ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
March 17, 2011
3:07 p.m.
MEMBERS PRESENT
Representative Lance Pruitt, Co-Chair
Representative Bob Lynn
Representative Kurt Olson
Representative Dan Saddler
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
Representative Neal Foster, Co-Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 39
"An Act requiring a utility applying to the Regulatory
Commission of Alaska for a new or revised rate to have a refund
procedure in place."
- HEARD & HELD
HOUSE JOINT RESOLUTION NO. 20
Urging the President of the United States, the United States
Congress, and the Secretary of the United States Department of
Agriculture not to implement protection of inventoried roadless
areas under the "roadless rule" or otherwise restrict the
development of necessary hydroelectric projects in the Tongass
National Forest and the Chugach National Forest.
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 39
SHORT TITLE: RCA UTILITY RATES; REFUND PROCEDURES
SPONSOR(s): REPRESENTATIVE(s) PETERSEN
01/18/11 (H) PREFILE RELEASED 1/7/11
01/18/11 (H) READ THE FIRST TIME - REFERRALS
01/18/11 (H) ENE, L&C
02/10/11 (H) ENE AT 3:00 PM BARNES 124
02/10/11 (H) Heard & Held
02/10/11 (H) MINUTE(ENE)
03/17/11 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
DAVID DUNSMORE, Staff
Representative Pete Petersen
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented changes to HB 39 in Version T, on
behalf of Representative Petersen, sponsor.
STUART GOERING, Assistant Attorney General
Commercial/Fair Business Section
Civil Division (Anchorage)
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Answered a question during the hearing on
HB 39.
ACTION NARRATIVE
3:07:07 PM
CO-CHAIR LANCE PRUITT called the House Special Committee on
Energy meeting to order at 3:07 p.m. Representatives Pruitt,
Saddler, Petersen, Tuck, and Olson were present at the call to
order. Representative Lynn arrived as the meeting was in
progress.
3:07:53 PM
CO-CHAIR PRUITT announced that HJR 20 was scheduled but would
not be heard at the request of the prime sponsor, Representative
Kyle Johansen.
HB 39-RCA UTILITY RATES; REFUND PROCEDURES
3:09:25 PM
CO-CHAIR PRUITT announced that the only order of business would
be HOUSE BILL NO. 39, "An Act requiring a utility applying to
the Regulatory Commission of Alaska for a new or revised rate to
have a refund procedure in place."
3:10:23 PM
REPRESENTATIVE PETERSEN removed his objection to HB 39, Version
D, which was left pending at the House Special Committee on
Energy meeting of 2/10/11.
3:10:43 PM
REPRESENTATIVE SADDLER made a motion to adopt HB 39, Version 27-
LS0228\T, Kane, 2/25/11, as the working document. There being
no objection, Version T was before the committee.
3:11:13 PM
DAVID DUNSMORE, Staff, Representative Pete Petersen, Alaska
State Legislature, informed the committee that the Regulatory
Commission of Alaska (RCA) has scheduled discussion of the bill
for its meeting on 3/23/11. House Bill 39, Version T, reflects
several changes from the previous version that were suggested by
the Department of Law (DOL), and presents a "win" position for
consumers, utilities, and the RCA. He directed attention to
page l, beginning at line 6, and said the change in Section 1,
Subsection (e), requires that a refund plan is submitted within
60 days after the granting of an interim and refundable rate,
instead of at the time of the rate filing. This change
decreases the possibility of an unnecessary filing by a utility.
Mr. Dunsmore continued that Subsection (e) further allows a
utility to submit its refund plan in a procedure preapproved by
the RCA through regulations, in a plan previously approved by
the RCA and put in the utility's tariff, or in a case-specific
refund plan. Subsection (f) requires the RCA to adopt
regulations relating to Subsection (e), and Subsection (g)
requires that the ruling on the refund plan occurs with or
before the final ruling on the rate case. Section 2 is the
uncodified implementation provision that requires the RCA to
begin the process of adopting the regulations within 30 days of
the effective date of Section 2. Sections 3 and 4 are effective
date clauses that change the effective date of Section 1 to
7/1/13, and the effective date of Section 2 to "immediate."
3:15:32 PM
REPRESENTATIVE TUCK asked for a review of the three ways a
utility can submit its plan.
MR. DUNSMORE restated the three options.
REPRESENTATIVE SADDLER asked for clarification on the second
option.
3:17:11 PM
MR. DUNSMORE explained that the second procedure allows an
individual utility to determine its particular organizational
needs for a specific procedure that may be different from the
preapproved procedure. With the approval of the RCA, the
procedure would be part of the utility's tariff.
REPRESENTATIVE SADDLER surmised an application for an original
tariff, or for amendments, would provide an opportunity to
include a refund procedure.
MR. DUNSMORE indicated yes.
REPRESENTAIVE SADDLER then asked whether the preapproved
procedure could apply to all utilities.
3:18:25 PM
MR. DUNSMORE opined that it is up to the RCA to define how that
would work; in fact, the intent of the legislation is to leave
that to the RCA's discretion after hearing from ratepayers and
the utilities.
CO-CHAIR PRUITT recalled that the RCA earlier expressed concerns
about implementing regulations on a refund, before a refund
situation arises. He asked for the RCA's "comfort level" on
this issue.
3:20:09 PM
MR. DUNSMORE relayed the sponsor's intention to review any
concerns raised by the RCA and DOL. He referred to the rate
refund case involving ENSTAR Natural Gas Company (ENSTAR), and
noted that in that case there was a gas cost adjustment process,
which does not usually result in an interim rate. As the bill
was originally written, that procedure may not have been
identified; however, with the change allowing the filing to
occur 60 days after the interim rate has been approved, this
problem is solved. Mr. Dunsmore advised that the technical
reasons to choose one refund plan over another are best left to
the regulation process and the RCA's professional staff; for
example, if a utility does not have available cash to pay a
refund, the repayment may be structured over a period of time,
thus the RCA should address this in the regulatory process.
3:23:08 PM
REPRESENTATIVE OLSON asked whether the RCA has opened a docket
on this issue.
3:23:24 PM
STUART GOERING, Assistant Attorney General, Commercial/Fair
Business Section, Civil Division (Anchorage), Department of Law
(DOL), said the RCA has not opened a docket on this subject, and
that would be required by this proposed legislation. He pointed
out that the RCA already has the authority to require the filing
of refund plans at the beginning of a rate case, rather than the
traditional practice of waiting until the end, which may
possibly become a desirable procedure with rate cases in order
to find out what problems exist with preapproved refund plans.
3:24:39 PM
[HB 39 was heard and held.]
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 3:24 p.m.