SENATE LABOR AND COMMERCE COMMITTEE February 21, 1995 1:30 p.m. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator John Torgerson, Vice Chairman Senator Mike Miller Senator Judy Salo MEMBERS ABSENT Senator Jim Duncan COMMITTEE CALENDAR SENATE BILL NO. 65 "An Act expanding the services that may be offered by an electric cooperative to include direct satellite television, sewer, water, or gas services when authorized by the Alaska Public Utilities Commission; relating to officers of a telephone or electric cooperative; relating to amendment of the articles of incorporation of a telephone or electric cooperative; and providing for an effective date." PREVIOUS ACTION No previous action WITNESS REGISTER Mary Jackson Legislative Aide to Senator Torgerson State Capitol Juneau, Alaska 99811 POSITION STATEMENT: Testified for the sponsor of SB 65 Dave Hutchens ARECA 703 W. Tudor #200 Anchorage, AK 99503 POSITION STATEMENT: Testified in support of SB 65 ACTION NARRATIVE TAPE 95-6, SIDE A CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 1:30 p.m. The committee took up SB 65. MARY JACKSON testified for Senator Torgerson, sponsor of SB 65. She explained SB 65 extends services provided by electrical cooperatives to include satellite television, water, sewer and gas. The bill was prompted by revisions in the federal government's loan program which provides loans for water and sewer. Senator Torgerson's district is particularly interested in the satellite television service. There is also potential for using this bill to provide gas service in the smaller areas which is not financially feasible for larger cooperatives or private ventures. SB 65 also includes statutory housekeeping changes relating to the titles established by the by-laws of the corporation. Two fiscal notes have been submitted, the APUC note shows no cost until the third year, at which time the cost would be $75,000. The other fiscal note is zero. SENATOR KELLY asked if there was a positive fiscal note. MS. JACKSON explained one of the fiscal notes indicated there would be a $1,000 cost per year as the result of the permitting process. Number 60 DAVE HUTCHENS, Executive Director of the Alaska Rural Electric Cooperative Association (ARECA), stated his support of SB 65. He commented the most important section of the bill is Section 2 which provides for the expansion of power that Ms. Jackson described. He emphasized SB 65 does not give any automatic right to serve in an area to any electric utility, it is simply a change in the corporate powers of the electric cooperative. They would still be required to go through the same regulatory process as anyone else to get a certificate to provide each of the different services. Section 1 clarifies that it is not the intent to permit electric cooperatives to go in on top of someone and provide a service. Section 2 is specific to corporate powers, and not to anything related to the Alaska Public Utilities Corporation (APUC). The bulk of SB 65 is related to housekeeping measures. Several sections are conforming amendments that correspond to Section 3, which sets the policy allowing the electric cooperatives, in their bylaws, to determine what to call their own board officers. This is not a significant issue for most, but enables a few to go to Wall Street to obtain financing. SENATOR KELLY asked when direct satellite cable television would be able to come on line. MR. HUTCHENS indicated another satellite would have to be launched, which will take a couple of years. SENATOR KELLY asked if SB 65 is more of a planning mechanism. MR. HUTCHENS replied affirmatively, and pointed out the immediate need is the sewer and water service because of changes in the U.S. Department of Agriculture that have consolidated those loan programs. When the change is being made, ARECA would like to have these additional services made available as well. SB 65 plans for the eventuality that direct satellite television will be available in two years. Naknek Electric serves Naknek, South Naknek, and King Salmon. They think there is natural gas in the area that would be sufficient for local use and they would like to be able to provide that service. Number 132 SENATOR KELLY asked if the satellite television service would impact any areas that are currently served under a cable so that the cable alternative would be prohibited. MR. HUTCHENS replied no, and whether or not SB 65 passes, direct satellite television will be made available by someone. SB 65 allows the service to be provided through the electric cooperative, rather than having to establish separate corporations. Consumers would buy their own hardware. SENATOR KELLY asked if the electric cooperative would essentially provide a billing service. MR. HUTCHENS indicated it would. SENATOR MILLER expressed concern about the fiscal note, since the APUC considers the fiscal note a blank check. He asked that the committee request the Finance Committee to look at the APUC to prevent them from using fiscal notes to increase their number of staff. SENATOR TORGERSON moved SB 65 out of committee with individual recommendations. SENATOR KELLY noted there has been no notice of opposition to SB 65. Without objection, SB 65 was moved out of committee with individual recommendations. SENATOR KELLY adjourned the meeting at 1:40 p.m.