HB 394-RCA REGULATE NATURAL GAS STORAGE FACILITY  4:31:04 PM CHAIR SUMNER announced that the next order of business would be HOUSE BILL NO. 394, "An Act relating to the Regulatory Commission of Alaska and regulation of the service of natural gas storage and liquefied natural gas import facilities; relating to records of the Regulatory Commission of Alaska; relating to rates established by the Regulatory Commission of Alaska; and providing for an effective date." 4:31:22 PM The committee took an at-ease from 4:31 p.m. to 4:32 p.m. 4:32:31 PM REPRESENTATIVE CARRICK moved to adopt Amendment 1 to HB 394, labeled 33-LS1441\U.1, Nauman, 4/4/24, which read as follows: Page 1, lines 2 - 3: Delete "relating to records of the Regulatory  Commission of Alaska;" Page 2, line 27, through page 3, line 4: Delete all material. Renumber the following bill sections accordingly. Page 4, lines 17 - 27: Delete all material. Renumber the following bill sections accordingly. 4:32:49 PM REPRESENTATIVE WRIGHT objected. 4:32:53 PM REPRESENTATIVE CARRICK explained that Amendment 1 would remove the confidentiality requirement of HB 394 and cited her questions to the RCA during the previous bill hearing as reason for the proposed amendment. 4:34:08 PM REPRESENTATIVE WRIGHT asked for the opinion of the bill sponsor. 4:34:24 PM REPRESENTAIVE TOM MCKAY, Alaska State Legislature, on behalf of the bill sponsor, the House Resources Standing Committee, on which he serves as chair, deferred the answer regarding HB 394 to Trevor Jepson. 4:34:43 PM TREVOR JEPSON, Staff, Representative Tom McKay, Alaska State Legislature, on behalf of the bill sponsor, the House Resources Standing Committee, on which Representative McKay serves as chair, explained that there is currently a petition process that a company has to apply for to receive confidentiality of financial records. He said that the bill sponsor strongly opposes Amendment 1 and warned that the proposed legislation would be "moot, null, and void" if Amendment 1 were to pass. 4:35:28 PM A roll call vote was taken. Representatives Carrick and Fields voted in favor of Amendment 1 to HB 394. Representatives Saddler, Wright, Prax, Ruffridge, and Sumner voted against it. Therefore, Amendment 1 failed to be adopted by a vote of 2-5. 4:35:57 PM CHAIR SUMNER moved to adopt Amendment 2 to HB 394, labeled 33- LS1441\U.2, Nauman, 4/4/24, which read as follows: Page 1, line 2: Delete "and liquefied natural gas import  facilities" Page 1, line 7: Delete "AS 42.05.711(q), (s), and (w)" Insert "AS 42.05.711(q) and (s)" Page 3, lines 16 - 18: Delete all material. Renumber the following bill sections accordingly. REPRESENTATIVE SADDLER objected for the purpose of discussion. 4:36:11 PM TREVOR JEPSON said that Amendment 2 would allow for certain dual jurisdiction liquified natural gas (LNG) import facilities. In response to a question from Representative Saddler, he indicated that [Representative McKay's staff] had not found any further information regarding dual regulatory authority. 4:37:48 PM REPRESENTATIVE FIELDS observed that Amendment 2 was "better written" and "more concise." CHAIR SUMNER stated that he would withdraw Amendment 2, then announced that without objection, it was so ordered. 4:38:11 PM The committee took a brief at-ease at 4:38 p.m. 4:38:40 PM CHAIR SUMNER moved to adopt Amendment 3 to HB 394, labeled 33- LS1441\U.3, Nauman, 4/4/24, which read as follows: Page 1, lines 2 - 4: Delete "and liquefied natural gas import  facilities; relating to records of the Regulatory  Commission of Alaska; relating to rates established by  the Regulatory Commission of Alaska; and providing for  an effective date" Page 1, line 7: Delete ", (s), and (w)" Insert "and (s)" Page 2, line 3, through page 3, line 4: Delete all material. Renumber the following bill sections accordingly. Page 3, lines 16 - 18: Delete all material. Renumber the following bill sections accordingly. Page 4, lines 9 - 27: Delete all material. Renumber the following bill sections accordingly. Page 4, line 29: Delete all material. REPRESENTATIVE WRIGHT objected for the purpose of discussion. 4:39:01 PM REPRESENTATIVE MCKAY stated support for Amendment 3. MR. JEPSON said that Amendment 3 would clarify language that should've already be considered. 4:39:35 PM REPRESENTATIVE WRIGHT removed his objection. REPRESENTATIVE SADDLER objected for the purpose of discussion. 4:40:08 PM REPRESENTATIVE SADDLER inquired as to how any given federal authority might play a role in the cost of LNG and asked for an example of a facility where federal authority is included in the facilities cost calculations. MR. JEPSON responded that he did not currently have an answer to those questions. 4:41:16 PM ROBERT DOYLE, Chair, Regulatory Commission of Alaska, said he would need to research to answer Representative Saddler's question. REPRESENTATIVE SADDLER clarified that he would like to know the downstream effects of Amendment 3 but added that he was "fairly satisfied." 4:42:21 PM JOHN SIMS, President, Enstar National Gas, told Representative Saddler that he couldn't answer his question at the time and made clear that ENSTAR Natural Gas Company is in support of Amendment 3. 4:43:37 PM REPRESENTATIVE SADDLER removed his objection. There being no further objection, Amendment 3 was adopted. 4:43:51 PM REPRESENTATIVE FIELDS moved to adopt Amendment 4 to HB 394, as amended, labeled 33-LS1441\U.4, Nauman, 4/4/24, which read as follows: Page 1, lines 3 - 4: Delete "relating to rates established by the  Regulatory Commission of Alaska;" Page 2, lines 3 - 26: Delete all material. Renumber the following bill sections accordingly. Page 4, lines 9 - 16: Delete all material. Renumber the following bill sections accordingly. REPRESENTATIVE WRIGHT objected. 4:44:08 PM REPRESENTATIVE FIELDS explained that Amendment 4 would help to keep the costs of stored gas low for a utility by changing the fair market value language in HB 394. REPRESENTATIVE MCKAY pointed out that HB 394 would cover all gas and emphasized that the price of gas is too unpredictable to justify the "fair market value" language in HB 394. He stated opposition to Amendment 4. REPRESENTATIVE FIELDS explained the proposed amendment using a hypothetical example. REPRESENTATIVE MCKAY deferred the question to Mr. Doyle and commented that it is not his intention to oversell stored gas under HB 394. 4:47:44 PM CHAIR SUMNER summarized Amendment 4 and invited Mr. Doyle to speak to it. 4:48:28 PM MR. DOYLE said that he agrees with the bill sponsor that gas prices are established through long term contracts which are not influenced by exogenous events. 4:49:32 PM REPRESENTATIVE SADDLER asked Mr. Doyle what the RCA includes in its definition of costs associated with the term "oil and gas fields." MR. DOYLE answered by using an example of how a long-term gas storage contract might be conducted and further gave context to his answer by explaining the process that a contract goes through to come to fruition. REPRESENTATIVE SADDLER asked if the value of the oil and gas itself in the field is not worth more than the acquisition cost. CHAIR SUMNER explained that the combined cost of the cushion gas and the working gas would be comparable to the other rates and shared his belief that the price would fluctuate by "market magicians." 4:52:48 PM MR. JEPSON said that the fair market value language relates only to assets of oil and gas companies, not the gas itself. 4:53:52 PM A roll call vote was taken. Representatives Fields and Carrick voted in favor of Amendment 4 to HB 394. Representatives Saddler, Prax, Wright, Ruffridge, and Sumner voted against it. Therefore, Amendment 4 failed to be adopted by a vote of 2-5. 4:54:15 PM REPRESENTATIVE FIELDS moved Amendment 5 to HB 394, as amended, labeled 33-LS1441\U.8, Nauman, 4/17/24, which read as follows: Page 1, lines 3 - 4: Delete "relating to rates established by the  Regulatory Commission of Alaska;" Page 2, lines 3 - 26: Delete all material. Renumber the following bill sections accordingly. Page 4, lines 9 - 16: Delete all material. Renumber the following bill sections accordingly. REPRESENTATIVE SADDLER objected. 4:54:27 PM REPRESENTATIVE FIELDS explained that Amendment 5 would give the RCA the authority to review data and records related to confidentiality of gas prices and sales. 4:55:09 PM The committee took an at-ease from 4:55 p.m. to 5:00 p.m. 5:00:16 PM REPRESENTATIVE MCKAY stated that Amendment 5 is not necessary. REPRESENTATIVE FIELDS asked Mr. Doyle if the proposed legislation would need Amendment 5. 5:01:02 PM MR. DOYLE responded that the way HB 394 is currently written is sufficient to give the RCA the authority to review financial records as necessary. 5:01:58 PM REPRESENTATIVE FIELDS [moved to] withdraw Amendment 5. [There being no objection, Amendment 5 was withdrawn.] 5:02:10 PM REPRESENTATIVE RUFFRIDGE moved to report HB 394, as amended, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE CARRICK objected. 5:02:30 PM A roll call vote was begun and subsequently voided. 5:02:57 PM The committee took an at-ease from 5:02 p.m. to 5:03 p.m. 5:03:05 PM A roll call vote was taken. Representatives Wright, Saddler, Prax, Ruffridge, and Sumner voted in favor of reporting HB 394, as amended, out of committee with individual recommendations and the accompanying fiscal notes. Representatives Carrick and Fields voted against it. Therefore, CSHB 394(L&C) was reported out of the House Labor and Commerce Standing Committee by a vote of 5-2.