Legislature(1993 - 1994)
1993-04-20 Senate Journal
Full Journal pdf1993-04-20 Senate Journal Page 1570 SB 106 SENATE BILL NO. 106 "An Act authorizing power transmission interties between Anchorage and the Kenai Peninsula, between Healy and Fairbanks, and between the Swan Lake and Tyee Lake hydroelectric projects, and approving the design and construction costs of the interties; and providing for an effective date" was read the second time. 1993-04-20 Senate Journal Page 1571 SB 106 Senator Pearce moved and asked unanimous consent for the adoption of the Finance Committee Substitute offered on page 1436. Senator Duncan objected. The question being: "Shall the Finance Committee Substitute be adopted?" The roll was taken with the following result: SB 106 Adopt Finance Committee Substitute? YEAS: 15 NAYS: 5 EXCUSED: 0 ABSENT: 0 Yeas: Adams, Duncan, Frank, Halford, Jacko, Kelly, Kerttula, Leman, Miller, Pearce, Phillips, Rieger, Sharp, Taylor, Zharoff Nays: Donley, Ellis, Lincoln, Little, Salo and so, CS FOR SENATE BILL NO. 106(FIN) "An Act establishing the energy authority revolving fund; repealing the rural electrification revolving loan fund and the bulk fuel revolving loan fund; relating to procurements for certain transmission lines; authorizing power transmission interties between Anchorage and the Kenai Peninsula, between Healy and Fairbanks, between the Swan Lake and Tyee Lake hydroelectric projects, and between Sutton and Glennallen and approving the design and construction costs of the interties; and providing for an effective date" was adopted. CS FOR SENATE BILL NO. 106(FIN) was read the second time. Senator Ellis offered Amendment No. 1 : Page 15, line 25: Delete "secs. 32 and 35" Insert "secs. 32, 35, and 36" Page 15, line 31: Delete "secs. 32 and 35" Insert "secs. 32, 35 and 36" 1993-04-20 Senate Journal Page 1572 SB 106 Page 16, line 19: Delete "sec. 35" Insert "secs. 35 and 36" Page 17, line 5: Delete "sec. 35" Insert "secs. 35 and 36" Page 17, after line 26: Insert a new bill section to read: "* Sec. 36. The authorizations made by secs. 30, 31, 33, and 34 of this Act are contingent upon the Alaska Energy Authority including in the construction contracts for the projects authorized by secs. 30, 31, 33, and 34 of this Act, a requirement that the contractors consider employment applicants who (1) have been chronically unemployed or underemployed during the past 12 months and have been available for work during that time; and (2) have graduated within the past five years from programs that developed skills needed for work on the project." Renumber the following bill section accordingly. Senator Ellis moved for the adoption of Amendment No. 1. Senator Pearce objected. The question being: "Shall Amendment No. 1 be adopted?" The roll was taken with the following result: CSSB 106(FIN) Second Reading Amendment No. 1 1993-04-20 Senate Journal Page 1573 SB 106 YEAS: 10 NAYS: 10 EXCUSED: 0 ABSENT: 0 Yeas: Adams, Donley, Duncan, Ellis, Kerttula, Lincoln, Little, Pearce, Salo, Zharoff Nays: Frank, Halford, Jacko, Kelly, Leman, Miller, Phillips, Rieger, Sharp, Taylor and so, Amendment No. 1 failed. Senator Adams offered Amendment No. 2 : Page 1, line 2: Delete "and the bulk fuel revolving loan fund" Page 6, line 7: Delete "and" Page 6, line 8, after ",": Insert "and the bulk fuel revolving loan account under AS 44.83.600" Page 7, line 31: Delete "[AND]" Insert "and" Page 8, lines 4 - 5: Delete "and (D) acquisition of bulk fuel and bulk fuel reserves;" Page 15, after line 22: Insert new bill sections to read: "* Sec. 29. AS 44.83.600 is amended to read: Sec. 44.83.600. BULK FUEL REVOLVING LOAN ACCOUNT [FUND] ESTABLISHED. (a) There is established in the Alaska Energy Authority the bulk fuel revolving loan account [FUND] to assist communities in 1993-04-20 Senate Journal Page 1574 SB 106 purchasing bulk fuel. A community, or a private individual who has written endorsement from the governing body of the community, is eligible for a loan from the bulk fuel revolving loan fund for a bulk fuel purchase. (b) Money in the account [FUND] may be used by the legislature to make appropriations for costs of administering this chapter. * Sec. 30. AS 44.83.605(a) is amended to read: (a) There is established as a special account within the bulk fuel revolving loan account [FUND] the foreclosure expense account. This account is established as a reserve from fund equity. * Sec. 31. AS 44.83.610 is amended to read: Sec. 44.83.610. LOAN TERMS FOR BULK FUEL PURCHASES. (a) Loans made from the bulk fuel revolving loan account [FUND] to one borrower in any fiscal year (1) may not exceed $100,000 [$50,000]; (2) shall be repaid in one year or less; and (3) may not exceed 90 percent of the wholesale price of the fuel purchased. (b) Interest may be charged on a loan made from the bulk fuel revolving loan account [FUND]. Interest shall be charged on a loan at a rate equal to the percentage of the average weekly yield of municipal bonds for the 12 months preceding the date of the loan, as determined by the authority from municipal bond yield rates reported in the 30-year revenue index of the Weekly Bond Buyer. However, if the authority finds that a community cannot afford to repay a portion of interest on a loan, and makes a determination in writing, the authority may reduce or eliminate the interest rate applicable to the loan. (c) Repayments of the principal, the interest, and the money chargeable to principal or interest that is collected through liquidation by foreclosure or other process on a loan made under AS 44.83.600 - 44.83.650 shall be paid into the bulk fuel revolving loan account [FUND]. 1993-04-20 Senate Journal Page 1575 SB 106 * Sec. 32. AS 44.83.630 is amended to read: Sec. 44.83.630. FEES. The authority may collect the fees and collection charges established under AS 44.83.625 and shall deposit the money in the energy revolving loan [GENERAL] fund." Renumber the following bill sections accordingly. Page 15, lines 23 - 24: Delete "44.83.600, 44.83.605, 44.83.610, 44.83.615, 44.83.620, 44.83.625, 44.83.630," Page 15, line 25: Delete "32 and 35" Insert "36 and 39" Page 15, line 31: Delete "32 and 35" Insert "36 and 39" Page 16, line 6: Delete "30 and 31" Insert "34 and 35" Page 16, line 11: Delete "30 and 31" Insert "34 and 35" Page 16, line 15: Delete "30 and 31" Insert "34 and 35" Page 16, line 19: Delete "35" Insert "39" 1993-04-20 Senate Journal Page 1576 SB 106 Page 17, line 5: Delete "35" Insert "39" Page 17, line 22: Delete "30, 31, 33, and 34" Insert "34, 35, 37, and 38" Page 17, line 27: Delete "29" Insert "33" Senator Adams moved for the adoption of Amendment No. 2. Senator Kelly objected. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: CSSB 106(FIN) Second Reading Amendment No. 2 YEAS: 8 NAYS: 9 EXCUSED: 0 ABSENT: 3 Yeas: Adams, Duncan, Ellis, Kerttula, Lincoln, Little, Salo, Zharoff Nays: Frank, Halford, Kelly, Leman, Pearce, Phillips, Rieger, Sharp, Taylor Absent: Donley, Jacko, Miller and so, Amendment No. 2 failed. Senator Adams offered Amendment No. 3 : Page 16: Delete lines 16 and 17 1993-04-20 Senate Journal Page 1577 SB 106 Page 17, lines 25 and 26: Delete the following sentence: "If the participating utility declines in writing to apply for the loan or grant, the authority may proceed with the design or construction itself." Senator Adams moved for the adoption of Amendment No. 3. Senators Sharp, Kelly objected. The question being: "Shall Amendment No. 3 be adopted?" The roll was taken with the following result: CSSB 106(FIN) Second Reading Amendment No. 3 YEAS: 9 NAYS: 11 EXCUSED: 0 ABSENT: 0 Yeas: Adams, Donley, Duncan, Ellis, Kerttula, Lincoln, Little, Salo, Zharoff Nays: Frank, Halford, Jacko, Kelly, Leman, Miller, Pearce, Phillips, Rieger, Sharp, Taylor and so, Amendment No. 3 failed. Senators Lincoln, Zharoff offered Amendment No. 4 : Page 2, lines 15 and 16: Delete "without this assistance from the state" Senator Lincoln moved for the adoption of Amendment No. 4. Senator Taylor objected. The question being: "Shall Amendment No. 4 be adopted?" The roll was taken with the following result: 1993-04-20 Senate Journal Page 1578 SB 106 CSSB 106(FIN) Second Reading Amendment No. 4 YEAS: 9 NAYS: 11 EXCUSED: 0 ABSENT: 0 Yeas: Adams, Donley, Duncan, Ellis, Kerttula, Lincoln, Little, Salo, Zharoff Nays: Frank, Halford, Jacko, Kelly, Leman, Miller, Pearce, Phillips, Rieger, Sharp, Taylor and so, Amendment No. 4 failed. Senators Lincoln, Zharoff offered Amendment No. 5 : Page 2, line 10: Delete "is intended to be" Insert "should be at least" Senator Lincoln moved for the adoption of Amendment No. 5. Senator Taylor objected. The question being: "Shall Amendment No. 5 be adopted?" The roll was taken with the following result: CSSB 106(FIN) Second Reading Amendment No. 5 YEAS: 8 NAYS: 12 EXCUSED: 0 ABSENT: 0 Yeas: Adams, Duncan, Ellis, Kerttula, Lincoln, Little, Salo, Zharoff Nays: Donley, Frank, Halford, Jacko, Kelly, Leman, Miller, Pearce, Phillips, Rieger, Sharp, Taylor Kerttula changed from "Nay" to "Yea". 1993-04-20 Senate Journal Page 1579 SB 106 and so, Amendment No. 5 failed. Senator Ellis offered Amendment No. 6 : Page 1, line 3, after ";": Insert "requiring certain electric utilities to prepare integrated resource plans; prohibiting state agencies and corporations from participating in certain projects unless they are consistent with the approved integrated resource plan; and requiring a report concerning disruption of the state's energy supply;" Page 2, after line 16" Insert a new subsection to read: "(d) The legislature further finds that (1) the state has invested hundreds of millions of dollars in electrical energy generation and distribution facilities and the public has a compelling interest in the efficient and cost-effective utilization of these energy supply and distribution facilities; and (2) the Alaska Energy Authority has documented substantial opportunities to make cost-effective energy efficiency and conservation investments in the state." Page 3, after line 31: Insert a new bill section to read: "* Sec. 4. AS42.05 is amended by adding new sections to read: Sec. 42.05.292. INTEGRATED RESOURCE PLANS. (a) An electric utility that uses or is served by a power generating or distribution facility owned by the state or constructed using state financial assistance with annual sales that exceed 300,000,000 kilowatt hours shall, on or before January 15,1995, and every four years thereafter, file an integrated resource plan with the commission. The plan must show how the utility will meet forecasted power requirements. A forecast required by this subsection must 1993-04-20 Senate Journal Page 1580 SB 106 be for the next 20 years. In the plan, the utility shall (1) list and describe current facilities and energy supply resources of the utility; (2) include a forecasted retirement schedule that lists the facilities that the utility expects to remove from service, discusses the assumptions used to develop the retirement schedule, and includes the forecasted use of specific facilities, the remaining useful life of the facilities, and forecasted maintenance work; (3) describe the utility's interconnection relationships with other utilities and small power producers, and the utility's agreements for operation of joint use facilities, power exchanges, power pooling, reserve sharing, commodity displacement, and other operating arrangements; (4) document energy end-use in the utility service area and identify with reasonable accuracy the final physical use of electricity in the residential, commercial, and industrial sectors, including use within each sector for space heating and cooling, lighting, water heating, refrigeration, and appliances; (5) forecast system power demand including annual, seasonal, and peak day load hourly duration curves and best estimates of anticipated peak demand of the major user classifications including residential, commercial, and industrial sectors; (6) analyze the utility's existing ability to meet increased system requirements, including (A) opportunities for generation, transmission, or other system efficiency improvements; (B) potential electric power pooling; (C) possible interconnection with qualifying cogenerators or small power producers; (D) anticipated demand reductions in power requirements as a result of market-induced or programmatic conservation efforts; and 1993-04-20 Senate Journal Page 1581 SB 106 (E) current utility load management efforts; (7) summarize the utility's load research programs, end-use analysis, and load management investigations, including (A) the status of current and anticipated load research, data collection, and analysis; (B) the status of current and anticipated end-use research, data collection, and analysis; (C) an assessment of changes anticipated in end-use requirements from appliance and mechanical system efficiency improvements for each consumer sector; (D) an evaluation of the effects on utility costs from end-use efficiency changes; (E) a description of methods including innovative rate designs available to modify, coordinate, or control end uses to manage system loads; and (F) cost estimates for implementation of load management programs; (8) provide long-term forecasts, based on end-use and econometric methodologies as appropriate, including (A) base, low, and high forecasts of the power requirements for the utility service area; (B) a discussion of the assumptions used in developing the forecasts including reserve margin requirements, population growth or decline, employment growth or decline, economic de- velopment, changes in service area, and other factors that influence the demand for electrical energy; and (C) a sensitivity analysis that tests the importance of specific assumptions; 1993-04-20 Senate Journal Page 1582 SB 106 (9) identify and evaluate alternative system development options to meet forecasted power requirements; the options must address availability, reliability, flexibility, and cost-effectiveness; (10) identify the system development option with the lowest present value cost over the forecast period; (11) recommend a specific system development option and an implementation plan for the option; the option must identify projected facility retirement, development of additional generating and transmission sys- tems, load management efforts, conservation, and energy end-use efficiency improvements; (12) if the system development option recommended by the utility under (11) of this subsection is different from the system development option with the lowest present value cost identified under (10) of this subsection, provide an analysis and justification for the recommended system development option; and (13) include other information considered necessary by the commission to ensure adequate evaluation of all supply-side and demand-side alternatives. (b) After consulting with the Alaska Energy Authority, the commission may establish by regulation a consistent plan development and reporting methodology for the integrated resource plans required under (a) of this section including the coordinated preparation and filing of individual plans by closely integrated utilities served by common facilities. (c) In this section, "present value cost" means the total of future costs of a system development option, including environmental costs, discounted to the present. Sec. 42.05.293. REVIEW AND APPROVAL OF INTEGRATED RESOURCE PLANS. (a) The commission shall establish by regulation a procedure for the review and approval of a plan submitted under AS42.05.292 that includes a provision for public hearings before the commission in the principal localities served by the utility 1993-04-20 Senate Journal Page 1583 SB 106 submitting the plan. (b) After consulting with the Alaska Energy Authority, the commission shall approve a utility's integrated resource plan, including the recommended system development option, if the commission finds that the plan (1) ensures system reliability; (2) would provide consumers with the lowest reasonable cost of power over the forecast period; cost savings identified through life-cycle cost analysis may be considered even though the cost savings will be realized after the forecast period; (3) adequately addresses conserving electrical energy through cost-effective, end-use efficiency improvements using readily available or reliably anticipated methods or technology; (4) documents a reasonable expectation of future load and resource requirements; (5) uses, as appropriate, life-cycle costing and cost-effectiveness analysis and explains the criteria and assumptions on which the analysis is based; (6) evaluates resource alternatives that would be appropriate for the service area in light of technology currently available and reliably anticipated to exist during the forecast period; and (7) describes the utility's data collection activities, additional data requirements, and efforts to develop that additional data. (c) If the commission finds that a utility's integrated resource plan and recommended system development option does not meet the criteria set out in (b) of this section, the commission may reject the plan or approve a modified plan and system development option that meets the criteria. Commission approval of a plan and system development option authorizes the utility to imple- ment the plan as approved. (d) The commission shall set rates for utility services and revenue requirements at a level sufficient for a 1993-04-20 Senate Journal Page 1584 SB 106 utility to recover all reasonable expenses and capital expenditures incurred by the utility in preparing the plan and implementing the approved plan. Sec. 42.05.294. COMPLIANCE WITH INTEGRATED RESOURCE PLAN. An electric utility that is subject to the requirements of AS42.05.292 and 42.05.293 may not participate in the use of an electrical generation or transmission system project authorized by the legislature after January15, 1995, whose construction or acquisition was financed in whole or in part by state appropriations unless the project is consistent with the utility's approved integrated resource plan under AS42.05.292 and 42.05.293." Renumber the following bill sections accordingly. Page 5, after line 6: Insert a new bill section to read: "* Sec. 7. AS44.83 is amended by adding a new section to read: Sec. 44.83.085. GRANTS FOR INTEGRATED RESOURCE PLANS. The authority may make a grant to an electric utility to assist in paying the cost of preparing an integrated resource plan under AS42.05.292." Renumber the following bill sections accordingly. Page 15, line 25: Delete "32 and 35" Insert "34 and 37" Page 15, line 31: Delete "32 and 35" Insert "34 and 37" 1993-04-20 Senate Journal Page 1585 SB 106 Page 16, line 6: Delete "30 and 31" Insert "32 and 33" Page 16, line 11: Delete "30 and 31" Insert "32 and 33" Page 16, line 15: Delete "30 and 31" Insert "32 and 33" Page 16, line 19: Delete "35" Insert "37" Page 17, line 5: Delete "35" Insert "37" Page 17, line 22: Delete "30, 31, 33, and 34" Insert "32, 33, 35, and 36" Page 17, after line 26: Insert a new bill section to read: "* Sec. 38. After consulting with the Alaska Energy Authority and the Department of Military and Veterans' Affairs, the Department of Community and Regional Affairs shall prepare a report examining the implications of a major disruption of the energy supply to consumers in the state, including a discussion of the implications of a substantial increase in the price of energy. The department shall submit the report to the Alaska State Legislature on or before January15, 1994." 1993-04-20 Senate Journal Page 1586 SB 106 Page 17, line 27: Delete "1 - 29" Insert "1 - 31 and 38" Senator Ellis moved for the adoption of Amendment No. 6. Senator Taylor objected. The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: CSSB 106(FIN) Second Reading Amendment No. 6 YEAS: 9 NAYS: 11 EXCUSED: 0 ABSENT: 0 Yeas: Adams, Donley, Duncan, Ellis, Kerttula, Lincoln, Little, Salo, Zharoff Nays: Frank, Halford, Jacko, Kelly, Leman, Miller, Pearce, Phillips, Rieger, Sharp, Taylor and so, Amendment No. 6 failed. Senator Taylor moved and asked unanimous consent that CS FOR SENATE BILL NO. 106(FIN) be considered engrossed, advanced to third reading and placed on final passage. Senator Adams objected. The question being: "Shall CS FOR SENATE BILL NO. 106(FIN) be advanced to third reading?" The roll was taken with the following result: CSSB 106(FIN) Advance from Second to Third Reading? 1993-04-20 Senate Journal Page 1587 SB 106 YEAS: 11 NAYS: 9 EXCUSED: 0 ABSENT: 0 Yeas: Frank, Halford, Jacko, Kelly, Leman, Miller, Pearce, Phillips, Rieger, Sharp, Taylor Nays: Adams, Donley, Duncan, Ellis, Kerttula, Lincoln, Little, Salo, Zharoff and so, the bill failed to advance to third reading.