Legislature(2021 - 2022)BARNES 124

05/06/2022 09:00 AM House LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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+= HB 301 UTILITIES: RENEWABLE PORTFOLIO STANDARD TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 190 REGULATORY COMMISSION AK/REFUSE UTILITIES TELECONFERENCED
Heard & Held
         HB 301-UTILITIES: RENEWABLE PORTFOLIO STANDARD                                                                     
                                                                                                                                
9:22:35 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS announced that the  final order of business would                                                               
be HOUSE BILL  NO. 301, "An Act relating to  the establishment of                                                               
a renewable portfolio standard  for regulated electric utilities;                                                               
and providing for an effective  date."  [Before the committee was                                                               
CSHB 301(ENE).]                                                                                                                 
                                                                                                                                
9:22:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE  moved  to  adopt  Amendment  1  to  CSHB
301(ENE), labeled 32-GH2546\W.1, Klein, 5/3/22, which read:                                                                     
                                                                                                                                
     Page 7, line 23:                                                                                                           
          Delete "alternative"                                                                                                  
     Insert "clean"                                                                                                             
                                                                                                                                
9:23:02 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS objected for purposes of discussion.                                                                            
                                                                                                                                
9:23:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE explained  Amendment 1  would change  the                                                               
term "alternative"  to "clean".   Responding to  Co-Chair Fields,                                                               
he confirmed that Amendment 1  is a technical cleanup because the                                                               
term "alternative" was  missed when the draft came  over from the                                                               
House Special Committee on Energy.                                                                                              
                                                                                                                                
9:23:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NELSON inquired about the definition of "clean".                                                                 
                                                                                                                                
REPRESENTATIVE SCHRAGE  responded that  "clean" is  defined under                                                               
the definition section [within Section  6 of CSHB 301(ENE)] where                                                               
all the sources of energy generation are listed.                                                                                
                                                                                                                                
CO-CHAIR FIELDS added that the  House Special Committee on Energy                                                               
believed that "clean" was a  better term and this straggling term                                                               
of  "alternative" was  missed in  the cleanup  of the  bill.   He                                                               
further noted that under the  amendment by Representative Tuck in                                                               
that  committee, the  term "clean"  included nuclear  as well  as                                                               
traditional energy generation.                                                                                                  
                                                                                                                                
9:24:14 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  removed his objection.   There being  no further                                                               
objection, Amendment 1 to CSHB 301(ENE) was adopted.                                                                            
                                                                                                                                
9:24:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE  moved  to  adopt  Amendment  2  to  CSHB
301(ENE), labeled 32-GH2546\W.2, Klein, 5/3/22, which read:                                                                     
                                                                                                                                
     Page 8, line 28:                                                                                                           
          Delete "clean"                                                                                                        
          Insert "renewable"                                                                                                    
                                                                                                                                
     Page 8, line 30:                                                                                                           
          Delete the first occurrence of "clean"                                                                                
          Insert "renewable"                                                                                                    
                                                                                                                                
     Page 8, line 31:                                                                                                           
          Delete the first occurrence of "clean"                                                                                
          Insert "renewable"                                                                                                    
                                                                                                                                
     Page 9, line 1:                                                                                                            
          Delete the first occurrence of "clean"                                                                                
     Insert "renewable"                                                                                                         
                                                                                                                                
9:24:25 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS objected for purposes of discussion.                                                                            
                                                                                                                                
9:24:26 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE explained  that  Amendment  2 is  further                                                               
cleanup in  that it  deletes "clean"  and inserts  "renewable" in                                                               
[four] occurrences.   He requested  Mr. Ryan Johnston  to explain                                                               
Amendment 2 in more detail.                                                                                                     
                                                                                                                                
9:24:47 AM                                                                                                                    
                                                                                                                                
RYAN  JOHNSTON,  Staff,  Representative  Calvin  Schrage,  Alaska                                                               
State Legislature,  on behalf of Representative  Schrage, sponsor                                                               
of Amendment 2, explained that  in the House Special Committee on                                                               
Energy    an   amendment    by   Representative    Tuck   changed                                                               
"alternative", but  then a conceptual  amendment changed  back to                                                               
"clean".  When  that was done on the fly,  he continued, "it left                                                               
'clean' in every  area, but it has 'clean' and  'clean energy' in                                                               
those places, so  we don't need four cleans, so  changing it back                                                               
to 'renewable'."   Also, he noted, that section of  the bill does                                                               
not fall  within the  new clean energy  statute, it  falls within                                                               
the existing  Alaska Energy Authority (AEA)  statute, and because                                                               
AEA is  still using  its definitions of  renewable and  clean, it                                                               
makes the  most sense to  continue using "renewable"  and "clean"                                                               
for the Alaska Energy authority.                                                                                                
                                                                                                                                
9:25:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCARTY asked whether  removing "clean" would also                                                               
remove  alternative  ways of  producing  energy  or securing  the                                                               
intent that polluting types of things not be made.                                                                              
                                                                                                                                
CO-CHAIR FIELDS responded no.                                                                                                   
                                                                                                                                
REPRESENTATIVE MCCARTY,  regarding the use of  renewable language                                                               
only,  inquired  about the  utility  systems  that are  producing                                                               
energy through,  say, natural  gas and  scrubbing to  not pollute                                                               
the environment.                                                                                                                
                                                                                                                                
CO-CHAIR FIELDS replied  that Amendment 2 is  a technical cleanup                                                               
because there are underlying AEA  statutes that address renewable                                                               
energy, and that  is all Amendment 2 cleans up.   Under the bill,                                                               
he said,  the clean energy  standard is inclusive of  nuclear and                                                               
what most people would  consider renewable, including hydropower,                                                               
wind,  tidal, and  solar.   Natural gas  is not  considered clean                                                               
energy because of its greenhouse impact, he explained.                                                                          
                                                                                                                                
MR. JOHNSTON  drew attention to  page 8  of the bill,  [lines 28-                                                               
29],  which state,  "identifying  progress  developing clean  and                                                               
clean  energy resources".   In  Amendment 2,  he clarified,  only                                                               
[the first "clean"]  would be replaced so that  those lines would                                                               
state,  "identifying  progress  developing  renewable  and  clean                                                               
energy resources".                                                                                                              
                                                                                                                                
9:28:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAUFMAN suggested that  a conceptual amendment may                                                               
be needed  because in  the language on  line 28  removing "clean"                                                               
there is an "and".                                                                                                              
                                                                                                                                
MR.  JOHNSTON answered  that the  amendment would  delete "clean"                                                               
and insert  "renewable" so  the language  [on lines  28-29] would                                                               
read, "developing renewable and clean energy".                                                                                  
                                                                                                                                
9:29:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY asked  whether  the ability  to scrub  is                                                               
acknowledged.                                                                                                                   
                                                                                                                                
CO-CHAIR FIELDS replied  that that will be addressed  in the next                                                               
amendment.                                                                                                                      
                                                                                                                                
9:30:00 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS removed  his objection  to Amendment  2.   There                                                               
being no further objection, Amendment 2 was adopted.                                                                            
                                                                                                                                
9:30:11 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS explained  that he will be  offering Amendment 3,                                                               
which  is an  idea  that  came out  of  discussion  in the  House                                                               
Special   Committee  on   Energy  where   Representative  Kaufman                                                               
suggested that  there should be  a process to  potentially change                                                               
what falls within  the definition of clean energy  resources.  He                                                               
said he thinks  one pending technological change  that could play                                                               
out is carbon  capturing sequestration, whether from  gas or from                                                               
coal.  Under  Amendment 3, he said, AEA would  report back to the                                                               
legislature  and  the legislature  would  have  the authority  to                                                               
change the  definition of  clean energy  resources; AEA  is being                                                               
asked to advise the legislature on it because AEA is the expert.                                                                
                                                                                                                                
9:31:19 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  moved to adopt  Amendment [3] to  CSHB 301(ENE),                                                               
labeled 32-GH2546\W.3, Klein, 5/4/22, which read:                                                                               
                                                                                                                                
     Page 7, following line 20:                                                                                                 
          Insert a new section to read:                                                                                         
          "Sec. 42.05.925. Additional renewable energy                                                                        
     resources.  Not less  than once  every five  years, the                                                                  
     commission  shall  request  a report  from  the  Alaska                                                                    
     Energy Authority  reviewing clean  energy technologies,                                                                    
      and determine whether an available technology is an                                                                       
       approved renewable energy resource for purposes of                                                                       
     complying with the clean energy standard."                                                                                 
                                                                                                                                
     Page 7, line 21:                                                                                                           
          Delete "Sec. 42.05.925"                                                                                             
          Insert "Sec. 42.05.930"                                                                                             
          Delete "AS 42.05.900 - 42.05.925"                                                                                     
          Insert "AS 42.05.900 - 42.05.930"                                                                                     
                                                                                                                                
     Page 8, line 4:                                                                                                            
          Delete "or"                                                                                                           
                                                                                                                                
     Page 8, line 5, following "nuclear;":                                                                                      
          Insert "or                                                                                                            
       (F)  a resource that the commission approves under                                                                       
     AS 42.05.925;"                                                                                                             
                                                                                                                                
9:31:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAUFMAN objected to Amendment 3.                                                                                 
                                                                                                                                
9:31:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCARTY  thanked the maker  of the amendment.   He                                                               
said it  needs to be  recognized that technology evolves  in many                                                               
different realms, even in operations  that are using natural gas,                                                               
a classic  example being the  growing of vegetables in  the Chena                                                               
Hot Springs hot house.                                                                                                          
                                                                                                                                
9:32:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAUFMAN  removed his objection to  Amendment 3 and                                                               
thanked Co-Chair Fields for the  concept in the amendment.  There                                                               
being no further objection, Amendment 3 was adopted.                                                                            
                                                                                                                                
CO-CHAIR FIELDS  thanked Representative Kaufman for  the idea for                                                               
Amendment 3.                                                                                                                    
                                                                                                                                
9:33:03 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS moved  to adopt  Amendment 4  to CSHB  301(ENE),                                                               
labeled 32-GH2546\W.4, Dunmire/Klein, 5/3/22, which read:                                                                       
                                                                                                                                
     Page 3, line 27:                                                                                                           
          Delete "2030"                                                                                                         
          Insert "2027"                                                                                                         
                                                                                                                                
     Page 8, line 11:                                                                                                           
          Delete "each 10-year period"                                                                                          
          Insert "the period before December 31, 2027, the                                                                      
       period between December 31, 2027, and December 31,                                                                       
       2040, or the period between December 31, 2040 and                                                                        
     December 31, 2050, as"                                                                                                     
                                                                                                                                
9:33:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ objected for purposes of explanation.                                                                        
                                                                                                                                
9:33:08 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS explained  Amendment 4  would move  up by  three                                                               
years  the first  deadline for  the Clean  Energy Standard.   One                                                               
reason for that,  he related, was the  discussion by stakeholders                                                               
around potential  ramp down of  Cook Inlet gas  production, which                                                               
motivated him to ramp up  renewable energy generation and to more                                                               
quickly diversify  Alaska's energy  sources to  provide consumers                                                               
with  protection and  options.   Another factor  in proposing  to                                                               
move 2030 to  2027, he stated, is that under  the bill the energy                                                               
generation  doesn't have  to be  installed and  operating by  the                                                               
target  date.   A two-year  time horizon  goes beyond  the target                                                               
date  so a  project could  be approved  in 2027  and deployed  in                                                               
2029, he  continued, and  given that  it made  sense to  move the                                                               
date to  2027.  Many  projects deployed  under this bill  will be                                                               
operational in 2029, he added.                                                                                                  
                                                                                                                                
9:34:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NELSON  asked whether  the AEA has  been contacted                                                               
as to whether moving down three years is a realistic goal.                                                                      
                                                                                                                                
CO-CHAIR  FIELDS replied  that he  hasn't talked  to AEA  but has                                                               
shared this  with the utilities.   He  said Amendment 3  was also                                                               
based on suggestion from previous  testifiers.  He noted that the                                                               
bill as  introduced by  the Dunleavy  Administration had  2025 as                                                               
the first  target, so 2027 meets  in the middle.   He invited Ms.                                                               
Julie Estey to speak to the dates.                                                                                              
                                                                                                                                
9:35:13 AM                                                                                                                    
                                                                                                                                
JULIE ESTEY, Director, External  Affairs & Strategic Initiatives,                                                               
Matanuska   Electric  Association   (MEA),  responded   that  the                                                               
utilities have been consistent in  wanting this first deadline to                                                               
offer  some additional  flexibility from  the initial  governor's                                                               
bill  in  recognition of  regular  project  timelines that  could                                                               
cause  further delays.   She  said [the  utilities] would  prefer                                                               
that  it remain  2030 in  recognition of  project timelines.   In                                                               
working   with  renewable   energy   developers  and   developing                                                               
projects,  she   continued,  [the  utilities  must   go  through]                                                               
permitting and  land acquisition, and one  current power producer                                                               
is running  into increased  costs of  solar panels  and financing                                                               
due to the  global unrest.  In consideration of  the realities of                                                               
making this happen,  [the utilities] would prefer  that it remain                                                               
at 2030.                                                                                                                        
                                                                                                                                
9:36:32 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ drew attention to  subsection (d) on page 4 of                                                               
the bill,  beginning on  line 20, which  states "if  the capacity                                                               
will begin  providing the  clean electrical  energy to  the load-                                                               
serving entity not later than (1)  two years after the end of the                                                               
compliance period".   She said  she interprets that to  mean that                                                               
amending the year to 2027 for  the first goal would result in not                                                               
having  anything online  [until]  2029.   She  asked whether  Mr.                                                               
Chris  Rose  has the  same  reading  or  any concerns  about  the                                                               
[proposed date change].                                                                                                         
                                                                                                                                
9:37:33 AM                                                                                                                    
                                                                                                                                
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP), answered  that that  is the  way he would  read it.   The                                                               
original bill had 2025, he said,  and he has concerns with moving                                                               
it to  2030.  The  Railbelt utilities  are currently at  about 20                                                               
percent, he stated,  so it would be moving from  20 percent to 25                                                               
percent  by 2027.   He  further  noted that  the original  bill's                                                               
requirement of 30  percent has been moved down to  25 percent, so                                                               
the  amount of  electricity that  must be  renewable by  2027 has                                                               
already been  reduced by 5 percent.   As pointed out  by Co-Chair                                                               
Fields,  he continued,  moving  to 2027  would  require that  the                                                               
projects be in service and  delivering electricity by 2029, which                                                               
is seven years away.  He  said there are many small projects that                                                               
the  utilities could  be undertaking  right now  that would  move                                                               
toward  that, plus  there is  waiver  language in  the bill  that                                                               
would allow the utilities to make a  case to the RCA if they felt                                                               
there was  something that really  prevented them from  getting to                                                               
the 25  percent by 2027.   He said  REAP supports Amendment  3 to                                                               
move it to 2027.                                                                                                                
                                                                                                                                
9:39:00 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ  requested Mr. Rose  to talk about  the waiver                                                               
language  and how  he  thinks that  that  provides utilities  the                                                               
flexibility they need.                                                                                                          
                                                                                                                                
MR. ROSE replied  that there are multiple elements  to the waiver                                                               
language that  the utilities could bring  to the RCA to  say they                                                               
tried to do  this but couldn't for these reasons.   Some of those                                                               
reasons could  be the  ones that  Ms. Estey  brought up,  such as                                                               
problems with  supply chains  or transmission.   He said  the new                                                               
electric  reliability   organization  (ERO)  will   hopefully  be                                                               
certificated  by  this  fall  and  will  begin  doing  its  first                                                               
integrated  resource plan  sometime  next year.    That plan,  he                                                               
specified, will develop lots of  alternative portfolios that will                                                               
eventually be approved  by the RCA.  Wind and  solar projects can                                                               
be built  in two years or  less, he advised.   If the requirement                                                               
was to  go this direction in  2025 there is four  years, he said,                                                               
two years until  2027 and then an additional two  years under the                                                               
provisions of  the bill  to get  it built  and the  project done.                                                               
Emphasis  on   moving  this  direction  needs   to  continue,  he                                                               
stressed, particularly given the  availability of Cook Inlet gas.                                                               
He said REAP supports this important amendment.                                                                                 
                                                                                                                                
9:41:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAUFMAN stated he finds  merit in the arguments of                                                               
potential difficulty  and that current  supply chain  issues will                                                               
only get  worse, as will inflation.   Given global and  US issues                                                               
with respect to  the economy, inflation, and  stagnation, he said                                                               
he believes  [the legislature]  must tread  carefully.   He added                                                               
that he  doesn't see  anything wrong  with the  utilities leading                                                               
the target knowing  that requirements are coming,  but not having                                                               
to  go  through  the  processes  described.    He  said  he  will                                                               
therefore object to  Amendment 3 although he  appreciates some of                                                               
the arguments for it.                                                                                                           
                                                                                                                                
REPRESENTATIVE  MCCARTY  concurred with  Representative  Kaufman.                                                               
He  said  while  flying  over  the  Port  of  Seattle  he  saw  a                                                               
diminished number  of cargo  containers in the  port, and  he has                                                               
heard  that  China  is  reducing  [its exports].    The  goal  is                                                               
admirable, he said,  but the timeline is too quick,  so he agrees                                                               
with keeping it at 2030, plus the goal is not being diminished.                                                                 
                                                                                                                                
9:43:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KAUFMAN requested  Ms. Estey's  thoughts on  this                                                               
subject.                                                                                                                        
                                                                                                                                
MS.  ESTEY offered  a correction.    She specified  that by  [the                                                               
utilities']  current calculations  the  Railbelt  is around  15.3                                                               
percent renewable, so it would be  a jump of 10 percent, which is                                                               
significant.  She stated that  the high capital-intensive utility                                                               
industry has  a long lead time  for developing a project.   While                                                               
she  hears Mr.  Rose's  point about  going to  the  RCA with  the                                                               
reasons  [the  utilities] can't  meet  this  goal, she  said  the                                                               
preference is to set goals  that are achievable.  In establishing                                                               
this big policy,  she argued, one of the worst  things that could                                                               
happen would be to  set it up for the utilities  not to make that                                                               
first goal.  Setting it to 2030  gives a longer line of sight and                                                               
takes  in  the  realities  of  permitting,  interconnection,  and                                                               
transmission  which  take substantial  time.    For example,  she                                                               
continued, MEA  has now  been going  through a  transmission line                                                               
process  for a  couple years  and is  looking at  potential legal                                                               
challenges,  so  there  are  just  significant  realities.    She                                                               
pointed out  that under the  bill's provisions the RCA  will have                                                               
two  years after  the bill's  passage to  promulgate regulations,                                                               
meaning the  regulations wouldn't be  out until 2024 if  the bill                                                               
is  passed in  2022.   As to  the integrated  resource plan,  she                                                               
noted that it  will be a year  at best before all  the pieces are                                                               
in  place to  start  the integrated  resource  planning and  then                                                               
another  year  or two  after  that.    [The utilities]  want  the                                                               
timelines to be realistic and  achievable, Ms. Estey stated.  The                                                               
utilities  are  not  trying  to  push  back,  she  stressed,  the                                                               
utilities are saying this isn't realistic.                                                                                      
                                                                                                                                
9:46:10 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  stated he is  tired of the utilities  moving the                                                               
goalposts as he  didn't hear any concerns yesterday  when he told                                                               
Ms.  Estey about  this deadline.    He said  he previously  heard                                                               
support  from the  utilities for  compromising, and  2027 and  25                                                               
percent is a compromise.  This  is moving way slower on renewable                                                               
energy  than almost  any other  set of  utilities in  the US  has                                                               
moved,  he asserted.    Keeping it  at 2030  is  10 years  before                                                               
requiring  a  single kilowatt  hour  from  renewable energy  from                                                               
flowing into  the grid  which, he argued,  is indefensible.   The                                                               
governor put  out a fairly  aggressive target, he  continued, and                                                               
he has worked in good faith to advance compromise.                                                                              
                                                                                                                                
9:47:11 AM                                                                                                                    
                                                                                                                                
A roll  call vote  was taken.   Representatives  Schrage, Snyder,                                                               
Fields,   and  Spohnholz   voted   in  favor   of  Amendment   4.                                                               
Representatives Kaufman,  McCarty, and  Nelson voted  against it.                                                               
Therefore, Amendment 4 to CSHB  301(ENE) was adopted by the House                                                               
Labor and Commerce Standing Committee by a vote of 4-3.                                                                         
                                                                                                                                
9:47:59 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 9:47 a.m. to 9:48 p.m.                                                                       
                                                                                                                                
9:48:23 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS moved  to adopt  Amendment 5  to CSHB  301(ENE),                                                               
labeled 32-GH2546\W.5, Klein, 5/4/22, which read:                                                                               
                                                                                                                                
     Page 7, line 25, following "is":                                                                                           
          Insert "generated from capacity built on or after                                                                     
     July 1, 2022, that generates electrical energy"                                                                            
                                                                                                                                
9:48:26 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ objected for purposes of explanation.                                                                        
                                                                                                                                
9:48:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS spoke to Amendment 5.   He said the original bill                                                               
introduced  by   the  administration  had  no   renewable  energy                                                               
credits.    Renewable  energy   credits,  he  explained,  provide                                                               
utilities  with additional  flexibility in  terms of  meeting the                                                               
goal  because a  rural  community off  the  Railbelt could  build                                                               
renewable  energy  generation  where  maybe the  net  savings  to                                                               
consumers  is  greater  and  sell  renewable  energy  credits  to                                                               
Railbelt utilities.   He related that in discussion  in the House                                                               
Special Committee on Energy it  wasn't clear when projects had to                                                               
be online  to qualify for  these renewable energy credits.   Also                                                               
heard, he noted,  was concern from utilities  about requiring re-                                                               
litigation of the  Bradley Lake Agreement, so in  the interest of                                                               
not re-litigating  the Bradley Lake Agreement  and tariff issues,                                                               
Amendment 5  clarifies that renewable  energy credits  under this                                                               
bill would  be for  generation built  on or  after 7/1/2022.   He                                                               
said this  gives additional flexibility  for utilities  and gives                                                               
rural Alaska stake in the success of the bill.                                                                                  
                                                                                                                                
9:49:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NELSON offered his  understanding that the credits                                                               
would be available to any  company that has developed energy from                                                               
7/1/22 onward.                                                                                                                  
                                                                                                                                
CO-CHAIR FIELDS  replied yes, Amendment  5 is for  projects going                                                               
forward, it clarifies  that this is new generation.   It would be                                                               
pointless  to write  a renewable  portfolio  standard (RPS)  that                                                               
would count all  the existing hydropower in  Southeast Alaska, he                                                               
explained.  But,  he said, if communities in  Southeast Alaska or                                                               
Western Alaska  want to build  additional renewable  capacity and                                                               
count that toward the RPS goal  for the Railbelt under this bill,                                                               
then it is a win-win.                                                                                                           
                                                                                                                                
REPRESENTATIVE NELSON  inquired about  the kind of  projects that                                                               
energy producers  might have online  soon and whether  they could                                                               
utilize this credit almost immediately.                                                                                         
                                                                                                                                
CO-CHAIR FIELDS answered that several  projects listed in the AEA                                                               
portfolio are  funded under  the Renewable  Energy Fund,  what is                                                               
called  a waterfall,  so  it  is the  prioritized  projects.   He                                                               
invited  Mr.  Rose to  detail  some  of the  potential  near-term                                                               
projects in rural Alaska that  could qualify for renewable energy                                                               
credits under Amendment 5.                                                                                                      
                                                                                                                                
9:51:03 AM                                                                                                                    
                                                                                                                                
MR.  ROSE  responded  that the  Renewable  Energy  Fund  Advisory                                                               
Committee recently approved $14.9 million  for projects.  He said                                                               
he  doesn't  have  a  list  of  those  projects,  but  some  were                                                               
construction  projects, of  which many  were feasibility  on cost                                                               
and studies.   He related  that more  than $600 million  worth of                                                               
projects have moved  forward since the Renewable  Energy Fund was                                                               
developed  in 2008.   About  85 construction  projects have  been                                                               
developed  through that  fund, he  continued, through  both state                                                               
appropriations  and   matching  funds  from  federal   and  local                                                               
entities.   Many communities are  working on projects  right now,                                                               
he  stated,  because  the  technology  continues  to  evolve  and                                                               
because  the  very  high  electric  rates  in  rural  Alaska  are                                                               
probably  going to  be  much higher  given oil  prices.   So,  he                                                               
added,  here is  incredible  incentive for  those communities  to                                                               
reduce their dependence  on imported diesel for  generation.  Mr.                                                               
Rose said REAP  believes there is going to  be continued movement                                                               
on  renewable energy  across rural  Alaska.   He  said he  cannot                                                               
speak to  future potential increases in  hydroelectric generation                                                               
in Southeast Alaska, but it is a possibility.                                                                                   
                                                                                                                                
9:52:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NELSON  asked whether  the credits in  Amendment 5                                                               
would fall  on a project  that is halfway  built or would  not be                                                               
producing electricity for a couple years for a rural community.                                                                 
                                                                                                                                
MR. ROSE  replied that he doesn't  have the language in  front of                                                               
him,  but  he  thinks  that  that is  an  important  point.    He                                                               
suggested it  could be  clarified that  projects that  were under                                                               
construction  as of  July 2022  could be  eligible because  it is                                                               
possible that some projects are currently underway.                                                                             
                                                                                                                                
CO-CHAIR  FIELDS stated  that  his intent  is  new projects,  not                                                               
projects that are 98 percent completed.                                                                                         
                                                                                                                                
9:53:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KAUFMAN asked  whether  Co-Chair Fields  believes                                                               
the language in Amendment 5 is clear relative to his intent.                                                                    
                                                                                                                                
CO-CHAIR  FIELDS answered  that he  thinks it  is but  will check                                                               
with  Legislative Legal  Services  and if  it isn't  sufficiently                                                               
clear it can be cleaned up with an amendment on the floor.                                                                      
                                                                                                                                
REPRESENTATIVE KAUFMAN noted that he is okay with that.                                                                         
                                                                                                                                
9:54:13 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ removed  her objection to Amendment  5.  There                                                               
being no further objection, Amendment 5 was adopted.                                                                            
                                                                                                                                
9:54:24 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS moved  to adopt  Amendment 6  to CSHB  301(ENE),                                                               
labeled 32-GH2546\W.6, Klein, 5/6/22, which read:                                                                               
                                                                                                                                
     Page 4, line 17:                                                                                                           
          Delete "fine"                                                                                                         
          Insert "penalty"                                                                                                      
                                                                                                                                
     Page 6, line 5:                                                                                                            
          Delete "fine"                                                                                                       
          Insert "penalty"                                                                                                    
                                                                                                                                
     Page 6, line 7:                                                                                                            
          Delete "fine"                                                                                                         
          Insert "penalty"                                                                                                      
                                                                                                                                
     Page 6, line 8, following "standard":                                                                                      
          Insert "that must be invested by the load-serving                                                                     
     entity in clean energy generation"                                                                                         
                                                                                                                                
     Page 6, line 9:                                                                                                            
          Delete "fine"                                                                                                         
          Insert "penalty"                                                                                                      
                                                                                                                                
     Page 7, line 2:                                                                                                            
          Delete "fine"                                                                                                         
          Insert "penalty"                                                                                                      
                                                                                                                                
     Page 7, line 5:                                                                                                            
          Delete "fine"                                                                                                         
          Insert "penalty"                                                                                                      
                                                                                                                                
     Page 7, line 9:                                                                                                            
          Delete "fine paid"                                                                                                    
          Insert "penalty incurred"                                                                                             
                                                                                                                                
     Page 7, line 12:                                                                                                           
          Delete "payment of the fine"                                                                                          
          Insert "imposition of the penalty"                                                                                    
                                                                                                                                
     Page 7, following line 15:                                                                                                 
          Insert a new subsection to read:                                                                                      
     "(f)  To satisfy a  penalty imposed under this section,                                                                    
     a load-serving  entity shall invest an  amount equal to                                                                    
     the penalty in clean  energy generation for the benefit                                                                    
     of the entity's customers."                                                                                                
                                                                                                                                
9:54:25 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ objected for purposes of explanation.                                                                        
                                                                                                                                
9:54:26 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS explained  that Amendment 6 is  a suggestion from                                                               
the utilities that  fines under the bill would  be collected from                                                               
ratepayers because  most utilities  are cooperatives so  there is                                                               
no other  source of  money.  Additionally,  he said,  Amendment 6                                                               
cleans up the fine structure so  that rather than having the fine                                                               
flow  through the  utility,  then to  the RCA,  and  back to  the                                                               
utility,  the fines  would be  changed to  a penalty  year.   The                                                               
amendment, he  continued, clarifies that any  penalties under the                                                               
bill would  be collected by  the utility and reinvested  in clean                                                               
energy generation  to help meet  the bill's intent.   Amendment 6                                                               
does not change  the amount of the fine, he  related.  He further                                                               
pointed out that the RCA's updated  fiscal note is lower, in part                                                               
in  recognition  of  Amendment  6  where  the  RCA  will  not  be                                                               
collecting  money.    He  stated  that if  there  are  any  fines                                                               
implemented in  this bill,  consumers will be  curious as  to why                                                               
they are  being fined, what  the fine is  going toward, and  as a                                                               
consumer he  would want  to see that  his cooperative,  if fined,                                                               
would   be  reinvesting   his  dollars   into  renewable   energy                                                               
generation.   It  is  not a  fine  for  the sake  of  a fine,  he                                                               
stressed, it  is a fine  or penalty for  the sake of  meeting the                                                               
goals in this bill.                                                                                                             
                                                                                                                                
9:56:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NELSON,  regarding the  last section  of Amendment                                                               
6, asked  whether the amendment  sponsor would be open  to having                                                               
the fine rebated back to the customer originally.                                                                               
                                                                                                                                
CO-CHAIR FIELDS  replied that he  thinks if that were  done there                                                               
would be no meaningful penalty  for utilities failing to meet the                                                               
requirements of the bill.                                                                                                       
                                                                                                                                
CO-CHAIR SPOHNHOLZ  interjected to indicate it  might actually be                                                               
an incentive.                                                                                                                   
                                                                                                                                
CO-CHAIR FIELDS  continued his response  with "unless we  want to                                                               
have  a personal  penalty for  the  board members,"  but said  he                                                               
doesn't  want "to  go there."   He  said he  would prefer  a fair                                                               
structure of having reasonable contents  that will meet the goals                                                               
of the  bill that don't  personally penalize the people  who work                                                               
for the utilities.                                                                                                              
                                                                                                                                
9:57:01 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ removed  her objection to Amendment  6.  There                                                               
being no further objection, Amendment 6 was adopted.                                                                            
                                                                                                                                
9:57:10 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS moved  to adopt  Amendment 7  to CSHB  301(ENE),                                                               
labeled 32-GH2546\W.7, Klein, 5/4/22, which read:                                                                               
                                                                                                                                
       Page 2, line 1, following the first occurrence of                                                                        
     "energy":                                                                                                                  
          Insert "generated from capacity constructed on or                                                                     
     after July 1, 2022,"                                                                                                       
                                                                                                                                
9:57:11 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ objected for purposes of explanation.                                                                        
                                                                                                                                
9:57:12 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  noted that Amendment 7  accompanies Amendment 5.                                                               
He said  a request from  the utilities  was to have  a consistent                                                               
tariff up and down the  Railbelt for dispatch of renewable energy                                                               
but that it  be structured in a way that  doesn't re-litigate the                                                               
Bradley Lake Agreement.   The virtue of a  flat tariff throughout                                                               
the  Railbelt, he  explained, is  that even  if renewable  energy                                                               
generation is  deployed in,  say, Seward,  that energy  should be                                                               
able  to be  dispatched up  to Chugach  Electric Association,  or                                                               
Matanuska  Electric   Association,  or  Golden   Valley  Electric                                                               
Association  without pancaking  tariffs  that disincentivize  the                                                               
production and dispatch  of such energy.  He noted  that in terms                                                               
of the  structure of the  drafting it  took two amendments  to do                                                               
that  Amendment 5 and Amendment 7.                                                                                              
                                                                                                                                
9:58:14 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SPOHNHOLZ removed  her objection to Amendment  7.  There                                                               
being no further objection, Amendment 7 was adopted.                                                                            
                                                                                                                                
9:58:23 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 9:58 a.m. to 10:22 a.m.                                                                      
                                                                                                                                
10:22:18 AM                                                                                                                   
                                                                                                                                
CO-CHAIR FIELDS announced that CSHB 301(ENE) was held over.                                                                     

Document Name Date/Time Subjects
HB 301 Amendment #7 W.7 - Fields 5.5.22.pdf HL&C 5/6/2022 9:00:00 AM
HB 301
HB 301 Amendment #5 W.5 - Fields 5.5.22.pdf HL&C 5/6/2022 9:00:00 AM
HB 301
HB 301 Amendment #4 W.4 - Fields 5.5.22.pdf HL&C 5/6/2022 9:00:00 AM
HB 301
HB 301 Amendment #3 W.3 - Fields 5.5.22.pdf HL&C 5/6/2022 9:00:00 AM
HB 301
HB 301 Amendment #2 W.2 - Schrage 5.3.22.pdf HL&C 5/6/2022 9:00:00 AM
HB 301
HB 301 Amendment #1 W.1 - Schrage 5.3.22.pdf HL&C 5/6/2022 9:00:00 AM
HB 301
HB 301 Letter of Support 5.2.22.pdf HL&C 5/6/2022 9:00:00 AM
HB 301
SB 190 Amendment #1 - Fields 4.29.22.pdf HL&C 5/6/2022 9:00:00 AM
SB 190
SB 190 Amendment # 1 Legal Opinion - Legislative Legal 5.5.22.pdf HL&C 5/6/2022 9:00:00 AM
SB 190
HB 301 Fiscal Note RCA-RCA 5.6.22.pdf HL&C 5/6/2022 9:00:00 AM
HB 301