SB 217: "An Act relating to the Regulatory Commission of Alaska."
00 SENATE BILL NO. 217 01 "An Act relating to the Regulatory Commission of Alaska." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 42.05.141(c) is amended to read: 04 (c) In the establishment of electric service rates under this chapter the 05 commission shall promote the conservation of resources used in the generation of 06 electric energy and shall promote competitive and nondiscriminatory 07 procurement of electrical energy from and by public utilities, qualifying facilities, 08 and independent power producers. 09 * Sec. 2. AS 42.05.141 is amended by adding new subsections to read: 10 (e) The commission shall make regulatory decisions consistent with state 11 energy policy declared in AS 44.99.115. The commission shall 12 (1) promote the development of renewable and alternative energy 13 resources, including geothermal, wind, solar, hydroelectric, hydrokinetic, tidal, and 14 biomass energy, for use by residents of the state and for export; 15 (2) promote the development, transport, and efficient use of
01 nonrenewable and alternative energy resources, including natural gas, coal, oil, gas 02 hydrates, heavy oil, and nuclear energy, for use by residents of the state and for 03 export; 04 (3) work to identify and assist with development of the most cost- 05 effective, long-term sources of energy for each community statewide; and 06 (4) create and maintain permitting and regulatory processes that 07 encourage independent power producers to develop, finance, own, operate, and 08 manage qualifying facilities and independent power producers. 09 (f) The commission shall require that the owner of a transmission asset located 10 in the state allow a qualifying facility or independent power producer fair access to a 11 transmission asset at the same cost as the owner or owning entity charges itself. 12 * Sec. 3. AS 42.05.151(a) is amended to read: 13 (a) The commission may adopt regulations, consistent [NOT 14 INCONSISTENT] with state [THE] law including the state energy policy declared 15 in AS 44.99.115, necessary or proper to exercise its powers and to perform its duties 16 under this chapter. 17 * Sec. 4. AS 42.05.175(e) is amended to read: 18 (e) The commission shall issue a final order in a rule-making proceeding 19 (1) not later than 730 days after a complete petition for adoption, 20 amendment, or repeal of a regulation under AS 44.62.180 - 44.62.290 is filed; 21 (2) [OR,] when the commission initiates a rule-making docket, not 22 later than 730 days after the order initiating the proceeding is issued, except as 23 provided in (3) of this subsection; or 24 (3) when the commission initiates a rule-making docket relating to 25 a qualifying facility or the state energy policy declared in AS 44.99.115, not later 26 than 365 days after the order initiating the proceeding is issued. 27 * Sec. 5. AS 42.05.211 is amended to read: 28 Sec. 42.05.211. Annual report. The commission shall, by November 15 of 29 each year, publish an annual report reviewing its activities during the previous fiscal 30 year and notify the legislature that the report is available. The report must 31 (1) address the regulation of public utility service in the state as of
01 June 30; 02 (2) [AND MUST] contain details about the commission's compliance 03 with the requirements of AS 42.05.175(a) - (e), with the timeline extensions made by 04 the commission under AS 42.05.175(f), and with other performance measures 05 established by the commission; and 06 (3) list the avoided cost of each public utility issued a certificate 07 under AS 42.05.221. 08 * Sec. 6. AS 42.05.221(d) is amended to read: 09 (d) In an area where the commission determines that two or more public 10 utilities are competing to furnish identical utility service and that this competition is 11 not in the public interest, the commission shall take appropriate action to eliminate the 12 competition and any undesirable duplication of facilities. This appropriate action may 13 include [, BUT IS NOT LIMITED TO,] ordering the competing utilities to enter into a 14 contract that, among other things, would [:] 15 (1) delineate the service area boundaries of each in those areas of 16 competition; 17 (2) eliminate existing duplication and paralleling to the fullest 18 reasonable extent; 19 (3) preclude future duplication and paralleling; 20 (4) provide for the exchange of customers and facilities for the 21 purposes of providing better public service and of eliminating duplication and 22 paralleling; and 23 (5) provide [SUCH] other mutually equitable arrangements [AS 24 WOULD BE] in the public interest, including, when applicable, a requirement that 25 a public utility purchase electric energy or energy capacity from a qualifying 26 facility or independent power producer at the avoided cost of the public utility 27 unless that purchase results in a rate increase for the consumer. 28 * Sec. 7. AS 42.05.311(a) is amended to read: 29 (a) A public utility having sewers, conduits, utilidors, poles, pole lines, pipes, 30 pipelines, mains, or other distribution or transmission facilities shall, for [A] 31 reasonable compensation, permit another public utility, a qualifying facility, or an
01 independent power producer to use them when the public convenience and necessity 02 require the [THIS] use, [AND] the use will not result in substantial injury to the 03 owner, or the use will not result in substantial detriment to the service to the 04 customers of the owners. The cost of modifications or additions necessary to a joint 05 use shall be at the expense of the public utility, qualifying facility, or independent 06 power producer requesting the use of the facilities. 07 * Sec. 8. AS 42.05.311 is amended by adding new subsections to read: 08 (d) An electric utility shall permit connection to be made and service to be 09 furnished between a system operated by it and the system or facilities operated by 10 another public utility, qualifying facility, or independent power producer if the 11 connection 12 (1) is required by the public convenience and necessity; 13 (2) is in accordance with AS 42.05.141(e) and the state energy policy 14 declared in AS 44.99.115; 15 (3) will not result in substantial injury to the owner or other users of 16 the facilities of the entities making the connection; and 17 (4) will not result in substantial detriment to the service provided by 18 the entities making the connection. 19 (e) If a request for interconnection or joint use is made to the owner of a 20 public utility for use of a facility located in the state that was financed in whole or in 21 part with federal or state grants or loans and an interconnection or joint use study has 22 not been performed in the five years immediately preceding the request, the owner of 23 the public utility shall pay for the applicable study. If an interconnection or joint use 24 study has been completed in the five years immediately preceding the request, the 25 entity requesting interconnection or joint use may procure the applicable study at its 26 own expense. 27 (f) When providing access to a transmission asset, a public utility may not 28 (1) discriminate between users of the transmission asset; 29 (2) employ an anticompetitive practice with a transmission asset; or 30 (3) use its management, ownership, or control of a transmission asset 31 to increase the cost to or prevent use by a utility, qualifying facility, or independent
01 power producer attempting to use a transmission asset. 02 (g) A public utility may assess reasonable integration charges or credits to 03 another public utility, qualifying facility, or independent power producer connecting to 04 its system. 05 (h) A benefit resulting from a connection described in this section shall be 06 credited toward the connecting entity. Upon request of the commission or the 07 connecting entity, the owning public utility shall disclose the basis for the integration 08 charges or credits and shall bear the burden of demonstrating that the charges or 09 credits comply with this section. 10 * Sec. 9. AS 42.05.321 is amended to read: 11 Sec. 42.05.321. Failure to agree upon joint use or interconnection. (a) In 12 case of failure to agree upon the joint use or interconnection of facilities or the 13 conditions or compensation for joint use or interconnections, the public utility, 14 including any municipality, or an interested person may apply to the commission for 15 an order requiring the interconnection. If, after investigation and opportunity for 16 hearing, the commission finds that public convenience and necessity require the joint 17 use or connection, that the connection is consistent with AS 42.05.141(e) and the 18 state energy policy declared in AS 44.99.115, and that the use or connection will not 19 result in substantial injury to the owner utility or its customers, or in substantial 20 detriment to the services furnished by the owner utility, or in the creation of safety 21 hazards, it shall 22 (1) order that the use be permitted; 23 (2) prescribe reasonable conditions and compensation for the joint use; 24 (3) order the interconnection to be made; 25 (4) determine the time and manner of the interconnection; 26 (5) determine the apportionment of costs and responsibility for 27 operation and maintenance of the interconnection. 28 (b) Notwithstanding an exemption from other regulation, this [THIS] 29 section and AS 42.05.311 apply to a utility, qualifying facility, or independent 30 power producer [ALL UTILITIES WHETHER OR NOT THEY ARE EXEMPT 31 FROM OTHER REGULATION UNDER AS 42.05.711].
01 * Sec. 10. AS 42.05.381(a) is amended to read: 02 (a) All rates demanded or received by a public utility [,] or by any two or more 03 public utilities jointly [,] for a service furnished or to be furnished shall be just and 04 reasonable; however, a rate may not include an allowance for costs of political 05 contributions, costs of [OR] public relations, or costs related to actions against a 06 qualifying facility or independent power producer except for reasonable amounts 07 spent for 08 (1) energy conservation efforts; 09 (2) public information designed to promote more efficient use of the 10 utility's facilities or services or to protect the physical plant of the utility; 11 (3) informing shareholders and members of a cooperative of meetings 12 of the utility and encouraging attendance; [OR] 13 (4) emergency situations to the extent and under the circumstances 14 authorized by the commission for good cause shown; or 15 (5) a mediator, independent expert, or similar impartial analyst 16 used in good faith negotiations with a qualifying facility or independent power 17 producer. 18 * Sec. 11. AS 42.05.411 is amended by adding a new subsection to read: 19 (d) Upon the filing of a new or revised tariff, the commission shall review the 20 entire tariff for consistency with AS 42.05.141(e) and the state energy policy declared 21 in AS 44.99.115. If the new or revised tariff is not consistent with AS 42.05.141(e) 22 and the state energy policy, the commission shall direct the utility to revise the tariff to 23 be consistent with AS 42.06.141(e) and the state energy policy and submit the revised 24 tariff to the commission. 25 * Sec. 12. AS 42.05.431(c) is amended to read: 26 (c) Notwithstanding (b) of this section, 27 (1) a wholesale agreement for the sale of power from a project licensed 28 by the Federal Energy Regulatory Commission on or before January 1, 1987, and 29 related contracts for the wheeling, storage, regeneration, or wholesale repurchase of 30 power purchased under the agreement, entered into between the Alaska Energy 31 Authority and one or more other public utilities or among the utilities after October 31,
01 1987, and before January 1, 1988, and amendments to the wholesale agreement or 02 related contract, and the wholesale agreement or related contract assigned by the 03 Alaska Energy Authority to a joint action agency formed under AS 42.45.310 that 04 purchases the project from the Alaska Energy Authority, are not subject to review or 05 approval by the commission until all long-term debt incurred for the project is retired, 06 or, for a wholesale agreement or related contract assigned to a joint action agency 07 formed under AS 42.45.310, until all long-term debt incurred to pay the purchase price 08 to the Alaska Energy Authority is retired; [AND] 09 (2) a wholesale agreement or related contract described in (1) of this 10 subsection may contain a covenant for the public utility to establish, charge, and 11 collect rates sufficient to meet its obligations under the contract; the rate covenant is 12 valid and enforceable; 13 (3) a wholesale agreement between a public utility and a qualifying 14 facility or independent power producer, for the sale of power at or below the 15 avoided cost of the public utility, is valid and enforceable; and 16 (4) a wholesale agreement for the purchase and sale of electricity is 17 not subject to review or approval of the commission if, at the time the initial 18 agreement is made, the entity providing the electricity is not a utility and the 19 purchaser is a person located outside a certificated service area of a utility, 20 regardless of whether the purchaser subsequently becomes part of a certificated 21 service area of a utility. 22 * Sec. 13. AS 42.05.431(e) is amended to read: 23 (e) Validated costs incurred by a utility in connection with the related 24 contracts described in (c)(1) of this section must be allowed in the rates charged by the 25 utility. In this subsection, "validated costs" are the actual costs that a utility uses, under 26 the formula set out in related contracts described in (c) of this section, to establish 27 rates, charges for services and rights, and the payment of charges for services and 28 rights. This subsection does not grant the commission jurisdiction to alter or amend 29 the formula set out in those related contracts, except that the commission may alter 30 or amend the formula to ensure that the contracts are consistent with 31 AS 42.05.141(e) and the state energy policy declared in AS 44.99.115.
01 * Sec. 14. AS 42.05.511(a) is amended to read: 02 (a) The commission may 03 (1) investigate the management of a public utility, including [BUT 04 NOT LIMITED TO] staffing patterns, wage and salary scales and agreements, 05 investment policies and practices, purchasing and payment arrangements with 06 affiliated interests, for the purpose of determining inefficient or unreasonable practices 07 that adversely affect the cost or quality of service of the public utility; 08 (2) review emergency backup, mid-term, and long-term fuel 09 supply plans for reasonableness; 10 (3) investigate suspected discriminatory or anticompetitive 11 practices in the procurement of wholesale power from a qualifying facility or 12 independent power producer. 13 * Sec. 15. AS 42.05.711(r) is amended to read: 14 (r) A plant or facility owned or operated by an independent power 15 producer [THAT GENERATES ELECTRICITY ENTIRELY FROM RENEWABLE 16 ENERGY RESOURCES] is exempt from regulation under this chapter if 17 (1) the plant or facility 18 (A) is first placed into commercial operation on or after 19 August 31, 2010, and before January 1, 2025 [2016]; and 20 (B) does not generate more than 80 [65] megawatts of 21 electricity; and 22 (2) the net electricity generated by the plant or facility is sold only to 23 one or more electric utilities that are regulated by the commission or to one or more 24 customers who are located outside a certificated service area of a utility and who 25 are not the "public," as that term is defined in AS 42.05.990 [; AND 26 (3) THE PERSON THAT CONSTRUCTS, OWNS, ACQUIRES, OR 27 OPERATES THE PLANT OR FACILITY HAS NOT RECEIVED FROM THE 28 STATE 29 (A) A GRANT THAT WAS USED TO GENERATE THE 30 ELECTRICITY FROM THE RENEWABLE ENERGY RESOURCES; OR 31 (B) A TAX CREDIT RELATED TO THE GENERATION OF
01 ELECTRICITY FROM THE RENEWABLE ENERGY RESOURCES]. 02 * Sec. 16. AS 42.05.711 is amended by adding a new subsection to read: 03 (u) A qualifying facility that generates less than 80 megawatts of electricity is 04 exempt from regulation under this chapter. 05 * Sec. 17. AS 42.05.990(6) is amended to read: 06 (6) "public utility" or "utility" includes every corporation whether 07 public, cooperative, joint action agency, or otherwise, company, individual, or 08 association of individuals, their lessees, trustees, or receivers appointed by a court, that 09 owns, operates, manages, or controls any plant, pipeline, or system for 10 (A) furnishing, by generation, transmission, or distribution, 11 electrical service to the public for compensation; 12 (B) furnishing telecommunications service to the public for 13 compensation; 14 (C) furnishing water, steam, or sewer service to the public for 15 compensation; 16 (D) furnishing by transmission or distribution of natural or 17 manufactured gas to the public for compensation; 18 (E) furnishing for distribution or by distribution petroleum or 19 petroleum products to the public for compensation when the consumer has no 20 alternative in the choice of supplier of a comparable product and service at an 21 equal or lesser price; 22 (F) furnishing collection and disposal service of garbage, 23 refuse, trash, or other waste material to the public for compensation; 24 (G) furnishing the service of natural gas storage to the public 25 for compensation; 26 (H) furnishing the service of liquefied natural gas storage to the 27 public for compensation; 28 * Sec. 18. AS 42.05.990 is amended by adding new paragraphs to read: 29 (14) "anticompetitive practice" means 30 (A) a practice that directly or indirectly manipulates the 31 purchase or sale of electric energy, access to an electric transmission facility,
01 the cost of electric energy, the price paid for wholesale electric energy, or the 02 charges or credits allocated to a qualifying facility or independent power 03 producer, including interconnection, integration, wheeling, and demand ratchet 04 charges or credits; 05 (B) an act, practice, or scheme by a utility to defraud; or 06 (C) making an untrue statement or omission of material fact in 07 a communication published by a public utility for use by the commission, a 08 qualifying utility, an independent power producer, or the customers of the 09 utility; 10 (15) "avoided cost" means the incremental cost to an electric utility of 11 electric energy or electric capacity or both that, but for the purchase of that unit from a 12 qualifying facility or independent power producer, a public utility would have to 13 generate itself or purchase from another source; 14 (16) "distribution lines" means low voltage transmission lines that 15 deliver power to retail customers; 16 (17) "independent power producer" means a corporation, person, 17 agency, authority, or other legal entity other than a qualifying facility that owns or 18 operates facilities for the generation of electricity for wholesale delivery to a public 19 utility or for use by customers outside the certificated service area of a utility; 20 (18) "joint action agency" means a joint action agency established 21 under AS 42.45.300, except as otherwise provided in AS 42.05.711(o); 22 (19) "qualifying facility" means 23 (A) a small power production facility located in the state that 24 generates 80 megawatts of electricity or less and whose primary energy source 25 (i) is a renewable or alternative energy resource, 26 including geothermal, wind, solar, hydroelectric, hydrokinetic, tidal, or 27 biomass energy; or 28 (ii) originates in the state; or 29 (B) a cogeneration facility located in the state that sequentially 30 produces electricity and another form of useful thermal energy, including 31 steam or heat, in a manner that is more efficient than the separate production of
01 both forms of energy; 02 (20) "reasonable compensation" means a return on the private equity of 03 the owning public utility or joint action agency for the portion of the facility that is 04 jointly used plus the cost to the owning public utility or joint action agency of the 05 capacity of the sewer, conduit, utilidor, pole, pole line, pipe, pipeline, main, or other 06 distribution or transmission facility that is jointly used; 07 (21) "reasonable integration charges or credits" means the 08 nondiscriminatory costs that are directly attributable to the system connection, 09 reasonably necessary to maintain safe and reliable operations of the utility system, in 10 excess of the corresponding costs that the public utility would have otherwise 11 incurred, not duplicative of costs already charged related to the system connection, 12 and determined in the same manner as the utility allocates the charges to itself; 13 (22) "transmission asset" means an asset used to move bulk electricity 14 from where it is produced or generated to distribution lines. 15 * Sec. 19. AS 42.45.300 is amended to read: 16 Sec. 42.45.300. Joint action agencies. Two or more public utilities may form 17 a joint action agency for the purpose of participation in the design, construction, 18 operation, and maintenance of a generating or transmission facility and to secure 19 financing for carrying out the design, construction, operation, and maintenance of the 20 facility. A joint action agency may request the Alaska Industrial Development and 21 Export Authority to issue revenue bonds for projects of the agency. A joint action 22 agency may be regulated as [HAS THE POWERS OF] a public utility under 23 AS 42.05.