HB 29-ELECTRIC UTILITY LIABILITY  2:35:07 PM CHAIR CLAMAN announced that the final order of business would be HOUSE BILL NO. 29, "An Act relating to liability of an electric utility for contact between vegetation and the utility's facilities; and relating to vegetation management plans." CHAIR CLAMAN reminded the committee that previous discussions on HB 29 had included issues related to insurance companies and rates. He stated that the Alaska Power Association (APA) has responded to suggested draft language by the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies. 2:36:25 PM CHAIR CLAMAN asked the Alaska Power Association to answer a question he had posed to it earlier that remained unanswered, which was, according to the preference of the APA, whether the legislature should examine creating a statewide standard for vegetation management that would be enacted by the Regulatory Commission of Alaska (RCA) and apply to utility companies or whether the utility companies should submit vegetation management plans to the RCA, subject to its approval. 2:37:01 PM ANDY LEHMAN, General Counsel, Alaska Power Association, answered on behalf of the APA that it opposed either option. He added that a single, statewide standard would not work due to the diversity of vegetation and growth rates throughout the state. He stated that some utilities have virtually no risk of vegetation interacting with facilities, and other utilities have significantly different risks. CHAIR CLAMAN interjected to ask whether the APA would prefer to submit vegetation management plans to the RCA, subject to its approval rather than there being a statewide standard. MR. LEHMAN asked for the committee to consider that Alaska [utility] cooperatives have maintained an option for decades that permits their memberships to vote whether they would be subject to regulation by the RCA. He added that all the cooperatives outside of the Railbelt had voted not to be subject to regulation. He suggested that vegetation management plans subject to RCA approval would amount to a fundamental shift in the way that cooperatives are managed. He stated he was not in a position to endorse either option. 2:39:47 PM CHAIR CLAMAN acknowledged the hesitancy on the part of Mr. Lehman to answer and suggested that, in the absence of any other option, he surmised that the position of the APA would be to submit vegetation management plans to the RCA, subject to its approval rather than a statewide standard. 2:40:10 PM REPRESENTATIVE VANCE stated her understanding that the intent of the bill would be to reduce the liability of vegetation on utility [companies] and asked how many instances resulted in liability to utility companies and, by extension, to Alaskans, and to what expense. CHAIR CLAMAN asked Representative Vance whether she wished to know whether the urgency of the proposed legislation was based on how many lawsuits [were brought against utility companies] historically or whether she was asking the reason for the urgency now. REPRESENTATIVE VANCE stated that she was attempting to understand the opposition [to HB 29]. She stated her understanding that the [unfulfilled] need would be to protect rate payers. CHAIR CLAMAN asked Representative Vance from whom she inferred opposition. REPRESENTATIVE VANCE answered that she had inferred opposition from the APA. CHAIR CLAMAN offered that the APA does not agree with the perspective offered by the insurance companies and suggested that the proposed legislation may protect utility companies but may place a higher burden on property owners and, while utility rates may be less affected, property owners may be subject to higher property insurance rates. He recalled the Miller's Reach fire that had resulted in a lawsuit filed on behalf of property owners against the State of Alaska alleging that the State had mismanaged the fire and [should be held liable]. He opined that the utility companies are articulate in their opposition to the RCA reviewing vegetation management plans subject to its approval. 2:44:16 PM REPRESENTATIVE VANCE referred to a paragraph from the letter from the APA [included in the committee packet], entitled "HB 29 Additional Document - APA Response to APCIA and NAMIC Joint Letter to HJUD 4.12.2021" which read, [original punctuation provided]: The Division of Forestry testified that out of 313 fires resulting from vegetation contacting utility facilities from 2011-19, the state only pursued compensation from utility companies for firefighting response costs once. Out of all those fires that involved utility facilities, only once (.3%) did the state believe a utility should be held responsible for State fire suppression costs. REPRESENTATIVE VANCE stated her understanding that the APA claims that [its members] are already taking actions to sufficiently protect their facilities from risk. She asked whom shall benefit from the passage of the bill and expressed her wish that the people should benefit. She expressed her sympathy to utility companies' reluctance to invite more regulation that will result in more cost. She acknowledged the insurance companies' interest in gaining more [revenue] from proposed changes to regulations. She asked how many instances of an insurance company filing a claim against a utility had occurred. 2:46:12 PM CHAIR CLAMAN stated that there existed at least one lawsuit pending against the [Matanuska Electrical Association] (MEA) and referred to the committee packet item, entitled "HB 29 Additional Document - Anchorage Daily News Article (Distributed by HJUD Committee) 3.28.2021" and opined that there did not exist a complete picture on the frequency of insurance companies seeking compensation from other parties for damages. CHAIR CLAMAN referred also to a paragraph in the letter from the APA [included in the committee packet] entitled "HB 29 Additional Document - APA Response to APCIA and NAMIC Joint Letter to HJUD 4.12.2021" which read [original punctuation provided]: That demonstrates that in the State's view, Alaska's electric utilities are already doing everything they reasonably can to protect their facilities from fire risk. CHAIR CLAMAN expressed his disagreement that this statement could be construed as a representation of the state's viewpoint. He suggested that the questions posed during the hearing on HB 29 warranted further discussion by the committee. 2:47:20 PM REPRESENTATIVE VANCE asked for testimony from the bill's sponsor regarding the questions that had been brought forward. 2:47:57 PM REPRESENTATIVE GEORGE RAUCHER, Alaska State Legislature, as prime sponsor of HB 29, stated that he had been listening to the discussion and cautioned that decisions made should be based on facts and data rather than on the opinions [of interested parties]. 2:48:54 PM REPRESENTATIVE EASTMAN suggested that testimony should be sought from the Division of Forestry to provide its perspective on the discussion. REPRESENTATIVE RAUSCHER suggested that an amendment could be drafted to offer guidelines on an environmental management plan. 2:50:31 PM CHAIR CLAMAN stated his appreciation to the bill sponsor and affirmed that it was the committee's intent to work together and encouraged additional conversation rather than an amendment. He referenced law existing in the State of Utah and possibly the State of California as a potential source of information to further develop effective policy. He opined that the State of California regulations were complex due to the State's regulatory complexities. He suggested that rate increases to utilities and insurance are unpopular and that the state and federal government are subject to the largest cost associated with [wildfires]. 2:52:28 PM REPRESENTATIVE RAUSCHER noted that the State of California has a high number of wildfires and property loss and cautioned that its policy was not likely drafted confined to utility right-of way. 2:52:57 PM CHAIR CLAMAN added that Alaska has experienced more wildfires in the last 10-15 years than in prior years. He opined that the discussion on HB 29 had raised complex issues. He stated the intention would be a committee substitute. He stated that the APA, insurance companies, and utility consumers in Alaska have each raised legitimate concerns. 2:53:53 PM CHAIR CLAMAN announced that HB 29 was held over.