Members of the finance committee committee come to order first thing first we will introduce our pages Willie Vetao, and Senator Davis. Willy. Up there you are, welcome Emma Thomas senator Van Dine Emma thank you for being here. William Booker senator Harrington thank you senator Bardford to have you. Brian Brade I think that's pronounced correctly am I correct Brian thank you senator Robinson. Jacob Hard senator Birger and Livingston. Senator Van Dine thanks very much we've really enjoy having you here and hopefully you'll walk away with some good experience in the general assembly especially on the senate side. This meeting could not be run properly without having some top norch sergeant at arms and I was of the best Stive Wilson Charles Maselas and Dale [xx]. Thank you gentleman for helping us make this successful. Chris we are waiting for Healthy final to come back. Okay, alright, first bill, Senate Bill 218 town of Franklin, satellite indexation, Senator Davis. Thank you Mr. Chairman, ladies and gentlemen of the committee. First of all I'd like to offer an amendment to this bill and members should have this amendment, Members of the committee we have a PCS before us Senator Apodaca make a motion then we accept the PCS for information and all in favor please say aye, Aye Oppose no, ayes have it. Excuse, me Senator Davies go forward and you've an amendment I understand. That's correct. Okay. even though this bill was technically not a DNX section bill. The amendment is a DNX section issue having to do with property in my county the amendment is going to do, and I've a letter from the town of Murphy, saying that they're okay with this DNS section the municipality limit goes right through this gentleman's house and I don't know why it's there, but anyway, the town has agreed not to tax him in the town and the county both, and I have map of it here if anybody would like to look, but all people I know the property with it and so is the town so I like for a favourable consideration of the amendment. Alright, Senator Davies is a member of the committee and actually sends the amendment floor before you. Has there been enough explanation on the amendment to members of the committee. Any questions. Alright, seeing none, all in favour of the amendment please say aye, oppose nay, the ayes have it body of the bill. Thank you Mr. Chairman again. Ladies and gentlemen of the committee, my bill was for a DNX session issue in Franklin, and it's specifically to modify the rules regarding DNX section. This is a piece of property that some it was a sub division about 35 years ago, when the fore line was put in 441 South coming out of Franklin. It went through the sub division and basically wiped out the sub division I have there are about 12 involved with the property owners I have science statements from 10 of them saying that they are good with these two of Marasam Tea Property owners and we could not get in touch with them but basically it is going to allow some development in this area where as part of a sub division was and so am asking for your support there is another part of the bill having to do with the architect deanaxation and am acquainted with this issue but this is a provision by a Senator Tillman so with your permission Senator Rucho I will ask Senator Tillman would you please explain that provision in the archival portion of the bill. Same issues Mr. Chairman [xx] a portion of the subdivision that wound to be need their services and it will be advantageous to both the sub division and the city and everybody opposed to it. Members of the committee, do you hear? Senator Apadoca you have a question? Yes sir Mr chairman of Amai, I didn't major in geography but it's like genelosity of frankly and I urge you deal on another place? So, throughout the docked that's the next Bill So, enough said. Mr Chairman I'd like to give a favorable report motion for the next bill for the right general. Now the Chair ahead of the
game senator Apodaca always is his, alright let's go on to the bill that we were working on, let's try to do 218 vote thurnder[sp?] Franklin satellite, and taxation any question members of the committee. Senate tell me the motion in favour report on PCS on senate bill 280.218 as amended, and unfavor to the original bill we have it before you all in favor please say aye, aye, oppose no, ayes have it, alright that 218 image done, senator Davis let's go on to the next one, let's get this finished and then we will have at all the time necessary, senate bill 141 wine's bill and taxation referendum there is no PCS on this one so the bill is before you members of the committee Davis brief explanation so we can move it forward. Thank you Mr. Chairman, ladies and gentlemen this is essential almost the same thing as the bill that we had last session and what's going to allow is Lakes Junior Lascot to be annexed by Waynesville, if the voters in the Lake Junior plus approve it in a referendum it will take place this November and if the town of Waynesville approves to annex then everybody gets to up to battle on this particular issue, they get to decide whether they want to be in next or not. Mr. Chair, may I renew my previous motion Senator Apodaca does make a motion for favorable report on Senate Bill 141 but any members of the committee, I have got a Senator Bryan and then Senator Brad, Mr. Chairman and Senator even there in if not my memory sounds me correct, is there one of the Jaisens community to let general Alaska of people who were involved in some king of dispute about this we inclusion or exclusion from this annexation that? Since I can't remember meeting with some community representatives from an adjoining neighborhood. Senator Davis. Mr. Chairman, I am not acquainted with that people end at joining some of the property owners in the Region Alaska did not want to be annexed, but even they cannot vote on this referendum if they're absentee property owners, but two surveys have been done at the considerable cost to survey these people, and each time, over 60% of the absentee land owners agree to be annexed, and basically what this is going to do is going to allow Lake Januluska, they have about at least $10 million of infrastructure needs, and they there, and they are going to get the same or a better service from the town of Waynesville for a less cost than the home owners' dues that they're paying them. OK now, members of the committee, I've got Senator Brooke, this about the third time we've talked about [xx] [xx]. Lets put this to bed today. Senator Brooke. Thank you Mr chairman Davis I come from a long lot of passages and this area is very close to endure to my heart that being said there is two questions told about the infrastructure need will these incorporation include the dam. My understanding is it does not. Is that correct we have individuals like Mr. Chip Carian is here and he may be able to confirm that response Mr. Chair Is Mr. Kerry in in the audience? I'm right here. And where are you? Okay, I'm sorry and then identify yourself as to which role is, and if you can answer that question. Yes I will. Chief Killion with Nelson Moores, Ryans Cobra represent both the Jules asembly and the town of [xx] the dam is owned by Jim [xx] continues to be owned by Jim [xx] the town is not assuming any responsibility for maintenance or repair of the dam senator Broke. Follow up. If this property is in assent to the town of [xx] will they have be permitted to sell alcohol in this property? Mr. Chairman? Yes Sir. They will not they've already passed the resolution I believe the town the lake in Alaska has put in a lease they have some properties that has been leased and part of the lease agreement is that alcohol is not to be sold. Follow up. If that's part of lease agreement, what is the next time the property become available become of the new lease, well that's no longer a part of it. Mr. Chairman if I can be part of Mr killing any game please. Well, the property if you are talking about senator broke his own back, you ask the Assembly, and there's no alcohol on any other property within the assembly. Now it was a lease, at one point, and the folks that were listed felt that can sell alcohol. That lease is no longer in existence, that was an over sight, was never intended to permit the sell of alcohol.
There will be no alcohol sales on the general Alaska assembly grounds. Senator Broke. Just quick follow up. That restaurant did have as menu is already printed with alcohol on it. Just letting everyone know. Yes it did. And that was an oversight and it's not fair I like that now. That's been corrected. Okay. Members of the committee, you have this issue before you, Senate Apodaca, sent forward see me, try making this. I was going to make sure I understand. We saying that we are going to have a referendum with both Lake[sp] Jim Lanska[sp] and the city of Wanes Wool. Is that what I heard? Mr Chairman yes sir, before you members of committee, are in favour if what from Senator Apodaka from on Senate Bill 141, all in favor please say aye, Aye Oppose nay, ayes have it. Thank you Mr. Chairman Senator Davis thanks very much and I trust you'll take care of those two bills on the floor. Okay, I've got one more quick one, Senator Mcssik? You're on this one? Yes Alright, his will probably be your best effort in being brief. You only need to pass this local bill, How much better can that be? Alright, I get a favorable report from Senator Bryant, a question ladies and gentlemen? Seeing none all in favor please say aye Aye All oppose nay Senator Mcssik, you are rewarded today. Good job. Alright, now this is a one bill we need to get going on, and members of the committee what we are doing today, this is hard a long session in a comas, yesterday I believe we gonna focus to emotionally, on the issue of the financial portion of this bill and we have Representative Hager and representative Miller here today to help answer some questions there will be, a public comment that I have listed here, and it is going to be for two minutes. And I want you to focuss the finance potion of this bill, we had quite a discussion yesterday, and I will give the committee a clear understanding. This bill will be voted on today Representative Hagan welcome to the senate finance. [xx] local bill, please note yes. That was a good try Mr Chairman, if it's okay with you, if senator [xx] would just list out the finance. Okay, members of the committee we're going to have Miss [xx] explain the portion that the [xx] committee he is needing to understand and review, and we will take a few moments, but Miss Fenil thank you for being here. I'm going to review the first part of the bill, the first part of the bill is Economic Development Program, it is not an Economic Development Program in the way the committee usually hears Economic Development Programs, this is not actually a State program that involves State funds this is a way to allow natural gas companies to extend lines to large manufactures and is a way for them to recover the costs of extending those lines from the repairs so part one of the bill creates a new writer for local distribution companies gas companies to recover the cost of extending the two large manufactures, first a company must go to commerce and this is actually section 1.2 of the bill and it must be certified by commerce to be eligible and to be eligible the business must agree to create 1500 jobs and invest at least $200 million in private firms, if that is true it would then do to the utility commission and at that point the utility commission will approve a writer to recover the cost of infrastructure to this new large possibly manufacturing facility, the cost that would be recovered would be the invisible part of the infrastructure that's build, when new pipelines are built the visible part is the part that can be recovered by the local gas distribution company from the rates that already charges the invisible part is the part that would not be covered part would be recovered in this writer and the cost that would be recovered are the normal cost that were recovered when infrastructure is passed to in the rates. I will note that their three different limitations Spain in this the writer mechanism no single natural gas local distribution company may expand more than $25 million on the infrastructure, none of the [xx] distribution companies in the state may spend $75 million overall and may be recovered writer, and finally for each individual company the writer that is imposing this may not exceed 5% of the total annual service margin revenue, so there is also a gap on the individual writer. is effective when it
becomes low but expires after July 2020. Members of the committee you hear the explanation on the finance portion of this bill, any questions? Senator Blue. It's just a question Mr. Chairman to Mr. Neil are there other utilities that are to benefit from this kind of allowance, I mean if we're going to let gas companies go in and and recover quickly or some specified way, their costs, it seems that it could benefit any utility that needed to do this to a potential work site, development site, and I just wonder whether there're others that, basically it could be freed so that they can benefits some to the guests coming. There are other utilities that That may benefit for something similar to this, I'll say that it will need to be basically, detailed or sort of, I'm missing my word here but kind of made individual for each utility, because their costs are different. So you're going to have different issues with a, for example an electric utility when they're extending lines. They've different costs and different considerations, and the water company has different costs and different considerations. One of the issues with this, is because the local gas distribution companies, their pipelines are so expensive. That's when you get to the issues, that the company is making decision, not to locate North Carolina because these costs are so high, not because the gas company is trying to solve it right but just because that infrastructure is basically so expensive. So if there would be something for other utilities, it will need to be basically designed for those. Follow up Senator Blue. Just following up, thinking this in a more comprehensive way it seems that both of them and other things of that nature could benefit a new site like this depending on what you're going to do though, and we'll be thinking about how to more comprehensively cover this can be expenses if you got a green fill safe that you are trying to use for some purpose like that. Representative Harger. Good question single I appreciate any game just to support the committee, this is done for what we call the big fish is $200 million and the bill determined within the investment 1500 usually and we see it more in this North Carolina do we see it anywhere is kind of fair where we have a watch North Carolina guy run this bills because this will not have no more benefits from this, but we usually see this gas and not pushed out and that is really what we are looking for trying to push more gas lines out, trying to get more energy into the area so we can get these folks on the flat lands you guys have out in the East. Okay, I'm Senator Stine next, then Senator Ford, Senator Hise Chairman, question for on who is the writer revered is it on all consumers? Consumers as well as commercial as as well as industrial and is it applied equally among them or at what rate and then the second follow up question is is it a one time writer to be collected in one year or does it go on for a few years? The writer will be collected against all customers of the local gas distribution companies are taking over under the retail rates so we specially negotiated right that will not be included, but it wouldn't part to the residential, the industrial and the commercial customers. How it's allocated among those classes I believe it's how it will be allocated in the previous rate case so when they do a rate case they allocate among classes then and they would do the same thing for this writer and I'll get back to you if I'm incorrect just double check on that point and was there, I might have missed that What was the second question? The second question was, is it a one, must a writer be collected in one year or does it apply for multiple years? It applies for multiple years, there is a provision in the bill that the writer will end when the utility comes in for it's next general rate case. So at that point the cost will be rolled into the right case and it will just be recovered in the rate but it won't be collected all in one year I believe it will be collected over a period of time. Generally over a period of time and that this for wife of the, let me look at that and come back to you. That participates for all questions chair for me Follow up one more. Thank you, which is any protection to ensure that if the natural gas security does not come in for a low case, for some extent and period of time that they can't collect the writer such that there cover exceed whatever the cost of the investment,? There is language in the building provides a writable only be corrected until the cost is recovered, so the winder you will go way the cost will be recovered Okay, senator Ford. Thank you Chairman, Mr Fidel can you share with me any insight that you've I have
because my understanding is that the cost of this new installation is going to be bond on the rate pairs with the knowledge that you have and if you can share with us as a committee basing on Methane gas is already collecting, is there financial room and for them to be able to absorb this cost on their own, Under the economical level under how they are regulated they are only require to pay for the cost recovered in their margin so part of how the writer calculated is that they calculate the feasible and in-feasible part so the calculation is actually the in-feasible part so the calculation that's required in the bill is to prove that this is the amount that they are not going to collect through the margin or the profit that they are already recovering so that is part of the bill and that is part of the calculation they should do before they can go in and get this right they are recovering the in-feasible part, Okay I have got senator Hearst Thank you miss chairman two quick questions first is looking at, you talked about businesses that will in the perhaps we are in other businesses that will employ 15 hundred people we did see in North Carolina last year an existing business that was employing well over this number, who was forced by the EPA to shut down all and put in natural gas when natural gas did not exist in that county we had to alert a lot of the world to try to run natural gas to that point one things decide to renationalise[sp?]. But my question gets around to, does this involve, when you're talking about jobs, does this also include protecting existing jobs within that number or will be the only diosicable to industries? Yes sir, the way the certification of commas is written, it applies to companies that have invested or intend to invest 20 million or who employ or intend to employ 1, 500, so I believe that commerce would have the authority to approve if that company had 1, 500 full-time employees, and invested this amount of money in with their current employer. I do not believe it is women only new entrance to the state And then little quick follow up the sun set died on this desired primarily of to a the issue of new writer or 2020 new writers that are out there expiring in regardless if they pay for infrastructure It is only for new a writer, so any writer that was allowed under this, would continue as it would normally, and be recovered for the number of years that would need to be recovered, just no new writers would be allowed after 2020. Okay, I've got Senator Cook, we do have a timeline so let's we have a few folks who are going to speak on the finest portion of this bill only. Is there a way that this bill could be used for large communities that are being developed? This is not really designed for residential or for towns in the past there has been natural gas expansion funds that were used to extend natural gas to areas, but that is not something was contemplated by this bill. A few years back we actually had a bond to expand natural gas that the General Assembly supported and I think those funds have probably been expired since that time so going on Senator Brian, then Senator Wells, Senator Jackson, B. Jackson. Mr. Chair I'm I to understand are you ruling, I have a question about the impact of some provisions in part two of the electric rates and I wanted to ask the question of the utility commissions about that are you saying that that is not allowed, no we are supposed to be focusing on the finance portion of this. Here is what I'll say to you, let us see how we are proceeding the question and if we have time available we'll try to get you an answer. Alright I've got Senator Brent Jackson thank you Mr. Chairman appropriate time I have an amendment I would like to run on part two section 2.2 of this bill this time we have a sponsors Dave and I have looked at this menu in it and it is a good meaning we have does the committee have it before you? am not sure Mr Chairman would we pass that out? While we are passing that out we are going to put you on hold just a moment so we can continue going I've got senator Wells do you have comment.comment and I would like to propose an amendment for discussion, so that committee has time to re-read before it goes to the floor. We've this is light and level and we had not connected with bill sponsor so they sign it, but not studied it. Alright then I'm going to put you on hold for a moment while they pass out and folks have chance to read it. I've got senator Tillman.
I T's the second time I'll hold mine. Okay, and then I've got senator McKissick. Yes Representative Harger, I'm just curious let's say we've a firm, they made this commitment and they go out there and they open this new business in this area and they close within a year. What happens in those circumstances where they've gone out of extended these line and area that otherwise wouldn't have been. They've gotten a writer and it's going to be paid on by everybody that's a payer, rate payer and what happens is that any kind of type of provision that will at least try to get money kind of a craw back type arrangement an event that would have happened. I did see anything but perhaps you can point meet in that direction. Thank you senator McKissick Miss. Chairman there is something we discussed this in house finance if I'm not mistaken, there is requirement I believe will say for 10 year contract in here plus the contracts agreement come from the Twin the gas company and the new owner of the business I think base here I think Mr. Chairman the gas company I'm sure they can speak on their contractual agreements. They're very tight. Sen. McKissick, if someone puts down $200 million I think they are in the game but Dell pulled out, well they didn't put it down, I mean am just saying if there is somebody who could speak to that be great and we can move on quickly. Can anyone other than the contract? Miss Fennell? The this does not have a traditional clawback. As it has been noted that the infrastructure will be built, so there's not a way to remove the infrastructure there is a contract that's required to be signed and before the infrastructure will be built, and I'm not sure if the gas companies want to speak to this, but in the past in the House, the gas companies were saying that as part of that contract they would put requremets that would require payments in those contracts because at that point the gas company is the one that has expended the funds, and the gas company is the one who would be trying to seek recovery of those funds from its repairs. Follow up Mr. Chair. If we could hear from the gas company, the thing that I want to make sure of is that in the event that ever happens we don't want all the other ratepayers in the state to be paying for that are served by that particular utility? Is there someone from the gas company be here to be able to respond to that? Chairman, there's Jaz Tunnell from. Alright, please identify yourself and see if you can respond to Senator McKissick's question. Yes Sir Good afternoon. My name is Jaz Tunnell Senior Manager for Government Relations with Piedmont Natural Gas Company and Senator McKissick, if I understand your question, the question is let's say a large manufacturer takes advantage of this program, intends to locate in North Carolina, agrees to invest the $200 million worse and hire 1, 500 people and does not meet its obligations? That is correct, either they don't meet them and don't show up or either they open it and they're gone in a year or some unreasonable time frame? Yes Sir, in our experience, we have very strong contracts that we engage in. We make sure that we have credit-worthy counterparts and we we do projects of this scale, those candidates are thoroughly vetted and we certainly have provisions in our contracts so we can go after or recover those investments as appropriate. Quick last follow up. Last follow up, this is it. And that's simply this, in the event that would were to happen would that rider that's been approved, that's passing on that cost to all the other individuals, will that go away? Or is it who is going to benefit if that happens? Does the money just go back to the gas company? Utility and they keep it and the writer is still out there, does that writer get modified or appealed? Senator, thank you so much I appreciate that question, I would have to divert public to address that particular aspect of it. Alright. Miss Theirs[sp?], could you help us respond to that question. I know its one that might not likely ever occur but see if we can get an answer to it. Can you restate your question for me make sure I understand it, My name is Chris [xx] Executive Director of Public Staff, we have affirmed that going out there and they either have not constructed the facility to hire these 1500 people or either they open up the facility and they close it in an unreasonable period of time one or two years. What happens at that point in time I understand it's a contract with the gas company, they're going to [xx] one way or the other, who knows I don't know what the circumstances might be, but in the event that were to occur and the gas company recoups this money, does that will wait so this individuals don't have to pay that additional cost? I don't think the writer would necessarily go away, however, the Public Staff would pursue that money through an appropriate proceeding of the Utilities Commission to make sure that that money did flow through to the benefit of rate payers, so the writer might stay in place but I think that will be displaced with the money that was recovered from the gas company probably in a civil proceeding. Okay, I've got Senator Jackson, it's time for your amendment, your amendment has been out there, would you explain it please?
Thank you Mr. Chairman, and I might need to get staff to help me, but basically what we're doing is amending it to, we're not raising it any or lowering it any, we're just shifting around some of the cost cap to allow the poultry and swine operations to catch up speed on technology. As well as we're adding a little bit to the study section on that. I've asked Miss Fennell if she would. Miss Fennell, would you please provide some additional enlightenment on this amendment? Yes Sir, Part 2 of the bill caps the current cost caps that are in place for REPS. For the Renewable Energy Portfolio Standards, the public utilities are allowed to collect in a rider the cost of the REP Standards, but there is cost cap. Part 2 of the bill cuts that cost cap off at the current level which is $12 for residential, 150 for commercial, and $1, 000 for residential per account, per year. What this does is take a portion of each of those class caps and creates a separate cap for poultry and swine. So, poultry and swine will be able to use the regular cost cap and the new cost cap. So, basically it curves out a part of the cost cap the amount that can be recovered and designates that for portray ans Swan which are also part of the set aside for the. Members you've heard the explanation mention of the amendment from senator Jackson any questions? Senator Stine. Question for senator Jackson. I like how you've section 2.6 which has to do with the study but I am concerned about the indeterminate nature of it is just puts it in this join commission without any requirement and they will ever talk back to us when we charge commissions with work that by next April come back to use and we and opportunity to act if we want and I just wanted to see if you'd be open to putting on a reporting time to get back to the legislature. Mr. Chairman I have no problem with that. We did not think of it at the time but we figured they would be making the report when all the other LARC committees. Let me make a decision on this this needs a little bit more work. Why don't you submit this on the floor as an amendment? If it's going to pull then we all agree on the time. Why don't we do it that way? OK. Your don't have thing like the time line. Well I was going to the whole amendment okay with you now. Yes, go ahead. It's a good amendment and we can talk about the time, the date after that, Mr. Chairman. You want to pass the amendment. If that's OK. OK, Members of the committee, we have an amendment before us submitted by Sen. Jackson. No additional discussion. All in favor of the amendment, please say Aye. Aye. Opposed Nai Ayes have it. I trust you'll spend sometime with Sen. Tine to try to get that date resolved. Yes, sir and Rep. Hager as well. I've got Senator Wells and time is of the essence, I don't believe we're going to accept this amendment today, correct? Correct. Discussion. We'll continue working with the bill sponsor before it goes to the floor, for discussion I'm a little concerned about looking at small pieces of an energy grid, there is an article at your desk, no led has effectively stated that we've got questions about out grid, and I'm using that to lead into another issue. How should the grid be built? It feels like a lot of times that we're building an energy grid similar to building an interstate county by county without looking at the bigger picture, and I'd like to see some of the parts from a higher level. The intent of this amendment is to get some cost going forward on energy generation methods. I have a 50 year old coal generation plant in my district, 2, 090 megawatts, could serve two million homes. It's 50 years old. So we won't continue to use that forever. What's the cost of coal generation going forward if we need to replace that plant. What's the cost of nuclear? What's the cost of solar? I'd like to see that from this point looking ahead and use those cost to come up with some kind of comprehensive plan on how we're going to get power generation. After Hurricane Hugo, I discovered that there's something worse than high priced electricity there is no electricity and I spent one week in the house with young boys with no power. I want to make sure we avoid that and part of that is a pricing structure and a structure of overall grid, Okay So I'll continue working with sponsors. Okay, you heard the discussion that mean that Senator [xx] will work with Representative Hager to see if a suitable amendment will come up regarding the study. You are aware of it and you'll probably see that again. Senator Brad. Just real quick, I just want to respond the hurricane top at county two, That's a falsehood. S Enator Hudson Two question Mr. Chairman. One, does the adoption
of Senator Jackson's amendment, mean that we may now discuss the probations part two. We will, if time allows, trying to define, once we have some public comments. Okay. Second question. We forgot add to part one. What allowance if any is made for fuel cost modifications, for the associated federalization of the gas? I might need a little more information Senator Hart so there is no adjustment for fuel cost modification. Are we talking about someone trying to modify there existing plant to now use natural gas? I mean what is their fuel cost increases, does that mean that the matter is that the right itself to the customers increases? Well the natural gas company they only pass along the wholesale rate of the natural gas, they do not have any control over the actual rate of the gas. It's unlike electricity where the more they buy, the less the cost. It is just they are paying the whole rate and so when they pass on to customers all they pass on is the wholesale rate. This bill only represents the physical infrastructure going in not the fuel that goes Senator Bibbs that is on a whole another issue that is pretty on the gas candy bazaar this is for actually installing the infrastructure, Senator Hardsaw but as far as rate payers are concerned, ultimately it involves both, and that's my concern because they made it has to do with the distribution of equipment that is more staff of incorporating it and it certainly doesn't deal with fuel cost is we just said, so we're talking about potential rate increases for folks. For the construction portion isn't it? when increase anyway if you didn't put this infrastructure and I know sure I understand maybe may increase or decrease I wonder how when I get my gas bill and in mean time I have a on each month, and I'm not sure whether we have a, we have been talking about sorry we are talking about creating an exception in the right side basis. It will actually be a writer it is not going to effect all of the rates its going to be a rider for just the infrastructure cost of the infusable portion of the line business so it's just infrastructure cost that is going to be recovered in the radar. There is no fuel cost, or any Exactly okay and I've got Senator Apodaca. Follow up on Senator Hartsell. So if I have got abc and I switch from coal to natural gas, the actual lines brought in to my widget company we can have a rider attached that bills that back to the gas customers. Yes it's the the infrastructure cost what is going cost when the line is going. I understand that but the customer is going to pay for the infrastructure cost Yes its the gas company paying for the infrastructure costs and then the natural gas company will pass along the costs to it's rate payers in a rider. So i. E rate payers equal customers, correct? Yes Okay [xx] let me cut you quick, sit up doc and this is for folks invest $200 million with 1500 [xx] car company, [xx] manufacture company I understand what you're saying just for the infrastructure and with the latter piece Follow up, they put a car company in senator Brian district and they charge back on the latter infrastructures your costs for putting that car company gas line in, I could be paying that in Henderson bill, correct? As a customer? I think you're on public service now Okay Mr. Chairman let me say thank on this few words we are going to put this infrastructures and we're going to pay this rider for the term of hire of a loan, 20 years, 30 years and not only ar you going to pay for who gets to use it, but all these other people well like Sen. Apodaca in the mountains, Senator Bryant, you're going to get to pay for it too for as long as this contract is in vogue, okay? If you like that, you'll love this. Well I think there's probably another point to that and that is that when that customer utilizes their paying gas bills and any new customers around there would add to the revenue and help control it it is not really a loss entity it is an opportunity to upgrade a piece of property that is going to be for a major manufacturer which may or may not
occur but when you have more customers utilizing eventually businesses come that use gas then they have a chance to add more revenue to the system in the ritual law, send out your last question and then I got you get the public comment. What happens if we have a deal? Hopefully we would never have another incentive of that nature. Alright, members on credit am clad now I have got one two three four people and we are going to be discussing the issue of the finance portion of this bill only I have miss mukoko come out identify yourself. Mr. Chair just a point of order. What sir? The fine [xx] include the writer for the natural gas and the writer for the lest because they are both lighters is that right? are we correct on that Doreen, yes, they are both writers none of this goes to the traditional finance they will never come to finance the only person they economically developed refer to finance because it up to the chair the chair is going to be talking only about the economic development part of this mrs mukoko you have 2 minutes. Yes am betty Mukoko North Carolina sustainable energy association and I will reserve my comment and my concern even when a pert of the bill opened up for discussion very good. Thank you Mrs Grey come forward and the Mr, Brieston you are going to be next so time is the essence. Hi Mr. Chairman my name is Fucky Grey I work for the John law foundation thank you for the opportunity to be part of this discussion I wanted to talk about part two of the bill is that okay? No. No okay I will reserve my comments until we open that we open that up. Very fine Mr Braissen, I have got the same the problem. Okay and the I have got [xx] the plan. Part two please. We are going to be done by 2. O'clock I have a comment from representative Hager let's hold on senator [xx] has one question is this trying to figure out can you give me a sense of whats visible and invisible in that concept. Because I think the Lands and the digging holes under visible and I guess proportionally if I going to write a line and someone asks how much it's going to cost is in this actual invisible part we are actually talking about. I'm not sure I can actually give you a percentage it's really a calculation that's done based on the amount of revenue the gas company believes it's going to get from the ultimate consumer so basically calculates how much revenue that new customer is going to generate then figure out how much the new line is going to cost so it's really not a type is just a percentage certain part of that will be paid with the margins that are coming in from the current customer and some of it wont be recovered. Follow up. Ok one more follow up. The invisible part is what the company would not have recovered if it need to operate and use the amount of natural gas that they want to use so if it fails and went online we'll be responsible for that cost and repairs any way because their would be you build in into the visible cost of their current rate structure it's only this additional part out here that they'd never make up that we do for economic development purposes is that correct? Yes but typically the natural gas company requires the company that they are serving to pay the invisible part so that's the difference it's who is going to pay the invisible part the're other economic development programs that also pay for that invisible part there that's enlisted in the summary but this is just a new way to have that invisible part paid for other than the ultimate customer OK Representative Hager you have some closing comments? questions thank you very much, what we are trying to do is give another tool to watch for our cunsumers to allow them to have a way to attract large manufactures again over $200 million over 1500 jobs we think at the end of the day that will lift all votes in North Carolina that will help everybody you that will help you the tax revenues that will help everything again Senator Hisse says we are only talking about the invisible part which is only a small percentage of the visible part which you will end up paying for for anyway under red case. Just remember that it's not like we're running the line from here to Senator Brown's place and everybody's going to pay for that line. It's not. It's just that these that you wouldn't have to do anyway because you're collecting customers on the way. The natural gas you're getting in and actually the gas company's getting from that offsets that infusable piece also. Just remember that revenue they are making of the natural gas. Okay, now let me do this. I'm going to ask one question Senator Ford.
I'm going to let Senator Bryant ask her question if we can answer it quickly we will and then I'm going to call for a vote. Senator Ford. Thank you Mr. Chairman, and I appreciate it and I'm sensitive to the fact that you have a timeline that you're trying to meet. In Commerce yesterday, I withheld some questions that I had concerning part two in reps because I was looking forward to coming to Finance and to be able to discuss the financial and fiscal impact of the reps being maintained at 6% rather than the gradual rate that was accepted in 2007 going to 12 and a half, and now I'm not going to have that opportunity to be able to answer those questions and I think it's a little bit difficult. Senator Ford, how long have you been on the finance committee? [xx] We always focus on the finance issue. Mr. Chairman I would love to sit down with Senator Ford if he would be okay with that. Sit down with you and answer all the questions for you My understanding is this is a part of the financial part of it. That's the reason why I brought it up here. Okay one question. I just have a comment if that's okay. Okay. And my comment is that it seem like this is that with picking winners and losers, and that we're raising rates in one part of the bill not looking at the financial implication on rates in the second part of the bill as well and I'm just concerned about that. It just seems inconsistent and for that reason I just can't support either part because I think we are inconsistent. Thank you ma'am. OK this bill that when we have our motion for favour report Senator Heis offers a motion for favorable report on Senate Bill 332, will go to the floor unless the rules committee, or the rules chairman deciding anything different regarding additional hearings, but we'll go to the floor for some continued discussion any answers. Mr. Chairman. Who asked you questions?. Senator Booth[sp?] of the discussion and the concerns I think the general consensus among a lot of members when you do get the motion, I would ask that there be and the ayes and nos be recorded. No division and then the motion is for a favor report of Senate Bill 332 as amended. Mr. Chairman, Sir Chairman has made the decision on the division. I understand pursuant to work rule, I mean the rule says Well the chairman says no. Okay all in favor of Senate bill 332 will say aye, Aye. All opposed No, The ayes have it. Division, Committee is adjourned. Division. That wasn't even close Mr. Chairman