SB 123: "An Act relating to the regulation of electric utilities and electric reliability organizations; and providing for an effective date."
00 SENATE BILL NO. 123 01 "An Act relating to the regulation of electric utilities and electric reliability 02 organizations; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 42.05 is amended by adding new sections to read: 05 Sec. 42.05.292. Electric reliability organizations. (a) An electric utility must 06 participate in an electric reliability organization if the utility operates in an 07 interconnected electric energy transmission network served by an electric reliability 08 organization certified by the commission. 09 (b) A person may submit to the commission an application for certification as 10 an electric reliability organization for an interconnected bulk-power system. The 11 commission may certify one electric reliability organization for each interconnected 12 electric energy transmission network. The commission may certify an electric 13 reliability organization if the commission determines that the electric reliability 14 organization
01 (1) has the ability to develop reliability standards that provide for an 02 adequate level of reliability of a bulk-power system; 03 (2) has the ability to develop an integrated resource plan under 04 AS 42.05.293(a); 05 (3) has established rules to 06 (A) ensure that the directors of the electric reliability 07 organization and the electric reliability organization act independently from 08 users, owners, and operators of the bulk-power system; 09 (B) equitably allocate reasonable dues, fees, and other charges 10 among all load-serving entities connected to the bulk-power system for all 11 activities under this section; 12 (C) provide fair and impartial procedures for the enforcement 13 of reliability standards; 14 (D) provide for reasonable notice and opportunity for public 15 comment, due process, openness, and balance of interests in developing 16 reliability standards and exercising its duties; and 17 (4) is governed by a board that 18 (A) includes as nonvoting members the chair of the 19 commission or the chair's designee and the attorney general or the attorney 20 general's designee; and 21 (B) is formed as 22 (i) an independent board; 23 (ii) a balanced stakeholder board; or 24 (iii) a combination independent and balanced 25 stakeholder board. 26 (c) The commission shall form an electric reliability organization for an 27 interconnected bulk-power system if no person has applied for certification as an 28 electric reliability organization for that interconnected bulk-power system under (b) of 29 this section on or before October 1, 2020. 30 (d) An electric reliability organization shall file each reliability standard or 31 modification to a reliability standard with the commission as a new or revised tariff
01 provision. All users, owners, and operators of a bulk-power system shall comply with 02 reliability standards contained in a tariff that is approved by the commission. The 03 commission may enforce a reliability standard adopted under this section. A reliability 04 standard adopted under this section 05 (1) shall provide for the reliable operation of the bulk-power system or 06 of a bulk-power system facility; a reliability standard adopted under this section may 07 provide for 08 (A) cybersecurity protection; 09 (B) facility security; 10 (C) additions or modifications to a bulk-power system facility 11 to the extent necessary to provide for reliable operation of the bulk-power 12 system; 13 (2) may not require enlargement of bulk-power system facilities or 14 construction of new transmission capacity or generation capacity. 15 (e) The commission may approve a proposed reliability standard or 16 modification to a reliability standard submitted by an electric reliability organization if 17 the commission determines that the standard is just, reasonable, not unduly 18 discriminatory or preferential, and in the public interest. The commission may reject 19 or amend, in whole or in part, a proposed reliability standard or modification to a 20 reliability standard. A proposed standard or modification takes effect upon approval 21 by the commission. A standard approved under this subsection satisfies the 22 requirements of AS 42.05.291(c). 23 (f) The commission may, on its own motion or upon complaint, order an 24 electric reliability organization to submit to the commission a proposed reliability 25 standard or modification to a reliability standard that addresses a specific matter. 26 (g) An electric reliability organization may impose a penalty on a user, owner, 27 or operator of an interconnected bulk-power system for a violation of a reliability 28 standard if, after notice and a hearing, the electric reliability organization 29 (1) finds that the user, owner, or operator has violated a reliability 30 standard; and 31 (2) files notice of the proposed penalty and the record of the
01 proceeding with the commission at least 30 days before imposition of the penalty. 02 (h) The commission may, on its own motion or upon complaint, order a user, 03 owner, or operator of a bulk-power system to comply with a reliability standard and 04 impose a penalty against the user, owner, or operator of a bulk-power system if the 05 commission finds, after notice and a hearing, that the user, owner, or operator of the 06 bulk-power system has engaged or is about to engage in an act or practice that violates 07 a reliability standard. 08 (i) A user, owner, or operator may appeal to the commission a penalty 09 imposed under (g) or (h) of this section. The commission may, on its own motion, 10 review a penalty imposed under (g) or (h) of this section. The commission shall, after 11 notice and a hearing, issue an order affirming, modifying, reinstating, or revoking the 12 penalty or remand the penalty to the electric reliability organization for further 13 proceedings. Unless otherwise ordered by the commission, a penalty shall remain in 14 effect during proceedings under this section. The commission shall expedite 15 proceedings under this subsection. 16 (j) A penalty imposed under (g), (h), or (i) of this section must bear a 17 reasonable relation to the seriousness of the violation and take into consideration the 18 effort of a user, owner, or operator to remedy the violation in a timely manner. 19 (k) The commission may direct an electric reliability organization to conduct 20 assessments of the reliability and adequacy of the bulk-power system. 21 (l) If a reliability standard adopted under this section conflicts with a function, 22 rule, tariff, rate schedule, or agreement that has also been accepted, approved, adopted, 23 or ordered by the commission, a user, owner, or operator shall comply with the 24 function, rule, tariff, rate schedule, or agreement until the conflict is resolved by the 25 commission. 26 (m) An electric reliability organization shall file with the commission each 27 proposed rule or proposed rule change, along with an explanation of the basis and 28 purpose of the proposed rule or proposed rule change. The commission may, on its 29 own motion or upon complaint, propose a change to the rules of an electric reliability 30 organization. A rule change proposed by the commission takes effect upon a finding 31 by the commission, after notice and opportunity for public comment, that the rule
01 change is just, reasonable, not unduly discriminatory or preferential, and is in the 02 public interest. 03 (n) The commission shall adopt regulations governing electric reliability 04 organizations, reliability standards, and modifications to reliability standards 05 consistent with this section. Regulations under this section 06 (1) may include a requirement that an electric reliability organization 07 obtain a certificate of public convenience and necessity; 08 (2) may provide for the issuance of an open access transmission tariff 09 to the electric reliability organization; 10 (3) must provide a process to identify and resolve conflicts between a 11 reliability standard and a function, rule, tariff, rate schedule, or agreement that has 12 been accepted, approved, adopted, or ordered by the commission; 13 (4) must allow the electric reliability organization to recover its costs 14 through surcharges added to the rate for each participating electric utility. 15 Sec. 42.05.293. Integrated resource planning. (a) An electric reliability 16 organization shall prepare and file with the commission an integrated resource plan for 17 meeting the reliability requirements of customers within its interconnected bulk-power 18 system in the most cost-effective manner, consistent with the load-serving entities' 19 obligations. An integrated resource plan must contain an evaluation of the full range of 20 cost-effective means for load-serving entities to meet the service requirements of 21 customers, including additional generation, transmission, and conservation or similar 22 improvements in efficiency. An integrated resource plan must include options to meet 23 customers' collective needs at the lowest cost, consistent with the public interest, 24 regardless of the location or ownership of new facilities. 25 (b) The commission shall, after notice and a hearing, approve, reject, or 26 modify an integrated resource plan submitted under (a) of this section, consistent with 27 the public interest. 28 (c) The commission may include in a public utility's rates 29 (1) the cost of resources acquired in accordance with an integrated 30 resource plan adopted under this section; 31 (2) cost-effective expenditures for improving the efficiency with which
01 the public utility provides and its customers use utility services; and 02 (3) the cost of a utility to comply with the planning requirements of 03 this section, including planning costs and portfolio development costs. 04 (d) The commission shall adopt regulations governing the submission of a 05 plan under this section, including the content of a plan, time for filing a plan, criteria 06 for determining cost-effectiveness, and other criteria as determined by the 07 commission. 08 (e) In this section, 09 (1) "planning costs" means the costs of evaluating the future demand 10 for services and alternative methods of satisfying future demand; 11 (2) "portfolio development costs" means the costs of preparing a 12 resource in a portfolio for timely acquisition of the resource. 13 Sec. 42.05.294. Project preapproval. (a) A public utility that is 14 interconnected with a bulk-power system may not construct a large energy facility 15 unless the commission determines that the facility 16 (1) is necessary to the bulk-power system with which it would be 17 interconnected; 18 (2) complies with reliability standards; and 19 (3) would meet the needs of a load-serving entity that is substantially 20 served by the facility in the most cost-effective manner. 21 (b) Unless the commission finds otherwise by clear and convincing evidence, 22 a large energy facility that was included in the most recent integrated resource plan 23 approved under AS 42.05.293 is considered to satisfy the requirements of (a) of this 24 section. 25 (c) In this section, "large energy facility" means 26 (1) an electric power generating plant or combination of plants at a 27 single site with a combined capacity of 15,000 kilowatts or more with transmission 28 lines that directly interconnect the plant with the transmission system; or 29 (2) a high-voltage transmission line that 30 (A) has a capacity of 69 kilovolts or more; and 31 (B) is greater than 5 miles in length.
01 * Sec. 2. AS 42.05.990 is amended by adding new paragraphs to read: 02 (14) "bulk-power system" means electrical generation resources, 03 transmission lines, interconnections, and associated equipment operated at voltages of 04 69 kilovolts or more by two or more interconnected utilities, at least one of which is 05 subject to the provisions of AS 42.05.291; 06 (15) "cybersecurity incident" means a malicious act or suspicious 07 event that disrupts or attempts to disrupt the security of data or the operation of 08 programmable electronic devices and communication networks, including hardware 09 and software that are essential to the reliable operation of the bulk-power system; 10 (16) "electric reliability organization" means an organization that is 11 certified by the commission under AS 42.05.292; 12 (17) "electric utility" means a public utility that provides electricity 13 service; 14 (18) "interconnected electric energy transmission network" means a 15 network of bulk-power system components operating in a geographic area that are 16 synchronized so that the failure of one or more of the components may adversely 17 affect the ability of the operators of other components within the system to maintain 18 reliable operation of the facilities within the control of the operators; 19 (19) "load-serving entity" means an electric utility that has a service 20 obligation to distribute power to end users; 21 (20) "reliable operation" means operating the elements of the bulk- 22 power system within equipment and electric system thermal, voltage, and stability 23 limits so that instability, uncontrolled separation, or cascading failures of the system 24 will not occur as a result of a sudden disturbance, including a cybersecurity incident, 25 or unanticipated failure of system elements. 26 * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 TRANSITION: REGULATIONS. On or before July 1, 2020, the Regulatory 29 Commission of Alaska shall adopt regulations necessary to implement the changes made by 30 this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 31 before the effective date of the law implemented by the regulation.
01 * Sec. 4. Section 3 of this Act takes effect immediately under AS 01.10.070(c). 02 * Sec. 5. Except as provided in sec. 4 of this Act, this Act takes effect July 1, 2020.