"An Act relating to the regulation of water and sewer utilities of political subdivisions that are not in competition with other water and sewer utilities; and providing for an effective date. "
House Bill 108 would exempt Anchorage Waste Water Utility from regulation by the Regulatory Commission of Alaska (RCA). Except for the City of Pelican, no other municipal owned water/wastewater utility is regulated by the RCA. (Pelican requested regulation of its water utility by the RCA).
The current RCA regulation processes are cumbersome, slow, expensive, and non-responsive to local needs. Ratepayers are required to pay for the expensive RCA regulatory process as a surcharge on every bill, whether or not their utility has a case pending. For example, from 1993 until 2003 AWWU never had a rate increase from the RCA or the APUC, yet ratepayers have paid a regulatory assessment to the RCA as part of every bill. In 2004 AWWU ratepayers are projected to pay about $500,000 to the RCA to cover the costs of regulation. The greatest costs appear in the form of regulatory delay in obtaining approval of a requested change.
The MOA is directly accountable to ratepayers served by the utilities - they are voters. The Municipality has experience successfully regulating enterprise activities. The Port of Anchorage, Solid Waste Services and Merrill Field are all financially sound and provide first class customer service. Municipal public hearings are held on any proposed rate increase and the public is very involved in the hearing process.
HB 108 changes existing law by adding language stating a water or sewer utility owned by a political subdivision not directly competing with another water or sewer utility is exempt from RCA regulation. Additionally, Section 2 continues any pending matters before the RCA and therefore those matters are not affected by this legislation. Additionally rulings made by the RCA pending the effective date of the legislation remain in effect until the public body is established and completes a rate review process based on the utility's cost in a test year (test year not earlier than 2004).
HB 108 also contains a contingency clause in Section 3, which allows the legislation to take effect only if the governing body establishes a separate body to continue the fair and open process of setting rates based on standard industry practices.