Legislature(1999 - 2000)

05/06/1999 09:15 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 SENATE BILL NO. 157                                                                                                            
"An Act relating to power cost equalization; and                                                                                
providing for an effective date."                                                                                               
MARY JACKSON, staff to Senator John Torgerson was invited                                                                       
to join the committee.   She explained CSSB 157(FIN),                                                                           
version "I" work draft for the committee.  She further                                                                          
briefly outlined the sectional analysis, sections 1, 2, 3                                                                       
and 4.  She explained the difference between the two bills.                                                                     
The committee substitute does not make any differential to                                                                      
kilowatt hours of the original bill and statute; did not                                                                        
add Kenai and Palmer to Statewide average; deleted                                                                              
commercial users; did not lower PCE utility rates; raised                                                                       
the floor from 9.5 to 17.0 cents and added fuel efficiency                                                                      
notice requirements.                                                                                                            
Senator Adams said that one of the greatest impacts was on                                                                      
page two, section two, line nine.  He said it would                                                                             
increase the electrical power equity.  An individual would                                                                      
only receive $93/month.  He thought they were going for a                                                                       
floor between 9.5 to 10.                                                                                                        
Ms. Jackson explained that the question of where to apply                                                                       
this floor was to ascertain which user would be hurt the                                                                        
Senator Green asked about the fuel efficiency notice                                                                            
requirements.  Ms. Jackson said there were two APUC and the                                                                     
Division of Energy who were the "watchdogs" for the                                                                             
efficiency notice requirements.  She said they work with                                                                        
each utility.  Members of the division were present to                                                                          
answer any questions.                                                                                                           
Senator Wilken asked about the spreadsheet and who provided                                                                     
it.  Ms. Jackson said that the department had provided it                                                                       
and they were present to answer any questions.                                                                                  
Senator Green asked if there was any calculation on the                                                                         
impact to schools?  Ms. Jackson said that a specific run                                                                        
was not made on this matter, however, Senator Torgerson had                                                                     
written a letter to the department regarding this matter.                                                                       
They advised that if there was a problem with a particular                                                                      
school they would consider a waiver.                                                                                            
Senator Adams said that different schools depending on                                                                          
their location would have different costs and they would be                                                                     
asking for a waiver perhaps.  He asked if there were any                                                                        
runs available on the difference between 9.5 and 17.0.  Ms.                                                                     
Jackson indicated that it was in the spreadsheet provided                                                                       
by the division.                                                                                                                
Senator Adams commented regarding the PCE issue.  "The                                                                          
public needs to know what direction we are going in if                                                                          
these changes are going to be made."                                                                                            
Co-chair Torgerson referred to line fifteen of the                                                                              
spreadsheet.  Ms. Jackson explained that figure was                                                                             
Senator Parnell MOVED CSSB 157 (FIN) "I" to be ADOPTED.                                                                         
Senator Donley explained that he did not want to see this                                                                       
bill moved out today.  Co-chair Torgerson said he wanted to                                                                     
move the bill out today.  Senator Donley explained that he                                                                      
had drafted amendments but they were to the old version of                                                                      
the bill.  He therefore, OBJECTED.                                                                                              
By a roll call vote of 6 yeas (Torgerson, Parnell, Leman,                                                                       
Wilken, Green, Phillips) and 2 nays (Donley, Adams)(P.                                                                          
Kelly absent) CSSB 157(FIN) "I" was ADOPTED as the working                                                                      
draft before the committee.                                                                                                     
Co-chair Torgerson asked that copies of the work draft be                                                                       
provided the public.                                                                                                            
The committee took a brief at ease at approximately 9:30                                                                        
Co-chair Torgerson reconvened the committee at                                                                                  
approximately 9:40 a.m.                                                                                                         
LAMAR COTTEN, Deputy Commissioner, Department of Community                                                                      
and Regional Affairs was invited to join the committee.  He                                                                     
voiced concern for the small communities regarding these                                                                        
cuts.  He noted they have appreciated working with the Co-                                                                      
chair's staff regarding this issue.  There are                                                                                  
approximately 175 communities receiving assistance under                                                                        
this program, but they were not aware of how many                                                                               
individuals directly were receiving this assistance.  They                                                                      
have made some suggestions regarding increasing the revenue                                                                     
from the Four Dam Pool program.                                                                                                 
Co-chair Torgerson further referred to the floor being kept                                                                     
at 700 kWh.  Mr. Cotten explained.  They have looked at                                                                         
different models to reduce the kilowatt-hours to 350.                                                                           
JOSEPH KOLLAR, Executive Secretary, Office of the                                                                               
Commissioner, Department of Community and Regional Affairs                                                                      
was invited to join the committee.  He concurred with the                                                                       
comments made by Mr. Cotten.                                                                                                    
Senator Wilken asked Mr. Cotten explain the spreadsheet.                                                                        
Mr. Kollar walked the committee through the spreadsheet.                                                                        
Less than half of the kilowatt-hours sold in a community go                                                                     
to commercial users.  Column thirteen was total kilowatt                                                                        
hours consumed.  Column fourteen was kilowatt-hours                                                                             
acceptable to PCE.                                                                                                              
Senator Wilken asked about column nine and how it was                                                                           
derived.  Mr. Kollar said it was set by PCE.  He continued                                                                      
explaining the columns for the committee.  He explained                                                                         
Pelican dropping off the program.  He explained the                                                                             
communities with low usage rates are on page one of the                                                                         
spreadsheet and those with high usage rates are on page                                                                         
five of the spreadsheet.  Communities with a high usage                                                                         
rate stood to lose more than those communities with a low                                                                       
usage rate.  In conclusion he explained the "totals" on                                                                         
page five.                                                                                                                      
Senator Leman asked about page five of the spreadsheet.  He                                                                     
suggested perhaps the "ceiling" should be adjusted as well                                                                      
as the "floor".                                                                                                                 
Co-chair Torgerson asked if a run had been made and Mr.                                                                         
Kollar indicated they had compared what the average payment                                                                     
would be.  He would be willing to provide those comparisons                                                                     
to the committee.                                                                                                               
(pause on record)                                                                                                               
Mr. Kollar explained another comparison for an example for                                                                      
the committee in response to the request from Senator                                                                           
Leman.  He said, however, he did not have a "neat" summary                                                                      
to present on paper at this time to the committee.                                                                              
Co-chair Torgerson asked that runs be provided to the                                                                           
committee by this afternoon.  Mr. Kollar said that was                                                                          
Senator Phillips asked about page one of the spreadsheet.                                                                       
He would appreciate an average also be provided.                                                                                
Senator Adams comments regarding commercial payments.  Mr.                                                                      
Kollar responded.  Commercial as indicated was private                                                                          
commercial and also included some non-profits.  He will                                                                         
look into which non-profits and what commercial and                                                                             
communities.  Senator Adams said he felt this was a very                                                                        
important matter and Co-chair Torgerson concurred.                                                                              
There followed a brief discussion between Senator Adams and                                                                     
Mr. Cotten regarding AIDEA involvement.  Mr. Cotten said                                                                        
that Randy Simmons from AIDEA was on line to answer any                                                                         
Co-chair Torgerson asked the department to have the                                                                             
requested information from Senators Adams and Leman by this                                                                     
afternoon in his office.                                                                                                        
(Tape # 126, Side A switched to Side B at log #589.)                                                                            
Senator Leman explained again his request to the                                                                                
department.  Senator Adams also had brief comments and                                                                          
suggested perhaps another source could be looked for to                                                                         
fund revenue.  Co-chair Torgerson concurred.  He said they                                                                      
would work with Senator Adams to try and sort out this                                                                          
Co-chair Torgerson HELD the bill in committee and said he                                                                       
would bring it up again as soon as possible.  He then moved                                                                     
to teleconference and asked if anyone wanted to testify.                                                                        
Senator Adams said that in looking for revenue sources was                                                                      
there anything available for appropriation from AIDEA?                                                                          
RANDY SIMMONS, Executive Director, AIDEA, Department of                                                                         
Commerce and Economic Development responded via                                                                                 
teleconference from Anchorage.  He said there was                                                                               
approximately $8 million that could be made available.  In                                                                      
response to a question from Co-chair Torgerson he said they                                                                     
were looking at the possibility of higher dividend payments                                                                     
to the State.  They do anticipate higher dividends but do                                                                       
not know the amount.  He would not, however, assume the                                                                         
amount could be lowered by the amount the Governor was                                                                          
putting in the fund regarding PCE for next year.  They were                                                                     
looking at offering up more money for the year 2000.  Co-                                                                       
chair Torgerson said there was only thirteen days left.                                                                         
Mr. Simmons indicated he was aware of this.                                                                                     
ERIC YOULD, Executive Director for ARECA was invited to                                                                         
join the committee.  He voiced his concern with this bill.                                                                      
Co-chair Torgerson assured they would continue working with                                                                     
him also.                                                                                                                       
Co-chair Torgerson SET ASIDE CSSB 157(FIN) "I".  He then                                                                        
called SB 97.                                                                                                                   

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