Legislature(1999 - 2000)
05/18/1999 09:05 AM House URS
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON UTILITY RESTRUCTURING
May 18, 1999
9:05 a.m.
MEMBERS PRESENT
Representative Bill Hudson, Chairman
Representative John Cowdery, Vice Chairman
Representative Pete Kott
Representative Norman Rokeberg
Representative Brian Porter
Representative John Davies
Representative Ethan Berkowitz
Representative Joe Green (alternate)
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CONSIDERATION OF ALASKA REGULATION COMMISSION APPOINTEES:
Wilfred K. Abbott - Anchorage
Patricia Maria Demarco - Anchorage
James S. Strandberg - Anchorage
G. Nanette Thompson - Anchorage
Burnell Smith - Eagle River
- CONFIRMATIONS ADVANCED
PREVIOUS ACTION
No previous action to record.
WITNESS REGISTER
WILFRED K. ABBOTT, Appointee
to the Alaska Regulatory Commission
9701 Arlene
Anchorage, Alaska 99515
Telephone: (907) 248-3798
POSITION STATEMENT: Testified as appointee to the Alaska
Regulatory Commission.
PATRICIA MARIA DeMARCO, Appointee
to the Alaska Regulatory Commission
8101 Oney Circle
Anchorage, Alaska 99516
Telephone: (907) 346-8385
POSITION STATEMENT: Testified as appointee to the Alaska
Regulatory Commission.
JAMES S. STRANDBERG, Appointee
to the Alaska Regulatory Commission
3217 Purdue Street
Anchorage, Alaska 99508
Telephone: (907) 278-5812
POSITION STATEMENT: Testified as appointee to the Alaska
Regulatory Commission.
G. NANETTE THOMPSON, Appointee
to the Alaska Regulatory Commission
1031 West 4th, Number 200
Anchorage, Alaska 99501
Telephone: (907) 269-5267
POSITION STATEMENT: Testified as appointee to the Alaska
Regulatory Commission.
BURNELL SMITH, Appointee
to the Alaska Regulatory Commission
No address provided.
Eagle River, Alaska
No telephone provided.
POSITION STATEMENT: Testified as appointee to the Alaska
Regulatory Commission.
STEPHEN CONN
Alaska Public Interest Research Group
PO Box 101093
Anchorage, Alaska
Telephone: (907) 278-3661
POSITION STATEMENT: Encouraged the committee to promote an
education process for the new appointees.
ERIC YOULD
Alaska Rural Electric Cooperative Association
703 West Tudor
Anchorage, Alaska 99503
Telephone: (907) 561-6103
POSITION STATEMENT: Commended the choice of appointees.
ACTION NARRATIVE
TAPE 99-22, SIDE A
Number 0001
CHAIRMAN BILL HUDSON called the House Special Committee on Utility
Restructuring meeting to order at 9:05 a.m. Members present at the
call to order were Representatives Hudson, Cowdery, Kott, Rokeberg,
Porter, Davies, Berkowitz and Green (alternate).
CONSIDERATION OF ALASKA REGULATION COMMISSION APPOINTEES
CHAIRMAN HUDSON announced that the only order of business would be
the consideration of the appointments to the Alaska Regulatory
Commission.
Number 0080
WILFRED K. ABBOTT, Appointee to the Alaska Regulatory Commission,
said that he was excited to be a part of this changing regulatory
arena. He informed the committee that he was in the U.S. Air Force
for 28 years. After retirement from the U.S. Air Force, Mr. Abbot
was a Building Official for the Municipality of Anchorage for a
year during the waning years of construction. Then he was the
Director of the Department of Public Works, Municipality of
Anchorage, for a short time after which he became the Director of
the Office of Emergency Management. Subsequently, Mr. Abbott
worked in the private sector for an environmental firm for a year.
Finally, Mr. Abbott moved to his current position as the Director
of Housing Operations, Public Housing Division, Alaska Housing
Finance Corporation. Mr. Abbott commented that there is a lot of
hard work ahead and he is a hard worker.
Number 0346
REPRESENTATIVE COWDERY commented that he met Mr. Abbott when he
worked for the Municipality of Anchorage. Mr. Abbott is very
organized, is a hard worker, and would be an asset to this
commission. Representative Cowdery noted that Mr. Abbott was a
prisoner of war in Vietnam for six years.
REPRESENTATIVE GREEN asked Mr. Abbott if he was aware of the
variety of issues that he would have to pass judgement on.
MR. ABBOTT replied, yes and recognized that the commission is a
very busy body with varied issues. Mr. Abbott said that he looked
forward to those aspects and thrives on such.
REPRESENTATIVE PORTER concurred with Representative Cowdery's
comments and welcomed Mr. Abbott.
REPRESENTATIVE DAVIES inquired as to Mr. Abbott's impression of the
emerging retail competition for telephone utilities and possibly
electric utilities in the future.
MR. ABBOTT said that he believed that enterprise should be allowed
to proceed as far as is in the public's interest.
Number 0649
PATRICIA MARIA DeMARCO, Appointee to the Alaska Regulatory
Commission, testified via teleconference from Anchorage. She said
that she was honored to be suggested for appointment to the Alaska
Regulatory Commission. She felt she has been preparing for this
position for most of her adult life. Ms. DeMarco informed the
committee that she has a doctorate in genetics and has an empirical
scientists approach to information analysis. At present, there is
an intersection between the march of technology and the march of
information as a basis for business as well as daily life.
Regulatory procedure is mired in a tradition which requires
innovation and creativity to accommodate the speed with which this
industry is evolving. Alaska is a great challenge in the
regulatory world due to wide geographic disparities. If the state
desires all citizens have the right to appropriate infrastructure
and utility amenities, there must be a balancing of the risks and
opportunities in a cost efficient manner.
MS. DeMARCO informed the committee that she has served on the
regulatory staff of the Connecticut commission during the time that
state was dealing with the deregulation of electric, gas, and
telecommunications industries simultaneously. Although the
conditions in Connecticut are vastly different than Alaska, the
need to accommodate change in a compressed time frame is common to
many such commissions. She expressed interest in bringing modern
technology to the entire state. The utility infrastructure is a
significant component of the economic future of Alaska. The
ability to integrate the utility infrastructure efficiently is a
tremendous opportunity the commission can shape. In conclusion,
Ms. DeMarco commented that she looked forward to working with the
committee.
REPRESENTATIVE GREEN asked if in Ms. DeMarco's work with
Connecticut, she had become familiar with the type of joint federal
and state board of universal service as in Alaska.
MS. DeMARCO said that was not the case in Connecticut because
Connecticut had more stringent rules than the federal government in
most areas. The only area of joint jurisdiction was the nuclear
regulatory review of the nuclear power plant.
REPRESENTATIVE GREEN noted that this joint relationship could be a
major issue and was happy that Ms. DeMarco was up to speed on that
issue.
Number 0986
REPRESENTATIVE DAVIES commented that Ms. DeMarco's background will
probably be in demand as this process continues. He inquired as to
her thoughts of the different challenges which face deregulation of
electric utilities given the ownership patterns in Alaska.
MS. DeMARCO indicated that the lack of connectivity among
communities would be more of an issue than ownership. The
deregulation issues are more defined by how service is provided to
rural areas and therefore, she was interested in technologies that
could provide more cost efficient service in areas that are not on
the connected grid. She noted the importance of tying the
structure of the industry to the functions being served in the
communities.
CHAIRMAN HUDSON expressed the hope that Ms. DeMarco and the other
members would provide some creativity. He indicated the need to
review this issue in the urban as well as rural setting. He
presumed that Ms. DeMarco would be willing to travel.
MS. DeMARCO said she looked forward to traveling throughout Alaska.
She believed the cooperatives were a good structure from which to
work. She informed the committee that she has worked for a
municipal electric cooperative which represented five communities,
one of which was only 14 square miles. There were some interesting
problems in Connecticut and there are pockets of rural communities.
REPRESENTATIVE PORTER congratulated Ms. DeMarco and commented that
she must find someone suitable to replace her at the Anchorage
Economic Development Corporation (AEDC).
REPRESENTATIVE ROKEBERG echoed Representative Porter's comments.
He noted that Ms. DeMarco has done an extraordinary job at AEDC.
Number 1251
JAMES S. STRANDBERG, Appointee to the Alaska Regulatory Commission,
testified via teleconference from Anchorage. He informed the
committee that he was born in Anchorage and has worked extensively
in the public and private sector. Presently, Mr. Strandberg is a
consulting engineer in private practice. He pointed out that the
bulk of his work has been in energy systems both in the Railbelt
and rural power systems. Mr. Strandberg said that he was honored
to have been selected and believed he could be of service. He
echoed Ms. DeMarco's statements regarding the winds of change
across the nation with regard to utility services. Although his
experience has been primarily in energy and power systems, he noted
that he was conscious of the equal importance of telecommunications
infrastructure. There is an opportunity in Alaska and these
systems will be important in the way Alaska develops. In
conclusion, Mr. Strandberg looked forward to serving on the
commission.
REPRESENTATIVE GREEN commented that Mr. Strandberg had an
impressive dossier. He wondered if Mr. Strandberg would have to
guard against any potential or perceived conflict of interest.
MR. STRANDBERG stated that he would transfer his projects to
colleagues in total in order to eliminate any conflict of interest.
He did not believe a commissioner could function without doing
such.
REPRESENTATIVE GREEN mentioned that Mr. Strandberg is a civil and
mechanical engineer.
Number 1503
REPRESENTATIVE DAVIES welcomed Mr. Strandberg's experience on the
commission. He requested that Mr. Strandberg address the
challenges Alaska faces with respect to universal service and
general approaches to the many rural communities.
MR. STRANDBERG acknowledged that he would need to do much study on
universal service. With regard to general approaches, he said that
the commission must consider the needs of the rate payer because
the goal is to provide reliable, affordable, and dependable service
to each rate payer. He reiterated that utilities will be
instrumental in the competitiveness of the state. Therefore, there
should be strides for good service in the urban areas as well the
fringes of those urban areas. With regard to rural areas, Mr.
Strandberg has participated in community energy projects which are
directed towards replacing power cost equalization (PCE) in rural
areas. Community energy projects are very important for the PCE
dilemma.
REPRESENTATIVE ROKEBERG expressed curiosity in Mr. Strandberg's
relation to the former Commissioner Harold Strandberg and a friend
of Representative Rokeberg's, Sig Strandberg (ph).
MR. STRANDBERG informed the committee that the former commissioner
was his uncle and that Sig Strandberg (ph) is his brother.
CHAIRMAN HUDSON commented that he liked what he heard from this
conversation and was interested in further examination, evaluation
and suggestions regarding community energy projects.
REPRESENTATIVE ROKEBERG asked if Mr. Strandberg felt that the
Alaska Regulation Commission should have oversight in the refuse
industry or the small water utilities.
REPRESENTATIVE BERKOWITZ asked if Mr. Strandberg believed that the
commission should do what the legislature allows.
MR. STRANDBERG said that he was not supportive of regulation unless
it is clearly shown to be necessary. While he viewed the refuse
industry as an energy source, he could not comment on the
regulatory side at this time.
Number 1847
G. NANETTE THOMPSON, Appointee to the Alaska Regulatory Commission,
testified via teleconference from Anchorage. She informed the
committee that she graduated from Stanford University in 1978,
after which she attended the University of Washington School of
Law. Ms. Thompson is a member of the Alaska Bar and the Washington
Bar, but she has practiced in Alaska since her graduation. She
began working in private practice for a large Seattle-based firm.
The she worked for a year in the Attorney General's office, after
which she worked for a small Anchorage firm. During her time at
the small Anchorage firm, she worked for utility and government
clients. In 1988, Ms. Thompson started her own firm and has been
in practice for seven years and has continued to represent utility
and municipal clients. She also works as a contract hearing
officer for various state agencies. Ms. Thompson left private
practice in 1995 and took over the Alaska Public Utilities
Commission. She was confirmed by the legislature, but left the
commission when the supreme court ruled that the seat to which she
had been appointed was not vacant. Since that time, Ms. Thompson
returned to the Attorney General's office in the Oil Gas and Mining
Section. She mentioned that she was familiar with SB 133 and is
familiar with the audits that were the basis for this project.
Many of the current APUC staff, for whom she has great respect,
were present when Ms. Thompson was there in 1995. She recognized
the need for change in the organization and its operations. The
passage of the Telecommunications Act in 1996 was the beginning of
massive changes in the regulation of utilities which is the case
now with electric utilities. She looked forward to the opportunity
to be a part of those changes. Ms. Thompson believed that SB 133
contains the tools enabling the new commission to respond to the
changes in the regulatory environment.
REPRESENTATIVE COWDERY commented that a past APUC commissioner, Don
Schroer, gave Ms. Thompson high marks.
REPRESENTATIVE PORTER also mentioned that former commissioner, Don
Schroer, had conveyed to him that he enjoyed working with Ms.
Thompson. Representative Porter was pleased to see Ms. Thompson's
reappointment to the commission.
Number 2044
REPRESENTATIVE DAVIES asked Ms. Thompson to comment on the added
flexibility that was attempted to be built into the hearing
structure. He asked if she felt that would allow the commission to
move through the backlog more rapidly than in the past.
MS. THOMPSON replied yes. She supported the options given to the
commission to resolve the various issues the commission faces. The
flexibility should allow the work to be accomplished more
efficiently and more rapidly.
REPRESENTATIVE GREEN asked if Ms. Thompson felt this new group
would be up to the task, recognizing that there is a learning
curve, a large backlog, and a heavy work load.
MS. THOMPSON recognized that as a tremendous challenge for the
group, but noted that the group contains a variety of expertise.
Ms. Thompson viewed the commission as having a dual task to first
address the backlog in cases and second to look ahead with regard
to how the commission will do business. She believed the group to
be "up to it."
REPRESENTATIVE GREEN inquired as to Ms. Thompson's feelings on the
joint federal and state board of universal services, in particular
a former member of the national board was able to bring a
significant number of dollars to the state. He asked if she had
any proposals to regain a seat on the board.
MS. THOMPSON agreed that it was a loss, but she did not have a
specific plan to regain a seat.
Number 2190
REPRESENTATIVE ROKEBERG noted that a key area of concern as
identified by the NRA report and the testimony on HB 183 and SB
133, was the timing of this issue. Senate Bill 133 contains a
section which demands regulations by a date certain. He inquired
as to Ms. Thompson's thoughts on that issue; can the commission
develop regulations meeting statutory requirements in six months?
MS. THOMPSON stated that the legislature has told the commission it
must do so and although, it will be a challenge, the commission
will do so. She believed that there is a deadline in the
legislation for the end of 1999.
REPRESENTATIVE ROKEBERG mentioned that there was a significant
amount of controversy surrounding the advocacy sections of SB 133.
He asked how she would perceive the direction of the statute to the
commission in that area.
MS. THOMPSON said that it is appropriate to have a separate
advocacy staff within the commission. She informed the committee
that one of the first issues she will address will be which of the
existing staff and that hired will be part of the advocacy staff.
REPRESENTATIVE ROKEBERG pointed out that some testimony commented
on the apparent or appearance of conflict of interest by staff
shifting. Will the direction of the statutory change help that?
MS. THOMPSON responded that should solve the problem. She
explained that the concern was that in some cases the staff would
be an advocate while on other cases, the staff would be an advisor.
The criticism, from the industry and the commission, was that there
was not the help available to resolve cases with a clear line.
Therefore, placing people always in the role of advocate should
alleviate that problem. If there is any difficulty in implementing
that, she predicted the commission would probably voice that next
session.
CHAIRMAN HUDSON moved on to Burnell Smith who he noted he has
worked with for a long time. They worked together when Chairman
Hudson was the Chair of the House Oil & Gas Committee. He
commented that Mr. Smith is a fine citizen and asset to this state.
Number 2369
BURNELL SMITH, Appointee to the Alaska Regulatory Commission, said
that he was honored to be in this position. He informed the
committee that he graduated as an engineer in technology from Texas
A&M in 1973. Since graduation, Mr. Smith has been in project
construction and came to Alaska in 1980 as a project engineer at
Tesoro for a construction company. He fell in love with the state
and returned in 1983 to work with Tesoro. Mr. Smith has worked for
Tesoro for 16 years as project management, project engineer, and
part-time manager of government affairs and special projects for
the past six years. He indicated that his project background would
be of some benefit to the commission. He noted that he did not
have a telecommunications background, but does have a background in
electric utilities. Mr. Smith emphasized that Alaska is growing
and will bloom in utilities in the future.
REPRESENTATIVE PORTER commented that he has worked well with Mr.
Smith in the past and he has always given fair and objective input.
TAPE 99-22, SIDE B
REPRESENTATIVE BERKOWITZ mentioned that he appreciated all the help
Mr. Smith provided when there was controversy over a pipeline in
Representative Berkowitz's district.
REPRESENTATIVE GREEN said that it is great for another engineer to
be on the commission. He asked if Mr. Smith foresaw any potential
conflict of interest with regard to issues that he may be asked to
regulate.
MR. SMITH informed the committee that Tesoro does have an issue in
front of the docket with the commission. He stated that he would
recuse himself from that docket and should be able to remove
himself from any conflict of interest. He noted that he sat on the
Board of Marine Pilots for almost five years, and he has had to
recuse issues in areas involving the Board of Marine Pilots.
REPRESENTATIVE COWDERY commented that the Governor made a good
choice. He hoped that the commission recognized the areas which
need improvement within the commission as well as dealing with the
backlog. Representative Cowdery was impressed with all the members
and he looked forward to working with them.
MR. SMITH noted that he did have a good work ethic and this
commission looks as if there will be much work involved.
REPRESENTATIVE ROKEBERG echoed Representative Porter's comments
regarding Mr. Smith.
CHAIRMAN HUDSON announced that he would like to schedule a briefing
at the commission in the fall. He also indicated the need for the
commission to keep the committee in the loop. For the record,
Chairman Hudson noted that the Alaska Rural Electric Cooperative
Association (ARECA) does not have any problems with any of the
appointees, although there is concern regarding the lack of
institutional knowledge with the group. Furthermore, Jim Rowe
expressed concern that there is no one from telecommunications
which Chairman Hudson believed would be a challenge for the
commission.
Number 2231
STEPHEN CONN, Alaska Public Interest Research Group, commented that
these are extremely complex issues. The learning curve on
telephone deregulation and electric restructuring is immense.
Therefore, there will be quite a challenge for new people to deal
with these issues and receive "centered" guidance, that is to say
unbiased guidance. He acknowledged that even he would have a
slant, from the rate payer and consumer side. Mr. Conn expressed
concern that these new faces will immediately begin to address many
issues related to utilities. He said that many of the committee
members are vastly more knowledgeable with such issues than the
appointees, although he was unsure as to how to remedy the
situation. Mr. Conn mentioned that one possibility would be to
obtain outside consultants such as CH2M HILL. He suggested and
encouraged the committee to underwrite through appropriations, a
learning process for the new appointees in order to engage
expertise.
REPRESENTATIVE ROKEBERG recalled that SB 133 is somewhat quiet
regarding consumer protections and therefore, he assumed that
existing statute covers those areas. He asked if Mr. Conn would
like to suggest any changes to the consumer complaints aspect.
MR. CONN commented that Representative Rokeberg's legislation on
the consumer's bill of rights for electric restructuring was
forthright and a model for complaint resolution. He indicated that
Representative Rokeberg's legislation should be given additional
emphasis and passed out. There is a tremendous need for changes
which would remain even without restructuring. Mr. Conn indicated
that utility restructuring and the consumer side must go "hand in
glove." He mentioned that he saw how an uncertain mandate
regarding consumers prejudiced the work of the old APUC. It should
be made clear what is under the commission's jurisdiction.
Number 1900
ERIC YOULD, Alaska Rural Electric Cooperative Association, stated
that ARECA is pleased with this new commission, in particular with
the appointments of Ms. Thompson and Ms. DeMarco.
REPRESENTATIVE PORTER pointed out that in this committee's struggle
with this issue, the committee "took out professional
qualifications and put in a restriction on political affiliations."
He said, "For the record, these five represent one Republican, one
Democrat, and three non-partisans; precisely what this committee
(indisc.)."
REPRESENTATIVE ROKEBERG recommended that the new appointees get
copies of the NRA report on the commission, the Joint Committee on
Electric Utility Restructuring, the CH2M HILL report, the minutes
regarding HB 183 and SB 133, and the record of the House Special
Committee on Utility Restructuring. That information would provide
the appointees with much background.
CHAIRMAN HUDSON announced that staff would provide the appointees
with a packet. He congratulated the appointees and was excited
about working with the new commission.
Number 1758
REPRESENTATIVE KOTT moved to forward the names of Wilfred K.
Abbott, Patricia Maria DeMarco, James S. Strandberg, G. Nanette
Thompson, and Burnell Smith for the Alaska Regulatory Commission.
There being no objection, it was so ordered.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Utility Restructuring meeting was adjourned at
10:10 a.m.
| Document Name | Date/Time | Subjects |
|---|