Session: State Capitol, Room 515 Juneau, AK 99801-1182 Phone: (907) 465-3424 Fax: (907) 465-3793 Interim: 50 Front Street, Suite 203 Ketchikan, AK 99901 Phone: (907) 247-4672 Fax: (907) 225-8546 716 W 4th Avenue, Suite 360 Anchorage, AK 99501 Phone: (907) 269-0129 Fax: (907) 269-0128

Sponsor Statements for HB 496
Public Utilities Exempt from Regulation

An Act providing that a utility or electric operating entity owned and operated by a political subdivision of the state competing directly with a telecommunications utility is not subject to the Alaska Public Utilities Regulatory Act.

HB 496 allows a municipality to continue to self-regulate its municipally owned utilities even if another utility enters into competition with it.

Alaska law presently provides that a municipally owned utility is exempt from rate regulation by the Regulatory Commission of Alaska ("RCA"). However, the exemption is lost if another utility enters into competition with the municipally owned utility. The municipally owned utility loses its exemption even if the competing utility is not rate regulated in any way.

The result of competition between a municipally owned utility and a non-rate regulated utility under present law would require the municipally owned utility to become fully rate regulated by the RCA while its competition could be completely unregulated.

HB 496 attempts to level the playing field. HB 496 continues the exemption for municipal utilities in the face of competition except when the competition is from a fully rate regulated utility. At that point, the municipal utility loses its exemption and both the municipal utility and the competing utility would become fully rate regulated by the RCA.

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