SB 190-REGULATORY COMMISSION AK/REFUSE UTILITIES  9:05:44 AM CO-CHAIR SPOHNHOLZ announced that the first order of business would be CS FOR SENATE BILL NO. 190(FIN), "An Act extending the termination date of the Regulatory Commission of Alaska; relating to Regulatory Commission of Alaska regulations regarding refuse utilities; relating to the powers and duties of the legislative audit division; and providing for an effective date." 9:06:16 AM CO-CHAIR FIELDS moved to adopt Amendment 2 to CSSB 190(FIN), labeled 32-LS1525\W.3, Ambrose, 5/12/22, which read: Page 1, line 2, following "utilities;": Insert "relating to municipal refuse utilities;" Page 1, line 11, following "filings.": Insert "It is the intent of the legislature under sec. 4 of this Act to ensure the Regulatory Commission of Alaska and local decision makers make informed decisions in the public interest; it is not the intent of the legislature to interfere with normal rate- making methodologies." Page 2, following line 8: Insert new bill sections to read:  "* Sec. 3. AS 42.05.641 is amended to read: Sec. 42.05.641. Regulation by municipality. The commission's jurisdiction and authority extend to public utilities, including a municipal refuse  utility, operating within a municipality, whether home rule or otherwise. In the event of a conflict between a certificate, order, decision, or regulation of the commission and a charter, permit, franchise, ordinance, rule, or regulation of [SUCH] a local governmental entity, the certificate, order, decision, or regulation of the commission shall prevail.  * Sec. 4. AS 42.05.641 is amended by adding new subsections to read: (b) A municipality that seeks to privatize a municipal refuse utility that is subject to the provisions of this chapter shall submit a proposal to the commission for review. The commission may approve the proposal if the commission finds, after consideration of whether the proposal will result in higher rates for consumers, that privatization is in the public interest. A privatization proposal must include (1) a business plan that lists the prospective vendors; (2) the projected cost of private operation compared to continued municipal operation for a 10- year period; (3) disclosure of any potential conflicts of interest on the part of municipal officials; and (4) proposed methods (A) for periodically evaluating the utility's performance to avoid diminished service quality, interruption, or stoppage of work by the contractor; (B) to encourage competition and productivity; (C) for monitoring a contract in order to detect any contractor defaults, monitor penalties, and prepare for contract renewals or renegotiations and inflation; and (D) to address municipal employee displacement. (c) In this section, "privatize" means (1) selling, renting, leasing, transferring, or bequeathing a certificate of public convenience and necessity obtained by a municipality to another entity; or (2) subcontracting a portion of refuse collection in a particular service area to another entity.  * Sec. 5. AS 42.05.990(6) is amended to read: (6) "public utility" or "utility" includes every (A) corporation whether public, cooperative, or otherwise, company, individual, or association of individuals, their lessees, trustees, or receivers appointed by a court, that owns, operates, manages, or controls any plant, pipeline, or system for (i) [(A)] furnishing, by generation, transmission, or distribution, electrical service to the public for compensation; (ii) [(B)] furnishing telecommunications service to the public for compensation; (iii) [(C)] furnishing water, steam, or sewer service to the public for compensation; (iv) [(D)] furnishing by transmission or distribution of natural or manufactured gas to the public for compensation; (v) [(E)] furnishing for distribution or by distribution petroleum or petroleum products to the public for compensation when the consumer has no alternative in the choice of supplier of a comparable product and service at an equal or lesser price; (vi) [(F)] furnishing collection and disposal service of garbage, refuse, trash, or other waste material to the public for compensation; (vii) [(G)] furnishing the service of natural gas storage to the public for compensation; (viii) [(H)] furnishing the service of liquefied natural gas storage to the public for compensation; (B) plant, pipeline, or system for  furnishing collection and disposal service of garbage,  refuse, trash, or other waste material to the public  for compensation that is owned, operated, managed, or  controlled by a municipality;" Renumber the following bill sections accordingly. 9:06:18 AM CO-CHAIR SPOHNHOLZ objected for the purpose of discussion. 9:06:20 AM CO-CHAIR FIELDS noted the committee has been trying to refine this amendment in coordination with the Regulatory Commission of Alaska (RCA), Department of Law, and Legislative Legal Services. 9:06:45 AM CO-CHAIR SPOHNHOLZ requested Co-Chair Fields describe how Amendment 2 is different from "the earlier version" the committee was considering. CO-CHAIR FIELDS said Amendment 2 isn't substantively different, it is how the amendment is going to work. Amendment 2, he stated, would ensure the RCA does a review to make certain that proposed private ownership or proposed private operations do not adversely impact consumers. If a municipality is subsidizing municipal services, he continued, the intent is that the RCA back out those costs and look at an apples-to-apples comparison. 9:07:35 AM REPRESENTATIVE MCCARTY inquired whether the apples-to-apples evaluation would include looking at whether the subsidy is out of property tax. For example, he said, the cost may go up if a business takes over, but the taxation may go down. CO-CHAIR FIELDS responded yes. He explained that the amendment isn't written at that level of detail because the RCA would be able to do that analysis. 9:08:05 AM REPRESENTATIVE KAUFMAN requested the bill sponsor provide his view of Amendment 2. 9:08:17 AM SENATOR ROBERT MYERS, Alaska State Legislature, as prime sponsor of CSSB 190(FIN), noted that he saw the amendment yesterday. He responded that it is still a big policy call, and he would prefer to see it as its own legislation rather than tacked onto this bill. He said he can live with it, however, and would like for the bill to move to the next committee. 9:08:45 AM REPRESENTATIVE NELSON requested the RCA provide its opinion of Amendment 2. 9:09:01 AM ROBERT "BOB" PICKETT, Chair, Regulatory Commission of Alaska (RCA), responded that he saw the amendment about 25 minutes ago and has no opinion on it. He said the priority is to get this extension bill out of committee as soon as possible because the consequences of not doing so, and setting into motion the winddown procedure, would be severe and consequential for all Alaskans. CO-CHAIR FIELDS stated that the RCA sent some guidance that was attempted to be incorporated when the amendment was drafted, and that is what he was referencing regarding coordination. 9:09:39 AM CO-CHAIR SPOHNHOLZ removed her objection to Amendment 2. REPRESENTATIVE KAUFMAN objected to Amendment 2. 9:09:43 AM A roll call vote was taken. Representatives McCarty, Schrage, Snyder, Fields, and Spohnholz voted in favor of Amendment 2. Representatives Nelson and Kaufman voted against it. Therefore, Amendment 2 to CSSB 190(FIN) was adopted by a vote of 5-2. 9:10:20 AM CO-CHAIR FIELDS moved to report CSSB 190(FIN), as amended, out of committee with individual recommendations and the attached fiscal notes. There being no objection, HCS CSSB 190(L&C) was reported out of the House Labor and Commerce Standing Committee.