An Act creating and providing for the Alaska Energy Conservation Commission and transferring to it the powers and duties of the Alaska Public Utilities Commission and the Alaska Oil and Gas Conservation Commission; repealing the Alaska Public Utilities Commission and the Alaska Oil and Gas Conservation Commission; relating to regulation of waste collection and disposal; relating to the powers of the chair of the Alaska Energy Conservation Commission; relating to the appellate procedures of the Alaska Energy Conservation Commission; and providing for an effective date.

SB 133 is an attempt to streamline government by re-structuring the Alaska Public Utilities Commission and the Alaska Oil & Gas Conservation Commission into one commission, the Alaska Energy Conservation Commission. Combining the agencies will improve the long term function, effectiveness, and efficiency of both commissions.

SB 133 has been re-written to address concerns raised regarding the timing of the merger along with other issues. The following changes were made in the Senate Resources Committee to alleviate those concerns.

1. The repeal of the APUC and the creation of the Alaska Energy Conservation Commission will still occur effective July 1, 1999. However, the AOGCC will not merge with the APUC at this time and will require subsequent legislation to do so.
2. The legislature shall authorize LB&A to work on a transition report to be delivered to the governor and the Legislature on the first day of the second session of the 21st Legislature. The Governor shall appoint one commissioner from each commission to work with LB&A on the transition report. The report shall contain recommendations for re-structuring the two commissions into one. It is the intent of the Legislature to introduce legislation during the second session that would combine the two commissions based on the recommendations of LB&A.
3. The AOGCC will physically move to the same location as the APUC as soon as possible, but not later than July 1, 2000. The two commissions will share record keeping facilities and clerical staff after that time.
4. The Chairman of the AECC shall be paid an annual salary equal to Step C, Range 27. All other commissioners shall be paid according to their current pay status.
5. Pipeline regulation and all pending matters, along with at least two tariff staff, shall move to the AOGCC on the effective date of July 1, 1999.
6. The AOGCC shall have access to the additional hearing officers at the AECC during the transition period following July 1, 1999. The hearing officer will likely be needed to assist with pipeline regulation.

This legislation does not create policy changes to the goals and objectives of the commissions other than the de-regulation of the refuse industry. De-regulation of the refuse industry has been recommended in recent legislative audits due to the determination that the cost of regulation may exceed the associated benefits.

Both commissions will continue to operate separately until the legislature has reviewed LB&A's transition report and additional legislation has passed authorizing the merger.

SB 133 repeals the APUC while carrying forward existing regulations as well as all pending matters currently before either commission. The new commission will be composed of five commissioners. The five commissioners shall be members of the general public with no requirement for areas of specific expertise. I feel that specific expertise wasn't necessary and that the public interest would best be served by having maximum flexibility in acquiring qualified individuals from the general public.

The chairman will have limited authority over the other commissioners and general oversight of commission functions. In addition, the chairman shall assign and distribute the workload, set a maximum time allowed for the completion of cases, and manage the time keeping records for commissioners and staff.

The commission will function more efficiently under a new system where the chairman empanels three or more commissioners to each case. This type of system will expedite the process by allowing the chairman to assign an appropriate number of commissioners to each case depending on the magnitude.

SB 133 will improve the professionalism of the commission by strengthening the power of the commissioners while reducing the power of staff. The APUC currently employs a system in which the Executive Director could potentially influence the outcome of pending decisions through the assignment of specific personnel to a case. Commission decisions are the responsibility of the commissioners and should not be within the purview of the Executive Director or staff. This position has also restricted the flow of communication between the commissioners and staff.

Another problem area under the current structure is the dual roles that staff is asked to perform. Staff are often asked to play the role of public advocate on one case while they are acting in an advisory capacity on another. This creates a difficult situation in that the staff may be required to switch roles back and forth while working with the commissioners.

The funding source of the commission shall continue as currently exists with a regulatory cost charge (RCC) on an industry by industry basis. This type of user fee design can establish a basic fairness in that only those who benefit from the regulatory process be responsible for it's cost; it also has the added benefit of encouraging consumers to recognize and eliminate unwarranted regulation through deregulation elections. This benefit can only be realized to the extent that the RCC program reasonably links the cost-causer with the cost-payers.

SB 133 instructs the commission to adopt a time management system to ensure accurate accounting for time billed to each aspect of the commission's functions. Legislative Audit has been recommending a time management system for the APUC in every audit since 1979. To date, the APUC does not use industry or utility codes on payroll time sheets and therefore workloads are approximated using rough estimates.

I have used existing statutory language from both commissions and, in the absence of a preference of one over the other; I defaulted to the language used by the AOGCC. SB 133 will improve our ability to protect the long-term public interest through increased efficiency of the functions of the commission.