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Public Utilities and Technology Interim Committee
MINUTES OF THE
PUBLIC UTILITIES AND TECHNOLOGY INTERIM COMMITTEE
October 22, 1997 - 9:00 a.m. - Room 223 State Capitol
Members Present:
Sen. Lorin v. Jones, Co-Chair
Rep. Beverly Ann Evans, Co-Chair
Sen. John P. Holmgren
Sen. Alarik Myrin
Sen. Craig A. Peterson
Rep. Jeff Alexander
Rep. Ralph Becker
Rep. Orville D. Carnahan
Rep. Gary F. Cox
Rep. Christine R. Fox
Rep. Brent H. Goodfellow
Rep. Byron L. Harward
Rep. Tom Hatch
Rep. J. Brent Haymond
Rep. Dennis H. Iverson
Rep. David M. Jones
Rep. Jack Seitz
Rep. Daniel H. Tuttle
Members Absent:
Sen. Mike Dmitrich
Staff Present:
Mr. Richard North,
Research Analyst
Ms. Tani Pack Downing,
Associate General Counsel
Ms. Wendy Bangerter,
Committee Secretary
Note: A list of others present and a copy of materials distributed in the meeting are on file in the Office of Legislative Research and General Counsel.
1. Call to Order - Rep. called the meeting to order at 9:15 a.m.
MOTION: Rep. Carnahan moved to approve the minutes of August 20, 1997. The motion passed unanimously.
2. Update - Electric Power Deregulation Task Force
Rep. Fox updated the Public Utilities and Technology Interim Committee (PUT) on the work of the Electrical Deregulation Consumer Choice Task Force. She noted there are two
meetings remaining, November 3, and November 13, before they could present any draft
legislation to the PUT.
3. Natural Gas Extension To Rural Areas Option
Richard North, Legislative Research, explained the telephone universal service fund that
could be used as an example for natural gas.
Vern Fisher and Harold Ranquist, Intermountain Gas Association, emphasized the most
serious issue being, the access to Mountain Fuel's pipelines. Mr. Fisher explained that
municipalities do not fall under the legislation sponsored by Rep. Hatch, but they should be the
borrowing entity because of their bonding power, and that the funds should be used for
infrastructure, not for the acquisition of gas. Mr. Ranquist explained that Intermountain Gas' proposal would avoid antitrust issues, that Mountain Fuel's proposal would create antitrust
issues, and that they feel confident the Public Service Commission (PSC) is capable of finding a
solution through a universal service fund.
Rep. Hatch commented the universal service fund for gas proposal would create a fund
administered by the state; and because those decisions are made politically, it may not be in the
best interests of the citizens. The Legislature should help areas obtain gas service where needed,
but then let the market forces respond, he said.
Chuck Greenhaught, Mountain Fuel, explained the varied approaches Mountain Fuel has
taken in attempting to solve problems around the state for specific geographical areas.
Claire Geddes, United We Stand, expressed concern for the level of subsidy in Mountain
Fuel's proposal. She also expressed concern that the rate-payers instead of investor/share holders
are being asked to pay for the expansion of a monopoly.
Steve Mecham, PSC, stated the commission is not opposed to a gas universal service
fund, but it is tricky as it competes with other forms of energy. He explained the Legislature
would be establishing a policy that natural gas is the preferred fuel. He noted that any new
policy passed by this Legislature to ensure competitor use of Mountain Fuels' pipelines, will, no
doubt, be litigated.
Mark Harris, Propane Gas Supply, stated he believes the subsidy being discussed is not
appropriate or necessary. He expressed concern about the free market issue and the varied
choices of fuel from which customers can choose. He feels he could provide propane fuel
service to rural Utah as cheaply.
Craig Twitchell, Panguitch City Council, stated Mountain Fuel has done a good job of
servicing rural Utah and has received a rate change each time they expanded service to another
community. Everything is in place for Mountain Fuel to receive another rate change in order to
provide service to Panguitch, he said. He stated if propane's rates could be regulated by the PSC,
they could be more competitive. Natural gas, he emphasized, is the preferred fuel.
Rep. Harward noted the rate change would be less than what it costs to provide service
and the existing rate-paying customers would subsidize the remainder. He expressed concern
about subsidizing one industry at the direct detriment of another.
4. Communications Systems At the Local Government Level
Lt. Phil Bates, West Jordan Police Department , Management Information System Coordinator, explained the communications systems utilized by their Police Department, as well
as the entire city of West Jordan and other communities around the state. He explained the
benefits of the system, including the current applications they use.
5. Statewide Partnership for Telecommunication Services RFP Update
Raylene Ireland, Administrative Services, updated the committee on the most recent
meetings with Multimedia Fiber Services regarding the fiber optic highway proposal. She stated
there is no indication of a final recommendation to the governor at this date. She reviewed items
of discussion from meetings with legislative leadership, and noted the state is not proposing
ownership in this system nor do they want to compete with the private sector.
Ken Jones, Information Technology Services, explained the RFP will link with a fiber
backbone service, and that it is not intended to move into local exchange lines. The scope of the
original RFP, he said, has changed to ensure leasing from local providers. He emphasized the
state is not intending to market this, but envisions a general contractor working with the state.
Rep. Evans noted the last meeting of the PUT will be held on November 19, 1997. She asked for any study items for 1998.
MOTION: Sen. Jones moved to adjourn the meeting. The motion passed unanimously.
The meeting adjourned at 11:40 a.m.
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