SSTA - 2/14/95 SB 54 ELECTRIC UTIL & SOLID WASTE REMOVAL  CHAIRMAN SHARP calls the Senate State Affairs Committee to order at 3:40 p.m and brings up SB 54 as the first order of business before the committee. The chairman informs the committee that the proposed committee substitute for SB 54 corrects a drafting error. On page 1, line 14, the language to be deleted should be [AND PRESENTLY OR FORMERLY SERVED BY], and not simply [PRESENTLY OR FORMERLY], as was specified in the original version of the bill. The chairman also notes that the committee has received written testimony from the Alaska Rural Electric Cooperative Association, Inc. (ARECA) and Commercial Refuse. CHAIRMAN SHARP states it is his intent to take as much testimony as possible today to hear input for possible changes to SB 54. The committee will hold SB 54 in order to work on the bill, and will hear it again next week. The chairman calls the first witness. Number 070 DAVE HUTCHENS, Executive Director, Alaska Rural Electric Cooperative Association, Inc. (ARECA), asserts that utilities are most efficient when they are monopolies. In lieu of competition, services and rates are regulated by the APUC (Alaska Public Utilities Commission), unless the consumers of a particular utility vote to opt out of regulation. Mr. Hutchens repeats information already submitted to the committee in his written statement. Mr. Hutchens states ARECA supports SB 54. Number 165 CHAIRMAN SHARP asks Mr. Hutchens if he thinks the wording change in the proposed committee substitute is required. MR. HUTCHENS thinks it is required. Number 170 JIM ARNESON, Commercial Refuse, testifying from Anchorage via teleconference, states he has already provided written copy of his comments to the committee. Mr. Arneson would like to see either full or partial deregulation of the refuse industry. He does not think the refuse industry possesses the characteristics of a natural monopoly. Mr. Arneson repeats the information already submitted to the committee in writing. Number 228 SENATOR RANDY PHILLIPS asks Mr. Arneson how many certificates have been issued for refuse hauling in the Anchorage area. MR. ARNESON lists four companies with certification. SENATOR RANDY PHILLIPS asks Mr. Arneson if he is asking for deregulation of the certificates. MR. ARNESON responds he is asking for some sort of deregulation, either partial or total. He is cautious about asking for total deregulation. Number 257 SENATOR RANDY PHILLIPS asks Mr. Arneson if he is currently only serving commercial operations. MR. ARNESON replies that is correct. SENATOR RANDY PHILLIPS asks if the other operations are serving commercial and residential operations. MR. ARNESON replies that is correct. SENATOR RANDY PHILLIPS asks Mr. Arneson if he thinks the other companies would object to his suggestion of deregulation. MR. ARNESON responds the other companies would object, mainly because they do not want any competition. Number 295 SENATOR LEMAN comments he philosophically agrees with Mr. Arneson. Senator Leman is interested in taking a look possibly implementing some of Mr. Arneson's suggestions. CHAIRMAN SHARP reminds the committee that SB 54 will be held in order to consider suggestions. Number 307 SENATOR RANDY PHILLIPS asks Mr. Arneson how he heard about SB 54. MR. ARNESON answers he tries to stay informed. He came across SB 54 while doing some research at the Anchorage Legislative Information Office. Number 320 JIMMY JACKSON, Attorney for GCI, states that, though GCI is not directly affected by SB 54, maintaining the possibility of competition in all utility markets is in the best interest of the public. Therefore, GCI opposes SB 54, and particularly section 1. Mr. Jackson thinks SB 54 is unnecessary. The APUC already has ample authority to prevent harmful competition. He also thinks SB 54 would be harmful. Mr. Jackson says the trend in many places is towards competition, not towards protecting service areas. The affect of SB 54 may very well be to deny Alaska's citizens the benefits of competition. Number 355 SENATOR LEMAN says he was instrumental in passing legislation allowing intrastate telephone competition. At the time, the company that had the monopoly on intrastate telephone service said allowing competition would not work. Time has shown that competition is good for telephone companies and consumers. Senator Leman asks Mr. Jackson if GCI's revenues have increased. MR. JACKSON says GCI's revenues have increased. He is not sure if Alascom's revenues have increased though. On the national level, Mr. Jackson says both MCI and AT&T's revenues have increased with competition. Mr. Jackson states monopolists will always assert that competition cannot work. He does not think people will demand that an extra set of wires be put down the street. Number 385 CHAIRMAN SHARP comments, wires were put down both sides of the street in some areas of Anchorage, until exclusive service areas were established. So he has a problem allowing competition to come in and "cherry-pick" the large, profitable loads. He is a strong supporter of deregulating the whole system. Number 405 SENATOR RANDY PHILLIPS asks Mr. Hutchens if the CEA (Chugach Electric) or MEA (Matanuska Electric) has a position on SB 54. MR. HUTCHENS does not think that CEA and MEA are opposed to SB 54. He thinks MEA supports SB 54, but does not think there is an official position from CEA. Number 420 CHAIRMAN SHARP asks if anyone else wishes to testify on SB 54. Hearing none, he announces that SB 54 will be held for future consideration.