Minutes of the First Meeting

of the 2000-01 Interim


 July 14, 2000


The first meeting of the Special Subcommittee on Energy was held on Friday, July 14, 2000 at 10:00 a.m., in Room 131 of the Capitol Annex. Representative Tom McKee, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:  Representative Tom McKee, Chair; Senators Charlie Borders, Paul Herron, Alice Forgy Kerr, Marshall Long, Vernie McGaha, and Joey Pendleton; Representatives Eddie Ballard, Jim Bruce, Buddy Buckingham, Dwight Butler, Bob DeWeese, Lonnie Napier, Chris Ratliff, Tom Riner, Tommy Turner, and Charles Walton.


Guests:  David Lucas, Commercial Mobile Radio Service Emergency Telecommunications Board; Jack Burch and Julia Thomas, Community Action Council; Becky Roehrig, Affordable Energy Corporation; Dave Brown Kinloch, Soft Energy Associates; Keith Valade, Metro Human Needs Alliance; Russ Cave, GTE; Tom Marshall; Van Needham, Cinergy; Doug Hall, Kentucky Youth Advocates; Lyle Cobb, Cobb and Associates; Greg Colmar, BellSouth; Bob Blackburn, OPS (CFC); Kip Bowmar, Kentucky Association of Community Action Agencies; and Cliff Jennings, Division of Family Support, Cabinet for Families and Children.


LRC Staff:  Dan Risch, Tanya Monsanto, and Sheri Mahan.


Senator Pendleton moved that the minutes from the October 15, 1999 meeting be approved as written.  Second by Representative Buckingham.  Minutes were approved by voice vote.

Next, Chairman McKee asked Mr. David Lucas, Chairman of the Commercial Mobile Radio Service (CMRS) Emergency Telecommunications Board, to explain proposed administrative regulations offered by the CMRS Board.  The regulations proposed would set out the procedures and requirements for allowing disbursement of the fund collected through the cellular 911 fee, which is to be used in upgrading equipment to meet Federal Communications Commission wireless E911 requirements.

Mr. Lucas gave a brief overview of the regulations, discussing how funds would be disbursed to emergency dispatch centers (PSAPs) and to cellular service providers.  He also described the certification process for PSAPs.

Chairman McKee pointed out that the Administrative Regulation Review Subcommittee discussed that the proposed regulation 202 KAR 6:030 was in direct conflict with a statute.  Representative Bruce asked for an explanation of the conflict and stated that the committee should pass the regulations out of committee.

Representative Buckingham moved to defer action on the regulations until the committee's September meeting.  Second by Representative Walton.  Motion was approved by voice vote.

Mr. Kip Bowmar, executive director of the Kentucky Association of Community Action, and Mr. Cliff Jennings, policy analyst for the Division of Family Support, provided the committee with an overview of the fiscal year 2001 Low Income Home Energy Assistance Program (LIHEAP) block grant application and plan.  Mr. Bowmar first asked the committee to consider adoption of a resolution requesting Congress to make funds available to assist low income Kentucky households in paying expenses such as air conditioners, fans, and higher utility bills to cool households during summer months.  Staff was directed to draft a resolution by voice vote.

Next, Mr. Bowmar gave an overview of LIHEAP, providing demographics for those Kentuckians who are considered to be in crisis.  He also provided information on subsidization of heating and cooling for those in crisis.  Finally, he provided an analysis of fund utilization from FY 2000's block grant moneys.  Materials related to Mr. Bowmar's presentation are on file in the LRC library.

Mr. Jennings provided further detail of how the funds are spent throughout the program.  Representative Walton asked for a breakdown of the administrative expenses.  Mr. Jennings and Mr. Bowmar explained how funds are disbursed to the needy and how administrative costs are factored into the total budget for LIHEAP.  Representative Walton asked for a more detailed accounting of LIHEAP administrative expenses and that the information be provided to the committee.  Mr. Bowmar stated that information would be forwarded to the committee.

Chairman McKee asked if the figures in the application were calculated on lower cost energy and if rising energy rates will affect the program.  Mr. Bowmar stated that rising energy rates could have a serious impact on the program, causing either fewer citizens to be served by the program or limiting the amount of funds which could be given to individuals.

Chairman McKee then opened the meeting for public comments on the LIHEAP program.  Seeing no one seeking recognition, he closed the floor to public comment.

Senator Herron moved the LIHEAP block grant plan be transmitted to the Legislative Research Commission with committee approval.  Second by Representative Ballard.  Motion was passed by voice vote.

Finally, Mr. Jack Burch of the Community Action Council for Lexington-Fayette, Bourbon, Harrison and Nicholas counties gave a presentation regarding the need for a universal service fund for gas and electricity utilities in Kentucky.  He stated the importance of providing low income families with affordable energy.  Mr. Burch discussed the limited ability of assistance programs to provide the kind of consistent help that these citizens need to manage their energy burden.  He discussed potential impacts on low income citizens, including health and safety risks, and potential homelessness.  Mr. Burch detailed the impact of uncollectable accounts on energy providers and the potential impact of restructuring on Kentucky.  He then described ways to implement a universal energy service program in Kentucky, the impact universal service programs have had on other states, and SB 211, which was introduced during the 2000 Regular Session and which would have established a statewide universal service program.

Representative Riner asked how much money a $0.50 universal service charge would generate; how many non-profit organizations are involved in low income home energy assistance programs; and how needy families find out about various programs.  Mr. Burch replied it would generate approximately $12 million annually, which would assist about 1,200 households per year.  He stated that many non-profit organizations offer some assistance, and these can be accessed through local community action agencies.  Mr. Keith Valade of the Metro Human Needs Alliance stated that typically identification of those in need is accomplished through LIHEAP information.

Representative Ratliff asked if the deregulation of the natural gas industry and various environmental laws impacted energy rates for consumers.  Mr. Burch answered that deregulation has had some impact, but it has not been the only factor in increasing natural gas prices.  Mr. Burch then stated that with rising energy prices, it becomes more important to not be completely dependent on Congress for funds to assist low income households.

Chairman McKee thanked those who testified and asked Mr. Burch to provide the committee with information regarding universal service programs in other states.  He also asked the staff to provide the committee members with information regarding the problems found in the CMRS Board administrative regulations prior to the committee's next meeting.  Chairman McKee stated the next meeting of the Special Subcommittee on Energy would be held in September on its regularly scheduled meeting day.


Being no further business, the meeting was adjourned at 11:40 a.m.