the Task Force should follow a specific study plan for the 1998 interim. He provided committee
members with printed copies of his slide presentation.
Mr. Douglas Larson, PacifiCorp, highlighted on behalf of PacifiCorp two issues related to
the direction the Task Force has taken: 1) proceeding with the rate case; and 2) studying issues
during the 1998 interim. He stated that PacifiCorp is comfortable with going before the PSC and
presenting its issues in a rate case because PacifiCorp believes that customer choice competition will
bring benefits to customers.
Mr. Richard Anderson, Utah Deregulation Group and Industrial Customers Coalition,
indicated that the industrials are pleased with what has transpired thus far and think that next year
the Task Force recommendations will be best for the state.
Mr. Richard Campbell, Department of Commerce, Division of Public Utilities (Division),
told the committee that the Division supports competition. The Division feels that competition will
drive greater efficiency than the cost plus system the state is operating under now. He indicated,
however, that the Division is supportive of the Task Force's direction and believes that further study
is needed on some of the complex issues.
Mr. Roger Ball, Department of Commerce, Committee of Consumer Services, told the task
force that he is representing the interests of residential and small business consumers of utility
services in the state and he believes the residential and small business consumers are not demanding
competition in the supply of electric power. He indicated that the demand is coming from the
industrials who want to be able to buy large amounts of voltage at wholesale prices.
Mr. Mike Peterson, representing Utah's rural electric cooperatives, said the cooperatives have
concerns with deregulation of the electrical industry. He indicated that although the cooperatives
support the concept of customer choice, the cooperatives would like to be sure they understand who
will be impacted and how they will be impacted by deregulation.
Mr. Ted Rampton, Utah Associated Municipal Power Systems (UAMPS), said UAMPS
believes the municipalities have an important role to play in the continuation of these studies.
UAMPS looks forward to the study process next year and pledges its efforts in reaching a practical
solution for these complicated issues.
Mr. Leon Pexton, Resource Manager and Chief Financial Officer, Utah Municipal Power
Agency (UMPA), told the committee that UMPA supports deregulation, but only if residential,
commercial and industrial customers benefit from it. He provided committee members with printed
copies of his comments.
Ms. Claire Geddes, United We Stand, said that Utah enjoys some of the lowest rates in the
world and unless the Legislature can show that deregulation is better, her organization does not
believe the Task Force has had enough proof to show that all customer classes will benefit.
Mr. Jeff Fox, Crossroads Urban Center, indicated that until it can be demonstrated that the
overwhelming market power that PacifiCorp has in this state which prohibits competition and would
lead to a deregulated monopoly and that residential, small business, and agricultural users would
benefit from deregulation, he would urge the Legislature to reject any form of deregulation.
Committee discussion followed.
4. Report: Blue Ribbon Commission on the Workers' Compensation Fund of Utah - Commissioner Merwin Stewart, Chair, Workers' Compensation Blue Ribbon Commission
(Commission), explained that the Commission was created in the 1997 General Session by H.B. 175
which required the Commission to give a report to this committee. He indicated that the charges
given to the Blue Ribbon Commission were privatization of the Workers' Compensation Fund of
Utah (Fund); how to serve the residual market; the granting of new insurance authority to the Fund
for competitive reasons; and any other related issues. He stated that at its November 5th meeting, the Commission passed six recommendations to the Legislature. He provided committee members with
copies of the Commission's report.
Mr. Lane Summerhays, Workers Compensation Fund of Utah, told the committee that he
believes the recommendations of the Commission are good recommendations and encouraged
members of the committee and the Legislature to move forward with these recommendations.
Mr. Larry Bunkall, President, Utah Manufacturers' Association (UMA), said he was
concerned that employers and employees did not have more of an opportunity to participate in the
Commission's meetings, but they worked outside of the process through other meetings to resolve
some of the issues. He indicated that the UMA believes the future of the Fund should be for the
benefit of Utah employers and employees and that the liability of the Fund must be closely limited.
Mr. Orrin T. Colby, Wasatch Crest Mutual Insurance Company, said Wasatch Crest would
prefer to see free competition. He indicated that there should be nonexclusive arrangements made
between carriers, providers, and others who may provide services, and Wasatch Crest endorses the
efforts of the Commission and the recommendations that have been presented.
Mr. Alan Edwards, Risk Manager, State of Utah, indicated that Recommendation #3 which
allows state agencies to have options with their workers' compensation is already dealt with in statute
in terms of how it would be administered for the state. He suggested a review of this
recommendation to see if it makes the best financial or administrative sense for state agencies.
Ms. Angela Warren, American Insurance Association (Association), stated that the
Association has a concern with the granting of authority of in-state subsidiaries. It is not necessary
to grant this authority when there are other means to achieve maximum flexibility and pricing. She
stated that the Association is afraid that with the creation of instate subsidiaries, it will be a backdoor
approach to creating a company to load off the poor risks and then eventually separate them from
the state fund. This will create a stabilizing effect on the rest of the market.
Mr. Robert Hinckley Perry, insurance businessman, indicated that one of the major themes
of the Commission was the concept of privatization. He stated that he is a member of the Utah
Association of Health Underwriters and it is concerned about having access for all members of the
association who are properly trained and licensed to be able to sell workers compensation through
the fund itself. He urged the committee to exercise caution and seek legal guidance as it deals with
quasi-public corporations.
Mr. Eric Mouser, Personnel Director, City of Provo, expressed his support for the
recommendations of the Commission and indicated that he is supportive of allowing the Commission
to compete to maintain the type of business position it can to provide this type of rate status for the
city of Provo. He urged the committee to support and move forward with the recommendations.
Mr. Mel Green, Chairman, Board of State Workers Compensation Fund, discussed how the
administration of the Fund like a business has resulted in sound and frugal investments which
increased the income to the fund, reduced accidents in the work place, and cut claims. He suggested
leveling the playing field for everyone and allowing the board of the Fund to make critical business
decisions.
Mr. Philip G. Heyde, Counsel for Liberty Mutual Insurance Group, spoke on tiered pricing
and how it functions. He provided committee members with a printed copy of his comments.
Committee discussion followed.
MOTION: Sen. Buhler moved that the committee accept the Commission's recommendations and request that legislation be prepared reflecting those recommendations. The
motion passed unanimously. Sen. Wharton and Sen. Poulton declared a conflict of interest.
5. Task Force Report: Task Force on Regulatory Barriers to Affordable Housing - Rep. Ron Bigelow, Chair, Task Force on Regulatory Barriers to Affordable Housing, distributed a copy
of the task force's report and indicated that the task force addressed several issues on which it took
no action. The task force did agree on two bills and four resolutions which it either adopted or
supports.
Committee discussion followed.
MOTION: Rep. Arent moved that the committee endorse the "Resolution Supporting Resources for Affordable Housing" as a committee bill. The motion passed unanimously. Sens.
Mayne and Wharton and Reps. Barth and Bradshaw were absent for the vote.