ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 5, 2024
1:36 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Click Bishop, Vice Chair
Senator Elvi Gray-Jackson
Senator Kelly Merrick
Senator Forrest Dunbar
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 115
"An Act relating to physician assistants; relating to
physicians; and relating to health care insurance policies."
- MOVED CSSB 115(HSS) OUT OF COMMITTEE
SENATE BILL NO. 135
"An Act establishing the Alaska Work and Save Program;
establishing the Alaska Retirement Savings Board; and providing
for an effective date."
- MOVED CSSB 135(L&C) OUT OF COMMITTEE
SENATE BILL NO. 257
"An Act relating to the Regulatory Commission of Alaska;
relating to public utilities; relating to electric reliability
organizations; relating to the Alaska Energy Authority; relating
to the Rail belt Transmission Organization; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 115
SHORT TITLE: PHYSICIAN ASSISTANT SCOPE OF PRACTICE
SPONSOR(s): SENATOR(s) TOBIN BY REQUEST
03/27/23 (S) READ THE FIRST TIME - REFERRALS
03/27/23 (S) HSS, L&C
01/23/24 (S) HSS AT 3:30 PM BUTROVICH 205
01/23/24 (S) Heard & Held
01/23/24 (S) MINUTE(HSS)
02/06/24 (S) HSS AT 3:30 PM BUTROVICH 205
02/06/24 (S) Heard & Held
02/06/24 (S) MINUTE(HSS)
02/15/24 (S) HSS AT 3:30 PM BUTROVICH 205
02/15/24 (S) Moved CSSB 115(HSS) Out of Committee
02/15/24 (S) MINUTE(HSS)
02/19/24 (S) HSS RPT CS 3DP 2AM SAME TITLE
02/19/24 (S) DP: WILSON, KAUFMAN, DUNBAR
02/19/24 (S) AM: TOBIN, GIESSEL
02/28/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/28/24 (S) Heard & Held
02/28/24 (S) MINUTE(L&C)
04/05/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 135
SHORT TITLE: AK WORK & SAVE PROGRM; RETIRE. SAVINGS BD
SPONSOR(s): SENATOR(s) WIELECHOWSKI
04/24/23 (S) READ THE FIRST TIME - REFERRALS
04/24/23 (S) L&C, FIN
02/14/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/14/24 (S) Heard & Held
02/14/24 (S) MINUTE(L&C)
04/05/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 257
SHORT TITLE: ELECTRIC UTILITY REGULATION
SPONSOR(s): RESOURCES
03/01/24 (S) READ THE FIRST TIME - REFERRALS
03/01/24 (S) L&C, RES, FIN
03/01/24 (S) L&C WAIVED PUBLIC HEARING NOTICE,RULE
23
03/04/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/04/24 (S) Heard & Held
03/04/24 (S) MINUTE(L&C)
03/04/24 (S) RES AT 3:30 PM BUTROVICH 205
03/04/24 (S) <Bill Hearing Canceled>
03/27/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/27/24 (S) Heard & Held
03/27/24 (S) MINUTE(L&C)
04/05/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
MCKENZIE POPE, Staff
Senator Loki Tobin
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave a brief presentation of SB 115.
CANDANCE HICKEL, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 115.
BETSY DOUDS-PACZAN, President
Alaska Academy of Physician Assistants
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 115.
GAYLE HORNBERGER, D.O., representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to SB 115.
KATHERINE VAN ATTA, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of SB 115.
KEILS KITCHEN, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 115.
JONATHAN TOWER, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 115.
DAVID WILKERSON, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 115.
PAM VENTGEN, Executive Director
Alaska State Medical Association (ASMA)
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 115 in its
current form.
ALISON STARR, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in support of SB 115.
JON ZASADA, Director
Government and External Affairs
Alaska Primary Care Association (APCA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 115.
CHRIS MILLER, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 115.
MARY SWAIN, CEO
Cama'i Community Health Center
Naknek, Alaska
POSITION STATEMENT: Testified in support of SB 115.
MARK RESTAD, representing self
Homer, Alaska
POSITION STATEMENT: Testified in support of SB 115.
FOLUSHO OGUNFIDITIMI, D.M., President
American Academy of Physician Associates (AAPA)
Daytona Beach, Florida
POSITION STATEMENT: Testified in support of SB 115.
MAGUERITE MCINTOSH, M.D., representing self
Sterling, Alaska
POSITION STATEMENT: Testified in support of SB 115.
DALE WALASZEK, representing self
Kasilof, Alaska
POSITION STATEMENT: Testified on SB 115.
JOHN MOORE, representing self
Willow, Alaska
POSITION STATEMENT: Testified in support of SB 115.
RICK BLAKE, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of SB 115.
MARIA ROLLINS, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 115.
SENATOR BILL WIELECHOWSKI, District K
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 135; introduced SB 135.
GORDON GLASER, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 135.
SENATOR CATHY GIESSEL, District E
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 257; presented SB 257.
JENNIFER MILLER, CEO/Manager
Renewable Independent Power Producers
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 257.
TONY M. IZZO, CEO
Matanuska Electric Association
Palmer, Alaska
POSITION STATEMENT: Testified in support of SB 257.
JOHN ESPINDOLA, Commissioner
Regulatory Commission of Alaska (RCA)
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of the RCA during the
hearing on SB 257.
ACTION NARRATIVE
1:36:54 PM
CHAIR JESSE BJORKMAN called the Senate Labor and Commerce
Standing Committee meeting to order at 1:36 p.m. Present at the
call to order were Senators Merrick, Dunbar, Gray-Jackson (via
TEAMS), and Chair Bjorkman. Senator Bishop arrived during the
course of the meeting.
SB 115-PHYSICIAN ASSISTANT SCOPE OF PRACTICE
[CSSB 115(HSS) was before the committee]
1:38:10 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO.
115 "An Act relating to physician assistants; relating to
physicians; and relating to health care insurance policies."
1:38:43 PM
MCKENZIE POPE, Staff, Senator Loki Tobin, Alaska State
Legislature, Juneau, Alaska, said SB 115 grants experienced
Physicians Assistants (PAs), those with more than 4,000 hours
practice experience, the flexibility to increase their ability
to see and treat patients, which will benefit the capacity of
Alaska's medical system. She said this also maintains the
collaborative agreement structure currently in place for less
experienced PAs defined in SB 44 as those with less than 4,000
hours of practice experience.
MS. POE said Alaskan PAs are asking us to let them help us to
meet our growing patient needs across the state. They will play
a vital role in meeting the growing and ongoing health care
needs of the people of Alaska, where 90 precent of PAs practice
in rural areas of Alaska and the majority of our primary care
physicians operate in urban Alaska. Currently Alaska law does
not allow PAs to operate to the fullest extent of their
expertise and knowledge. SB 115 seeks to remedy this situation
by allowing PAs to practice and to provide additional health
care options in Alaska without direct oversight from a
supervising physician. SB 115 authorizes PAs to expand their
services and will allow more patients to stay in their home
communities to receive routine medical care. SB 115 does not
sacrifice medical rigor or oversight, but simply allows
experienced and licensed PAs in the State of Alaska to continue
to offer high quality medical care within their scope of
practice.
1:40:51 PM
SENATOR DUNBAR mentioned the suggestion from some with concerns
about SB 115 that the 4,000 hours of experience should occur in
the specialized area of practice, for example, dermatology or
cardiology, prior to independent practice. He asked whether the
sponsor would support an amendment to define the hours of
experience by specialty.
1:41:43 PM
MS. POPE answered that the sponsor is aware of those concerns,
and she deferred to representatives of the Academy of Physicians
Assistants, attending online to help answer questions regarding
the specifics of operating as a PA in the state of Alaska. She
said it is the opinion of Senator Tobin's office that the
education of and licensing requirements of PAs should suffice to
equip them to practice as SB 115 describes. She said the 4,000-
hour requirement in SB 115 is in addition to the multiple years
of education and 3,000 or more hours of direct patient contact
PA's receive prior to licensing. She said once PA students enter
an accredited training program, they have 27 months of training
and 100 hours of continuing medical education every two years, a
comprehensive exam to become licensed and a large comprehensive
exam every ten years. She repeated the opinion of the sponsor's
office that these requirements suffice to prepare PAs [for
independent practice as described by SB 115].
1:43:52 PM
CHAIR BJORKMAN opened public testimony on SB 115.
1:44:25 PM
SENATOR BISHOP joined the meeting.
1:44:44 PM
CANDANCE HICKEL, representing self, Anchorage, Alaska, said that
as a physician assistant (PA) she was testifying in support of
SB 115 and that she practices in Anchorage at Providence Medical
Center in cardiothoracic surgery. She has worked there for the
past six years and for ten years before that she practiced in
neurosurgery, also in Anchorage. She said she has served as a PA
educator through the University of Washington since 2009. She
said there is widespread support for SB 115 among her PA
colleagues and that passage of the bill is essential for the
future of providing reliably available high quality health care
in the state of Alaska.
MS. HICKEL emphasized her family's commitment to the future of
Alaska, noting their boys are fifth generation Alaskans. She
said passing SB 115 aligns the future of healthcare in our state
in the right direction. She encouraged the committee to pass SB
115.
1:46:30 PM
BETSY DOUDS-PACZAN, President, Alaska Academy of Physician
Assistants, Anchorage, Alaska, said she was testifying in
support of SB 115. She said she is the president of the Academy
of Physician Assistants, and she works in addiction medicine and
behavioral health in Anchorage. She noted the opioid crisis and
the struggle with too few resources for care in every aspect of
medicine. She said SB 115 would remove obstacles to care and
enable PAs to practice to the full extent of their training and
experience. She said Alaska statutes that currently define the
scope of practice for PAs in Alaska were signed by the Alaska
Board of Medical Examiners in 1979, 45 years ago. She said the
statutes have not been rewritten since then though the
requirements for entry into a PA program are more seriously
competitive than ever. She said the programs themselves continue
to increase in the academic rigor and clinical training. She
said the profession has evolved and it is time for statute to
adjust appropriately.
MS. DOUDS-PACZN said the very particular set of circumstances
that contributed to the tenor of the 1979 statutes no longer
exist. She said there are now more than 168,300 PAs in the U.S.
engaging in more than 500 million patient interactions each
year. She said 18 countries utilize PAs or PA equivalents and
there are 306 accredited training programs for PAs.
MS. DOUDS-PACZN concluded, saying that PAs are neighbors,
friends and family members and they are constantly striving to
serve with expertise, compassion and integrity. She said SB 115
would allow PAs to continue to do so. She said PAs are
absolutely seeking to practice in collaboration as a part of a
team, but without a specified relationship with a single
[overseeing] provider. She said SB 115 is a tool that will move
us toward the end goal of quality care for all Alaskans. She
urged the committee to join in the effort to modernize Alaska
statute by passing SB 115.
1:48:59 PM
SENATOR DUNBAR restated the question about the specificity of
the requirement of 4,000 hours of experience in order to
practice without a collaborative agreement. He asked whether the
4,000 hours should be specific experience in a given specialty.
1:49:48 PM
MS. DOUDS-PACZAN answered that PAs receive a broad education in
all fields of medicine and the clinical training is 45 weeks or
approximately 2,000 hours of supervised clinical training
experience. She said each of those are within specialty settings
and PAs are often offered positions from those clinical
settings. She said when PAs join a practice, they do so with a
foundation of general knowledge and the training is "on the
job".
1:51:13 PM
SENATOR DUNBAR sought further clarification on training hours
over days, because hours of experience are specified by SB 115.
He asked whether the 4,000 hours required to practice
independently would be met during the initial [general] training
or thereafter during the "on the job" training.
1:51:53 PM
MS. DOUDS-PACZAN said that at the end of 45 weeks, PAs would
gain about 2,000 hours of supervised clinical experience. She
said in a 12-month period, most programs are set up for nine
four-week rotations, working full-time or more than full-time in
a supervised situation, such as surgery, emergency care,
obstetrics or primary care, for example. She compared the PA
requirements to those for a Nurse Practitioner (NP) who receive
an average of 27.5 weeks of supervised clinical training which
equates to about 1100 hours, or about half of the training hours
PAs receive.
1:54:00 PM
GAYLE HORNBERGER, D.O., representing self, Fairbanks, Alaska,
said she had 31 years of medical experience working in Alaska,
the past 27 years working in Fairbanks as a family physician.
She said her experience included Emergency Medical Services
(EMS), Community Health, Private Practice and Indian Health. She
said over those years she worked with, educated, mentored, and
employed PAs at all levels of their careers. She said the
original PA programs were focused on individuals who had
experience in health care such as military corpsmen, nurses and
paramedics who brought a significant wealth and depth of
knowledge with them. She said their experience helped to form a
level of trust and confidence necessary for physicians to feel
comfortable including PAs in their practice of medicine. PA
training is one year of basic sciences and one year of clinical
training before graduation. She opined that most PA training
programs today do not have the significant depth and wealth of
experience that the original PA students had.
DR. HORNBERGER said a PA with 4,000 hours of post-graduate hours
of specific experience does not equate with a medical school
graduate with over 8,000 hours of training plus 6,000 hours or
more of residency hours. Thus, she said, to request to remove
the requirement of working under a collaborating physician after
4,000 hours of experience is inappropriate. She said, keeping in
mind the need for patient safety and adequate knowledge to
provide medical care, the minimum equivalent of four years of
medical school and two years of family medicine residency are
roughly 14,500 hours minimum.
1:56:26 PM
KATHERINE VAN ATTA, representing self, Wasilla, Alaska, said she
has served as a PA for 18 years and she has also been a
Certified Nurse-Midwife (CNM) for five years. She said her
health care training has included two bachelor's degrees, two
Master's degrees education and a post-graduate fellowship during
which she served as a PA for four years, embedded in a physician
residency program working alongside physician residents. She
said she worked in a variety of positions in Alaska over the
past 15 years including almost three years on Adak Island in the
Aleutians, which is 1200 miles from the nearest accessible
physician or hospital. She said she currently divides her time
between working as a PA at a rural clinic in Bristol Bay and as
a CNM in the Mat-Su valley. She said she is also a courtesy
faculty member at the University of Washington, educating
Washington, Wyoming, Alaska Montana, Idaho (WWAMI) medical
students. She sought to make two main points.
1. Modernizing the statutes and regulations is a good idea.
She said there was a recent effort to modernize PA
regulations, but while the effort was appreciated, the
result was terrifying because the new proposed regulations
would have made it virtually impossible for PAs to work in
rural areas at all. The statutes would have eliminated
nearly 50 percent of the providers at the rural clinic
where she currently works. Instead of improving care, they
would have dramatically decreased access to care for rural
Alaskans.
2. As a Certified Nurse-Midwife (CNM), she said she is
licensed to practice independently as an Advanced Practice
Registered Nurse (APRN). She said some of her clients will
have to have cesarean sections and other procedures that
she does not do, which does not impair her ability to do
her job or collaborate when needed.
1:58:49 PM
KEILS KITCHEN, representing self, Anchorage, Alaska, said he has
worked as a PA in Alaska for the last 15 years, both in
Anchorage and remotely. He promoted removing the requirement for
[a formal] relationship between a PA and collaborating
physician. He noted that it is difficult to recruit medical
providers, physicians, PAs, or NPs to work in remote villages in
Alaska. The sites and communities present challenges unlike
anywhere else in the U.S. He said many of the communities do not
have enough funding available to attract physicians to work in
their clinics as providers or as administrator/medical director.
He said the current PA regulations prevent clinics from hiring
PAs due to the requirement for collaborative practice agreement
with a specific physician. He shared his experience of having
worked in clinics who were unable to renew his contract when the
physician/medical director left. The clinic could only consider
[hiring] NPs since NPs are allowed to practice without a
collaborative plan. The NPs that were hired were from out of
state and significantly less experienced in remote Alaska
medicine. He said hiring websites for remote Alaska show many
jobs that will only consider NPs due to the increased
requirements and administrative burden associated with employing
PAs. He said SB 115 would remove those administrative burdens
and allow those clinics to utilize experienced PAs along with
NPs to provide care to the underserved communities and increase
the pool of potential providers. He urged the committee to
support SB 115.
2:00:58 PM
JONATHAN TOWER, representing self, Anchorage, Alaska, said he is
a PA practicing in Anchorage, having graduated from MEDEX, a
program collaboratively taught with the University of Washington
(UW) between the University of Alaska Anchorage (UAA) campus and
the UW campus in Seattle. He said the past 5 years he has worked
as a cardiology PA. He thanked the committee hearing SB 115 and
sought to address Senator Dunbar's question about how many hours
would be sufficient [to prepare for] unsupervised or
uncollaborative PA practice within a specialty environment. He
said his current practice as part of a highly developed medical
team working directly with physicians who are on-call. He said
the current collaborative agreement requires that he designate
several of the physicians as his collaborators, though those
doctors may not be on shift with him and at the end of the year,
they are required to go through charts. He said the physicians
would have been required to sign off on these charts as part of
the existing modern collaborative medical environment. He opined
that it would not be reasonable to assign an arbitrary number of
hours as a measure of competency in a collaborative environment.
He said PAs are trained to be collaborative providers as are all
modern providers and collaboration is inherent in any
profession. He suggested that an administrative hurdle should
not be required to demonstrate a PAs ability to perform their
roles admirably in generalist or in specialist roles.
2:02:57 PM
DAVID WILKERSON, representing self, Anchorage, Alaska, said he
had worked as a PA for ten years and had graduated from MEDEX.
He served as an Army PA Lieutenant for three years as well as in
primary care settings, fast track settings, CDC, private
individuals, corporate companies, federal government and
contracting roles. He found during the Covid-19 response his
practice included multiple specialties and that he had over
2,000 hours in a number of them. He told about working as a
contracted employee during the Covid-19 response, primarily in
administrative roles that required a PA license to review
diagnostic tests. He said these positions were non-treating, low
acuity and in some cases, no direct patient care, but it was so
difficult to find physicians who would agree to sign off as
collaborators with PAs, though these roles were critical for
medical care during the response to Covid-19. He said that,
though a lot of requirements were removed nationally for
licensure [to facilitate Covid-19 response] the scramble to find
a collaborative agreement in order to practice was very
cumbersome. He urged passage of SB 115 to make it easier for PAs
to practice.
2:05:25 PM
PAM VENTGEN, Executive Director, Alaska State Medical
Association (ASMA), Anchorage, Alaska, said she worked in the
medical field all her adult life. She was a clinical medical
assistant, managed medical offices, worked for the medical
board, taught in the allied health programs at the University of
Alaska. She said the Alaska State Medical Association (ASMA)
opposes SB 115 in its current form. She said the ASMA's position
is that the collaborative relationship between physicians and
PAs must be a formal relationship. She reported that physician
members of the ASMA board were shocked and appalled to learn
that some PAs reportedly had to pay physicians to serve in that
collaborative relationship. She said ASMA agrees the need for an
alternate collaborative agreement is cumbersome and of little
benefit. She said they agree there is a need to update the
regulations for PAs. They agree there is a need to better define
remote locations and practice agreements in Alaska. She said
ASMA would like to work collaboratively with the Physician
Assistant Association and academy, the medical board and with
physicians to update and modernize these regulations. She said
ASMA believes SB 115 is not the best way to do so. She urged the
committee to hold SB 115 and promote collegial negotiations to
resolve the very real issues and concerns on the table.
2:07:41 PM
CHAIR BJORKMAN asked whether there had been any negotiations
since January about the concepts and ideas between ASMA and the
PA associations.
2:07:54 PM
MS. VENTGEN answered there had not. She reported that the
medical board was very challenging to work with. She said the
chairman of the medical board resigned effective March 1st.
2:08:33 PM
ALISON STARR, representing self, Kodiak, Alaska, said she
practices all over Alaska as a primary care PA and has served in
multiple rural locations. She said she often practiced in remote
settings where there was not a physician available for miles.
She also had jobs where she never met her collaborating
physician, and the relationship was simply to "check a box" for
employment or licensure. She said her employers obviously trust
her scope of practice to care for rural and underserved
communities. She opined that it is a waste of resources and
money to continue to require experienced PAs who have over 4,000
clinical hours have a written agreement with a physician. She
said this requirement further limits access to health care for
rural and underserved communities. She said advanced practice
colleagues, including NPs do not have this restriction and are
able to practice independently as soon as they graduate from
their training programs. She said the current regulations often
restrict experienced PAs from other states from practicing or
relocating to Alaska, especially rural and underserved Alaska
where she said it is already so difficult to get health care. It
also keeps PAs from other places from coming to Alaska because
it is difficult for them to find a collaborative physician when
they are applying for initial licensure, further limiting access
to high quality health care in Alaska.
2:10:34 PM
JON ZASADA, Director, Government and External Affairs, Alaska
Primary Care Association (APCA), Anchorage, Alaska, said the
APCA enthusiastically supports SB 115. He said health centers
have been pioneers in the institution of PAs as core primary
care providers in their practices for decades. He reported that
in 2022, 82 PAs provided care to over 7,000 patients through
72,000 visits. He said PAs account for one third of all the
Community Health Centers (CHC) medical providers in Alaska. He
said APCA believes SB 115 creates a valuable opportunity to
expand access to care in communities across the state and
enables the valuable providers to practice independently to the
full extent of their experience. he said SB 115 addresses an
acute challenge in serving patients. He expressed confidence
that PAs would continue to consult and collaborate with
physicians and other members of their patient care teams to
improve health.
2:11:59 PM
CHRIS MILLER, representing self, Juneau, Alaska, urged the
committee to move SB 115 forward. He said he was a practicing PA
in dermatology for 23 years in Juneau and Southeast Alaska,
treating thousands of patients. He said he delivered high-
quality, dermatological care to a medically underserved region.
He said he is very proud of the differences his practice had
made for people in Southeast Alaska communities. Without the
passage of SB 115 this session, Mr. Miller said he would no
longer be able to provide care for his patients after the
retirement of his collaborating physician in June. He said his
circumstances highlight the urgency and importance of SB 115. He
said he has been trying to secure another collaborating
dermatologist agreement for three years and the fact is there
are not enough dermatologists in the United State, much less
Alaska. Despite his decades of experience and value to the
communities he has served, the retirement of his collaborating
physician will shut him down and the practice will close. He
said he was sincerely concerned for the ongoing care of his
patients. He said SB 115 was his last hope to continue providing
services for his patients. He urged that SB 115 be moved forward
for a vote.
2:13:37 PM
SENATOR DUNBAR asked whether Mr. Miller could say at what point
in his dermatology practice he gained enough experience to
practice without a collaborative agreement. He acknowledged that
PAs are required by law to have a collaborative physician
agreement. He asked at what point he would have been comfortable
practicing without the agreement.
2:14:26 PM
MR. MILLER said people continue to learn throughout our careers.
He acknowledged that even after so many hours, he would not be
"ready" to practice completely independently. He said he knows
he doesn't know everything, but he knows what he knows, and he
knows to get help when he doesn't know. He said that awareness
is incumbent on any PA or physician. He said practitioners can't
know everything and need to be able to get help. He said after
two years [of collaborative practice] he was able to offer a
wide breadth of service.
2:15:32 PM
MARY SWAIN, CEO, Cama'i Community Health Center, Naknek, Alaska
said the Cama'i Community Health Center's scope of practice is
primary care, age 0 to end-of-life, as well as urgent and
emergent care. She said the health center is the receiving
facility for all 911 and EMS emergencies in their borough. Last
year they saw 214 patients in the ER and over 3000 patient
visits in total. She expressed full support for SB 115 for their
health center. She said the health center had not been able to
employ a physician for 15 years due to their remote location.
They employ PAs and NPs, and they need practitioners who are
able to practice to the full spectrum of the patients they see.
She said they must have primary care and extensive emergency
medical care training to work in their rural facility. She said
they pay, on a contract basis, two physicians to collaborate for
any PA. They are both highly trained physicians with over 60
years of experience between them. She said that in this time of
increasing inflation and flat funding for health centers
nationally, she is faced with the real decision of potentially
being unable to keep a PA due to the cost of the physician's
contracts for collaborative agreements. In addition, the time
required to file a collaborative agreement and have it approved
by the State of Alaska is problematic for her clinic. A recent
example was that a provider scheduled to work in September was
not able to work because her collaborative plan was not approved
in time. She asserted that other states are modernizing PA
requirements and she expressed enthusiasm for Alaska to follow
suit and for passage of SB 115.
2:17:48 PM
MARK RESTAD, representing self, Homer, Alaska, said he has been
a PA since 1995, practicing in Tok, Fairbanks, Kotzebue, and for
many years on the Kenai Peninsula. He said he works in primary
care in Homer and in Kenai. He is in support of SB 115. The
clinic where he works has been trying to hire another PA for
several months and finding a collaborative physician and getting
all the arrangements made has been rigorous and requires
extensive time. He said he had taken the board exam to be a PA
several times and he reported that it encompasses primary care
and specialty care. He asserted that to pass the exam required
that a provider be well-rounded [in their education and
experience]. He recommends that new PAs begin by practicing in a
general care setting for a year instead of a specialty setting
to get their practice style down before they pursue their
special area of interest. He opined they could then return to
primary care later. He expressed concern about PAs who go to
Anchorage to practice specialty care and then want to go "home"
to a community they were from and enter a supervised position.
He said he thought that was redundant and inefficient.
2:19:49 PM
FOLUSHO OGUNFIDITIMI, D.M., President, American Academy of
Physician Associates (AAPA), Daytona Beach, Florida, said the
AAPA is the national professional society of PAs across the
nation, representing about 168,000 PAs across all medical and
surgical subspecialties in all 50 states, the District of
Columbia, U.S. territories and the uniformed services. He said
the APAA supports SB 115. He said he had over 23 years of
administrative and clinical experience in health care
administration and urology. SB 115 would eliminate outdated
administrative burdens and allow PAs to practice to the full
extent of their education, training, and experience. He said
about 40 percent of Alaskans live in regions without adequate
access to primary care and urged that all can agree that is
unacceptable. As trusted, highly qualified professional
clinicians who often serve patients in primary care settings,
PAs are ready to do their part to expand patient access to care.
He referred to a recent Harris Poll survey finding that 91
percent of U.S. adults agree that PAs are part of the solution
to solve the shortage of health care providers across the
country. He said there are more than 800 licensed PAs in Alaska
who practice in all settings and specialties and to recruit and
retain more PAs, Alaska needs to update its PA practice laws. He
said SB 115 is an essential step to update PA practice
legislation to align legislative language with the way PAs
currently practice as trusted members of the health care team.
He said SB 115 would modernize PA practice in Alaska, allowing
PAs with more than 4,000 hours [of collaborative service] to be
exempt from collaborative agreement requirements. He emphasized
that SB 115 would not change the day to day care provided by PAs
and that PAs would continue, like all health care providers to
refer, consult and collaborate with physicians to ensure needed
care delivery.
2:22:09 PM
SENATOR DUNBAR referred to states that have already eliminated
collaborative agreement requirements. He asked whether they have
seen a change in the rates for malpractice insurance. He also
asked whether there was a difference in malpractice insurance in
those states for PAs that do primary care versus those who
specialty care.
2:22:39 PM
MR. OGUNFINDITIMI said there has not been a significant change
in malpractice insurance coverage or claims in states that had
reduced or eliminated the direct tether between a PA and a
physician. He explained that he says "direct tether" because
there would not be a complete break in the relationship with
physicians. He said it is about PAs being able to practice to
the fullness of their education and knowledge without the
administrative barriers [of direct collaborative agreement
requirements]. He said there was a recent study published in the
Journal of Medical Regulation that examined ten years of medical
malpractice payment reports from national practitioner database
that found that states where barriers to PA practice were lifted
maintained patient safety and made it easier to access high
quality, cost-effective care. He said there was over ten years
of data to suggest that lifting the barriers appeared to improve
as opposed to worsen malpractice claims.
2:23:48 PM
CHAIR BJORKMAN thanked testifiers for public input.
2:24:16 PM
MAGUERITE MCINTOSH, M.D., representing self, Sterling, Alaska,
said she has practiced as a physician in Alaska for over 23
years and has practiced with several PAs. She said her
relationship with them was not a monetary relationship; she
never charged for her collaboration with them. She said the PAs
had extensive experience and she was always impressed with their
knowledge and capabilities, and she supported SB 115 and it's
intent to relieve the administrative burden they now have. She
said she is currently working with a PA specializing in
substance abuse medication and he is teaching her from his
extensive experience. She said physicians can learn from and
collaborate with PAs just as they collaborate with specialists
when necessary.
2:25:59 PM
DALE WALASZEK, representing self, Kasilof, Alaska, said he has
been a PA for 27 years and worked in a variety of clinical
situations in extremely remote Alaska as well as civilian and
military worlds and in New Mexico. He echoed that PAs can work
independently without direct physician oversight or having a
collaborative agreement and provide excellent service and care
to patients. He has never had a malpractice lawsuit in 27 years,
despite working in pretty tense situations at times. He
appreciated the experience of reaching out and collaborating
with fellow colleagues in different areas of medicine to provide
the best care for patients.
2:27:06 PM
JOHN MOORE, representing self, Willow, Alaska, said he is
working part time as a PA, though trying to go back to work has
been an ordeal. He said his friend and colleague runs a clinic
and is a PA. The friend's collaborating physician refused to
take Mr. Moore on [as an additional collaborative PA] because of
the added responsibility. He said the fee to collaborate with
other physicians was exorbitant. He said it would have been less
expensive to hire a NP for the clinic because of the requirement
for a collaborative physician agreement. He supports SB 115
wholeheartedly because there are many people in need of health
care who do not receive health care. He noted that other states
have not experienced negative outcomes by granting PAs greater
autonomy. He said he would like to go back to work but is
hindered by the current regulations. He said there are people
who need care that PAs could provide.
2:29:10 PM
RICK BLAKE, representing self, Wasilla, Alaska said he currently
works at Cottonwood Clinic and has worked as a PA in Alaska
since 2000. He said PAs and other medical providers are trained
and constantly collaborate with other providers in all areas get
the information they need to provide the best care to the
patient. He urged the committee members to understand that even
if the working relationship is "untethered" practitioners
collaborate constantly in all fields of medicine.
2:30:12 PM
MARIA ROLLINS, representing self, Anchorage, Alaska, serves as a
psychiatric PA for one of Alaska's most underserved populations.
She said she has served for eight years at the Alaska
Psychiatric Institute (API). She said her work focuses on
providing crucial mental health services in Alaska. She said
supporting SB 115 is imperative to modernize the PA profession
in Alaska. It is essential to providing access to essential
health care, including vital psychiatric services. In her years
of practice at API she said she has encountered countless
barriers, not by the complexities of mental health conditions,
but by outdated statutes and regulations that restrict the
ability to offer care to the full extent of a PAs education,
training and experience. These limitations, such as the
exclusion of PAs to be listed as mental health professionals in
AS 47.39.15, does not just hinder the professional's
capabilities, but also significantly affect the wellbeing of the
communities they strive to serve, where access to psychiatric
care is often a matter of urgency. She advocated defining the
scope of practice for PAs at the statute level and removing the
requirement for collaborative plan, crucial in psychiatry. She
said these changes are vital, especially in rural and remote
areas where psychiatric services are scarce, and the rates of
mental health issues are often higher than the national average.
She said the changes proposed by SB 115 would allow psychiatric
PAs like her to fill critical gaps in mental health care, reduce
wait times for psychiatric services and ultimately save lives.
As a PA she is trained to diagnose, treat and manage complex
mental health conditions safely and effectively. Evidence from
other state with modern PA practices support that PAs can
significantly improve access to mental health care without
compromising the quality of care provided.
2:32:12 PM
CHAIR BJORKMAN closed public testimony on SB 115 and sought the
will of the committee.
2:32:23 PM
SENATOR MERRICK moved to report CSSB 115(HSS), work order 33-
LS0542\U, from committee with individual recommendations and
attached fiscal note(s).
2:32:38 PM
CHAIR BJORKMAN found no objection and CSSB 115(HSS) was reported
from the Senate Labor and Commerce Standing Committee.
2:32:44 PM
At ease
2:34:39 PM
CHAIR BJORKMAN reconvened the meeting.
SB 135-AK WORK & SAVE PROGRM; RETIRE. SAVINGS BD
2:34:50 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO.
135 "An Act establishing the Alaska Work and Save Program;
establishing the Alaska Retirement Savings Board; and providing
for an effective date."
2:35:11 PM
SENATOR BILL WIELECHOWSKI, District K, Alaska State Legislature,
Juneau, Alaska, Sponsor of SB 135 briefly introduced SB 135. He
said the idea is to ensure small businesses can have small
retirement accounts for workers. He said SB 135 is supported by
American Association of Retired Persons (AARP).
2:35:40 PM
CHAIR BJORKMAN opened public testimony on SB 135.
2:36:09 PM
GORDON GLASER, representing self, Anchorage, Alaska, said older
people do not want to be dependent on [anyone] for housing,
food, transportation. He said they are entitled to their
dignity. He said prevention is better than remediation. The
option to have a productive pension program that is available to
give them that choice is the best way to deal with this problem.
He shared a Greek expression that said a healthy society is one
in which old people will plant a tree knowing they will never
enjoy its shade. He urged the committee to support SB 135 in the
interest of preserving the dignity of retirees and comparing the
support to planting a tree for future retirees.
2:37:25 PM
CHAIR BJORKMAN closed public testimony on SB 135.
2:37:34 PM
CHAIR BJORKMAN solicited a motion.
2:37:43 PM
SENATOR MERRICK moved to adopt the committee substitute (CS) for
SB 135, work order LS0495\U, as the working document.
2:37:54 PM
CHAIR BJORKMAN objected for purposes of discussion.
2:38:02 PM
HUNTER LOTTSFELDT, Staff, Senator Wielechowski, Anchorage,
Alaska said the only change in the CS to SB 135 is to change the
effective date to July 2025 from July 2024 to allow the
administration time to set up the program.
2:38:27 PM
CHAIR BJORKMAN said a number of questions and comments posed by
the Permanent Fund Division and the Treasury had been received
by his office. He suggested those questions would be best dealt
with in [Senate] finance [Committee].
2:39:04 PM
CHAIR BJORKMAN removed his objection. He found no further
objection and CSSB 135 was adopted as the working document.
2:39:18 PM
CHAIR BJORKMAN solicited the will of the committee.
2:39:30 PM
SENATOR MERRICK moved to report the committee substitute (CS)
for SB 135, work order LS0495\U from committee with individual
recommendations and attached fiscal note(s.)
2:39:42 PM
CHAIR BJORKMAN found no objection and CSSB 135(L&C) was reported
from the [Senate Labor and Commerce Standing Committee].
2:39:51 PM
At ease
SB 257-ELECTRIC UTILITY REGULATION
[Contains discussion of SB 117 and SB 123]
2:41:35 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 257 "An Act relating to the
Regulatory Commission of Alaska; relating to public utilities;
relating to electric reliability organizations; relating to the
Alaska Energy Authority; relating to the Rail belt Transmission
Organization; and providing for an effective date."
2:41:58 PM
SENATOR CATHY GIESSEL, District E, Alaska State Legislature,
Juneau, Alaska, Sponsor of SB 257; gave a brief overview of SB
257. She said SB 257 creates a unified transmission system with
the goal of expediting the lowest cost energy access and
movement. It creates a Rail belt Transmission Organization
(RTO), which will work in collaboration with the Rail belt
Reliability Council. They will manage transmission, planning,
possibly construction of transmission in the future and applying
for grants to fund and upgrade Alaska's transmission system.
They will work under the Regulatory Commission of Alaska (RCA)
oversight related to tariffs.
2:42:42 PM
CHAIR BJORKMAN announced invited testimony for SB 257.
2:43:00 PM
JENNIFER MILLER, CEO/Manager, Renewable Independent Power
Producers, Anchorage, Alaska, introduced herself and said
Renewable Independent Power Producers (RIPP) develops, builds
and operates utility-scale solar farms in Alaska, for example
the Willow and Houston Solar Farm projects. She said RIPP's
mission is to diversify Alaska's energy generation mix and to
suppress energy prices for Alaskans through cost-competitive
renewable energy projects.
MS. MILLER said she was speaking as an Independent Power
Producer (IPP) and that she recently had the honor of serving on
the Governor's Energy Security Task Force and was the co-chair
for the railbelt subcommittee. She described the Task Force as
diverse, yet with significant areas of agreement. She said they
were able to align and define a common goal: Alaska's future
energy would be more reliable, more diverse and more affordable.
She said SB 257 is the enabler for that long-term future.
2:44:54 PM
MS. MILLER described the current energy transmission system. She
said there is a diverse group of owners such as the Homer
Electric Association, Alaska Energy Authority, Chugach Electric
Association, Matanuska Electric Association, etc. The system is
broken up and regionally managed by those owners which creates
inefficient oversight. She said SB 257 forms the Rail belt
Transmission Organization (RTO), which will create a common
unifying oversight structure, allowing wholistic management of
the grid and will facilitate the reliable, diverse and
affordable future envisioned by the Task Force. The goal is to
move energy from wherever it is most efficiently generated to
the user base. Wholistic management will open opportunities to
apply for and leverage federal grant money to upgrade
infrastructure, improving energy access for all.
MS. MILLER said SB 257 would also eliminate wheeling charges.
She explained that wheeling charges are fees paid to move energy
from one management area to another. She said the fees are
sometimes called "pancake" wheeling charges, [because they stack
up, like pancakes] charging each time energy is moved through.
These charges drive up the energy cost and create uncertainty
when developing new projects because the rates and cost base are
difficult to forecast.
MS. MILLER mentioned SB 217 which also eliminates wheeling
charges and equalizes the tax treatment for IPPs with utilities.
She expressed her support for both SB 257 and SB 217 and her
hope they would pass quickly.
2:48:10 PM
CHAIR BJORKMAN asked whether policies under consideration in SB
257 and SB 217 add or subtract barriers for the permitting and
process to start a new renewable energy project. He asked
whether the bills get rid of red tape or add more steps to the
process for IPPs.
2:48:38 PM
MS. MILLER said the current project approval process for IPPs
that would tie into the transmission [grid] is facilitated
through the Electric Reliability Organization (ERO). The project
approval step is part of the integrated resource planning
process. SB 257 would move that approval and planning under the
RTO. That approval step should only be in one place, the ERO or
the RTO and because that step is related to energy generation,
there would only be one project approval required. She clarified
that it would not be an additional step, but would remain a
single step.
2:49:38 PM
CHAIR BJORKMAN asked whether Ms. Miller had a preference for
where that planning step would be [with the ERO or the RTO].
2:49:47 PM
MS. MILLER said the ERO has had a slow start. She said there is
a diverse stakeholder set and that diversity sometimes requires
more time to iron out processes. She said the ERO is hiring a
CEO to facilitate efficiency. She opined the integrated resource
planning process should remain with the ERO and transmission
planning should be with the RTO. She said her organization does
both planning and execution [of projects] which allows
efficiency; so, if the RTO is constructing transmission
upgrades, she advocated for keeping the planning work with the
RTO as well, because planning is tightly tied to financing. She
said, especially when pursuing federal grants, it makes sense
for the transmission planning to stay with the RTO. She proposed
that, because the ERO has already done so much legwork, allow
them to continue with the generation planning and keep the
integrated resource planning with the ERO.
2:51:08 PM
CHAIR BJORKMAN asked what the expected timeline is for the ERO
to create an integrated resource plan. He noted that it had been
four years since the group was created and opined that was a
long time.
2:51:31 PM
MS. MILLER said she was not part of the ERO group and is only
familiar with it on the periphery. She deferred the question to
the ERO and observed that there was a lesson to be learned from
SB 123 and timelines. She advocated for firm timelines and
accountability. She suggested adding a timeline to SB 257,
specifying a date for forming the RTO and eliminating
transmission wheeling charges. She offered to follow up with a
firm date for the integrated resource plan.
2:52:46 PM
TONY M. IZZO, CEO, Matanuska Electric Association, Palmer,
Alaska said he brings 40 years of experience in the energy
industry with the last eight years as the CEO of the Matanuska
Electric Association. He said he strongly supports SB 257. He
said he co-chaired the rail belt subcommittee of the Governor's
Energy Security Task Force with Ms. Miller. The Task Force was
formed to develop a statewide comprehensive energy plan that
would evaluate energy generation, distribution and transmission
for the many communities of the State of Alaska. He said the
duty and responsibility of the task force was to identify
solutions for meeting Alaska's energy needs now and for the
future with a focus on affordability, reliability and energy
security. He said at the very first meeting of the task force,
the governor described a goal of achieving $.10 per kilowatt
hour by the year 2030, a moonshot goal the task force took
seriously. He said after dozens of meetings, including public
meetings, presentations and considerable discussion by the task
force, they concluded lower rates were not achievable in the
near term, especially not with the Cook Inlet natural gas
situation. They chose to focus on building a foundation for the
future of Alaska to achieve lower energy costs and facilitate
economic development. He said the task force unanimously came
together around three goals. He said the third goal was to "grow
the load" and he explained growing the load spreads the cost
across more consumers. The second goal was to diversify fuel
supply, specifically for energy security purposes, especially
away from natural gas in Southcentral Alaska. He said the task
force was charged with review and recommendation of a Renewable
Portfolio Standard (RPS) versus a Clean Energy Standard (CES).
He said the task force learned that cooperatives are not subject
to penalties because they are passed directly to consumers, but
investor-owned utilities pass penalties to shareholders rather
than raising rates.
2:56:14 PM
MR. IZZO said the number one goal of the task force was [energy]
transmission unification. He said the task force determined
that, as a foundation for the future, Alaska needs a single
backbone for the transmission of energy. He suggested a single
road from the Kenai Peninsula to Fairbanks as a metaphor to
describe the Railbelt Transmission Organization (RTO). He said
[currently] there are parts of the road that are dirt, parts are
gravel, parts are two-lane highway and it's owned by four
different parties with four different boards and four
communities. He opined the single most important step to take
today, for our future, no matter what kind of [energy source],
whether it is renewable, wind, solar, nuclear, sequestered
carbon from coal, etc., is the formation of the RTO.
2:57:26 PM
MR. IZZO expressed appreciation to the governor and the Senate
Resources Committee for crafting SB 257 and SB 217. He said they
eliminate the wheeling charges or the "toll" to get energy
through the four different service areas, removing an
obstruction for bringing on alternate sources of power,
especially at the economy of scale that makes it affordable for
75-80 percent of the population across the rail belt. He said SB
217 brings parity to IPPs and their private sector investors. He
said it reduces risk to ratepayers and he said that is good. He
said the downside in SB 217 is the need for clarity in its
language regarding the wheeling charges and the "transmission
association" that was identified.
MR. IZZO said SB 257 clarifies a path forward and fills in
important gaps. He said SB 257 is aligned with the governor's
task force recommendation and with the governor's press release
on SB 217. He expressed support for merging SB 217 and SB 257.
He said SB 257 focuses the scope on a larger public interest,
with the focus on the backbone of energy transmission that is
beneficial to the entire system, not just localized needs. He
said Alaska has grown beyond the current system which is
localized. He compared the energy system to a highway and said
the state's role is to develop infrastructure for the common
good as well as to open up opportunities for economic
development. He said the transmission system and the RTO as
described in SB 257 will accomplish that. He said SB 257 will
eliminate wheeling tariffs, which will work in Alaska and has
been proven to work in other places. He said SB 257 creates a
transmission organization that can own part and operate the
system for the common good and not just localized interests. He
said people have asked whether [forming the RTO] is necessary
and proposed that it be included in the Railroad Reliability
Council (RRC). He pointed out that having the RRC manage
transmission assets would be a direct conflict of interest and
as a CEO that has worked for investor-owned utilities in and
outside Alaska, he said he is keenly aware of the view of
lenders when turning over control of assets that are mortgaged.
He said he would have great difficulty approaching a lender to
say the transmission assets that are managed by fiduciaries and
a board of directors, and a CEO will now be managed by someone
else. He said the qualifications of fiduciaries are very
specific and that specific core competence is not present
throughout the RRC.
3:01:42 PM
MR. IZZO said SB 257, with the RTO, creates a place to put the
new grid assets; it consolidates about one third of the
transmission the state owns along the rail belt and that will
grow to over 50 percent, along with utility transmission assets
that are specific to the backbone. He said SB 257 creates a
structure for decisions to resolve conflicts without legal
action. He noted discussion about using a BP or Bradley Project
management committee-like structure. He said the Bradley Lake
Project Management Committee (BPMC), with 24 years in the rail
belt, is the highest functioning organization that he has seen
with operating costs around $1 million or less per year. He
opined that was because it was managed by the asset owners,
essentially with in-kind labor. He said he was a member of the
BPMC and they do not charge their time to the state. He said
BPMC believes that the project brings benefit to the members, so
he considers his time to be "in-kind." He said there are long-
standing agreement in place to avoid conflicts and pointed out
that over the past 27 years, tens of millions of dollars of
disputes in the past have been over transmission. He said SB 257
would eliminate the possibility of those expensive disputes in
the future. He said SB 257 increases the accountability to
ratepayers versus being an Alaska Energy Authority (AEA)-only,
by creating a management committee like the Bradley Project. He
said regulation is necessary, as identified in SB 257, which was
a task force recommendation. He said SB 257 also allows for
governance of the transmission system which has been proven to
work, ensures accountability and the public is open to
management-committee type meetings and can provide comment
online or in person in that type of structure.
3:04:06 PM
MR. IZZO recommended improvements to SB 257, such as leaving the
integration resource or generation planning process with the
RRC. He acknowledged the frustration with the four years it has
taken to get started but said he would like to give it more
time. He said he would remove from the ERO the transmission,
planning and tariff function. He said that was critical for the
RTO to succeed. He said clarity, intent and rate-recovery
language would be helpful; uploading the backbone, only costs
through the utilities to the end-user is critical. He again
compared the transmission system to a highway and said, if you
drive from point A to point B, that's all you pay for, but with
the transmission system, if you drive any part of the "road,"
you will pay for the whole system. He said the task force
suggests distinguishing the backbone to set up infrastructure
for future development that provides a foundation for a much
better and lower cost energy future; and we have outgrown the
current structure. He said SB 257 would eliminate inequities
between IPPS and utility-based projects and by being regulated
ensures the RCA has a lead role.
3:06:31 PM
MR. IZZO concluded by saying now is clearly a time to send a
signal to investors, developers and federal funders like the
U.S. Department of Energy that Alaska is ready to put skin in
the game and create a transmission system for the future that
will bring in industry and lower rates for all. He said the
current situation is the result of our existing system and
structures and he did not believe anything will improve without
legislative intervention.
3:07:11 PM
MR. IZZO said there is a lot of talk about collaboration in the
rail belt and he commended the true collaboration of the people
who keep the lights on and repair outages, however he thinks
there is more attention focused on insuring a perception of
collaboration. He suggested that if the utilities were investor-
owned there would be a strategic alliance. He said, though the
individual distribution utility would still exist, there would
be a unified message about goals, keeping rates low, providing
infrastructure for new consumers and reliability. He suggested
if there are inconsistent messages coming from utilities that
supported SB 257 and now don't support it, that should be more
of a reason for the legislature to take action.
MR. IZZO said this moment requires bold visionary action,
visionary leadership from elected officials. He said Alaskans
have entrusted the leadership with these decisions. He said this
is a moment in history when [leaders] will be judged, not so
much on what is done as on what is not done.
3:09:02 PM
CHAIR BJORKMAN noted the mention that the scope of knowledge
needed for the ERO board to be effective and their ability to
produce a work product in a timely manner may be lacking. He
also noted the desire to maintain the generation planning with
the ERO and asked whether there should be "side boards" or
guidelines for members of that board or timelines for work
products or limits to the amount of cost-recovery that the ERO
is able to undertake as they hire their own consultants and
duplicate efforts that utilities have already done.
3:09:56 PM
MR. IZZO said it was important to clearly state expectations and
consequences are important when it comes to work performance. He
said the RRC has had an unintentional slow start. He expressed
concern over what could be a $10 million per year organization
to adopt and enforce reliability standards and conduct
integrated resource plans every few years. He said, if costs
reached that level, it would exceed Regulatory Commission of
Alaska (RCA) costs for the entire state. He said he is concerned
about costs and, as a business leader is more focused on value
propositions. He said it was very frustrating to Matanuska
Electric Association (MEA) to experience hard push-back when
they asked the Railroad Reliability Council (RRC) to provide a
report on some relative frequency around their results, because
one of the intents of SB 123, 2020 was high functioning of the
rail belt utilities. He described the RRC as a one-stop shop
with independent voices conducting integrated resource plans as
the right thing for consumers. He explained that it is important
for the RRC to be able and willing to demonstrate and
communicate its results and fulfilling its purpose.
3:12:56 PM
CHAIR BJORKMAN said as the RRC goes forward, issuing reports,
etc., he said it would be important to gauge the cost to
individual ratepayers. He noted there are many line items on a
utility bill and he wondered if MEA includes a line item that
explains the cost of the RRC over the past four years to
ratepayers, for a report that has yet to be produced.
3:13:30 PM
MR. IZZO said the line item has been added as recently as 2023.
He said MEA provided communication to members of the RRC cost
and intent. He urged setting expectations and consequences, but
also advocated allowing RRC adequate time to produce a work
product and he opined that four years is getting pretty close.
He proposed asking the RRC to tell when they could be expected
to adopt reliability standards, explain how the standards will
be enforced, a timeline for enforcement and what the associated
costs are, in other words when there would be an integrated
resource plan. He said the RRC may have determined and
communicated some of those things, but not yet the most
important aspects. He said that, in business, if a product isn't
meeting expectations, the business must determine what revisions
are necessary to deliver the expected product.
3:15:06 PM
CHAIR BJORKMAN referred to the Bradley Project Management Group
(BPMG) and asked what elements of the RTO as described by SB 257
and SB 217 differ from the BPMG
3:15:37 PM
MR. IZZO said the development of the RTO in SB 217 is very
unclear. He said it was not aligned with the recommendations of
the task force, and he did not think it was aligned with the
governor's press release. He said there was a lot yet to flesh
out and regulations would have to follow approved legislation.
He said the intent of the task force was that the RTO would be
similar to the Bradley Project Management Group in structure. He
described that structure, explaining that the co-ops which take
power from Bradley are the governance body along with the Alaska
Energy Authority, which is the owner of the generation asset. He
compared that with the RTO and said the intent was that the AEA
would be the owner of much of the transmission infrastructure.
He described parts of the transmission system and how they
currently connect to one another. He said the state owns parts
of the system now and will own any assets built by the Grid
Resilience and Innovation Partnerships Program (GRIP) funding,
which are anticipated at first to be the High Voltage Direct
Current (HVDC) line from somewhere on the Kenai Peninsula and
the Homer system over to Southcentral Alaska. He said the
application had also been made to extend the line to Healy which
is needed to double-circuit. He said the RTO would be made up of
the state and the asset owners and would have very structured
voting rights, public meetings and public input and the state
would have final veto rights.
3:19:10 PM
CHAIR BJORKMAN asked whether Mr. Izzo would support language in
SB 257 to protect utilities if they become disconnected from the
rest of the grid or "islanded". He further asked what could be
done to protect utilities from costs associated with the RTO if
the utilities will be islanded as scheduled by another utility.
3:19:38 PM
MR. IZZO compared the current system with the ideal system,
which he described as a first-world system because it would have
two transmission lines. He pointed out line losses occur with
the current system, such as the Swan Lake fire and shutdowns for
other emergencies or regular scheduled maintenance. The line
losses cause higher costs for the utilities than would be the
case if a second line were available to carry power from other
sources. He said when the two-line system is built there will be
benefits and savings for costs that will no longer be
experienced. He also said the new system will set Alaska up for
economic opportunity of larger scale, lower cost power from
renewable sources, nuclear, etc. than is now available.
3:21:00 PM
MR. IZZO acknowledged a significant step between the current
system and the ideal. He noted that wheeling charges could be
eliminated now and said there was an appropriate way to do that
so no one utility or its members are harmed. He proposed an
immediate rate structure that would provide for building the
second line from the Kenai Peninsula to Healey. Until that
second line was built, some utility members would be subsidizing
other utility members because those utilities would be islanded,
or without access because of constraints on the system to the
lowest cost power necessary. He opined that the change could be
done in a stepped fashion, beginning with eliminating wheeling
charges now, getting rid of those constraints for the
Independent Power Producers (IPPs). As the system is de-
constrained a shift would be made to a standard rate.
MR. IZZO said, if a utility becomes islanded, once the new
system is built out, that utility should be exempt from paying
the costs of the overall system since their members would not be
able to take advantage of the overall system. He opined that
there was a way to do that where no one is harmed.
3:23:00 PM
CHAIR BJORKMAN referred to the scheduling of power movement up
and down the rail belt and asked whether utilities are able to
schedule power in such a way that it would disadvantage other
utilities in their ability to move power.
3:23:53 PM
MR. IZZO said there are ways that can happen and he has seen it
happen. He said the BPMC is effective in addressing that kind of
action immediately. He urged that creating an RTO structure
takes out the parochial politics, because with the GRIP funding
the state will own 50 percent or more of the rail belt
transmission. The state is not in any way involved in
transmission assets and he said that "an adult" is needed on the
rail belt. He said once the state has that much ownership and
having an RTO with bylaws and a formal structure versus
individual regulated utilities, will eliminate a lot of the
problems experience in the past. He mentioned that the state
does oversee transmission wheeling revenues now, but it is done
on through the RCA on an individual utility basis, not on a
macro level with a "backbone" perspective. He reiterated that
moving to that structure will eliminate a lot of the drama and
problems experienced in the past.
3:25:49 PM
CHAIR BJORKMAN asked whether the open access language of SB 257
would allow one utility or one IPP to sell power directly to a
large consumer (such as a mine or a refinery) in another
utility's area.
3:26:32 PM
MR. IZZO suggested that there may be a need for clarifying
language. He said this does happen through economy energy sales
and without specifics due to non-disclosure agreements he said
there are currently two utilities meeting with another regarding
a renewable project that is of a scale that is more than any
utility could take. He said there would be no obstruction to
doing that and when there are two lines and there are no
constraints on transmission and there is good reliability, it
would be possible for an entity to access competitively priced
power. He said that would be a positive situation because of job
creation, increased residential meters, and emerging service
industries that a utility would benefit from. He said he could
not think of a situation where a utility would disagree and try
to intervene, but he said he did not know.
3:28:37 PM
CHAIR BJORKMAN appreciated Mr. Izzo's testimony and sought to
determine whether there was a need for clarifying language
regarding open access that would prevent cannibalization of
customers from one utility service area to another.
3:28:59 PM
MR. IZZO said language to obstruct [one utility selling power
outside its region] could be needed and he would look into it.
He said his vision and the task force's vision for the rail belt
was that, unifying transmission and building out the grids from
the Kenai Peninsula to Healy using the GRIP [federal] funding
would level the playing field. He said the state would
automatically go to an economic dispatch in which the lowest
cost energy generation would benefit every entity in the system.
He said, with that as the ultimate goal, he did not see where
there is a problem. He said there might be a utility that might
have a concern and it would be prudent to see that there isn't
something in a regulation or a statute or a tariff that would
interfere with doing what would be best for the state's economy.
3:30:32 PM
JOHN ESPINDOLA, Commissioner, Regulatory Commission of Alaska
(RCA), Anchorage, Alaska, read the following statement:
[Original punctuation provided.]
Good afternoon and thank you for allowing me this
opportunity to provide public testimony.
For the record, my name is John Espindola,
Commissioner with the Regulatory Commission of Alaska.
This afternoon I am here to testify on behalf of the
RCA regarding some of the general powers of the
Commission, set forth in statutes and regulations, as
it relates to regulating utilities while protecting
the public interest.
• Statute AS 42.05.141 speaks specifically to the
"general powers and duties of the commission". Two
subsections I will be highlighting today are
subsections (a) and (d).
• Subsection (a) reads, The Regulatory Commission of
Alaska may do all things necessary or proper to
carry out the purposes and exercise the powers
expressly granted or reasonably implied in this
chapter including:
1. regulate every public utility engaged or
proposing to engage in a utility business inside
the state, except to the extent exempted in AS
42.05.711
2. investigate, upon complaint or upon its own
motion, the rates, classifications, rules,
regulations, practices, services, and facilities
of a public utility and hold hearings on them;
and
3. make or require just, fair, and reasonable rates,
classifications, regulations, practices,
services, and facilities for a public utility
3:32:07 PM
MR. ESPINDOLA continued:
Now, I will speak to the Commission's methodology in
determining just and reasonable rates and how the
Commission regulates the cost of energy for consumers.
The overall cost of energy for consumers is comprised
of non-fuel costs which are established through a
revenue requirement including fuel and purchased power
costs which are recovered through the Cost of Power
Adjustment also known as the COPA.
• Statute AS 42.05.381 states: Rates to be just and
reasonable, subsection (a) reads, all rates demanded
or received by a public utility, or by any two or
more public utilities jointly, for a service
furnished or to be furnished shall be just and
reasonable.
• We are charged by this statute to ensure that rates
are just and reasonable. To determine just and
reasonable rates the Commission reviews a utility's
proposed total annual required earnings, known as
the revenue requirement. At a high level, the
revenue requirement is the sum of the utility's
prudently incurred allowable expenses such as taxes,
interest on debt incurred by the utility, operating
expenses, annual depreciation, and a fair return on
investment.
3:33:23 PM
MR. ESPINDOLA continued:
• To determine the revenue requirement, we utilize a
"normalized test year" which is defined in
regulation 3 AAC 48.820 (42)
• In addition, regulation 3 AAC 48.540 requires an
electric utility to file a cost of service study
with a revenue requirement if their annual kWh sales
exceed 100,000,000; for an electric utility that has
less than 100,000,000 kWh in annual sales, a cost of
service study is required if the utility proposes a
new rate design. In this instance when a utility
proposes a new rate design, once the revenue
requirement has been determined, we review the "cost
of service study" defined in regulation 3 AAC 48.820
(40)
• This component of the ratemaking process allocates
the revenue requirement among customer classes.
Also, when verifying pricing objectives, the
Commission refers to 3 AAC 48.510 which reads, "the
cost causer should be the cost payer". The results
of the cost of service study are used as the basis
to develop rates for specific customer classes.
3:34:43 PM
MR. ESPINDOLA continued:
• Regulation 3 AAC 52.502(a) establishes the criteria
for adjustment clauses (i.e the COPA), where a
utility recovers fuel and purchased power costs
outside of the revenue requirement. In order to be
allowed to recover the costs through the adjustment
clause, cost elements must be approved by the
Commission. These cost elements must meet the
following criteria:
1. Subject to change at a rate that would cause
financial harm to the utility if the costs were
recovered through base rates; I note this is the
rate established in the revenue requirement
2. Beyond the control of the utility; and
3. Easily verifiable.
• Lastly, regulation 3 AAC 52.503 establishes the
formula and entries for the COPA, and 3 AAC 52.504
establishes the filing requirements for COPAs.
These filing requirements include invoices to verify
the costs as well as reports on generation and
sales.
Next, I will speak to a recent example of the
Commission approving a filing using factors other
than cost. In March, the Commission approved a gas
contract between a gas supplier and an electric
Railbelt utility. Although the cost of gas in this
filing was higher than what other Railbelt utilities
are currently paying, the commission approved the
contract to ensure the electric utility was able to
continue to provide reliable service to its
customers.
• Statute AS 42.05.141 subsection (d) states, when
considering whether the approval of a rate or a gas
supply contract proposed by a utility to provide a
reliable supply of gas for a reasonable price is in
the public interest, the commission shall:
1. recognize the public benefits of allowing a
utility to negotiate different pricing mechanisms
with different gas suppliers and to maintain a
diversified portfolio of gas supply contracts to
protect customers from the risks of inadequate
supply or excessive cost that may arise from a
single pricing mechanism; and
2. consider whether a utility could meet its
responsibility to the public in a timely manner
and without undue risk to the public if the
commission fails to approve a rate or a gas
supply contract proposed by the utility.
3:37:05 PM
MR. ESPINDOLA concluded his statement:
In closing, it is important to note that as the
Commission fulfills its statutory mandates while
protecting the public interest, ensuring public
utilities are solvent, that they provide safe and
adequate services with just and reasonable rates, and
terms & conditions, are all factors we use in our
decision making process. This afternoon I will not be
taking questions. However, the Commission is willing
to come back at a later date to allow this committee
an opportunity for questions. Thank you and this
concludes my testimony.
3:38:10 PM
MR. ESPINDOLA confirmed he was unable to answer questions at
this time.
3:38:33 PM
CHAIR BJORKMAN postponed public testimony, summarized heard
testimony and made closing remarks.
3:42:05 PM
CHAIR BJORKMAN held SB 257 in committee.
3:42:27 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 3:42 p.m.