HCS CSSB 106(FIN): "An Act transferring certain projects of and amending and transferring programs of the Alaska Energy Authority to the Department of Community and Regional Affairs; relating to the Alaska Energy Authority; permitting the Alaska Industrial Development and Export Authority to issue revenue bonds for certain plants or facilities for energy resources; permitting utilities to form joint action agencies; authorizing the Alaska Industrial Development and Export Authority to issue revenue bonds for power transmission interties; relating to rates for a public utility that sends or receives power over certain power transmission interties; relating to the power cost equalization and capital improvement fund; amending the purpose of the Railbelt energy fund."
00HOUSE CS FOR CS FOR SENATE BILL NO. 106(FIN) 01 "An Act transferring certain projects of and amending and transferring programs 02 of the Alaska Energy Authority to the Department of Community and Regional 03 Affairs; relating to the Alaska Energy Authority; permitting the Alaska Industrial 04 Development and Export Authority to issue revenue bonds for certain plants or 05 facilities for energy resources; permitting utilities to form joint action agencies; 06 authorizing the Alaska Industrial Development and Export Authority to issue 07 revenue bonds for power transmission interties; relating to rates for a public 08 utility that sends or receives power over certain power transmission interties; 09 relating to the power cost equalization and capital improvement fund; amending 10 the purpose of the Railbelt energy fund." 11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 12 * Section 1. FINDINGS AND INTENT. (a) The legislature finds that adequate, reliable, 13 electric service at affordable rates is a necessary ingredient of a modern society and a 14 prosperous developing economy. The legislature further finds that at the current stage of
01 social and economic development in the state, direct participation by the state is necessary to 02 assist in the development of a regional electric transmission infrastructure and to assist in 03 holding rates in high cost service areas to affordable levels. 04 (b) The legislature recognizes the high cost of electric power in rural Alaska and 05 intends that funding for power cost equalization from the general fund and from the power 06 cost equalization and rural electric capitalization fund remain at a minimum of $17,000,000 07 annually through the year 2013. The legislature further intends that this long-term 08 commitment to the power cost equalization program will permit and encourage the electric 09 utility industry and its lenders to develop the plans, make the investments, and take other 10 actions that are necessary or prudent to meet the utility needs of residents in rural Alaska. 11 * Sec. 2. AS 37.05.520 is amended to read: 12 Sec. 37.05.520. RAILBELT ENERGY FUND. There is established in the 13 general fund the Railbelt energy fund. The fund consists of money appropriated to it 14 by the legislature. The Department of Revenue shall manage the fund. Interest 15 received on money in the fund shall be accounted for separately and may be 16 appropriated into the fund annually. The legislature may appropriate money from the 17 fund for programs, projects, and other expenditures to assist in meeting Railbelt 18 energy needs, including projects for retrofitting state-owned buildings and facilities 19 for energy conservation. 20 * Sec. 3. AS 42.05.141(b) is amended to read: 21 (b) The commission shall perform the duties assigned to it under 22 AS 42.45.100 - 42.45.190 [AS 44.83.162]. 23 * Sec. 4. AS 42.05.431 is amended by adding a new subsection to read: 24 (h) When setting or reviewing rates for a public utility that sends or receives 25 power over the power transmission interties between Fairbanks and Healy or between 26 Anchorage and the Kenai Peninsula, the commission shall consider those costs that 27 have not been directly assigned to other individual generating utilities by the utility 28 responsible for the construction of the intertie to have been incurred for the system 29 existing on the effective date of this subsection. 30 * Sec. 5. AS 42 is amended by adding a new chapter to read: 31 CHAPTER 45. RURAL AND STATEWIDE ENERGY PROGRAMS.
01 ARTICLE 1. POWER ASSISTANCE PROGRAMS. 02 Sec. 42.45.010. POWER PROJECT FUND. (a) The power project fund is 03 established as a separate fund. The fund shall be distinct from any other money or 04 funds of the department and includes only money appropriated by the legislature and 05 money deposited under (g) of this section. 06 (b) Subject to AS 42.45.060, the department may make loans from the power 07 project fund 08 (1) to electric utilities, regional electric authorities, municipalities, 09 regional and village corporations, village councils, independent power producers, and 10 nonprofit marketing cooperatives to pay the costs of 11 (A) reconnaissance studies, feasibility studies, license and 12 permit applications, preconstruction engineering, and design of power projects; 13 (B) constructing, equipping, modifying, improving, and 14 expanding small-scale power production facilities that are designed to produce 15 less than 10 megawatts of power, conservation facilities, bulk fuel storage 16 facilities, and transmission and distribution facilities, including energy 17 production, transmission and distribution, and waste energy conservation 18 facilities that depend on fossil fuel, wind power, tidal, geothermal, biomass, 19 hydroelectric, solar, or other nonnuclear energy sources; and 20 (C) reconnaissance studies, preconstruction engineering, design, 21 construction, equipping, modification, and expansion of potable water supply 22 including surface storage and groundwater sources and transmission of water 23 from surface storage to existing distribution systems; 24 (2) to a borrower for a power project if 25 (A) the loan is entered into under a leveraged lease financing 26 arrangement; 27 (B) the party that will be responsible for the power project is 28 an electric utility, regional electric authority, municipality, regional or village 29 corporation, village council, independent power producer, or nonprofit 30 marketing cooperative; and 31 (C) the borrower seeking the loan demonstrates to the
01 department that the financing arrangement for the power project will reduce 02 project financing costs below costs of comparable public power projects. 03 (c) Before making a loan from the power project fund, the department shall, 04 by regulation, specify 05 (1) standards for the eligibility of borrowers and the types of projects 06 to be financed with loans; 07 (2) standards regarding the technical and economic viability and 08 revenue self-sufficiency of eligible projects; 09 (3) collateral or other security required for loans; 10 (4) the terms and conditions of loans; 11 (5) criteria to establish financial feasibility and to measure the amount 12 of state assistance necessary for particular projects to meet the financial feasibility 13 criteria; and 14 (6) other relevant criteria, standards, or procedures. 15 (d) A loan made by the department shall be made according to the standards, 16 criteria, and procedures established by regulation under this section. 17 (e) Repayment of the loans shall be secured in any manner that the department 18 determines is feasible to assure prompt repayment under a loan agreement entered into 19 with the borrower. The department may make an unsecured loan from the power 20 project fund to a borrower regulated by the Alaska Public Utilities Commission under 21 AS 42.05 if the borrower has a substantial history of repaying long-term loans and the 22 capacity to repay the loan. Under a loan agreement, repayment may be deferred for 10 23 years or until the project for which the loan is made has achieved earnings from its 24 operations sufficient to pay the loan, whichever is earlier. 25 (f) Power projects are subject to the following limitations on interest and 26 specific restrictions: 27 (1) power projects for which loans are outstanding from the former 28 water resources revolving loan fund (former AS 45.86) on July 13, 1978, may receive 29 additional financing from the power project fund; if granted, 30 (A) the term of the additional financing may not exceed 50 31 years;
01 (B) the interest of the additional financing must be at a rate of 02 not less than three or more than five percent a year on the unpaid balance; 03 (C) the grant of the additional financing must be conditioned on 04 the repayment of loan principal and interest to begin on the earlier of 05 (i) the date of the start of commercial operation of the 06 project; or 07 (ii) 10 years from the date the loan is granted; 08 (2) a loan for a power project 09 (A) may not be granted for a term that exceeds 50 years; and 10 (B) shall be granted at an interest rate that is not less than zero 11 percent and that is the lesser of 12 (i) a rate equal to the percentage that is the average 13 weekly yield of municipal bonds for the 12 months preceding the date 14 of the loan, as determined by the department from municipal bond yield 15 rates reported in the 30-year revenue index of the Weekly Bond Buyer; 16 or 17 (ii) a rate determined by the department that allows the 18 project to meet criteria of financial feasibility established under (c) of 19 this section. 20 (g) Loan repayments and interest earned by loans from the power project fund 21 shall be deposited in the power project fund unless an appropriation to fund the loan 22 directs otherwise. 23 (h) The legislature may forgive the repayment of a loan made from the power 24 project fund for a reconnaissance study or a feasibility study when the department 25 finds that the power project for which the loan was made is not feasible. 26 (i) Money in the power project fund may be used by the legislature to make 27 appropriations for costs of administering the fund. 28 Sec. 42.45.020. RURAL ELECTRIFICATION REVOLVING LOAN FUND. 29 (a) The rural electrification revolving loan fund is established in the department. The 30 fund consists of 31 (1) appropriations made to the fund; and
01 (2) repayments of principal and interest on loans made under this 02 section. 03 (b) Subject to AS 42.45.060, the department may make loans from the rural 04 electrification revolving loan fund to electric utilities certified by the Alaska Public 05 Utilities Commission. A loan from the fund may be made only for the purpose of 06 extending new electric service into an area of the state that an electric utility may serve 07 under a certificate of public convenience and necessity issued by the Alaska Public 08 Utilities Commission. A loan may be made from the fund to an electric utility if the 09 utility invests the money necessary to provide one pole, one span of line, one 10 transformer, and one service drop for each consumer for whom immediate service 11 would be provided by the extension of electric service. However, a loan may not be 12 made from the fund unless 13 (1) the loan is recommended by a loan advisory committee appointed 14 under AS 42.45.030; and 15 (2) the extension of electric service would provide immediate service 16 to at least three consumers. 17 (c) A loan from the rural electrification revolving loan fund shall bear an 18 annual rate of interest of two percent of the unpaid balance of the loan. 19 (d) When the department makes a loan under this section, the electric utility 20 receiving the loan shall, 21 (1) in addition to the rates that it is authorized to charge, charge the 22 consumers served by the electric service extended with the loan proceeds an amount 23 sufficient to pay the interest costs of the loan; 24 (2) pay to the department annually an amount equal to 25 (A) interest of two percent on the unpaid balance of the loan; 26 and 27 (B) payments on the unpaid balance of the principal of the loan 28 for each new consumer served by the electric service extended with the loan 29 proceeds; payments on the unpaid balance of the principal of the loan shall be 30 made at a rate equal to the difference between the actual cost of making the 31 service connection to the consumers and the minimum investment per consumer
01 required of the utility before a loan is made under (b) of this section. 02 (e) The department shall 03 (1) adopt regulations necessary to carry out the provisions of this 04 section; 05 (2) administer the rural electrification revolving loan fund; and 06 (3) submit to the legislature within the first 10 days of each regular 07 legislative session a report of actions taken by the department under this section and 08 an accounting of the rural electrification revolving loan fund. 09 (f) Money in the rural electrification revolving loan fund may be used by the 10 legislature to make appropriations for costs of administering the fund. 11 (g) On June 30 of each fiscal year the unexpended and unobligated cash 12 balance of the fund that is attributable to loans owned by the fund lapses into the 13 general fund. 14 (h) In this section, 15 (1) "consumer" means a person or a governmental agency, if the person 16 or governmental agency requests and offers to pay for electrical service to a facility 17 or part of a facility; the department shall consider a person who, or a governmental 18 agency that, offers to pay for electrical service to several facilities to be a separate 19 consumer for each facility, if each facility is physically separate from another facility, 20 other than through electric service lines, and if the person or governmental agency 21 requests and offers to pay for electrical service to each facility; 22 (2) "facility" means a structure capable of receiving and using electrical 23 energy; and 24 (3) "governmental agency" includes, with respect to the state or federal 25 government or a municipal government, a legislative body, board of regents, 26 administrative body, board, commission, committee, subcommittee, authority, council, 27 agency, public corporation, school board, department, division, bureau, or other 28 subordinate unit, whether advisory or otherwise, of the state, federal, or municipal 29 government. 30 Sec. 42.45.030. LOAN ADVISORY COMMITTEE. When an application for 31 a rural electrification loan is submitted to the department under AS 42.45.020, the
01 department shall appoint a local advisory committee from persons residing in the area 02 that the applicant utility is certified to serve. The loan advisory committee shall 03 consider the loan application and shall recommend whether the loan application is to 04 be approved or disapproved. The loan advisory committee may make a favorable 05 recommendation only if it determines that development in the area of the proposed 06 extension of electric service is likely to provide for full repayment of the loan under 07 AS 42.45.020(d) within 10 years. In making that determination, the committee shall 08 consider 09 (1) permanence of the premises to be served by the extension; 10 (2) land use patterns in the area; 11 (3) access for the line that would be installed with loan proceeds; 12 (4) availability of other utility service in the area; and 13 (5) the economic feasibility of the extension of electric service with the 14 proceeds of the loan. 15 Sec. 42.45.040. SOUTHEAST ENERGY FUND. The Southeast energy fund 16 is established as a separate fund. The fund consists of money transferred to it under 17 AS 42.45.050. The department may make grants from the Southeast energy fund to 18 utilities participating in the power transmission intertie between the Swan Lake and 19 Tyee Lake hydroelectric projects for power projects, for repayment of loans, and for 20 payments on bonds. 21 Sec. 42.45.050. FOUR DAM POOL TRANSFER FUND. (a) The four dam 22 pool transfer fund is established in the department. The fund consists of repayments 23 of principal and income that would have been deposited in the former power 24 development revolving loan fund under former AS 44.83.500. 25 (b) Subject to appropriation, the department shall transfer the balance of the 26 four dam pool transfer fund each month in accordance with this subsection. Subject 27 to appropriation 28 (1) 40 percent of the balance in the four dam pool transfer fund shall 29 be transferred to the power cost equalization and rural electric capitalization fund to 30 be used for power cost equalization and rural electric projects; 31 (2) 40 percent of the balance in the four dam pool transfer fund shall
01 be transferred to the Southeast energy fund to be used for power projects for utilities 02 participating in the power transmission intertie between the Swan Lake and Tyee Lake 03 hydroelectric projects; and 04 (3) 20 percent of the balance in the four dam pool transfer fund shall 05 be transferred to the power project fund to be used for statewide utility projects. 06 Sec. 42.45.060. APPROVAL BY LOAN COMMITTEE AND 07 LEGISLATURE. (a) A loan committee consisting of seven members is established. 08 The committee is composed of the commissioner of community and regional affairs, 09 the commissioner of commerce and economic development, the director of 10 management and budget, or the designees of the commissioners or the director, and 11 four public members. 12 (b) The public members of the committee are appointed by and serve at the 13 pleasure of the governor. Public members serve staggered four-year terms. Only one 14 public member may be appointed from each judicial district described in 15 AS 22.10.010. Public members of the committee serve without compensation but are 16 entitled to travel and per diem as provided for members of boards and commissions 17 under AS 39.20.180. A public member of the committee serves until a successor is 18 appointed. An appointment to fill a vacancy among the public members on the 19 committee is for the remainder of the unexpired term. 20 (c) The commissioner of community and regional affairs serves as chair of the 21 committee. The committee may elect other officers as necessary. A majority of the 22 members of the committee constitute a quorum and may exercise the powers of the 23 committee. 24 (d) A meeting by an electronic medium as provided in this subsection has the 25 same legal effect as a meeting in person. The committee may meet and transact 26 business by an electronic medium if 27 (1) public notice of the time and locations where the meeting will be 28 held by an electronic medium has been given in the same manner as if the meeting 29 were held in a single location; 30 (2) participants and members of the public in attendance can hear and 31 have the same right to participate in the meeting as if the meeting were conducted in
01 person; and 02 (3) copies of pertinent reference materials, statutes, regulations, and 03 audio-visual materials are reasonably available to participants and to the public. 04 (e) A member of the committee may not vote on a resolution of the committee 05 relating to a lease or contract to be entered into by the department under this chapter 06 if the member is a party to the lease or contract or has a direct ownership or equity 07 interest in a firm, partnership, corporation, or association that is a party to the contract 08 or lease. When abstaining from voting, the member must disclose the reason for the 09 abstention. A member who is a member of an electric cooperative that is organized 10 under or subject to AS 10.25 (Electric and Telephone Cooperative Act) may vote on 11 a resolution relating to a contract or lease to which that cooperative is a party. The 12 member shall disclose the cooperative membership at the time of voting. A resolution 13 of the committee that is approved by a majority of the members present who are not 14 barred from voting under this subsection is a valid action of the committee for all 15 purposes. 16 (f) Except for loans from the bulk fuel revolving loan fund (AS 42.45.250), 17 the department shall submit the loans that the department proposes to approve under 18 this chapter to the committee for the committee's review. The department may not 19 enter into a loan for an amount equal to or greater than $500,000 unless the committee 20 approves the loan or unless the loan has received legislative approval under (g) of this 21 section. The department may not enter into a loan for an amount less than $500,000 22 for a period of 30 days after submission of the proposal to the committee. If, within 23 the 30 days, the committee notifies the department that it intends to review a loan for 24 less than $500,000, the department may not enter into the loan unless it is approved 25 by the committee. 26 (g) The department may not enter into a loan for a major project unless it has 27 legislative approval of the project and the amount. An appropriation for the loan that 28 names the project subject to this subsection constitutes approval under this subsection. 29 Projects subject to legislative approval under this subsection include 30 (1) a project in which the cumulative state monetary involvement, 31 through loans, grants, and bonds, is at least $5,000,000; or
01 (2) a project for which a loan of more than $5,000,000 has been 02 requested. 03 ARTICLE 2. POWER COST EQUALIZATION AND 04 RURAL ELECTRIC CAPITALIZATION. 05 Sec. 42.45.100. POWER COST EQUALIZATION AND RURAL ELECTRIC 06 CAPITALIZATION FUND. (a) The power cost equalization and rural electric 07 capitalization fund is established as a separate fund for the purpose of 08 (1) equalizing power cost per kilowatt-hour statewide at a cost close 09 to or equal to the mean of the cost per kilowatt-hour in Anchorage, Fairbanks, and 10 Juneau by paying money from the fund to eligible electric utilities in the state; and 11 (2) to make grants to eligible utilities under AS 42.45.180 to improve 12 the performance of the utility. 13 (b) The fund shall be administered by the department as a fund distinct from 14 the other funds of the department. The fund is composed of 15 (1) money appropriated to provide power cost equalization to eligible 16 electric utilities and to provide grants for utility improvements; and 17 (2) interest earned on those appropriations. 18 (c) The fund is not a dedicated fund. 19 Sec. 42.45.110. ENTITLEMENT TO POWER COST EQUALIZATION. (a) 20 The costs used to calculate the amount of power cost equalization for all electric 21 utilities eligible under AS 42.45.100 - 42.45.150 include all allowable costs, except 22 return on equity, used by the Alaska Public Utilities Commission to determine the 23 revenue requirement for electric utilities subject to rate regulation under AS 42.05. 24 The costs used in determining the power cost equalization per kilowatt-hour shall 25 exclude any other type of assistance that reduces the customer's costs of power on a 26 kilowatt-hour basis and that is provided to the electric utility within 60 days before the 27 commission determines the power cost equalization per kilowatt-hour of the electric 28 utility. In calculating power cost equalization, the commission may not consider 29 validated costs or kilowatt-hour sales associated with a United States Department of 30 Defense facility. 31 (b) An eligible electric utility is entitled to receive power cost equalization
01 (1) for sales of power to local community facilities, calculated in the 02 aggregate for each community served by the electric utility, for actual consumption of 03 not more than 70 kilowatt-hours per month for each resident of the community; the 04 number of community residents shall be determined under AS 29.60.020; and 05 (2) for actual consumption of not more than 700 kilowatt-hours per 06 month sold to each customer in all classes served by the electric utility except 07 (A) customers of the utility under (1) of this subsection; and 08 (B) customers that are state or federal offices or state or federal 09 facilities other than public schools. 10 (c) The amount of power cost equalization provided per kilowatt-hour under 11 (b) of this section may not exceed 95 percent of the power costs, or the average rate 12 per eligible kilowatt-hour sold, whichever is less, as determined by the department. 13 However, 14 (1) during the state fiscal year that began July 1, 1993, the power costs 15 for which power cost equalization were paid to an electric utility were limited to 16 minimum power costs of more than 9.5 cents per kilowatt-hour and less than 52.5 17 cents per kilowatt-hour; 18 (2) during each following state fiscal year, the department shall adjust 19 the power costs for which power cost equalization may be paid to an electric utility 20 based on the weighted average retail residential rate in Anchorage, Fairbanks, and 21 Juneau; and 22 (3) the power cost equalization per kilowatt-hour may be determined 23 for a utility without historical kilowatt-hour sales data by using kilowatt-hours 24 generated. 25 (d) An electric utility whose customers receive power cost equalization under 26 AS 42.45.100 - 42.45.150 shall set out in its tariff the rates without the power cost 27 equalization and the amount of power cost equalization per kilowatt-hour sold. The 28 rate charged to the customer shall be the difference between the two amounts. Power 29 cost equalization paid under AS 42.45.100 - 42.45.150 shall be used to reduce the cost 30 of all power sold to local community facilities, in the aggregate, to the extent of 70 31 kilowatt-hours per month per resident of the community, and to reduce the cost of the
01 first 700 kilowatt-hours per customer per month for all other classes served by the 02 electric utility except state and federal offices and state and federal facilities other than 03 public schools. 04 (e) The power cost equalization program shall be administered by the 05 department based on a determination by the department under (a) and (c) of this 06 section of power cost equalization per kilowatt-hour for each eligible electric utility. 07 (f) The department may not deny an eligible electric utility power cost 08 equalization because complete cost information is not available. The department shall 09 assist an eligible electric utility that is exempt from rate regulation under AS 42.05 to 10 provide the cost information the department considers necessary to comply with 11 AS 42.45.100 - 42.45.150. Only power costs that are supportable may be considered 12 in calculating power cost equalization. Each electric utility is responsible for keeping 13 records that provide the information necessary to comply with AS 42.45.100 - 14 42.45.150 including records of monthly kilowatt-hour sales or generation, monthly fuel 15 balances, fuel purchases, and monthly utility fuel consumption. 16 (g) The department shall determine the cost of fuel for each eligible electric 17 utility using the procedure for approving fuel cost rate adjustments of electric utilities 18 subject to rate regulation under AS 42.05. 19 (h) Each electric utility receiving power cost equalization approved by the 20 department shall 21 (1) report monthly to the department within the time and in the form 22 the department requires; and 23 (2) use operational equipment designed to meter individual utility 24 customer power consumption and to determine and record the utility's overall fuel 25 consumption. 26 (i) The department shall review the report required under (h) of this section. 27 After review and approval of the report, the department shall, subject to appropriation, 28 pay to each eligible electric utility an amount equal to the power cost equalization per 29 kilowatt-hour determined under (a) and (c) of this section, multiplied by the number 30 of kilowatt-hours eligible for power cost equalization that were sold during the 31 preceding month to all customers of the utility under (b) of this section. Payment shall
01 be made by the department within 30 days after receipt from the utility of the report 02 required under (h) of this section. If appropriations are insufficient for payment in full, 03 the amount paid to each electric utility is reduced on a pro rata basis. 04 Sec. 42.45.120. NOTICE TO CUSTOMERS. If an electric utility receives 05 power cost equalization under AS 42.45.100 - 42.45.150, the utility shall either give 06 to its electric service customers eligible under this program, for each period for which 07 the payment is received, 08 (1) the following notice: 09 NOTICE TO CUSTOMER 10 For the current billing period the utility will be paid under the 11 State of Alaska's power cost equalization program 12 (AS 42.45.100) to assist the utility and its customers in reducing 13 the high cost of generation of electric energy. Your total 14 electrical service cost $. . . . . . 15 Less state equalization $. . . . . . 16 Your charge $. . . . . . ; or 17 (2) a notice approved by the department that provides electric service 18 customers the same information provided by the notice in (1) of this section. 19 Sec. 42.45.130. COST MINIMIZATION. (a) In order to qualify for power 20 cost equalization, each electric utility shall make every reasonable effort to minimize 21 administrative, operating, and overhead costs, including using the best available 22 technology consistent with sound utility management practices. In reviewing 23 applications for power cost equalization, the department may require the elimination 24 of unnecessary operating expenses. Each eligible electric utility shall cooperate with 25 appropriate state agencies to implement cost-effective energy conservation measures 26 and to plan for and implement feasible alternatives to diesel generation. 27 (b) In this section, "energy conservation measures" include weatherization and 28 other insulating methods, utilization of waste heat, appropriate sizing of new generating 29 equipment, and other programs of the state or federal government intended and 30 available for energy conservation. 31 Sec. 42.45.140. CUSTOMER PETITIONS. If the department receives a
01 petition requesting power cost equalization, signed by at least 25 percent of the 02 customers of an electric utility that is subject to rate regulation under AS 42.05 and 03 that has not applied for power cost equalization under AS 42.45.100 - 42.45.150, the 04 department shall require the utility to submit a power cost equalization application. 05 Upon a determination of eligibility for power cost equalization, the utility, as a part 06 of its service, shall receive power cost equalization and pass power cost equalization 07 benefits to its customers under AS 42.45.100 - 42.45.150. 08 Sec. 42.45.150. DEFINITIONS FOR AS 42.45.100 - 42.45.150. In 09 AS 42.45.100 - 42.45.150, 10 (1) "community facility" means a water and sewer facility, public 11 outdoor lighting, charitable educational facility, or community building whose 12 operations are not paid for by the state, the federal government, or private commercial 13 interests; 14 (2) "eligible electric utility" or "electric utility" means a public, 15 cooperative, or other corporation, company, individual, or association of individuals, 16 and includes the lessees, trustees, or receivers appointed by a court, that 17 (A) owns, operates, manages, or controls a plant or system for 18 the furnishing, by generation, transmission or distribution, of electric service 19 to the public for compensation; 20 (B) during calendar year 1983, had a residential consumption 21 level of power eligible for power cost equalization under former AS 44.83 of 22 less than 7,500 megawatt hours or had a residential consumption level of power 23 eligible for power cost equalization under former AS 44.83 of less than 15,000 24 megawatt hours if the utility served two or more municipalities or 25 unincorporated communities; and 26 (C) during calendar year 1984, used diesel fired generators to 27 produce more than 75 percent of the electrical consumption of the utility; an 28 electric utility that is a subsidiary of another electric utility is an "eligible 29 electric utility" if the operations of the subsidiary, considered separately, meet 30 the eligibility requirements of AS 42.45.100 - 42.45.150; if an electric utility 31 did not receive power cost assistance in 1983 but is otherwise eligible for
01 power cost equalization under AS 42.45.100 - 42.45.150, the utility is an 02 "eligible electric utility"; 03 (3) "power costs" means costs used in determining power cost 04 equalization under AS 42.45.110(a) and (c). 05 Sec. 42.45.160. ADJUSTMENTS TO POWER COST EQUALIZATION. (a) 06 The commission may adjust the power cost equalization per kilowatt-hour, determined 07 under AS 42.45.100 - 42.45.150, payable to an electric utility that is subject to rate 08 regulation under AS 42.05 if the 09 (1) commission has approved a fuel cost rate adjustment caused by an 10 increase or decrease in the electric utility's cost of fuel; 11 (2) commission has approved a permanent or interim rate increase or 12 decrease that establishes a higher or lower power cost; 13 (3) authority has discovered, in reviewing the monthly data submitted 14 by the electric utility, discrepancies that require adjustment of the power cost 15 equalization; or 16 (4) authority determines that appropriations are insufficient to finance 17 full payments to eligible electric utilities. 18 (b) An electric utility that is eligible to receive power cost equalization under 19 this section and that receives power cost equalization per kilowatt-hour approved by 20 the department shall report monthly to the department within the time and in the form 21 the department requires. An electric utility shall report 22 (1) the power cost equalization per kilowatt-hour approved by the 23 department; 24 (2) the total kilowatt-hours sold to each class of customer during the 25 preceding month; 26 (3) the total kilowatt-hours eligible for power cost equalization under 27 this section sold to each class of customer during the preceding month; 28 (4) the total kilowatt-hours generated during the preceding month, if 29 available; 30 (5) any department approved amendments to the schedule of rates in 31 effect during the preceding month; and
01 (6) an increase or decrease in the current unit price of fuel from the 02 base price used by the department in determining power costs if the change is expected 03 to result in a subsequent power cost equalization adjustment. 04 (c) The provisions of AS 42.45.100 - 42.45.150 relating to the determination 05 of the amount of power cost equalization and payment of the equalization assistance 06 apply to equalization assistance under this section. 07 Sec. 42.45.170. EQUALIZATION ASSISTANCE TO UNREGULATED 08 UTILITIES. (a) An electric utility that is not subject to rate regulation by the Alaska 09 Public Utilities Commission under AS 42.05 may receive power cost equalization if 10 the utility is otherwise eligible for equalization assistance under AS 42.45.100 - 42.45.150 and if the utility 11 (1) files with the department financial data necessary to determine the 12 power cost equalization per kilowatt-hour as prescribed by the department and that is 13 in compliance with AS 42.45.100 - 42.45.150; 14 (2) reports monthly to the department, within the time and in the form 15 required, the information required in (b) of this section; 16 (3) sets rates 17 (A) that consider the power cost equalization provided under 18 AS 42.45.100 - 42.45.150 by subtracting from its revenue requirements for 19 electric services the power cost equalization per kilowatt-hour that it is eligible 20 to receive; and 21 (B) under which the power cost equalization provided in 22 AS 42.45.060 - 42.45.110 is applied as a credit only against the cost of 23 kilowatt-hours eligible for equalization assistance under AS 42.45.100 - 24 42.45.150 that are consumed by each customer in any month; 25 (4) allows audits that the department determines are necessary to ensure 26 compliance with this section; and 27 (5) furnishes its electric service customers eligible under this program 28 a notice as specified in AS 42.45.120. 29 (b) An electric utility that is eligible to receive power cost equalization under 30 this section shall report in accordance with (a)(2) of this section 31 (1) the power cost equalization per kilowatt-hour approved by the
01 department; 02 (2) the total kilowatt-hours sold to each class of customer during the 03 preceding month; 04 (3) the total kilowatt-hours eligible for power cost equalization under 05 this section sold to each class of customer during the preceding month; 06 (4) the total kilowatt-hours generated during the preceding month, if 07 available; 08 (5) any amendments to the schedule of rates in effect during the 09 preceding month; and 10 (6) an increase or decrease in the current unit price of fuel from the 11 base price used by the department in determining power costs if the change is expected 12 to result in a subsequent equalization assistance level adjustment. 13 (c) An electric utility that is eligible to receive power cost equalization under 14 this section may have its power cost equalization per kilowatt-hour determination 15 changed by the department if the department 16 (1) has verified an increase or decrease in the electric utility's cost of 17 fuel; 18 (2) has verified an increase in rates based on an increase in costs; 19 (3) has discovered, in reviewing the monthly data submitted by the 20 electric utility, discrepancies that require adjustment of the power cost equalization; or 21 (4) determines that appropriations are insufficient to finance full 22 payments to eligible electric utilities. 23 (d) The provisions of AS 42.45.100 - 42.45.150 relating to the determination 24 of the amount of power cost equalization and payment of the equalization assistance 25 apply to equalization assistance under this section. 26 (e) An application for power cost equalization by an electric utility that is 27 eligible to receive power cost under this section does not extend the jurisdiction of the 28 Alaska Public Utilities Commission beyond that established by AS 42.05. 29 Sec. 42.45.180. GRANTS FOR UTILITY IMPROVEMENTS. (a) The 30 department may make a grant from the fund for an eligible utility for a small power 31 project that will reduce the cost of generating or transmitting power to the customers
01 of the utility. The amount of the grant may not exceed 75 percent of the cost of the 02 project. The department may not make a grant under this section unless the eligible 03 utility has secured financing for 25 percent of the cost of the project from a source 04 other than the power cost equalization and rural electric capitalization fund, as 05 provided under (c) of this section. 06 (b) The department may not allocate more than three percent of the balance 07 in the fund to grants under this section in a fiscal year. 08 (c) In determining whether an eligible utility has secured financing for 25 09 percent of the cost of the project from a source other than the power cost equalization 10 and rural electric capitalization fund, the department shall accept solicited and 11 unsolicited proposals for third party financing or for a joint venture between the utility 12 and an entity from the private sector provided that the private sector participant has 13 (1) a valid state business license; 14 (2) a resolution or letter of agreement executed by the eligible utility 15 agreeing to participation by the private sector participant; 16 (3) a business plan that illustrates how the proposed project will reduce 17 the cost of generating or transmitting power to the customers of the utility. 18 (d) In this section, 19 (1) "eligible utility" has the meaning given in AS 42.45.150; 20 (2) "project" includes 21 (A) power generation systems; 22 (B) transmission systems; 23 (C) distribution systems; 24 (D) metering systems; 25 (E) energy store systems; 26 (F) energy conservation programs; and 27 (G) bulk fuel storage facilities; 28 (3) "small power project" means a new or modified project that will 29 either generate, store, or conserve no more than 1.5 megawatts of power or provide a 30 metering system, transmission system, distribution system, or bulk fuel storage facility 31 that has an estimated cost of less than $3,000,000.
01 Sec. 42.45.190. DEFINITION FOR AS 42.45.100 - 42.45.190. In 02 AS 42.45.100 - 42.45.190, "fund" means the power cost equalization and rural electric 03 capitalization fund established under AS 42.45.100. 04 ARTICLE 3. ELECTRICAL SERVICE EXTENSION FUND. 05 Sec. 42.45.200. ELECTRICAL SERVICE EXTENSION FUND 06 ESTABLISHED. (a) The electrical service extension fund is established as a separate 07 fund in the department. The fund consists only of money appropriated to it by the 08 legislature. 09 (b) The department may make grants from the electrical service extension fund 10 to certificated electric utilities and to electric utilities exempt from certification under 11 AS 42.05.711, as a first priority, to pay for costs of site preparation and construction 12 for the extension of electrical service to private residences and small businesses not 13 currently served by an electric utility and, as a second priority, for making 14 improvements to existing utilities. The amount of a grant made under this section may 15 not exceed 60 percent of the total cost of construction of the project. The costs 16 considered in making a grant may not include costs of planning, feasibility studies, or 17 design. 18 (c) An electric utility that has received a grant under this section may charge 19 a connection fee for initial connection to the electrical service made available because 20 of the construction. The connection fee for each residential or commercial structure 21 shall conform to the line extension policy of the utility. 22 (d) The department shall adopt regulations under AS 44.62 (Administrative 23 Procedure Act) to implement this section. 24 (e) In this section, "certificated" means holding a certificate of public 25 convenience and necessity issued by the Alaska Public Utilities Commission under 26 AS 42.05. 27 ARTICLE 4. BULK FUEL REVOLVING LOAN FUND. 28 Sec. 42.45.250. BULK FUEL REVOLVING LOAN FUND. (a) The bulk fuel 29 revolving loan fund is established in the department to assist communities in 30 purchasing bulk fuel. A community, or a private individual who has written 31 endorsement from the governing body of the community, is eligible for a loan from
01 the bulk fuel revolving loan fund for a bulk fuel purchase. 02 (b) Money in the fund may be used by the legislature to make appropriations 03 for costs of administering this section. 04 (c) The foreclosure expense account is established as a special account within 05 the bulk fuel revolving loan fund. This account is established as a reserve from fund 06 equity. 07 (d) The department may spend money credited to the foreclosure expense 08 account when necessary to protect the state's security interest in collateral on loans 09 made under this section or to defray expenses incurred during foreclosure proceedings 10 after a default by an obligor. 11 (e) Loans made from the bulk fuel revolving loan fund to one borrower in any 12 fiscal year are not subject to AS 42.45.060 and 13 (1) may not exceed $100,000; 14 (2) shall be repaid in one year or less; and 15 (3) may not exceed 90 percent of the wholesale price of the fuel 16 purchased. 17 (f) Interest may be charged on a loan made from the bulk fuel revolving loan 18 fund. Interest shall be charged on a loan at a rate equal to the percentage of the 19 average weekly yield of municipal bonds for the 12 months preceding the date of the 20 loan, as determined by the department from municipal bond yield rates reported in the 21 30-year revenue index of the Weekly Bond Buyer. However, if the department finds 22 that a community cannot afford to repay a portion of interest on a loan, and makes a 23 determination in writing, the department may reduce or eliminate the interest rate 24 applicable to the loan. 25 (g) Repayments of the principal, the interest, and the money chargeable to 26 principal or interest that is collected through liquidation by foreclosure or other process 27 on a loan made under this section shall be paid into the bulk fuel revolving loan fund. 28 The fund is not a dedicated fund. 29 (h) The department may contract for the administration of the bulk fuel loan 30 program established in this section. 31 (i) The department shall dispose of property acquired through default or
01 foreclosure of a loan made under this section. Disposal shall be made in a manner that 02 serves the best interests of the state, and may include the amortization of payments 03 over a period of years. 04 (j) The department may adopt regulations necessary to carry out the provisions 05 of this section, including regulations to establish reasonable fees for services provided 06 and charges for collecting the fees. 07 (k) The department may collect the fees and collection charges established 08 under (i) of this section and shall deposit the money in the general fund. 09 (l) In this section, 10 (1) "bulk fuel storage facility" means a storage tank capable of holding 11 at least 10,000 gallons of petroleum fuel; and 12 (2) "community" means an organized municipality or an unincorporated 13 village that is a social unit, with a population of less than 2,000 people. 14 ARTICLE 5. JOINT ACTION AGENCIES. 15 Sec. 42.45.300. JOINT ACTION AGENCIES. Two or more public utilities 16 may form a joint action agency for the purpose of participation in the design, 17 construction, operation, and maintenance of a generating or transmission facility and 18 to secure financing for carrying out the design, construction, operation, and 19 maintenance of the facility. A joint action agency may request the Alaska Industrial 20 Development and Export Authority to issue revenue bonds for projects of the agency. 21 A joint action agency has the powers of a public utility under AS 42.05. 22 ARTICLE 6. MISCELLANEOUS PROVISIONS. 23 Sec. 42.45.400. ASSISTANCE TO RURAL UTILITIES. The department shall 24 provide technical assistance to rural utilities including catastrophe prevention programs 25 and other training programs for utility projects. The department shall provide rural 26 utilities with the technical assistance and training that the utilities need to improve the 27 efficiency, safety, and reliability of their power systems and to prevent emergency 28 situations from developing. At a minimum, the assistance and training must include 29 information on 30 (1) reducing distribution line losses; 31 (2) installation of generators that are more fuel efficient;
01 (3) preventative maintenance programs; 02 (4) safety inspections; 03 (5) installing and maintaining waste heat systems; 04 (6) improved metering systems; 05 (7) improved management and administration; and 06 (8) coordinating regional activities, including circuit rider maintenance 07 programs. 08 (b) In providing rural utilities with technical assistance and training, the 09 department shall give priority to contracting with the private sector for these services. 10 Sec. 42.45.410. RELATIONSHIP WITH PRIVATE SECTOR. The department 11 shall, to the maximum extent feasible, carry out its powers and duties under this 12 chapter by entering into contracts with appropriate entities in the private sector. 13 ARTICLE 7. GENERAL PROVISIONS. 14 Sec. 42.45.990. DEFINITIONS. In this chapter, unless the context otherwise 15 requires, 16 (1) "department" means the Department of Community and Regional 17 Affairs; 18 (2) "feasibility study" 19 (A) means a study conducted to establish the economic and 20 environmental practicality of completing a proposed power project; 21 (B) includes engineering and design work to meet the 22 requirements for submission of a license application for a proposed new project 23 to the Federal Energy Regulatory Commission; 24 (3) "power" includes electrical energy generated, distributed, bought, 25 or sold for lighting, heating, power, and every other useful purpose; 26 (4) "power project" or "project" means a plant, works, system, or 27 facility, together with related or necessary facilities and appurtenances, including a 28 divided or undivided interest in or a right to the capacity of a power project or project, 29 that is used or is useful for the purpose of 30 (A) electrical or thermal energy production other than nuclear 31 energy production;
01 (B) waste energy utilization and energy conservation; or 02 (C) transmission, purchase, sale, exchange, and interchange of 03 electrical or thermal energy, including district heating or interties; 04 (5) "reconnaissance study" means a study conducted to assess the 05 present and future electrical and thermal energy needs of an area. 06 * Sec. 6. AS 44.47.050(a) is amended to read: 07 (a) The department may 08 (1) advise and assist local governments; 09 (2) serve as staff for the Local Boundary Commission; 10 (3) conduct studies and carry out experimental and pilot projects for the 11 purpose of developing solutions to community and regional problems; 12 (4) promote cooperative solutions to problems affecting more than one 13 community or region, including joint service agreements, regional compacts, and other 14 forms of cooperation; 15 (5) serve as a clearinghouse for information useful in solution of 16 community and regional problems, and channel to the appropriate authority requests 17 for information and services; 18 (6) advise and assist community and regional governments on matters 19 of finance, including but not limited to bond marketing and procurement of federal 20 funds; 21 (7) prepare suggested guidelines relating to the content of notice of 22 bond sale advertisements, prospectuses, and other bonding matters issued by local 23 governments; 24 (8) administer state funds appropriated for the benefit of unorganized 25 regions within the state, allowing for maximum participation by local advisory councils 26 and similar bodies; 27 (9) carry out those administrative functions in the unorganized borough 28 that the legislature may prescribe; 29 (10) study existing and proposed laws and state activities that affect 30 community and regional affairs and submit to the governor recommended changes in 31 those laws and activities;
01 (11) coordinate activities of the state that affect community and 02 regional affairs; 03 (12) assist in the development of new communities and serve as the 04 agent of the state for purposes of participation in federal programs relating to new 05 communities; 06 (13) supervise planning, management, and other activities required for 07 local eligibility for financial aid under those federal and state programs that [WHICH] 08 provide assistance to community and regional governments; 09 (14) administer state and, as appropriate, federal programs for revenue 10 sharing, grants, and other forms of financial assistance to community and regional 11 governments; 12 (15) provide staff assistance, as requested, to the Rural Affairs 13 Commission; 14 (16) apply for, receive, and use funds from federal and other sources, 15 public or private, for use in carrying out the powers and duties of the department; 16 (17) request and utilize the resources of other agencies of state 17 government in carrying out the purposes of this chapter to the extent such utilization 18 is more efficient than maintaining departmental staff, reimbursing the other agencies 19 when appropriate; 20 (18) [REPEALED 21 (19)] advise and assist municipalities on procedures of assessment, 22 valuation, and taxation, and notify municipalities of major errors in those procedures; 23 (19) carry out the powers and duties assigned it under AS 42.45; 24 (20) carry out other functions and duties, consistent with law, necessary 25 or appropriate to accomplish the purpose of this chapter. 26 * Sec. 7. AS 44.83.030 is repealed and reenacted to read: 27 Sec. 44.83.030. MEMBERSHIP OF THE AUTHORITY. The directors of the 28 Alaska Energy Authority are the members of the Alaska Industrial Development and 29 Export Authority. 30 * Sec. 8. AS 44.83.040(a) is amended to read: 31 (a) The chair and vice-chair of the Alaska Industrial Development and
01 Export Authority shall serve as officers of the Alaska Energy Authority 02 [DIRECTORS SHALL ELECT ONE OF THEIR NUMBER AS CHAIRMAN AND 03 MAY ELECT OTHER OFFICERS THEY DETERMINE DESIRABLE]. The powers 04 of the Alaska Energy Authority [AUTHORITY] are vested in the directors, and three 05 [FOUR] directors of the authority constitute a quorum. Action may be taken and 06 motions and resolutions adopted by the Alaska Energy Authority [AUTHORITY] at 07 a meeting by the affirmative vote of a majority of the directors. The directors of the 08 Alaska Energy Authority [AUTHORITY] serve without compensation, but they shall 09 receive the same travel pay and per diem as provided by law for board members 10 under AS 39.20.180. 11 * Sec. 9. AS 44.83.070 is amended to read: 12 Sec. 44.83.070. PURPOSE OF THE AUTHORITY. The purpose of the 13 authority is to promote, develop, and advance the general prosperity and economic 14 welfare of the people of the state by providing a means of [CONSTRUCTING, 15 ACQUIRING,] financing and operating power projects and facilities that recover and 16 use waste energy. 17 * Sec. 10. AS 44.83.080 is amended to read: 18 Sec. 44.83.080. POWERS OF THE AUTHORITY. In furtherance of its 19 corporate purposes, the authority has the following powers in addition to its other 20 powers: 21 (1) to sue and be sued; 22 (2) to have a seal and alter it at pleasure; 23 (3) to make and alter bylaws for its organization and internal 24 management; 25 (4) to adopt regulations governing the exercise of its corporate powers; 26 (5) to [ACQUIRE, WHETHER BY CONSTRUCTION, PURCHASE, 27 GIFT OR LEASE, AND TO] improve, equip, operate, and maintain power projects; 28 (6) to issue bonds to carry out any of its corporate purposes and 29 powers, including [THE ACQUISITION OR CONSTRUCTION OF A PROJECT TO 30 BE OWNED OR LEASED, AS LESSOR OR LESSEE, BY THE AUTHORITY, OR 31 BY ANOTHER PERSON, OR THE ACQUISITION OF ANY INTEREST IN A
01 PROJECT OR ANY RIGHT TO CAPACITY OF A PROJECT,] the establishment or 02 increase of reserves to secure or to pay the bonds or interest on them, and the payment 03 of all other costs or expenses of the authority incident to and necessary or convenient 04 to carry out its corporate purposes and powers; 05 (7) to sell, lease as lessor or lessee, exchange, donate, convey, or 06 encumber in any manner by mortgage or by creation of any other security interest, real 07 or personal property owned by it, or in which it has an interest, when, in the judgment 08 of the authority, the action is in furtherance of its corporate purposes; 09 (8) to accept gifts, grants, or loans from, and enter into contracts or 10 other transactions regarding them, with any person; 11 (9) to deposit or invest its funds, subject to agreements with 12 bondholders; 13 (10) to enter into contracts with the United States or any person and, 14 subject to the laws of the United States and subject to concurrence of the legislature, 15 with a foreign country or its agencies, for the financing, [CONSTRUCTION, 16 ACQUISITION,] operation, and maintenance of all or any part of a power project, 17 either inside or outside the state, and for the sale or transmission of power from a 18 project or any right to the capacity of it or for the security of any bonds of the 19 authority issued or to be issued for the project; 20 (11) to enter into contracts with any person and with the United States, 21 and, subject to the laws of the United States and subject to the concurrence of the 22 legislature, with a foreign country or its agencies for the purchase, sale, exchange, 23 transmission, or use of power from a project, or any right to the capacity of it; 24 (12) to apply to the appropriate agencies of the state, the United States, 25 and to a foreign country and any other proper agency for the permits, licenses, or 26 approvals as may be necessary, and to [CONSTRUCT,] maintain and operate power 27 projects in accordance with the licenses or permits, and to obtain, hold, and use the 28 licenses and permits in the same manner as any other person or operating unit; 29 (13) [TO PERFORM RECONNAISSANCE STUDIES, FEASIBILITY 30 STUDIES, AND ENGINEERING AND DESIGN WITH RESPECT TO POWER 31 PROJECTS;
01 (14)] to enter into contracts or agreements with respect to the exercise 02 of any of its powers, and do all things necessary or convenient to carry out its 03 corporate purposes and exercise the powers granted in this chapter; 04 (14) [(15) TO EXERCISE THE POWER OF EMINENT DOMAIN IN 05 ACCORDANCE WITH AS 09.55.240 - 09.55.460; 06 (16)] to recommend to the legislature 07 (A) [THE ISSUANCE OF GENERAL OBLIGATION BONDS 08 OF THE STATE TO FINANCE THE CONSTRUCTION OF A POWER 09 PROJECT IF THE AUTHORITY FIRST DETERMINES THAT THE 10 PROJECT CANNOT BE FINANCED BY REVENUE BONDS OF THE 11 AUTHORITY AT REASONABLE RATES OF INTEREST; 12 (B)] the pledge of the credit of the state to guarantee repayment 13 of all or any portion of revenue bonds issued to assist in construction of power 14 projects; 15 (B) [(C)] an appropriation from the general fund 16 (i) for debt service on bonds or other project purposes; 17 or 18 (ii) to reduce the amount of debt financing for the 19 project; 20 [(D) AN APPROPRIATION TO THE POWER PROJECT 21 FUND FOR A POWER PROJECT; 22 (E) REPEALED 23 (F) DEVELOPMENT OF A PROJECT UNDER FINANCING 24 ARRANGEMENTS WITH OTHER ENTITIES USING LEVERAGED 25 LEASES OR OTHER FINANCING METHODS; 26 (G) AN APPROPRIATION FOR A POWER PROJECT 27 ACQUIRED OR CONSTRUCTED UNDER AS 44.83.380 - 44.83.425 28 (ENERGY PROGRAM FOR ALASKA)]. 29 * Sec. 11. AS 44.83.090(a) is amended to read: 30 (a) The authority shall, in addition to the other methods that [WHICH] it may 31 find advantageous, provide a method by which municipal electric, rural electric,
01 cooperative electric, or private electric utilities and regional electric authorities, or 02 other persons authorized by law to engage in the distribution of electricity may secure 03 a reasonable share of the power generated by a project, or any interest in a project, or 04 for any right to the power and shall sell the power or cause the power to be sold at the 05 lowest reasonable prices that [WHICH] cover the full cost of the electricity or 06 services, including capital and operating costs, debt coverage as considered appropriate 07 by the authority, and other charges that may be authorized by this chapter. Except for 08 a contract or lease entered into under former AS 44.83.380 - 44.83.425, a contract or 09 lease for the sale, transmission, and distribution of power generated by a project or any 10 right to the capacity of it shall provide: 11 (1) for payment of all operating and maintenance expenses of a project 12 and costs of renewals, replacements, and improvements of it; 13 (2) for interest on and amortization charges sufficient to retire bonds 14 of the authority issued for the project and reserves for them, plus a debt service 15 coverage factor as may be determined by the authority to be necessary for the 16 marketability of its bonds; 17 (3) for monitoring of the project by the authority or its agents; 18 (4) for full and complete disclosure to the authority of all factors of 19 costs in the transmission and distribution of power, so that rates to any persons may 20 be fixed initially in the contract or lease and may be adjusted from time to time on the 21 basis of true cost data; 22 (5) for periodic revisions of the service and rates to persons on the 23 basis of accurate cost data obtained by the accounting methods and systems approved 24 by the directors and in furtherance and effectuation of the policy declared in this 25 chapter; 26 (6) for the cancellation and termination of a contract or lease upon 27 violation of its terms by any person; 28 (7) for security for performance as the authority may consider 29 practicable and advisable, including provisions assuring the continuance of the 30 distribution and transmission of power generated by a project and the use of its 31 facilities for these purposes; and
01 (8) other terms not inconsistent with the provisions and policy of this 02 chapter as the authority may consider advisable. 03 * Sec. 12. AS 44.83.110(b) is amended to read: 04 (b) Notwithstanding any other provisions of this chapter, the trust indenture, 05 trust agreement, secured loan agreement, or other instrument or the resolution 06 constituting a contract with bondholders shall contain a covenant by the authority that 07 it will at all times maintain rates, fees, or charges sufficient to pay, and that a contract 08 entered into by the authority for the sale, transmission, or distribution of power shall 09 contain rates, fees, or charges sufficient to pay the costs of operation and maintenance 10 of the project, the principal of and interest on bonds issued under the trust agreement 11 as the same severally become due and payable, to provide for debt service coverage 12 as considered necessary by the authority for the marketing of its bonds and to provide 13 for renewals, replacements, and improvements of the project, and to maintain reserves 14 required by the terms of the trust agreement. This subsection does not require a 15 covenant that varies from a covenant entered into in accordance with the provisions 16 of former AS 44.83.380 - 44.83.425. 17 * Sec. 13. AS 44.83.382(a) is amended to read: 18 (a) A power development fund is established in the Alaska Energy Authority 19 to carry out the purposes of former AS 44.83.380 - 44.83.425. 20 * Sec. 14. AS 44.83.384(a) is amended to read: 21 (a) The fund may be used by the authority to provide money for 22 (1) [RECONNAISSANCE AND FEASIBILITY STUDIES AND 23 POWER PROJECT FINANCE PLANS PREPARED UNDER AS 44.83.177 - 24 44.83.181; 25 (2) THE COST OF A POWER PROJECT, INCLUDING BUT NOT 26 LIMITED TO COSTS OF ACQUIRING NECESSARY LICENSES, PREPARING 27 ENGINEERING DESIGNS, OBTAINING LAND, AND CONSTRUCTING THE 28 POWER PROJECT; 29 (3)] the defeasance of bonds, or the payment of debt service on loans 30 for or on an issue of bonds sold in connection with a power project constructed or 31 acquired before the effective date of this section;
01 (2) [(4)] the cost of operating and maintaining power projects 02 constructed or acquired before the effective date of this section; and 03 (3) [(5)] debt service on power projects constructed or acquired 04 before the effective date of this section. 05 * Sec. 15. AS 44.83.388(a) is amended to read: 06 (a) The authority shall maintain records of power project allocations from the 07 fund for each power project 08 (1) approved in accordance with former AS 44.83.185; and 09 (2) for which an allocation is made from an appropriation made by the 10 legislature without specifying an appropriation to a project. 11 * Sec. 16. AS 44.83.396(a) is amended to read: 12 (a) A power project that was [IS] acquired or constructed as part of the 13 former energy program for Alaska is owned, and shall be administered, by the 14 authority. 15 * Sec. 17. AS 44.83.398(a) is amended to read: 16 (a) The authority shall sell power produced from power projects acquired or 17 constructed under the former energy program for Alaska. For purposes of this section, 18 Tyee Lake, Swan Lake, Solomon Gulch, and Terror Lake hydroelectric facilities are 19 considered to be one power project. This power project is referred to as the initial 20 project. 21 * Sec. 18. AS 44.83.398(f) is amended to read: 22 (f) The provisions of (b) of this section do not apply to an intertie that is 23 authorized as a separate project under former AS 44.83.380. The authority shall 24 establish and maintain separate power rate schedules applicable to each intertie that it 25 has acquired or constructed as a separate power project under the energy program for 26 Alaska. The power rate schedules shall produce sufficient revenue from utilities 27 connected by the intertie to pay (1) operation, maintenance, and equipment replacement 28 costs of the intertie; (2) debt service of the intertie; and (3) safety inspections and 29 investigations of the intertie by the authority. If the authority determines that an 30 intertie has ceased to function as a separate project and has become a part of one or 31 more other power projects as a transmission line, the power rate schedules established
01 under this subsection shall be terminated and a wholesale power rate applicable to the 02 former intertie shall be calculated under (b) of this section for the project or projects 03 of which it has become a part. 04 * Sec. 19. AS 44.83.510(a) is amended to read: 05 (a) [THE AUTHORITY MAY BORROW FROM THE FUND FOR THE 06 PURPOSE OF FINANCING A POWER PROJECT ACQUIRED OR CONSTRUCTED 07 BY THE AUTHORITY UNDER THE ENERGY PROGRAM FOR ALASKA 08 (AS 44.83.380 - 44.83.425).] Repayment of a loan from the former power 09 development revolving loan fund must be made with the proceeds from the sale of 10 power from projects in the former energy program for Alaska. Except as provided 11 in AS 44.83.398(i), the payments required to be made by the authority on a loan from 12 the fund constitute debt service for the purpose of calculating the wholesale power rate 13 in AS 44.83.398(b)(1). 14 * Sec. 20. AS 44.83.530 is amended to read: 15 Sec. 44.83.530. DEFINITIONS. In AS 44.83.500 - 44.83.530, 16 (1) "fund" means the former power development revolving loan fund; 17 and 18 (2) "power project" means a project acquired or constructed under the 19 former energy program for Alaska, AS 44.83.380 - 44.83.425. 20 * Sec. 21. AS 44.83.930(a) is amended to read: 21 (a) When a project is operated by the authority, the authority shall enter into 22 one or more contracts for the sale of electrical power, energy, transmission capacity, 23 or service from the project. Unless the contract is entered into under former 24 AS 44.83.380 - 44.83.425, a contract entered into under this section must meet all 25 requirements of AS 44.83.090. 26 * Sec. 22. AS 44.83.990(3) is amended to read: 27 (3) "feasibility study" 28 (A) means a study conducted for the purpose of establishing the 29 economic and environmental practicality of completing a proposed power 30 project under former AS 44.83.181; 31 (B) includes engineering and design work to meet the
01 requirements for submission of a license application for a proposed new project 02 to the Federal Energy Regulatory Commission; 03 * Sec. 23. AS 44.88.105(d) is amended to read: 04 (d) The chairman of the authority shall annually, no later than January 2, 05 certify in writing to the governor and the legislature the amount, if any, required to 06 restore a capital reserve fund to the capital reserve fund requirement. The legislature 07 may appropriate to the authority the amount certified by the chairman of the authority. 08 The authority shall deposit the amounts appropriated under this subsection during a 09 fiscal year in the proper capital reserve fund. Nothing in this section creates a debt or 10 liability of the state. In this subsection, "capital reserve fund" means a capital reserve 11 fund that 12 (1) is created under this section on or before January 1, 1989; [, OR] 13 (2) secures refunding bonds if the refunding bonds are issued to refund 14 bonds that are secured by a capital reserve fund created under this section on or before 15 January 1, 1989; or 16 (3) secures bonds issued on or after the effective date of this section 17 for a power transmission intertie. 18 * Sec. 24. AS 44.88.155(d) is amended to read: 19 (d) A loan participation purchased by the authority with assets of the enterprise 20 development account or with proceeds of bonds secured by assets of the enterprise 21 development account 22 (1) may not exceed $10,000,000; however, in the case of a loan 23 participation for a power transmission intertie, the loan participation may exceed 24 $10,000,000 with legislative approval; 25 (2) may not be purchased unless 26 (A) the project applicant is not, or, if the applicant is not a 27 single proprietorship, all members of the business enterprise or enterprises 28 constituting the project applicant are not, in default on another loan made by 29 the state or by a public corporation of the state; and 30 (B) at least 20 percent of the principal amount of the loan is 31 retained by the loan originator;
01 (3) may not be purchased if the loan to be purchased exceeds the cost 02 of the project or 75 percent of the appraised value of the project, whichever is less, 03 unless the amount of the loan in excess of this limit is federally insured or guaranteed 04 or is insured by a qualified mortgage insurance company; 05 (4) may not be purchased if the participation in the loan to be 06 purchased is for a term longer than three-quarters of the authority's estimate of the life 07 of the project or 25 years from the date the loan is made, whichever is earlier; 08 however, in the case of a loan participation for a power transmission intertie, the 09 term may not be longer than 50 years from the date the loan is made; 10 (5) may be made only if the participation in the loan to be purchased 11 contains amortization provisions; the amortization provisions 12 (A) must be complete and satisfactory to the authority and 13 require periodic payments by the borrower; 14 (B) may allow the loan originator to amortize the portion of the 15 loan retained by the loan originator using a shorter amortization schedule than 16 the amortization schedule for the portion of the loan held by the authority if 17 (i) in the authority's opinion, the project financed can 18 support the increased debt service; and 19 (ii) the accelerated amortization schedule is required to 20 induce the originator to make the loan; 21 (6) may be made only if the participation in the loan to be purchased 22 is in the form and contains the terms and provisions with respect to insurance, repairs, 23 alterations, payment of taxes and assessments, default reserves, delinquency charges, 24 default remedies, acceleration of maturity, secondary liens, and other matters the 25 authority prescribes; and 26 (7) may be made only if the participation in the loan to be purchased 27 is secured as to repayment by a mortgage or other security instrument in the manner 28 the authority determines is feasible to assure timely repayment under a loan agreement 29 entered into with the borrower. 30 * Sec. 25. AS 44.88.155(g) is amended to read: 31 (g) Notwithstanding any other provision of this section, the authority may
01 waive or modify the requirements of this section as it considers appropriate and 02 prudent in order to finance a project if the authority intends to own the project or in 03 order to finance a power transmission intertie project. 04 * Sec. 26. AS 44.88.900(10) is amended to read: 05 (10) "project" means 06 (A) a plant or facility used or intended for use in connection 07 with making, processing, preparing, transporting, or producing in any manner, 08 goods, products, or substances of any kind or nature or in connection with 09 developing or utilizing a natural resource, or extracting, smelting, transporting, 10 converting, assembling, or producing in any manner, minerals, raw materials, 11 chemicals, compounds, alloys, fibers, commodities and materials, products, or 12 substances of any kind or nature; 13 (B) a plant or facility used or intended for use in connection 14 with a business enterprise; 15 (C) commercial activity by a small enterprise; 16 (D) a plant or facility demonstrating technological advances of 17 new methods and procedures and prototype commercial applications for the 18 exploration, development, production, transportation, conversion, and use of 19 energy resources; 20 (E) infrastructure for a new tourism destination facility or for 21 the expansion of a tourism destination facility; 22 (F) a plant or facility, other than a plant or facility 23 described in (D) of this paragraph, for the generation, transmission, 24 development, transportation, conversion, or use of energy resources; 25 * Sec. 27. AS 39.50.200(b)(46) and AS 44.83.045 are repealed. 26 * Sec. 28. AS 39.50.200(b)(46); AS 44.83.010, 44.83.105, 44.83.162, 44.83.163, 44.83.164, 27 44.83.165, 44.83.170, 44.83.177, 44.83.179, 44.83.181, 44.83.183, 44.83.185, 44.83.187, 28 44.83.189, 44.83.300, 44.83.310, 44.83.320, 44.83.325, 44.83.330, 44.83.340, 44.83.350, 29 44.83.360, 44.83.361, 44.83.363, 44.83.370, 44.83.380, 44.83.384(b), 44.83.384(c), 44.83.390, 30 44.83.392, 44.83.400, 44.83.410, 44.83.500, 44.83.510(b), 44.83.520, 44.83.600, 44.83.605. 31 44.83.610, 44.83.615, 44.83.620, 44.83.625, 44.83.630, 44.83.650, 44.83.990(8), and
01 44.83.990(9) are repealed. 02 * Sec. 29. The Alaska Industrial Development and Export Authority may issue bonds to 03 finance the acquisition, design, and construction of a power transmission intertie of at least 04 138 kilovolts between Healy and Fairbanks and owned, for the benefit of all of the utilities 05 participating in the intertie, by Golden Valley Electric Association, Inc. The principal amount 06 of the bonds may not exceed $60,000,000. 07 * Sec. 30. The Alaska Industrial Development and Export Authority may issue bonds to 08 finance the acquisition, design, and construction of a power transmission intertie of at least 09 138 kilovolts between Anchorage and the Kenai Peninsula to be owned, for the benefit of all 10 of the utilities participating in the interties, by Chugach Electric Association, Inc. The 11 principal amount of the bonds may not exceed $60,000,000. 12 * Sec. 31. The Alaska Industrial Development and Export Authority may issue bonds to 13 finance the acquisition, design, and construction of a power transmission intertie of at least 14 115 kilovolts between the Swan Lake and Tyee Lake hydroelectric projects and owned, for 15 the benefit of all of the utilities participating in the intertie, by Ketchikan Public Utilities. The 16 principal amount of the bonds may not exceed $40,000,000. 17 * Sec. 32. The Alaska Industrial Development and Export Authority may issue bonds to 18 finance the acquisition, design, and construction of a power transmission intertie of at least 19 138 kilovolts between Sutton and Glennallen and owned, for the benefit of all of the utilities 20 participating in the intertie, by Copper Valley Electric Association. The principal amount of 21 the bonds may not exceed $25,000,000. 22 * Sec. 33. APPLICABILITY. The repeal of statutes by sec. 28 of this Act does not affect 23 existing bonds or actions that have been taken under the repealed provisions. 24 * Sec. 34. TRANSITION. All litigation, hearings, investigations, and other proceedings 25 pending under a law amended or repealed by this Act, or in connection with functions 26 transferred by this Act, continue in effect and may be continued and completed by the Alaska 27 Energy Authority or the Department of Community and Regional Affairs, as appropriate, 28 notwithstanding a transfer or amendment or repeal provided for in this Act. Certificates, 29 orders, and regulations issued or adopted under authority of a law amended or repealed by this 30 Act remain in effect for the term issued, or until revoked, vacated, or otherwise modified 31 under the provisions of this Act. All contracts, rights, liabilities, bonds, notes, or other
01 obligations created by or under a law amended or repealed by this Act, and in effect on the 02 effective date of this Act remain in effect notwithstanding this Act's taking effect. The 03 Department of Community and Regional Affairs shall assume, for those programs and projects 04 transferred to it, the licenses, contracts, rights, liabilities, notes, or other obligations of the 05 former Alaska Energy Authority with the same limitations and provisions as under a license, 06 contract, right, liability, note, or other obligation of the former Alaska Energy Authority. Real 07 property, records, equipment, and other property of the Alaska Energy Authority related to the 08 programs and projects transferred to the department shall be transferred to the Department of 09 Community and Regional Affairs. 10 * Sec. 35. TRANSITIONAL PROVISION CONCERNING EMPLOYEES OF THE 11 ALASKA ENERGY AUTHORITY. When the Department of Community and Regional 12 Affairs determines that continued employment of certain employees of the Alaska Energy 13 Authority is necessary to continue uninterrupted service to programs, facilities, and power 14 projects formerly owned by the Alaska Energy Authority that have been transferred to the 15 department under this Act, the department may continue the employment of those employees. 16 * Sec. 36. INITIAL TERMS OF LOAN COMMITTEE. Notwithstanding AS 42.45.060(b), 17 enacted by sec. 5 of this Act, the initial terms of two of the public members of the loan 18 committee established under AS 42.45.060 shall be for two years. The remaining two public 19 members shall serve four-year terms as provided in AS 42.45.060. 20 * Sec. 37. CONTRACTS WITH PRIVATE SECTOR. The Alaska Energy Authority shall, 21 to the maximum extent feasible, enter into contracts with public utilities and other entities to 22 carry out its duties with respect to the maintenance and operation of power projects owned 23 by the Alaska Energy Authority. 24 * Sec. 38. ORDERLY TRANSFER OF FUNCTIONS. (a) Notwithstanding the effective 25 date of this Act, the governor, the Department of Community and Regional Affairs, the Alaska 26 Energy Authority, and the office of management and budget shall implement this Act in an 27 orderly fashion. The transfer of rural programs operated by the Alaska Energy Authority to 28 the Department of Community and Regional Affairs must be completed no later than 29 December 31, 1993. Until a program is transferred under this section, the Alaska Energy 30 Authority may continue to administer that program under the provisions of former AS 44.83, 31 notwithstanding the repeal of AS 44.83 in sec. 28 of this Act.
01 (b) The Alaska Energy Authority shall assist the members of the Alaska Industrial 02 Development and Export Authority to prepare for the powers and duties granted to them under 03 this Act. 04 * Sec. 39. In accordance with AS 01.10.030, if a provision of this Act, or the application 05 of a provision of this Act to a person or circumstance, is held invalid, the remainder of this 06 Act and the application to other persons or circumstances shall not be affected thereby.