Minutes for SB88 - Committee on Utilities

Short Title

Providing for the statewide election of commissioners of the state corporation commission, establishing the utilities regulation division in the office of the attorney general, requiring such division to represent and protect the collective interests of utility customers in utility rate-related proceedings and exempting the state corporation commission from the open meetings act.

Minutes Content for Tue, Feb 14, 2023

The Chairman resumed the hearing and called for opponent testimony on the bill.

Elizabeth Patton called for elected Kansas Corporation Commission (KCC) commissioners in order to hold them accountable to Kansas ratepayers. Ms. Patton claimed that a majority of Kansans preferred to elect the commissioners.

(Attachment 1)

Eric Stafford pointed out that a main driver of increased costs is the result of "transmission line over-buildout." Mr. Stafford supported the stated objectives of the bill. He suggested that the legislature consider processes that give the ratepayer more control over the process.

(Attachment 2)

Committee questions and comments ensued raising the following points:

A committee research request was made for how many commissioners are retained in other states (3 or 5 or more).
The bill does not establish a non-partisan method of electing commissioners.
Discussion ensued regarding the regulation of political contributions to elected commissioner campaigns.

Paul Snider asserted support for the bill to make KCC more accountable to the public who he alleged was to closely aligned with utilities. Mr. Snider referenced examples of refusing to act toward more comparable rates to neighboring states and other actions that favored utilities over those of ratepayers.

(Attachment 3)

Committee questions and comments ensued.

The Chairman called for neutral testimony on the bill.

John Idoux asserted that his organization takes no position on the merits of the bill, but expressed concerns the bill could significantly increase costs to the KCC and possibly the Citizen's Utilities (CURB). Mr. Idoux claimed that under the current system it would be grossly unfair to require the regulated entities to continue to fund the KCC and CURB agencies. He implored the committee to amend the bill to fund both agencies from the state general fund and eliminate the current assessment funding structure.

(Attachment 4)

Jeff McClanahan indicated that the KCC staff does have concerns regarding the creation of a utilities regulation division in the Kansas Attorney General's Office (AG) that would require a duplicative staff. Mr. McClanahan also noted that there exists a five-year training cycle for a new staff person out of college. He expressed concern that the new bill could weaken both the KCC and AG staff and could result in both higher costs and less regulatory certainty resulting from less experienced agency personnel recommendations. He also discussed other concerns to the establishment of a system of elected commissioners, the relationship between rates and reliability and that Kansas is in the lower 20% of utility investment friendly states.

Committee questions and comments ensued.

(Attachment 5)

Written-Only Neutral:

David Nickel, CURB

(Attachment 6

The Chairman called for opponent testimony on the bill.

Marc Spitzer related the bill to attempting to fit a round peg into a square hole asserting that in his opinion utility regulators are best selected by appointment rather than election. Mr. Spitzer stated that because regulation is an adjudicatory process it is ill-suited to partisan political campaigns. He cautioned that an electorial selection process could introduce unwarranted confusion into the operations of KCC.

(Attachment 7)

Chuck Caisley listed three proponent justifications for calling for the election of commissioners and then set out to debunk them. Mr. Caisley questioned and countered claims of there being a rate crisis, the impugning of KCC as a biased regulator and the extent of public support that actually exists for the proposed reforms. Mr. Caisley called for more review of the special contract prices negotiated for large volume power users. He suspected that the proponents of this bill may already benefit from special contracts for high energy users with discounts of as high as 13% more favorable than most business and individual Kansas ratepayers. Mr. Caisley emphasized that for every dollar discounted to a heavy energy user, consumers and businesses must make up the difference with substantially higher rates. He specifically proposed that one definite way to lower rates for individuals would be to consider "getting rid of these special contracts."

(Attachment 8)

Reagan McCloud stated that the process of governor nomination and senate appointment of KCC commissioners was the best method to select commissioners and objected to the KCC being exempted from Kansas Open Meeting (KOMA) laws.

Attachment 9)

Colleen Jamison stated concern regarding the proposal to elect commissioners, because: 1.) the legislature has delegated rate-making authority to the KCC in deference to its technical expertise; 2.) the proposed requirements for a duplicative staff in the Attorney General's office; and 3.) an inappropriate exemption from the KOMA laws.

(Attachment 10)

The Chairman requested that Ed Cross and Kimberly Svaty be available to complete opponent testimony during the next meeting.

Written-Only Opponent Testimony:

Whitney Damron, Liberty Utilities

(Attachment 11)

Patrick Vogelsberg, Kansas Gas Service

(Attachment 12)

Zack Pistora, Sierra Club of Kansas

(Attachment 13)

Kevin Gregg, EKOGA

(Attachment 14)

Committee questions and comments ensued.