CS FOR SENATE BILL NO. 133(RLS) am "An Act creating and relating to the Regulatory Commission of Alaska and transferring to it certain powers and duties of the Alaska Public Utilities Commission; repealing the Alaska Public Utilities Commission; relating to the powers of the chair of the Regulatory Commission of Alaska; relating to regulatory cost charges for public utilities and pipelines; relating to the appellate procedures of the Regulatory Commission of Alaska; relating to the Alaska Oil and Gas Conservation Commission; and providing for an effective date." Co-Chair Therriault MOVED to ADOPT Amendment 2 (copy on file). Representative Grussendorf OBJECTED. PAT CARTER, STAFF, SENATOR PEARCE explained Amendment 2. He observed that the amendment removes section 28, which authorizes the new Regulatory Commission of Alaska to employ one additional hearing office. He noted that this position is in the operating budget as passed by both bodies. The language is redundant. There being NO OBJECTION, Amendment 2 was adopted. Amendment 3 was WITHDRAWN. Representative J. Davies MOVED to ADOPT Amendment 4 (copy on file). The amendment would add the following language in section 7: "A party may file a petition for reconsideration of, or an administrative appeal of, a decision by a hearing officer, an arbitrator, or an administrative law judge that has been approved by the commission, or a decision of a hearing panel. The full commission shall act on the petition for reconsideration or the appeal." There being NO OBJECTION, Amendment 4 was adopted. Co-Chair Therriault MOVED to ADOPT Amendment 5 (copy on file). Amendment 5 would change the sunset date from the year 2004 to 2002. It was the intent of Co-Chair Therriault that the legislature review the transition of APUC. There being NO OBJECTION, it was so ordered. Co-Chair Therriault MOVED to ADOPT the following House Finance Committee Letter of Intent: SB 133 repeals the Alaska Public Utilities Commission and creates the Regulatory Commission of Alaska. In making this change to public utility regulation, it is the intent of the Legislature to respond to recommendations in legislative audits conducted in 1979, 1985 and 1989, and an audit performed by the National Regulatory Research Institute (NRRI) in 1998. The task of regulating public utilities has changed dramatically as the utility industry has moved from total regulation to regulated competition. The 21st Alaska Legislature is creating the Regulatory Commission of Alaska to address these changes in the utility industry on behalf of the people of the state of Alaska. The Regulatory Commission of Alaska is better equipped than the APUC to respond to industry proposals for changes in utility services, and to protect the interests of ratepayers in the wake of these changes. SB 133 gives the chair authority over administrative matters, leaving the other commissioners free to resolve substantive issues. To address the problem of the APUC's case backlog and time-consuming decision-making process, SB 133 allows panels of three commissioners, hearing officers or arbitrators to resolve cases where appropriate. It also requires the RCA to adopt regulations setting procedural timelines. To address the problems created by changing APUC staff's role between advocate and advisor, it establishes a separate public advocacy section within the RCA. SB 133 will improve this agency's accountability to the public. The RCA is required to establish a Management Information System, similar to the Legislature's BASIS system so that the public and industry can be better informed about the RCA's proceedings. It requires the RCA to implement a time management system to record the amount of time spent on filings from different industries, so that the Regulatory Cost Charge can be more fairly assessed. This year is an opportune time to make these changes. The Alaska Public Utilities Commission would begin winding down on June 30, 1999 under the sunset law. SB 133 requires the governor to appoint, and the Legislature to confirm, five commissioners who will represent the interests of the public. SB 133 provides for a study of the possibility of combining the functions of the Regulatory Commission of Alaska and the Alaska Oil and Gas Conservation Commission. The results of a study by the Legislative Budget and Audit Committee will be presented to the next session of this Legislature. If the Legislature decides to combine the two agencies' functions, the challenge of making that transition will be significantly eased by the creation and operating experience of the RCA under SB 133. Mr. Carter observed that the letter of intent sets into the record all the reasons for establishing a new commission and the structure changes. There being NO OBJECTION, the letter of intent was adopted. Mr. Carter noted that Alaska Regulatory Commission should be the Regulatory Commission of Alaska. Representative Foster expressed concern with the performance of the past executive director of the APUC. Mr. Carter reiterated that the intent is to clarify that staff takes direction from the chairman of the commission. MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT reviewed the fiscal note for the Alaska Oil and Gas Conservation Commission (AOGCC) fiscal note. There is a $147 thousand dollar general fund request in the contractual line for lease costs. There is a $321.9 thousand dollar capital request for moving costs. Co-Chair Therriault explained that the SB 133 fiscal note would be zeroed out in the conference committee if SB 134 and SB 133 pass. Representative J. Davies observed that the intent is to fund the request. Mr. Carter explained that the fiscal note reflects the changes to the legislation. Representative J. Davies MOVED to ADOPT Amendment 6 (copy on file). Co-Chair Therriault OBJECTED. Representative J. Davies explained that the amendment would add a person to represent the interest of the public. Co-Chair Therriault spoke against the amendment. He emphasized that all of the members are present to represent the consumer. There is also a separate public advocacy section. Mr. Carter added that every audit reaffirms that APUC was created to protect the interests of the public. Co- Chair Therriault noted that the current language is acceptable to the Administration. Representatives Grussendorf and J. Davies argued in support of the amendment. Vice-Chair Bunde spoke against the amendment. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf OPPOSED: Bunde, Davis, Foster, Kohring, Austerman, Therriault, Mulder Representatives Williams and Moses were absent from the vote. The MOTION FAILED (2-7). Representative Foster MOVED to report HCS CSSB 133 (FIN) out of Committee with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSSB 133(RLS) am was REPORTED out of Committee with a "do pass" recommendation and with two new fiscal impact notes, one by the Department of Commerce and one by the Economic Development and Department of Administration.