certain, that alcohol
shipped into the state would be covered.
Number 0667
REPRESENTATIVE CRAWFORD asked if the cost of the connoisseur
license would be prohibitive.
MS. STANCLIFF replied that, for her, the primary concern is
legality rather than expense.
REPRESENTATIVE CRAWFORD asked what the cost to the state would
be for issuing these licenses that he believes are expensive.
MS. STANCLIFF replied that the Department of Revenue or [the
Division of Occupational Licensing in the Department of
Community & Economic Development (DCED)] might be better able to
respond. She said she believes the fiscal note was based on
costs that other states with similar legislation have
experienced.
Number 0807
CHAIR ANDERSON asked if this legislation would affect even one
bottle of wine coming through the mail.
MS. STANCLIFF replied, "It does affect even one bottle. If you
are a member of wine-of-the-month club - one bottle."
CHAIR ANDERSON asked what penalties would result from this
legislation.
MS. STANCLIFF replied that the provider who breaks the law would
have committed a class C felony. She read from Section 5,
page 3, subsection (d).
CHAIR ANDERSON asked about the procedure if a person has bought
a bottle of wine through a wine-of-the-month club and doesn't
have a connoisseur's license.
MS. STANCLIFF replied that violating this law would result in a
class A misdemeanor for the person purchasing the wine; the
winery that provided the wine would be guilty of a class C
felony.
Number 1003
VICE CHAIR GATTO remarked:
I can order a bottle of wine and if I get caught,
spank my hand and I won't order any more. If I don't
get caught, I can order wine all day and all night and
all week and all year until I get caught. Now, on my
next offense I'm subject to penalty. I'm going to
guess that if a person wants a bottle of wine, they
are probably not going to get caught.
MS. STANCLIFF offered that when people want a bottle of wine,
they usually buy one at a local liquor store, rather than order
it over the Internet. She said she didn't believe people were
readily violating the law, but could also understand Vice Chair
Gatto's point.
VICE CHAIR GATTO asked, if his sister sent him a bottle of wine,
whether she would be in violation.
MS. STANCLIFF responded that she didn't know, but that this is a
concern and may require an amendment because the intent of the
bill is to prevent minors from ordering alcohol through the
Internet, and as a revenue-generating tax. She also expressed
concern for the dry communities in Alaska that can bring in
alcohol through the Internet.
REPRESENTATIVE LYNN questioned whether many minors order alcohol
via the Internet.
Number 1209
BOB BAILEY, Alaska Wine and Spirits Wholesalers Association,
Anchorage, said his association supports restricting the direct
shipment of alcohol into Alaska for three main reasons:
preventing the sale of alcohol to minors; addressing shipments
into dry communities; and tax revenue that isn't coming to the
state, but should be. He related that there has been an
increase in Internet ordering of alcohol into Alaska and that
while there are providers who are diligent about checking
identification, this doesn't preclude someone from using
another's identification.
MR. BAILEY spoke to the increase in the alcohol excise tax that
went into effect October of 2002. He said Alaska has the
highest alcohol excise tax in the U.S., and this provides a
legitimate financial reason for someone to order alcohol from
out of state, in particular, low-priced, low-weight liquor goods
in plastic bottles. He informed the committee that when
Alaska's alcohol tax is over $30 a case, that pays for the
freight quickly. He said Alaska is only one of two states in
the U.S. that have no restrictions on direct sale of alcohol.
He gave an example of a winery in California that can legally
ship directly to anyone in Alaska, but said an Alaskan licensed
retailer is unable to do so.
Number 1399
MR. BAILEY pointed out that enforcement would be necessary, but
opined that the felony provision would be the primary deterrent.
He predicted that wineries would oppose this bill, since they'd
prefer the status quo that allows them to ship freely. He also
surmised they'd notify customers of a change in the law so
they'd be in compliance. He noted that the process for the
legitimate connoisseur includes getting a license; getting the
appropriate shipping label; and sending it to the provider,
who'd then be alerted that shipping to Alaska was legal.
Number 1436
REPRESENTATIVE CRAWFORD asked for clarification of which states
allow shipping of alcoholic beverages.
MR. BAILEY pointed to a map. He noted that states can use
federal courts to enforce their liquor laws.
REPRESENTATIVE CRAWFORD expressed concern that the process was
complicated and the cost of the license onerous.
MR. BAILEY noted that this bill is patterned on a bill from
Montana and that the actual cost of the license could be
changed. He indicated support for the felony penalty.
REPRESENTATIVE LYNN asked how many connoisseurs in Alaska would
apply for this license.
MR. BAILEY replied that he didn't know, but Montana had issued
18 of these licenses since passing a similar law. He stressed
that this legislation, because of the felony provision, is
focused on providers of alcohol. In further response, he
reiterated the three projected areas of impact from the bill:
collection of taxes, aid in preventing minors' consumption, and
aid in preventing alcohol from getting to dry communities. He
added that in some cases, up to 10 percent of alcohol that goes
to minors was purchased via the Internet in other states, but
there are no related statistics for Alaska.
MR. BAILEY, in response to further questions from Representative
Lynn, admitted the revenue from this bill wouldn't be
substantial. He mentioned the amount the state is losing on
cheap liquor being shipped into the state by people who want to
avoid paying the state tax of $30 a case. Likening it to the
state's efforts to tax tobacco, he noted that the industry pays
over $30 million a year in alcohol tax into the general fund,
and suggested some of that could pay for this bill.
REPRESENTATIVE CRAWFORD agreed the felony provisions in the bill
are good, but questioned the amount for the license fee.
MR. BAILEY agreed with Representative Crawford.
Number 1860
REPRESENTATIVE DAHLSTROM asked Mr. Bailey to address the
benefits that this bill would bring to local business owners.
She also asked Mr. Bailey to state his major concern.
MR. BAILEY said it wasn't possible to measure the benefit at
this point. He said his major concern is consumption by minors,
specifically, "regulating that the people who shouldn't get it
don't get it."
Number 1943
REPRESENTATIVE ROKEBERG surmised that probably the major effect
would be prohibiting the purchase of spirits via the Internet.
He asked whether that is correct.
MR. BAILEY replied:
Right now, we suspect that inexpensive liquor like
vodka in plastic bottles, which may or may not be
going to bootleggers - we have no idea where it's
going - that would be prohibited completely by this.
The only thing allowed through the connoisseur's
license is the purchase of wine or beer, not spirits.
REPRESENTATIVE ROKEBERG recounted his personal experience with a
California vineyard. He said the genuine connoisseurs wouldn't
be affected as much as the wine-of-the-month club customers. He
noted that this bill prohibits the illegal purchase, over the
Internet primarily, of spirits, wine, and beer. It thus
maintains the integrity of the three-tiered system, with
regulation of the manufacturer, wholesaler, and retailer. He
referred to cyberspace as the fourth tier that needs regulation.
He asked if Mr. Bailey thought there was a sense of fairness
involved, since in-state people were paying taxes but out-of-
state people weren't.
Number 2113
MR. BAILEY said his association had attempted to pass this
legislation in the past, and the increased alcohol excise tax
provided further impetus for HB 505.
VICE CHAIR GATTO asked whether a person could, at this time, go
to the Internet and order wine legally.
MR. BAILEY replied that retailers have to purchase products
through wholesalers who are, in turn, designated by the
supplier. Individuals can order over the Internet, and
retailers can order over the Internet but cannot legally put
that product in their stores for resale.
VICE CHAIR GATTO asked about the urgency of this bill.
MR. BAILEY said one could infer that the high use of the
Internet in Alaska has resulted in a higher-than-average rate of
ordering alcohol over the Internet, which has resulted in lost
revenue to the state.
CHAIR ANDERSON said he supported the bill, but didn't think
minor consumption was an issue, and also felt the excise tax was
too high in Alaska, so that he wasn't overly concerned about the
lost revenue. He said he did believe, however, that the dry-
community issue in Alaska was a salient point.
Number 2338
MATT JONES, Anchorage, testified that he thought it important to
clarify that Montana is a "control state" where the sale and
distribution of alcohol is controlled by the state, so there is
a vested interest in reducing sales of "non-state-sold alcohol."
However, Alaska is a "license state" where alcohol is sold by
private companies.
TAPE 04-20, SIDE B
Number 2372
MR. JONES said he understood and supported the need to collect
taxes, as well as the need to keep alcohol out of dry
communities and away from minors. He wasn't sure beyond these
effects what the purpose of this bill was. He said the bill
would result in out-of-state wineries' not wanting to deal with
shipping to Alaska because of the added regulation. He
suggested this would be unfortunate because liquor stores in
Alaska don't carry every wine, and he felt that as a consumer
his choices would be diminished. He proposed that the
legislature could regulate the sale of hard liquor over the
Internet with another bill, rather than HB 505.
REPRESENTATIVE ROKEBERG read from the bill, page 2, Section 3.
He asked, "So, there's a requirement of registration. Do you
think these wineries will not register with the board and
therefore will not send you any wine?"
MR. JONES said his concern was more than that, since the winery
or brewery has to obtain a general wholesale license and get a
registered agent, and these requirements of the bill constitute
a burden for a small winery or brewery.
REPRESENTATIVE ROKEBERG clarified that the current law requires
obtaining a general wholesale license, appointing an agent, and
obtaining other applicable licenses. He said subsection (b)
actually makes it less cumbersome, since the business could sell
wine directly to the consumer without a wholesale license.
MR. JONES asked why there is a limit on the number of cases of
wine he can buy, since this would also limit revenue from taxes.
Number 2145
DOUG GRIFFIN, Chairman, Alcoholic Beverage Control Board,
Department of Public Safety, said the amount of alcohol coming
into the state due to the Internet sales is unknown. He said
this bill would not be a large revenue-generator. He noted that
he suspects there have been occurrences of underage people
getting alcohol through the Internet, but had never received a
complaint about this. He thought increased use of the Internet
would be an indicator that the ABC Board had done a good job of
reducing access to alcohol for underage persons.
MR. GRIFFIN said he wasn't aware of the cheap spirits Mr. Bailey
had referred to, and felt this bill was aimed primarily at
fairly high-end wine. He commented that this is part of a
nationwide battle between wineries, which argue they can't get
their product to be carried by wholesalers, and wholesalers who
feel that wineries are avoiding taxation, that underage people
may have access to alcohol, and that taxes aren't being paid by
these direct shipment routes. He surmised this battle is ripe
for adjudication before the U.S. Supreme Court, since circuit
courts have ruled in favor of the Twenty-first Amendment, saying
states have the right to regulate alcohol, and also in favor of
the interstate commerce clause, saying states could not limit
the ability of people to carry out commerce between states.
Number 1948
CHAIR ANDERSON said he had some concerns and thought it better
to hold the bill until next week. [HB 505 was held over.]
HB 453-JOINT ACTION AGENCIES
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 453, "An Act exempting from regulation under
the Alaska Public Utilities Regulatory Act wholesale agreements
for the sale of power by joint action agencies and contracts
related to those agreements, and joint action agencies composed
of public utilities of political subdivisions and utilities
organized under the Electric and Telephone Cooperative Act."
Number 1875
REPRESENTATIVE CHERYLL HEINZE, Alaska State Legislature,
sponsor, introduced HB 453. She referred to a chart that
illustrated upgrades needed for the Railbelt area electrical
grid, noting that the transmission lines date to the 1950s and
that generation assets are 20 to 30 years old. She said
Alaska's energy infrastructure is in desperate need of an
upgrade. According to the Railbelt Energy Study, the cost of
building, upgrading, and maintaining these upgrades is
anticipated to be around $5 billion. She predicted the cost of
new generators alone over this period would be $750 million, or
$2,000 for every resident along the Railbelt. She believed that
the House and Senate recognized this when they passed HCR 21,
establishing the Joint Energy Policy Task Force.
Number 1793
REPRESENTATIVE HEINZE explained that HCR 21 mandated the review
and analysis of the state's long-term energy needs, and asked
the task force to develop a long-term energy plan to efficiently
enhance Alaska's economic future. She commented that one of the
major recommendations made by the task force was that the state
promote unified operation of a Railbelt generation and
transmission system. The unified system operator would be in a
position to undertake the financial obligation of upgrading the
Railbelt. She pointed out that each company alone couldn't be
responsible for the $5 billion cost, but she thought several
companies together could.
REPRESENTATIVE HEINZE said this bill makes slight changes to the
joint action agency (JAA) statute, AS 42.45.300, specifically
changing language to exempt contracts from regulation.
Contracts made by the JAA with another public utility for the
sale of power, storage, regeneration, or wholesale repurchase
under a wholesale agreement would be an agreement between two or
more willing and capable parties. Any dispute would be handled
under contract law. She urged the committee to support this
bill. She indicated she'd spoken with members of the utilities
in the Railbelt and had addressed their concerns.
REPRESENTATIVE HEINZE focused attention on two questions she'd
asked Legislative Legal and Research Services. First, do the
exemptions given to JAAs in this bill apply to the retail rates
of the individual utilities and cooperatives that are members of
the agency? She said the answer is no. This won't affect
retail rates; it only affects the sale of wholesale power. And
second, will this bill affect existing contracts between
individual utilities? Again, she said, the answer is no. A new
law won't operate to modify existing contracts.
[Chair Anderson passed the gavel to Vice Chair Gatto.]
Number 1633
JON BITTNER, Staff to Representative Heinze, Alaska State
Legislature, testified that in December 2003 the task force
report on the electrical system in the Railbelt was released.
In its long-term energy needs section, the report said, within
the next 20 years it was determined that Alaska will need to
provide energy infrastructure for economic development, to
establish a unified system of operation, and to replace aging
generation [facilities]. He said HB 453 aids the Railbelt
utilities in achieving these needs and provides a stronger
framework in the statutes that large business enterprises like a
Railbelt JAA would need.
MR. BITTNER explained that this bill would ensure the utilities
could assume the economic leverage they need to replace aging
generators and old transmission lines. He commented that
Alaska's energy infrastructure is in need of repair and
replacement. According to the task force report released in
January 2004, most of the Railbelt's generation capacity is 20
to 40 years old and will become more costly to maintain and
replace. He concluded that the JAA being created by Chugach
Electric Company ("Chugach Electric"), Municipal Light and Power
(ML&P), and Golden Valley Electric Association (GVEA) will fill
the need to resolve these issues.
Number 1574
MR. BITTNER continued, saying the Railbelt report makes two
things clear. First, the cost of upgrading Alaska's
infrastructure will continue to increase. Second, there is a
need for a unified system operator. He said HB 453 helps to
address these issues by providing support for Alaska's
generation-transmission facilities that must undertake a huge
financial burden to maintain and expand the Railbelt's energy
infrastructure. He opined that utilities would gladly undertake
the necessary improvements if they could. All they need from
the legislature are better tools to develop them.
MR. BITTNER explained that with wholesale power agreements and
infrastructure improvements exempt from conventional rate
regulation, the participating utilities would feel secure in
committing to the necessary large-scale projects. Far from
removing all oversight from wholesale power agreements, he said,
HB 453 would remove an unnecessary burden of regulatory scrutiny
of wholesale power sales contracts and simply make the
utilities' transactions subject to contractual law, as are most
other contracts. The involved parties would make an agreement
based on a mutually acceptable contract that would cover all
aspects of the transaction over the course of that contract.
Mr. Bittner suggested if this unnecessary, onerous burden is
removed, the new Railbelt partnership will further reduce costs
to consumers, and said this deregulation is entirely in line
with existing JAA guidelines and statutes.
Number 1500
REPRESENTATIVE CRAWFORD said Chugach Electric had assured him
this bill doesn't affect consumers. However, if wholesale rates
doubled, this would surely affect the rates that consumers pay,
and he knew of no entity other than RCA [Regulatory Commission
of Alaska] that protects the consumer.
MR. BITTNER replied that this bill wouldn't remove regulations
to retail customers, and that RCA would still regulate rates for
them. He said the federal antitrust laws would cover most rate
changes for the wholesale agreements as well.
REPRESENTATIVE HEINZE proposed that one of the utility companies
involved should answer Representative Crawford's question, since
they have more expertise.
Number 1371
JOE GRIFFITH, Chief Executive Officer, Chugach Electric Company,
Anchorage, testified in support of HB 453, saying costs of the
generation and transmission of power will be passed to the
ultimate consumer, since that's the only source of money to pay
for the generation and transmission system. He informed the
committee that in places that don't have sufficient competition,
where there are cases of over-monopolistic service territories,
RCA has the responsibility to regulate.
MR. GRIFFITH pointed out that this does not describe the
proposed JAA, and said he thought the assumption was that the
JAA might not do business in a proper and appropriate manner.
But, he pointed out, it wouldn't make good business sense to the
JAA to price-gouge, and it's against the law. He asserted that
they'd do business in a reasonable manner and charge a
reasonable amount for their product, with margins, just as they
do today. He pointed out that in 38 or 40 states the wholesale
power and the distribution of the retail [power] isn't
regulated. He said Alaska is unique in this matter. He
explained that the current wholesale contracts that Chugach
Electric has couldn't be regulated if they hadn't written
regulation language in to start with, when they made the
contracts. He said he didn't see deregulation as a problem.
Number 1269
VICE CHAIR GATTO remarked, "Utilities, by their very nature, are
not a free-market enterprise."
MR. GRIFFITH responded that the wholesale side of the business
generally is.
VICE CHAIR GATTO replied that the utility isn't a free-market
enterprise, since there is no competing utility with parallel
power lines running down the road that customers could take
advantage of. He further said the only thing in place to
prevent a monopoly was a regulatory commission.
MR. GRIFFITH replied that this was correct for public utilities,
but not for JAAs, which aren't a public utility.
VICE CHAIR GATTO read from the bill, saying, "In the very first
words of the bill, 'An Act exempting from regulation', and in
the second word [line 2], 'wholesale agreements for the sale of
power'." Noting that he lives in the Matanuska-Susitna area, he
remarked, "We purchase our power wholesale, and very recently,
within the last year, there was a lawsuit that said, ... 'We
have been overcharged,' and the court said, 'Yes, you have.'"
He asked whether that is correct.
Number 1086
MR. GRIFFITH replied that Vice Chair Gatto was not exactly
correct. He explained:
It was a rate case, ... the first one that Chugach
Electric had taken forward since 1987. And in that
rate case we asked for a ... refundable rate increase.
We were granted that and then, through the process
before the regulatory commission, they determined that
those rates ... we asked for were not the ones that
should be placed, in fact. So we refunded the money
we had collected. There wasn't any overcollection
from the standpoint of price-gouging or anything; it
was that the rate-case determination was different.
VICE CHAIR GATTO responded:
And so the regulatory commission, then, was the savior
for protecting the consumer indirectly, because
Matanuska Electric refunded that money to the
consumers in their service area. That, ... to me, was
a very novel occurrence in that this commission was
the protector of this consumer. And without this
commission, this consumer would not have had any
refund, and that's what the decision was, that indeed
the consumer deserved a refund because of the rate
application change.
Whether or not there was an error, remember that
without -- that's why ... I'm concerned about this
exempting from regulation. Quite frankly, it scares
me. And I think that any public utility, by its very
nature of being a monopoly, certainly can have an
agreement with a union and say, "OK, you want an extra
$5 an hour? It doesn't matter to us. Just come back
to work, because all we've got to do is pass it on."
Without a ... regulatory agency, we, the consumer, are
in one pot of trouble. Am I correct?
MR. GRIFFITH replied that he couldn't entirely agree, and
reiterated that JAAs aren't public utilities, but are
wholesalers of generation and transmission assets. He said
contracts for generation, transmission facilities, and labor
aren't scrutinized or regulated by RCA except after the fact,
and then only because the authority to do this is written in the
contracts. He pointed out that the utilities themselves wrote
regulation into the contracts, and said he didn't think there
was evidence to say there'd been any example of misappropriation
of funds or gouging of consumers. He said he felt the process
Chugach Electric went through in the rate case was entirely
appropriate.
Number 1033
VICE CHAIR GATTO asked: If this legislation had been in place,
would that process have proceeded exactly as it did?
MR. GRIFFITH said yes, since those contracts weren't under a
JAA. He said even if the contracts were transferred, the
contractual language would remain the same.
Number 0978
TOM LOVAS, Chief Executive Officer, Four Dam Pool Power Agency,
testified, saying he was participating to understand the
requests of this legislation, to gather information, and to
understand the conditions surrounding the request for this
legislation. He also wanted to present information with regard
to the potential impact of HB 453 on the Four Dam Pool Power
Agency, now the sole JAA in operation in Alaska under the
authorizing legislation.
MR. LOVAS said HB 453 was not specifically initiated by the Four
Dam Pool Power Agency, but rather by the Railbelt utilities
previously mentioned. The board of directors of the Four Dam
Pool Power Agency hadn't yet taken a position on this
legislation, and thus he wasn't there to either support or
oppose it.
MR. LOVAS informed the committee that he did not think this
legislation, as it was described, would affect the Four Dam Pool
Agency at this time, but it might in the future when it could be
beneficial if the agency added additional projects to the four
hydroelectric units currently operated under the agency
framework, or if the Four Dam Pool Power Agency began to provide
power to nonmembers of the agency directly. He explained that
presently all sales at the wholesale level from the agency's
projects flow to the initial members of the agency, which are
the ultimate distribution utilities of that power. They make no
sales other than to members of the agency, except for
interruptible arrangements that may be from surplus energy. But
those, too, are organized through and by the initial members of
the agency. Consequently, wholesale power transactions of the
Four Dam Pool Power Agency are only within the membership of the
agency itself and not a third party.
MR. LOVAS explained that the priority of the projects is to
deliver power to those members and only those members of the
agency, each of which participates in the determination of the
budgets, rates, and charges. Sales of any surplus to third
parties are only by unanimous agreement of the members of the
agency. Their projects are governed by a power sales agreement
that was preexisting with the State of Alaska and continued on
through the arrangements by which the agency could acquire
projects from the state for the purposes of the member
utilities. Mr. Lovas said the authorizing legislation of the
initial project currently serves their needs and provides the
exemption from regulation that coincides with the exemption that
occurred in the prior projects, when they were owned by the
State of Alaska, under the power sales agreement.
[Vice Chair Gatto returned the gavel to Chair Anderson.]
Number 0772
REPRESENTATIVE ROKEBERG recalled the negotiations and the
difficulties with organizing the first JAA. He asked Mr. Lovas
if the Four Dam Pool and the legislation establishing that JAA
was the first one in Alaska. He also wanted to know if the Four
Dam Pool Power Project was regulated.
MR. LOVAS replied that his company was the first JAA in the
state. It is regulated by the Federal Energy Regulatory
Commission (FERC) with regard to the hydroelectric project
licensing issues. It is exempt from rate regulation by the RCA
under the terms of the existing legislation until such time as
any debt on the projects is fully paid.
Number 0700
REPRESENTATIVE ROKEBERG asked for the rationale behind this
arrangement.
MR. LOVAS responded that the original arrangement by which the
pool was formed included exemption from rate regulation for the
Four Dam Pool itself, while the projects were owned and operated
on behalf of the utilities by the State of Alaska. That
longstanding arrangement has continued on through this
transaction whereby the agency becomes the owner in lieu of the
State of Alaska. It's a continuation of a historical framework.
REPRESENTATIVE ROKEBERG asked, "Is the theory that the pool has
an existing contractual relationship in place, but then if
there's any transfer of your commodity, your energy, it's
between members that are already members to the agreement?"
MR. LOVAS affirmed that. The power sales agreement was specific
in that the power from the projects could only be used for the
purposes of the members of the pool that was originally
established back in the mid-1980s. There was no mechanism for
the agency to move power from the hydroelectric projects that
are incorporated in this to a third party that's not a member of
the agency itself.
REPRESENTATIVE ROKEBERG asked how many of the Four Dam Pool
Power Agency generators are tied to the grid.
MR. LOVAS replied that none are tied together with the grid at
this point, other than the delivery to the local distribution
cooperatives or municipalities.
Number 0600
REPRESENTATIVE ROKEBERG noted that even though they have a JAA,
they don't have a traditional grid whereby they can sell power
back and forth from one location to another.
MR. LOVAS concurred. He noted that development projects
underway would interconnect service territories, but the
priority obligation to the power would still apply from each
project to the initial member that was involved with that
project. He said there was one exception that might develop, a
potential segment of transmission from Petersburg to Kake; this
would involve surplus power, not the priority power that goes to
the members.
REPRESENTATIVE ROKEBERG asked Mr. Lovas, if he made a third-
party sale, whether he'd have to have the unanimous consent of
the membership, and whether this would be a regulated
arrangement with the third party.
MR. LOVAS replied that was correct, saying it could only be for
power not otherwise required by the members. He didn't believe
such a sale would be regulated.
REPRESENTATIVE ROKEBERG asked Mr. Lovas why a JAA model was
adopted for the Four Dam Pool Power Agency.
MR. LOVAS said the Four Dam Pool term was developed at the time
the long-term power sales agreement was established among the
five purchasing utilities of the project. He believed that term
had continued to be carried forward into the JAA as a matter of
familiarity.
Number 0423
REPRESENTATIVE ROKEBERG restated his question: "Why did you
become a joint action agency?"
MR. LOVAS replied that it was a mechanism available within the
state legislation, with statutes that provide a means by which a
number of public utilities would come together for the purpose
of owning and operating a project on their behalf. There was a
prior, available alternative to establish a framework.
Number 0367
MR. GRIFFITH of Chugach Electric said, "This is a very simple
change in the statutes we're asking for." He said he feels the
JAA is an organization whose time has come. The energy task
force had commented on the need for a joint system operator of
some nature. Mr. Griffith said ML&P and GVEA are saying they
want to be the joint system operator; they recognize the costs
and the challenges and are ready to act. He warned the
committee that there was no time to dally.
MR. GRIFFITH suggested it would be advantageous to not be
regulated in the wholesale sale of power, but to be regulated in
generation and transmission assets only; he felt this was
appropriate because the resulting contracts would be between
willing sellers and willing buyers, and contract law provides
for adjudicating contract disputes in superior court. He did
not feel that these contracts required regulation. He explained
that this bill would remove the "regulatory burden off of this
fledgling entity that we're creating." He told the committee
the burden consists of having to hire attorneys and build cases;
these activities are expensive and time consuming, and wouldn't
allow the JAA to be financially flexible.
MR. GRIFFITH referred to his own rate case that Vice Chair Gatto
had brought up, and commented that it cost Railbelt customers in
the neighborhood of $5 million. He said this money was
"absolutely nonproductive" and that he didn't think wholesale
contracts ought to be saddled with regulation. He said the
underpinning of Alaska's economy is the electrical system and
that the financing needed lack of regulation. He pointed out
that the courts are there to handle disputes.
Number 0087
CHAIR ANDERSON remarked that there'd be debate because of the
many people involved in this process. He had two questions, he
noted, and said, "One was the idea that, do you really need to
make this a statute, do you really need to codify this at this
time? Can't you already accomplish this without codification?"
MR. GRIFFITH replied that they could create a JAA today without
codification. He wasn't sure whether it would be regulated.
TAPE 04-21, SIDE A
Number 0040
CHAIR ANDERSON asked whether, without regulation, the consumer
would be hurt.
MR. GRIFFITH responded that this wouldn't happen because his
group wouldn't use poor business practices. He said they have a
very low margin and would be wholly owned subsidiaries of
publicly owned and publicly governed entities. He said he
couldn't imagine the boards of the utilities that would own the
JAA, or the assembly of the municipality, allowing somebody to
go out and gouge its own members.
REPRESENTATIVE ROKEBERG asked if Chugach Electric is currently
regulated for wholesale sales of power.
MR. GRIFFITH replied yes, by virtue of the wholesale contracts
it has, because it has required that in the contracts.
REPRESENTATIVE ROKEBERG asked if it is regulated by RCA by
contract or statute.
MR. GRIFFITH replied that it is regulated by RCA by contract,
but he believes the statutes were unclear about regulation on
the wholesale sale of power.
REPRESENTATIVE ROKEBERG asked if most utilities in the country
are privately held.
MR. GRIFFITH said most of the power in the U.S. is owned by
publicly held corporations owned by investors, and many of those
are regulated.
Number 0224
REPRESENTATIVE ROKEBERG asked for clarification on wholesale
sales regulation.
MR. GRIFFITH responded, "In the main, it is unregulated and sold
on almost a spot-market basis over several large power pools."
He added, "The United States is fairly well wired together,
except for Alaska."
REPRESENTATIVE ROKEBERG said this legislation would allow them
to set up a JAA and exempt them from regulation, but he was
unclear as to the intent of the legislation.
Number 0320
JIM POSEY, General Manager, Municipal Light and Power,
Anchorage, testified in support of HB 453, saying the intention
of HB 453 is to deregulate.
MR. GRIFFITH said it was their intention to create a JAA, and
they could do this under existing statute, but were suggesting
it would be a better business proposition to be unregulated by
the RCA. He said they would become the unified system operator
referred to in the energy task force report. He added they
would participate in joint upgrading projects and new power-
generation facilities.
Number 0393
VICE CHAIR GATTO said:
You mentioned a willing buyer and a willing seller.
Imagine ... that we were living in a Bush community
and had one store. We would still have a willing
buyer and a willing seller, but the store certainly
would still have the ability to make ... virtually any
price. ... They would certainly be able to raise the
price easily, wouldn't it?
MR. GRIFFITH replied that since they were unregulated, they
could set any price they chose.
Number 0455
VICE CHAIR GATTO stated:
I guess that's what troubles me about whenever we
establish a utility. We really need to maintain a
regulatory authority over a utility. Of course, as I
mentioned earlier, my concern is to remove the
regulatory ... authority and yet leave the utility in
place to establish, conceivably, it's own wholesale
power rates.
So, let me go to another thought. ... If, indeed,
we've looked at future power costs, would they then
still be controlled or somehow maintained by some
regulatory authority when these existing contracts
expired?
MR. GRIFFITH answered that if the JAA makes the contract and
this legislation is approved, then the answer is yes, post-2014.
Number 0546
TUCKERMAN BABCOCK, Manager of Government and Strategic Affairs,
Matanuska Electric Association (MEA), testified that MEA opposes
this bill, sees no reason to amend the existing statute, and
believes it provides for the creation of a JAA. He commented,
"The three utilities on line today that are intending to do that
are perfectly welcome to do so. They do not need to be
deregulated from the State of Alaska and the regulatory
commission in order to accomplish that goal." He asserted that
it was a misrepresentation of the energy task force report to
claim that these three utilities, acting together to form a JAA,
somehow would realize the recommendations of that report.
Urging the committee to read the report, he explained that the
task force recommended a unified system operator, not an
unregulated JAA.
MR. BABCOCK said MEA is concerned because it is the biggest
consumer in the Railbelt and has an all-requirements contract
with Chugach Electric that expires in 2014. He said he believes
MEA's perspective is really that of a consumer, as opposed to
looking for a way to maximize investment on generation and
transmission. Thus MEA doesn't see value in the legislature's
taking this special step to exempt this JAA from regulation.
Each of these utilities, under current state law, could go to
its own members today and request permission to deregulate.
However, he suggested, they've chosen to support the
"legislative end-run around their own member owners."
MR. BABCOCK said he didn't feel this action boded well for the
consumer; even if the committee wished to analyze this
legislation, anything of this significance should take more
consideration and caution before making such a major change to
how the utilities in the Railbelt are regulated. He mentioned
the need for the committee to make sure consumers and the member
owners of these cooperatives are protected.
Number 0723
REPRESENTATIVE GUTTENBERG noted that a JAA's members are the
utility companies members, so why would their members not
automatically vote to deregulate themselves?
MR. BABCOCK replied:
The various utilities that want to create the joint
action agency themselves become economically
deregulated. Once the membership has done that, I
think you would be more secure as a legislature in
agreeing to amend the joint action agency statute to
have the joint action agency itself be unregulated.
But at this point what you have before you are
monopoly utilities looking for a way to [have] aspect
of their business to be unregulated by the consumer
protection agency. And that makes Matanuska Electric
very nervous.
Number 0785
VICE CHAIR GATTO said MEA is a major wholesale purchaser and is
at the receiving end of contracts. He referred to a letter from
the RCA and asked that it be read into the record. It stated
[original punctuation provided]:
The Regulatory Commission of Alaska is opposed to
HB 453. This legislation holds the potential to
exempt from regulatory oversight most new electrical
generation in the Railbelt in future years. The only
effect of HB 453 is to provide an exemption from all
forms of regulatory oversight - this legislation does
nothing to otherwise enhance the functioning of joint
action agencies or define their operations. From the
perspective of the RCA, HB 453 provides no tangible or
measurable benefits to the consuming public while at
the same time creates significant potential for the
abuse of monopoly power in Alaska's most capital-
intensive industry.
The principal joint action agency under Alaska law is
the entity created to manage the "four-dam pool"
assets which were built with direct state
appropriations in the 1980's. This agency has
functioned reasonably well, but this has been the case
because of the unique circumstances which caused its
formation. Underpinning the formation of the four-dam
pool joint action agency was the fact that all of the
assets which were and are subject to agency management
were already constructed and that agreements were
already in place for the purchase and sale of
wholesale power from those projects. In summary, the
State, with heavy Legislative involvement, determined
that these investments were appropriate and that
management under the joint action agency concept was
the preferred course for the administration of these
facilities. AS 42.05.431(c) grants an exemption to
the four-dam pool agency from RCA jurisdiction but
that exemption is of limited duration.
In stark contrast, the exemption proposed in HB 453
would extend to an unknown number of new joint action
agencies for an undefined number of projects which
have not yet been planned, constructed, financed or
operated. Further, the exemption would be of
unlimited duration.
If exempt from RCA jurisdiction, new electrical
generation facilities in the Railbelt constructed
under the auspices of one or more new joint action
agencies would not be subject to ANY independent
review as to (1) their necessity or prudence; (2) the
reasonableness of their operating expenses; or (3) the
rates to be charged for power produced from these
facilities. The RCA believes that a grant of such
sweeping authority would be unprecedented in Alaska's
history.
A variety of problems could arise under this
legislation which would be very difficult to correct
once significant resources had been invested in a
particular project. One area lies in the scope of
projects which might be undertaken. For example, the
potential exists that a self-governed, unregulated
joint action agency could determine that the provision
of generation or transmission facilities might include
the construction of extensive private roadways,
pipelines, or even railroads. No independent
mechanism would exist to control or question such
decisions or investments. Similarly, no direct
mechanism would exist to control or question the
sizing of proposed plant investments or their fuel
sources.
In the arena of operations and maintenance, no agency
could review the reasonableness or prudence of
expenses of joint action agency facilities. Any and
all expenses would be included in the wholesale rates
to be charged to power distributors on a "take it or
leave it" basis.
The Legislature should understand that while joint
action agencies are identified in the final report of
the Energy Policy Task Force as a method for unified
system operation, the Task Force Report does not
mention or endorse the exemption of such agencies from
RCA regulation. The RCA agrees with the Energy Policy
Task Force recommendations that joint action agencies
can play a useful role in the planning, construction,
and operation of new generation and transmission
facilities. In the view of the RCA, constructive use
of the joint action agency concept must include
statutory provisions as to the scope, governance, and
operation of such agencies. The complete exemption of
such agencies from RCA jurisdiction does not solve any
identifiable problem except to satisfy a general
desire for the lessening of regulatory burdens.
The Legislature should understand that regional
interests of one utility could induce generation and
transmission decisions which, while favorable to one
utility, are not in the overall public interest. The
State needs to retain oversight of major
infrastructure decisions, and continued ratemaking
jurisdiction. Decisions on major infrastructure
projects are best reviewed either by the Legislature
or through an agency charged with siting and cost
analysis that embraces the Railbelt as a whole. This
will ensure major infrastructure decisions are made in
the public interest.
Multiple and serious costs to the consuming public
would arise from the blanket exemption proposed in
HB 453. HB 453 should not be enacted by the
Legislature.
CHAIR ANDERSON surmised that regulatory agencies would always be
opposed to deregulation.
Number 0844
MR. BABCOCK pointed out that any utility or JAA that invests in
generation and transmission is going to get a guaranteed return
in its rates that it's able to charge by the commission. He
offered that the debate that MEA, Homer [Electric], and others
had with Chugach Electric before the [RCA] on Chugach Electric's
latest rate case was the amount Chugach Electric thought it
needed to increase rates for retail and for wholesale, and the
amount the RCA, after a few years of analysis, determined to be
actually reasonable rates.
MR. BABCOCK said, in fact, the commission granted a rate
increase for Chugach Electric's retail consumers, although it
was smaller than the rate Chugach Electric had wanted. The
commission approved a rate decrease for the wholesale customers.
He suggested that regulation is the procedure that best protects
the consumers in Alaska, and he urged the committee not to
change it.
Number 0895
CHAIR ANDERSON asked for Mr. Babcock's reaction to Alaska Power
Association's support of HB 453.
MR. BABCOCK replied that he was not surprised that most monopoly
utilities would like to be deregulated. He said Mr. Yould [of
Alaska Power Association] represented an association of monopoly
utilities. He related that if MEA were a big generation and
transmission utility, it would probably be here as well, saying,
"Hey, great, deregulate us. We'd love to set our own rates
without any public scrutiny." He characterized MEA as the
biggest consumer in the Railbelt and said that's the perspective
he brought to bear.
Number 0982
MR. POSEY of ML&P spoke again in support of HB 453. He said a
year ago he became aware that the state was looking for money,
and thought they should have a conversation about what the state
was going to do with energy assets. He suggested the "Railbelt
folks" should be ready and should look for a tool in order to
accept assets such as the Alaska Intertie and Bradley Lake
[projects], if there is a decision to do that, "because taking
care of these assets takes ownership in order to invest money."
He continued:
If the state wasn't going to be putting money back
into infrastructure development, we - that is, the
Railbelt utility folks - had to be able to have a tool
to acquire the assets and go out to the market in
order to repair and/or expand these group of assets.
That is the total purpose. We are also looking at the
Railbelt energy study and the task force report that
says how much investment has to happen over the next
10 to 15 years. Once again, we need a vehicle because
all of us together make one medium-sized utility in
the Lower 48. So if we can't band together to do some
of these things, it would be very difficult for it to
happen at all. That dictates what happens to our
economy in the state of Alaska.
We're not seeking to deregulate our distribution, and
Mr. Tuckerman said we can go and invoke the
membership, but once you go for that, ... all of it's
deregulated, not just the wholesale. AEA [Alaska
Energy Authority] and AIDEA are not regulated for what
they do; they're basic assets. We're trying to walk
into their shoes in order to do the same thing that
they can do, if the state is not going to make major
investments into infrastructure. That's the total,
real reason we're here today. And that answer is, we
would like to help ourselves with that toolbox, and
this piece would help us get that done.
Number 1094
CHAIR ANDERSON asked Mr. Posey how he would respond to the fear
that the consumer would pay the price in a monopolistic arena.
MR. POSEY replied:
You heard Tom Lovas basically say that that's for
sales between themselves and the use of those assets
to provide for themselves. It's basically not
regulated. For us, those things that we're trying to
do, the assets that we use, for ourselves and anyone
who wanted to contract with us, to do the same thing
for a relative same price that we charge ourselves
would fall into that same group.
Or they can join the joint action agency and ... join
the larger group to do these things that have to be
done for the future investments in our utilities - no
more, no less. If you want to deal with the joint
action agency, you can join or you can buy from it.
But for our own purposes, we represent ... over 80
some percent, 90 percent of production of the
electricity in the Railbelt, and a large portion of
the interests. Current contracts [are] not covered by
this at all. In fact, I think MEA is interested in
building their own generation after the 4/2014 date.
They don't have to be unless they want to build their
generation as part of the joint action agency.
Number 1211
VICE CHAIR GATTO said:
It just reminds me of something: as a kid in a gang
they said, "You're either with me or you're against
me." What you're saying sounds awful similar to that,
that you can tell MEA, "They can join us or you're
against us." I don't think that's a fair appraisal of
MEA's position. Their position is ... to supply power
at the lowest possible penny per kilowatt-hour to
their consumers. And they do that essentially by
buying from someone else and reselling it. They do
the distribution costs, but, I think, ... about half
their cost is the purchase of power. So the purchase
price of their kilowatt has an enormous influence on
the rates that the customers pay. Now, ... you
wouldn't characterize the RCA as being opposed to
modernization, would you?
MR. POSEY responded:
The various interests here are interested in reducing
the total costs of future generation and transmission.
And we can only do that if we band together in order
to make these investments. Anyone else who would like
to do that is free to do it. MEA has asked me, if
they build new generation, will I buy from them ...
because they know they have to build to a certain
size. You read the task force report; it says
generation of this size should be built as a group.
It's not a gang. It's the recommendation of the
various task force that say, "Where are these areas?"
Fairbanks, and for the borough and the valley, they
need to act together as one group in order to do it -
not as a gang, but need to band together to do these
investments, just because of the total cost. And you
don't want to overbuild nor underbuild for that
future. It's not one gang against one person. It's
following that task force report, that all of us are
one medium-sized utility in the Lower 48. And that
includes MEA. And if we don't work together, and I do
mean work together, we can't get there, not at a
reasonable price for all the consumers.
Number 1453
MARK JOHNSON, Commissioner, Regulatory Commission of Alaska,
Department of Community and Regional Affairs, referred to the
position paper he'd submitted [text provided previously] and the
impact of this bill related to RCA jurisdiction, specifically,
two sections affected in AS 42.05. He expressed disappointment
in this legislation, saying the commission believes there is a
role for JAAs in carrying out identifiable needs in the energy
task force report, but this bill doesn't address any of the
problems identified in the report. He said RCA is against this
legislation and believes it represents bad public policy.
[HB 453 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:25 p.m.
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