HB 307: "An Act relating to the taxation of independent power producers; and increasing the efficiency of integrated transmission system charges and use for the benefit of ratepayers."
00 HOUSE BILL NO. 307 01 "An Act relating to the taxation of independent power producers; and increasing the 02 efficiency of integrated transmission system charges and use for the benefit of 03 ratepayers." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 PURPOSE. The purpose of this Act is to eliminate the charging of inefficient 08 transmission rates for integrated transmission systems that are also subject to the integrated 09 resource planning process of an electric reliability organization. 10 * Sec. 2. AS 10.25.540(b) is amended to read: 11 (b) Before March 1 of each year, 12 (1) each telephone cooperative shall pay to the state, instead of state 13 and local ad valorem, income, and excise taxes that may be assessed or levied, a 14 percentage of its gross revenue earned during the preceding calendar year;
01 (2) each electric cooperative and independent power producer shall 02 pay to the state, instead of state and local ad valorem, income, and excise taxes that 03 may be assessed or levied, a tax on the number of kilowatt hours of electricity sold at 04 retail by the cooperative or independent power producer during the preceding 05 calendar year; for the purposes of this paragraph, "independent power producer" 06 means a utility that only sells wholesale power to cooperative or municipal 07 utilities. 08 * Sec. 3. AS 42.05 is amended by adding new sections to read: 09 Article 11A. Integrated Transmission System Cost Recovery. 10 Sec. 42.05.900. Findings. The legislature finds that, for an integrated 11 transmission system that is subject to the integrated resources planning process of an 12 electric reliability organization, 13 (1) the elimination of per-unit wholesale transmission charges will 14 increase the efficiency by which electricity service is provided; 15 (2) the elimination of multiple pancaked rates is essential to the people 16 of the state; and 17 (3) the actual, reasonable costs to own and operate an integrated 18 transmission system should be fairly recovered from the load-serving entities 19 connected to the integrated transmission system. 20 Sec. 42.05.905. Integrated transmission system cost recovery. (a) The 21 commission shall establish a transmission cost recovery mechanism to ensure that the 22 actual, reasonable costs of owning and operating an integrated transmission system are 23 recovered to achieve the findings stated in AS 42.05.900. The transmission cost 24 recovery mechanism must take into account each load-serving entity's load in 25 comparison to the total load on the integrated transmission system. 26 (b) The commission shall develop a process to gradually transition the 27 collection of transmission costs recovered through a load-serving entity's base rates 28 and wheeling charges to tariffs that reflect the transmission cost recovery mechanism. 29 Sec. 42.05.910. Integrated transmission system association. (a) The 30 commission shall require all utilities that own or operate a portion of an integrated 31 transmission system and are subject to an electric reliability organization to form an
01 integrated transmission system association to assist in administering the system of 02 transmission cost recovery. The commission shall require the association to file tariffs 03 to achieve the purposes of AS 42.05.900 - 42.05.915. 04 (b) The integrated transmission system association may not own assets of the 05 integrated transmission system. 06 (c) Notwithstanding (b) of this section, the integrated transmission system 07 association is a public utility. 08 Sec. 42.05.915. Definitions. In AS 42.05.900 - 42.05.915, 09 (1) "electric reliability organization" has the meaning given in 10 AS 42.05.790; 11 (2) "integrated transmission system" means the non-generation assets 12 of an interconnected electric energy transmission network; a radial transmission line 13 constructed after the effective date of AS 42.05.900 - 42.05.915 for the purpose of 14 connecting a single generation asset to the interconnected electric energy transmission 15 network to effectuate contractual sales of energy to load serving entities is part of the 16 integrated transmission system only if the commission determines that the line is 17 economically necessary to enable the establishment of multiple new generation assets; 18 (3) "load-serving entity" has the meaning given in AS 42.05.790; 19 (4) "transmission costs" include the costs to own and operate the 20 integrated transmission system, as established by the commission or by contract, 21 including costs associated with the Bradley Lake hydroelectric project.