Insurance & Commerce - Senate
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Bills discussed (5)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
SB136
Act 156
· 5 mentions in chapter, transcript, agenda
Matched: “SB136 Irvin TO MODIFY GAS RATES TO DETERMINE THE LOWEST OR MOST A…”
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TO MODIFY GAS RATES TO DETERMINE THE LOWEST OR MOST ADVANTAGEOUS MARKET FOR PIPELINE COMPANIES. | Irvin | Notification that SB136 is now Act 156 |
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SB137
Act 308
· 5 mentions in chapter, agenda, transcript
Matched: “SB137 Irvin TO PROHIBIT DISCRIMINATION ON THE BASIS OF THE ENERGY…”
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TO PROHIBIT DISCRIMINATION ON THE BASIS OF THE ENERGY SOURCE OF A UTILITY SERVICE. | Irvin | Notification that SB137 is now Act 307 |
|
SB11
Act 253
· 3 mentions in chapter, agenda, transcript
Matched: “SB11 D. Sullivan TO ALLOW ARKANSAS CORPORATIONS AND ARKANSAS BAN…”
|
TO ALLOW ARKANSAS CORPORATIONS AND ARKANSAS BANKS TO HOLD ANNUAL OR SPECIAL SHAREHOLDER MEETINGS REMOTELY; … | D. Sullivan | Notification that SB11 is now Act 253 |
|
HB1027
Act 363
· 2 mentions in transcript, agenda
Matched: “…ay aye. Aye. Motion passed. If there's anybody here for the House Bill 1027, we're going to wait until next week on that, so you don't…”
|
TO AMEND THE LAW CONCERNING THE SALE AND REMOVAL PROCEDURE OF PERSONAL PROPERTY FROM A … | Cavenaugh | Notification that HB1027 is now Act 363 |
|
SB112
· 1 mention in agenda
Matched: “…F A UTILITY SERVICE. DEFERRED BILLS Number Sponsor Subtitle SB112 Teague CONCERNING SUITABILITY IN ANNUITY CONTRACT TRANSACTI…”
|
CONCERNING SUITABILITY IN ANNUITY CONTRACT TRANSACTIONS. | Teague | Died in Senate Committee at Sine Die adjournment. |
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Speaker 21
0:00
Let's go ahead and get our seats and get started here. We're going to pass over 1027. We may come back to it here in just a few minutes, but for right now, we're going to go to Senate Bill 11. Senator Sullivan, if you'll
Chair
Unverified
0:18
state your name for the record, you're recognized to present your bill. Thank you, Mr. Chair.
Senator Missy Irvin
Unverified
0:31
Senator Dan Sullivan, this bill was really a part of the emergency order to allow online bankers to get together and their shareholders for their annual different meetings remotely. It seems to have worked out well. I've worked with the Bankers Association. They are in agreement with this. We've had a couple of changes in it. I've worked with our local bankers in Jonesboro. They like the idea, and I do not see any, I haven't had any opposition to it.
There is, Lori Trogdon of the Bankers Association is here, if necessary, to testify. But other than that, I'll open it up to any questions. Okay. You heard an explanation of the
Speaker 21
1:15
bill. Do we have any questions from members of the committee? senator irvin
Senator Missy Irvin
Unverified
1:24
you recognize for a question thank you i'm just curious i mean is there any type of stipulation for confidentiality or is that um an issue or is that covered in the bill um or is that a requirement for
stockhold i'm not aware that it's a requirement uh
Speaker 14
1:40
given it's a shareholder meeting okay that issue has not
Speaker 21
1:49
come up with anyone okay thank you sure any other questions anybody from the audience want to speak for against the bill senator sullivan have you closed for your bill i'm closed thank you mr chair senator ingram got a motion to pass second any other discussion all in favor say aye bill
Senator Missy Irvin
Unverified
2:09
is passed thank you mr chair and thank you committee
Speaker 18
2:12
Okay, we're going to move on to Senate Bill 136. Senator Irvin. If
Chair
Unverified
2:36
you'll state your name, you're recognized as
Senator Missy Irvin
Unverified
2:39
Senator Irvin. Thank you, Senator Irvin. and I'm here to present Senate Bill 136.
This bill and the next bill are, to me, just straightforward, really good bills to make sure that our energy sources are available and reasonably, I would think, considered for our citizens. So the least cost gas purchasing statute, as it's currently written, requires natural gas utilities to purchase gas from the lower or most advantageous market and provides that failure to do so will prevent the gas utility from recovering
in its rates, the difference between the market price of the gas purchased and the price at which the purchase is made. So what this bill does is it amends and it clarifies the section of code which is the statute. Although natural gas is already the cleanest burning fossil fuel, natural gas, utilities are beginning to look at renewable natural gas, hydrogen, and other natural gas alternatives to enhance their gas supply and make their services even more environmentally friendly. So because, at least in the beginning, these alternative fuels may be more expensive than
geological or regular natural gas, Senate Bill 136 is intended to remove a potential barrier to the development of the markets for these fuels by making it clear that not Notwithstanding the current provisions of the least cost purchasing statute, the Arkansas Public Service Commission may allow a gas company to recover the cost of reasonable purchases of natural gas or natural gas alternatives, including renewable natural gas and hydrogen, if the purchase is determined to be in the public interest.
The Senate bill also clarifies the statute consistent with how it has generally been interpreted to make clear that there are factors other than price that may be taken into consideration by the Arkansas Public Service Commission in determining compliance with this statute. Some of these examples of these other types of considerations are things such as reliability of supply, impact on customer choice, and conditions associated with transportation
or storage. I do have Ted Thomas here with the PSC who can come up and give comments or answer questions. Okay. Mr. Thomas, if you'll have a seat there
Speaker 21
5:08
and state your name for the record, you recognize me. I'm Ted Thomas. I'm chairman of the
Speaker 23
5:16
Arkansas Public Service Commission. Why I think this bill is a good bill and an important
Speaker 25
5:23
bill relates to a very significant challenge that I think we face in Arkansas and nationally, too, and that is the potential
for environmental regulation that could be very expensive. Now at the national level, this is the climate debate, and while I accept the climate science, I know that sometimes it's politicized and exaggerated, but at its core it's still true. So we have that problem, but we have a second problem, and the solutions that are offered to fix that problem are so extreme and so costly that you have two big problems.
We're either going, actually there's two problems, and one I see as a potential solution. We're either going to get our head tore off by the impacts of climate change, we're going to get our head tore off by excessive energy prices trying to deal with it, or we're going to have a technological solution. So obviously what we want is a technological solution. Our regulated monopoly model is not optimal for innovation, and it's not just the utility, it's the model. And of course I'm in that model, I'm the regulator. And the example
I would use is we had cell phone technology years before it was deployed, and there were numerous regulatory commission orders that told the telephone company, we do not want you speculating or investing in speculative technology. We want you to keep the rates as low as you can. Well, that puts a cap on innovation. And what we need is if we're going to come up with the technologies to meet this challenge
So our economy doesn't get crushed by these regulations, we need innovation, and we need to be open-minded to any technology, whether it's carbon capture, fracking, nuclear, wind, solar, storage, hydrogen, renewable natural gas, anything. And what this bill does is it provides an exception to the least cost, so some experimentation can be done.
And every new technology starts out as more expensive than the incumbent because the incumbent has already scaled up. And if you're rigid about no, what you're being rigid about is no innovation, and if we're too rigid about innovation, we're going to get clobbered by energy costs. Now, renewable natural gas is, you know, you can get it off of a dumpster, off a junkyard. The big thing, though, is hydrogen has a lot of potential.
What you need for the hydrogen thing to work is to maintain your vigorous gas distribution system because there's thought that at some point that gas distribution system might be used for hydrogen. This touches a little bit on the next bill, but what we need to do is have flexibility for innovation and how this would work is the utility would bring us a plan. This is what we're trying to do. This is who we're working with for some sort of a demonstration project
at higher scale than the laboratory and we would experiment on it. We would know the precise cost, the precise extra cost that we're willing to incur to check out the new technology. So that's what we're trying to do. But they would have to bring a plan to the PSC and have a PSC finding that was in the public interest before we would do anything. With that, I'd be glad to
Chair
Unverified
9:03
answer any questions. Okay. Do we have any questions? Okay. Senator Teague and then Senator Elliott.
Speaker 32
9:09
Senator Teague, you're recognized for a question. So... Push
Senator Joyce Elliott
Unverified
9:25
your button there. Make the green... There you go. Ah. Seems to me you're emasculating the first section of the bill that says you can't do this,
Speaker 25
9:33
And you're saying, we'll just go around it and do this anyway. Or amending the least cost thing to
Senator Joyce Elliott
Unverified
9:38
create a limited exception. A limited exception, you're letting you do it any way you want to do it, basically, right?
Doesn't that just say you can do
Speaker 25
9:50
If you find it's in the public interest, if you find the costs are exceeded by the benefits of doing this. And what would that be? Give me an example. The chief benefit would be to allow people to scale up to test new technology in renewable natural gas or new technology in hydrogen to get a
Speaker 39
10:10
practical non-laboratory experiment with it. And you would let that experiment be added to the taxpayer's base?
Speaker 25
10:16
Well, it's the ratepayer's base. I mean ratepayer's. But we would measure the precise amount. It would not be a very large amount, and we would want to see a plan. this is the technology we're experimenting with, this is what we think will happen if we can do this experiment. So they have to bring a plan to do this.
Chair
Unverified
10:41
I appreciate it, thank you. Senator Elliott, you're recognized.
Senator Joyce Elliott
Unverified
10:48
Thank you so much. I think this idea is one, I understand what you're saying because you have to start somewhere to get somewhere, but at any point in our journey to making sure we have these alternatives, is equity ever a part of the consideration for the PSC that we're wanting
Speaker 44
11:11
different areas, different kind of groups taking part in what's an experiment at the time?
Speaker 25
11:20
Yes, well, I know we've targeted low income folks on this, And this probably wouldn't apply with this bill because you're taking a different product and you're mixing it into the distribution system without regards to where it's going. That's my understanding. And part of that, you're seeing, you know, the pipes can handle it and other stuff like that. But that is a very important consideration, particularly the cost. And when we do things on cost, you know, to me that is the ultimate urgency.
particularly with the COVID, because we have a fairly simple system. We have a very good system that's large and expensive and it's paid for where lots of folks, not everybody, it's affordable and it's a robust system. But part of how the system works is, you know, our role is to set what's called a tariff, which establishes the price. And the rule is that if you don't pay your bill, we send you a nasty letter.
And if then you don't pay your bill, we shut it off. And I know when I sign a piece
Chair
Unverified
12:40
the line. And so we're very conscious
Senator Joyce Elliott
Unverified
12:45
of the cost. All right, thank you. Okay, Senator Teague, you got another question? So, we're talking about, like, if a manufacturer wants to be able to say that they are burning waste gas from the landfill, right?
Speaker 25
12:58
Is that what we're talking about? Potentially. A potential benefit is meeting corporate renewable goals. That would be one of the things that might be on a list of potential benefits. But from the innovator's perspective, it's a way to get started to see, you know, it's a demonstration project at more scale than the lab. But that is one example of an objective that might make it in the public interest. If they could demonstrate there were folks that were asking for this and that they thought it would help economic development.
But the whole key is every new investment is speculative. And our regulated model doesn't do that well with it, not because utilities can't innovate, because our regulatory model, as it should be, is very focused on cost. But if it's too focused on cost, you get a situation like we had with the cell phones, where the technology was there before they were widely deployed, and it wasn't until they said, you can charge whatever you want and go do your cell phones, that we had a telecommunications technology explosion,
which has affected all of our lives. We all have our cell phones. But for years that technology existed and you can find regulatory decision after regulatory decision. This is, we do not want to put speculative cost in rates. We want you to do the lowest cost landline telephone. And that's a good system. Monopoly works when you have a standardized product and want universal service. but when you have different technologies, it struggles. We wanna help our utilities be more innovative
and there has to be programs like this for
Speaker 54
14:44
it to happen. So I'm a CenterPoint customer down in Nashville
Senator Joyce Elliott
Unverified
14:48
and I love CenterPoint. My heat comes on every 15 minutes or whatever and my house stays warm, I love it. And my water stays hot and get lots of it. And I'm supportive of what they want to do, except that I just feel that the customer is going to get it broke off in them before this is all said and done.
Speaker 25
15:09
One way to do it would be put a cap on it. Whenever we do these things, my view is it should be expressed, if there's a cost, it should be expressed in
Speaker 27
15:18
monthly bill impact for the average residential customer. I don't see this bill does that.
Senator Joyce Elliott
Unverified
15:24
Would you do that? Who would put the cap on it? Well, you'd put a
Speaker 25
15:30
cap in the legislation that if it costs, say, more than 5 cents a month, 10 cents a month, whatever you wanted the cap to be, then we couldn't exceed that under the law.
But it would be a small number like that, because when you spread out a small number, one penny a month times 700,000 customers times the 20-year life of a solar facility is $1.68 million. So if you say, well, there's a $1.68 million cost shift here, it's one penny a month.
Now, I don't know what those figures are on the gas side, but I do know that with or without that language, if a plan comes to us, We're going to be very conscious of the cost, and we're going to want to measure the cost in ratepayer impact for a month of the typical residential ratepayer. I appreciate it.
Chair
Unverified
16:31
So, thank you. Thank you, Mr. Chairman. Any other questions from
Speaker 21
16:38
Senator Pitch? You're recognized for a question. Thank you, Mr. Chairman.
Senator Mathew Pitsch
Unverified
16:43
Supportive of the bill, I have a question, though, in the wording. Line 36 on the first page calls for the methodology of production. We have a lot of natural gas development in the Fort Smith, my home area. And as you're probably aware, they went from vertical drilling to horizontal drilling, new technologies for extraction, et cetera. Is this bill going to cover that by saying methodology of production? Because it really is methodology of design that I think you're wanting to cover, if that makes sense.
And while you're about ready to answer that, we have had the luxury of using our landfill in Fort Smith for that. So our Max Steel Division of Quanax uses that. But I want to make sure because the big cost for most engineering projects is in the design phase going into production. I don't want to forget that set of cost because usually what you're talking about, dramatic rate changes come about with a new technology rather than a new product.
Speaker 51
17:44
My understanding of the bill is that covers that, that the production
Speaker 27
17:52
should be viewed as like the source, like from a landfill, but then it jumps the technology. I mean, it's also talking about the network. The hydrogen isn't new, it's the use of the network for distributing it that would be new. I
Senator Mathew Pitsch
Unverified
18:07
think it's broad enough to cover that. Quick follow-up and I'll be done. I just think that even the natural gas, we're still delivering natural gas to countless customers, but this would cover, and I want to make sure it does, the ability to, instead of coming straight down and drilling and the inefficiencies of that, going down and then going at horizontal drilling, which dramatically increased their ability to produce natural gas at a lower cost for the customers.
But if it doesn't cover that, we may need to make sure it
Speaker 27
18:37
does. Well, that is a proven innovation that has literally saved consumers. But at some point, that was an
Speaker 68
18:44
idea that I think this covers with the how do
Senator Mathew Pitsch
Unverified
18:47
we pay for it type deal. So I just want to make sure those are covered in being able to do this through the PSC. That is how I would
Speaker 69
18:58
read it, for sure. Any other questions?
Speaker 21
19:05
Okay. Is there anyone here to speak for or against the bill? All right. Senator Irvin, if you close for your
Senator Missy Irvin
Unverified
19:14
bill, you want to close? Thank you. Just, members, I know you've heard testimony, and I would appreciate a good vote and make a motion due pass. Senator
Speaker 21
19:21
Irvin moves due pass. Senator Pitch with a second. Any other discussion? All in
favor of the motion, say aye. Aye. Motion passed. If there's anybody here for the House Bill 1027, we're going to wait until next week on that, so you don't have to stick around, but we do have one more bill, Senate Bill 137.
Senator Missy Irvin
Unverified
19:38
Senator Irvin, if you want to present that. Thank you. Members, Senate Bill 137 gets a little bit to what Senator Elliott was talking about. Many homeowners prefer to heat their homes and cook with natural gas. I'm one of those. I have a propane tank, and I have to fill it up, and if I forget, I don't have heat at my house. So I don't have the luxury like Senator Teague does of being a customer of Centerpoint Energy. I just have to remember to text Skeeter Bean.
He's my guy, my propane guy, Skeeter Bean. And so Skeeter comes and fills up my tank for me, and I have heat at my house. But Senate Bill 137 is really a bill that really protects the right of Arkansans to choose their energy source. And it does that by prohibiting the enactment of these types of ordinances by local government entities in Arkansas. This is not happening in the state of Arkansas. However, you know, this was an important bill for the energy industry in our state and one that I would definitely support.
You know, we want to make sure that we have the availability to pick our energy source, particularly when it's very limited for those of us that live in rural Arkansas. So this is a bill that, you know, speaks very close to my heart, and I just, I can answer any questions, and again, Ted is here to answer any
Chair
Unverified
21:11
questions. Okay. Senator Ingram, you're recognized.
Senator Keith Ingram
Unverified
21:18
And being a former mayor and a believer in local control, I just always wonder why we wouldn't put up with this with the federal government if they tried to mandate to us that we couldn't
Speaker 78
21:35
make decisions. I know that it is sort of unrealistic to think that any community at this point in time or even in the near future could go 100% non-renewable. But please tell me what your thoughts are of why we should preempt local government, you know, that's closest to the people in making decisions that they feel like that are best for their community.
Senator Missy Irvin
Unverified
22:04
I'm going to let Ted Thomas speak to
Speaker 25
22:08
that, and then I'll follow up. You're recognized. Thank you, Mr. Chairman. And I generally agree with the view in terms of the local control. The problem here is the PSC has authority over the resource mix. The local government doesn't. But if you enact a bill like this, what it does is it takes options off the table, potentially for the entity that does have jurisdiction, which makes solving the problem a lot more expensive.
The natural gas system is a network.
Speaker 27
22:41
network, and it's paid for by participants that share the network. The cost of the network per participant goes down when you have more participants. The growth helps lower the cost, and the network is
Speaker 25
22:57
very important for a hydrogen option. If hydrogen turns out to be the economic least cost option to deal with climate change, you need that vigorous network. And when, folks, you need to keep your authority and responsibility in alignment.
It's too easy to politically say something that you don't have cost responsibility for. Let's be renewable and let somebody figure out else how to do the costs when that decision potentially takes options that we might need to come up with a low-cost option off the table. And I agree in our state it's unlikely that these things would be proposed. They've been proposed in other states, starting on the coast. There was one in Colorado, I believe, that was proposed last week.
But it's easy to be green when you're affluent and there's no responsibility for the cost. It's political symbolism. And the problem with the climate debate is there's too much political symbolism and not enough economic consideration. And if hydrogen is the winner, that natural gas network is going to be very valuable. And we want it to be able to grow, and it can't grow in areas that ban people from going to it.
So from the consumer side, we want them to have that choice. But in the big picture, from governing the resource mix, we want that option on the list. We don't want that
Speaker 81
24:30
option impaired by these kinds of decisions. I
Senator Missy Irvin
Unverified
24:33
hope that was responsive. Well, and I'm going to follow up with saying that I live in an area of the state of Arkansas where we generate a lot of energy through the release on our dams, through hydroelectric electricity. And we actually ship that electricity, if I'm not correct, elsewhere.
And so, you know, if you limit that decision to a local control decision, you're actually cutting off electrical, hydroelectric usage and energy sources to other people. And so, you know, I mean, following up to what Mr. Thomas said, I mean, I think there is a time and a place for local control and local decisions. and I understand that. However, when you're talking about energy sources, you know, we really
are hinged upon each other in a lot of different ways. And some states have that capability and some states don't. I remember, you know, when Texas was marching to Arkansas because they needed water because we have an abundant resource of water. So, you know, I think I agree with what Mr. Thomas said. I just wanted to highlight that individual, you know, experience from where I live and what we do. I think it's an important part
Chair
Unverified
25:49
of the decision. Senator Ingram, go ahead. One more follow-up with Mr. Collins.
Speaker 83
25:56
Are we on? Yep, try it again. Oh, yeah, okay. That's the
Speaker 85
26:04
way it works. Okay, then that same argument, wasn't that same argument used in reverse with Intergy and solar
Speaker 78
26:12
that the means of distribution was the cost and that sort of the opposite of what we're talking about here was what they said that you can't take away from the you're going to raise the transmission cost
if you give people options for solar. But we did go to solar, correct? We did, but we
Speaker 23
26:33
also imposed a grid fee so that those costs could
Speaker 25
26:36
be recovered Because, again, the network is, in the electric system, it's also true. That distribution network is very important. It's a natural monopoly, and it has to be paid for, which is why part of that program is a grid fee to address potential cost shift. Thank you, Mr.
Speaker 21
26:54
Chair. Any other questions, members of the committee?
Anybody here to speak for or against the bill? All right. Senator
Senator Missy Irvin
Unverified
27:06
Irvin, you want to close for your bill? I do want to appreciate Senator Beckham is here, and I appreciate him and others that reached out to me on this bill. We went about these a couple different ways and just glad to help and accommodate the folks that reached out to us and I want to thank those people for working with me on it. So, appreciate a good vote.
Speaker 21
27:30
And you move. Do you pass? Do we have a second by Senator Pitch? Any other discussion? All in favor, say aye. Aye. Motion passed. Members, that's it for today. We'll meet next week with House Bill 1027 and what else comes through to us. Have a good weekend. We're adjourned.
Agenda
Call to Order
SB11 D. Sullivan TO ALLOW ARKANSAS CORPORATIONS AND ARKANSAS BANKS TO HOLD ANNUAL OR SPECIAL SHAREHOLDER MEETINGS REMOTELY; AND TO DECLARE AN EMERGENCY.
SB136 Irvin TO MODIFY GAS RATES TO DETERMINE THE LOWEST OR MOST ADVANTAGEOUS MARKET FOR PIPELINE COMPANIES.
SB137 Irvin TO PROHIBIT DISCRIMINATION ON THE BASIS OF THE ENERGY SOURCE OF A UTILITY SERVICE.
Adjourn
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — INSURANCE & COMMERCE - SENATE, Feb 4, 2021 | Agenda | 1 | Official source ↗ |
Speakers
Speaker 21
Chair
Unverified
Senator Missy Irvin
Unverified
Speaker 14
Speaker 18
Speaker 23
Speaker 25
Speaker 32
Senator Joyce Elliott
Unverified
Speaker 37
Speaker 39
Speaker 44
Speaker 54
Speaker 27
Senator Mathew Pitsch
Unverified
Speaker 51
Speaker 68
Speaker 69
Senator Keith Ingram
Unverified
Speaker 78
Speaker 81
Speaker 83
Speaker 85