HB 453 -- REMOVE JOINT ACTION AGENCIES FROM RCA OVERSIGHT

Status of HB 453 in the Alaska Legislature     AIDEA Energy Policy Task Force   

RCA Position Paper (apparently 2/26/04)    Chugach Electric Position    ML&P Position ???    

LEGISLATIVE ACTION

HOUSE 
Labor and Commerce Committee
2/27/04 (59:30: to 1:59:55)   Minutes 
- 59:30 - Rep. Heinze   
- 1:06 - John Bittner staff to Rep Heinze
- 1:09 - Question from Rep Crawford
- 1:11:16 - Joe Griffith, CEA, to answer question; 38-40 states of the US do not regulate wholesale power or transmission of it.  Wholesale side IS competitive.  1:17 Dialog with Acting Chairman Gatto - Just give $5/hr more on labor contract and pass it on!  Without RCA no break on this activity.  INTERESTING EXCHANGE!!
- 1:19:10 - Tom Lovas CEO 4 Dam Pool -  
- 1:23 - Rep Rokeberg - 
- 1:30 - Joe Griffith - JAA's time has come, we ML&P, GVEA have stepped up to the plate.  We have to get going on this.  These are willing seller, willing buyer contracts; you don't really need regulation of these kinds of contracts.  The CEA rate case cost the Railbelt $5 million.  [That was a waste] 
-   - Legislation is now not clear if it its regulated or not; this makes it clearer.  I can't imagine the boards of these utilities to allow the gouging of their own members.  
- 1:37 - Rep Rokeberg questioning   Most power is moving in the US by publicly held private companies;  
- 1:39:40 - Rep Gatto - question  
- 1:42 - Tuckerman Babcock, MEA - CEA is misrepresenting what the Energy Policy Taskforce report says.  This is a legislative end run around the retail owners of the participating utilities.
- 1:46 - Gatto referred to RCA position ; Eric Yould supports this 
- 1:49 - Guttenberg asks if MEA is a for profit!
- 1:49:47 - Jim Posey, ML&P, We are not seeking to deregulate our retail.  
- 1:57 - Mark Johnson, Chairman, RCA - This legislation represents bad public policy.

3/19/04 (0:00: to 1:55:04)    Minutes
- 37:23 - Mark Johnson, Chairman, RCA - This is a fundamentally flawed bill...basic problem is Sec 2 of the bill, there are many problems, this amounts to a blank check...removes all form of state regulation would set this state on a path unlike any other state in the country.  Frankly we are very disappointed in this coming forward.  I was a little surprised that somehow the RCA did not have jurisdiction over wholesale contracts, I wanted to get that on the record.  There are problems facing electric utilities in the Railbelt, they are aging need new investment...Highly probable that if this is passed in its current form project would be undertaken, there would be no ability to control the largest component of the electric costs in the Railbelt. I've seen a proposed amendment...that revision is worse then the original.  42.05  page 2 and line 15 very quietly adds ...probably opens up a wide field of action in the Four Dam Pool situation.  To make adjustments to that is a very dangerous thing to do.  We appreciate the utilities are trying to develop an approach to making investments in new generation...Our activities provide certainty and stability to investment.  Doing away with us is not the way to get their.  I don't think the utilities have put a lot of effort and thought into this.         
- 51:20 - Rokeberg - My understanding is that currently wholesale is not regulated.  Johnson 42.05.431 b says that is not true.  In the lower 48 the only thing different is that FERC reviews it.  
- 56:39 - Gotto - Utilities have monopolistic power, we have to protect them.  Is there any reason removing a regulatory commission is good for the consumer?   
- 1:01:20 - Dave Calvert, Seward Electric, We are opposed to the JAA being unregulated.   
- 1:04:42 - Rick Baldwin, HEA General Counsel, We are opposed to deregulation of wholesale power contracts.  Ownership of generation resources are too concentrated in too few hands.  JAA members could skim the cream of the best quality power and the non members could get what's left.  We provided proprietary info to the EPTF and now they are moving forward to construct [with our information??] As for the assertion that contract law could solve disputes:  The courts are not equipped to deal with complex rate matters like the RCA which has professional staff in ratemaking.  The courts don't have this.  Typically they just have a judge and a secretary.  There's no reason this has to be wrapped up this session.  
- 1:10:42 - Christine Peal, VP at Seattle NW Securities in the Public Power Group.  Rating agency perspective.  What's being proposed here is what is normal in public power.  S&P financial report comments on the autonomy of public power being able to regulate their own operation.  Recent downgrading CEA experienced in 2003 due to the latest rate reduction ordered by the RCA.  1:17 Question from Rep. Crawford:  Why is now the critical time when rates are so low?  It seems that now it is unstable because of deregulation and we are moving away from that [good observation!]  Regulation will lower the rating because it is a constraint.          
- 1:23:27 - Rep Gatto - question    ANS by Peal:  Public utilities are not in business to make a profit...How would CEA overcharge if it is a willing buyer and seller who sign the contract?  Competition hasn't really take root in Texas or elsewhere.     
- 1:29 - Christine Peal continues her testimony.  The current unfavorable environment is costing ratepayers money here in Alaska because of an unfavorable regulatory environment casting a long shadow over the entities that borrow.  They better not drop again or it will put them in an entirely different realm...  Rep Rokeberg - Was CEA's downgrade due to other factors then bond downgrading. Is wholesale power flow unregulated on the Western grid?  YES... I also have worked for CEA as a financing consultant.          
- 1:37:36 - Eric Yould, Alaska Power Association - I am upset and disturbed with the testimony of Mark Johnson.  We favor JAA's ; then this bill came long to create them without RCA regulation.  We have taken the position of being in favor of the bill except that Seward and HEA do not favor this bill. There is a concern that we get the best financing for our agencies.  Four Dam Pool got exempted by the legislature and the Bradley Lake and intertie and all are doing fine.  Johnson said that without regulatory oversight the utilities age going to go out an gouge the public.  But these are all public entities!!  They don't have a desire to go out and charge the most to send back a big dividend to bond holders.  That's why we don't have IOU's because they are clustered around urban areas back east.  Outside, 23 states do not regulate cooperatives, 8 give the option of being regulated or not, CA does not regulate their coops but in their munis or coops the rates stayed down where they should be.  This is not a deregulation bill because it does not eliminate any service territories.  The testimony of Mr. Johnson, RCA can adjudicate differences but it does not come in advance of the contract.  The RCA implies under the current statutes it must obtain prior approval before putting in generation and that is patently not true!  There is nothing in the statutes for prior approval of siting.  They have the authority afterward but not before.  Rep. Rokeberg asked about the statute saying advance approval is needed.  Yould said no one does it.  [prematurely cut off at 1:55:04]     

Please send comments or questions to Chugach Consumers