Advocates decry lawmakers’ push to tighten regulators' deadline to review utility price hikes
Under a last-minute proposal from Anchorage Democratic Rep. Carolyn Hall, regulators would have nine months instead of 15 months to vet utility proposals.
Consumer advocates are objecting to a proposal advancing in the final days of Alaska’s legislative session that would sharply reduce the amount of time regulators have to review proposed rate increases by the state’s utilities.
The proposal would give the Regulatory Commission of Alaska, known as the RCA, 270 days to review new rates for utilities that sell goods like electricity and natural gas — down from the 450 days the agency currently is allowed by state law.
During that period, the agency scrutinizes documents submitted by the utilities, which are typically monopolies, in support of the prices they want to charge consumers — ensuring that rates are “just and reasonable” and “non-discriminatory.” It also holds hearings to consider objections and arguments submitted by businesses, consumer advocacy organizations and other entities that can participate in the proceedings.
Anchorage Democratic Rep. Carolyn Hall, co-chair of the House Labor and Commerce Committee, which has jurisdiction over the RCA, proposed the change last week in an amendment to a bill originally sponsored by Anchorage Republican Sen. Cathy Giessel.
Giessel’s legislation, Senate Bill 180, aimed to clarify the commission’s authority to regulate imports of liquefied natural gas.
Hall, who did not respond to multiple requests for comment this week, said at the hearing where she offered the amendment that existing “long timelines” limit Alaska’s utilities’ ability “to recover expenses and investments in a timely manner.”
At the hearing, officials from the cooperatively-owned electric utilities in both Fairbanks and Anchorage endorsed the proposal, and Hall said it’s also supported by Republican Gov. Mike Dunleavy’s office. (Officials with Dunleavy’s office did not respond to a request for comment.)
“We’re not advocating for a less-rigorous process, but more efficient timelines,” Ashley Bradish, an official with Fairbanks’ electric utility, Golden Valley Electric Association, said at the hearing.
Nathaniel Herz
Chugach Electric Association, Anchorage’s electric utility, believes the change would “save time and money in the adjudication of regulatory proceedings which will benefit our members, the utilities, and the commission,” spokeswoman Julie Hasquet said in a statement to Northern Journal.
But consumer advocates say they have concerns about the change to state law.
Energy prices in urban Alaska are expected to rise sharply in the coming years amid an impending supply crunch in the locally produced natural gas that fuels power plants and heats homes and commercial buildings.
The state’s regulatory commission “is responsible for ensuring that utilities do not charge their ratepayers unfair or unreasonable rates,” Brian Kassof, an analyst at the Alaska Public Interest Research Group advocacy organization.
“Without knowing how the RCA would implement accelerated timelines, it is impossible to know exactly how changes to the process would harm protections to ratepayers,” Kassof said in a statement to Northern Journal. “But a 40% reduction in the timeline would almost certainly erode these protections.”
Hall’s proposal came in an amendment “without advanced notice to the public,” Kassof said. Changes with the potential for such significant impact, he added, require “an open and substantial public discussion beyond what can occur in the final weeks of the legislative session.”
Advocates also note that the commission, by its own admission, has faced problems with staff recruitment, retention and vacancies — though the commission says it continues to meet its legal obligations.
Utilities can also recover costs while their permanent price increases are pending through what are known as "interim" rates — where consumers pay higher proposed prices until a decision by the commission, at which point any part of the increase that's rejected by the commission has to be paid back by the utility.
Officials from the commission did not appear at the hearing; Hall said they support the proposal. John Espindola, the commission’s chair, declined to comment on the proposal when reached by phone.
SB 180 remains in the House Labor and Commerce Committee. Giessel, the senator who originally sponsored the legislation, said she’s not opposed to Hall’s amendment.
The committee plans to hold another hearing on the bill, said Anchorage Democratic Rep. Zack Fields, who with Hall is co-chair of the committee. Reached by phone Wednesday, Fields said he started hearing concerns from advocates about Hall’s amendment this week and that they’re “legitimate, and should be addressed.”
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