Legislature(2001 - 2002)
03/21/2001 03:48 PM Senate RES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 140-SMALL WATER-POWER DEVELOPMENT PROJECTS
CHAIRMAN TORGERSON announced SB 140 to be up for consideration.
MR. DARWIN PETERSON, staff to Senator Torgerson, said in November
2000, Congress approved legislation extending programs under the
Federal Energy Policy and Conservation Act. Title V of this Act,
Public Law 106-469, was proposed by Senator Murkowski and transfers
licensing and regulatory authority over small hydroelectric
projects to the state in Alaska only. The enabling federal
legislation applies to hydro-projects of 5,000 kilowatts or less.
Before Alaska can acquire jurisdiction from the Federal Energy
Regulatory Commission (FERC), the legislature must adopt this
legislation and the Governor must submit a program to FERC. As the
bill is currently drafted, RCA would be the state agency
responsible for regulating these small hydro-projects. All the
current environmental, cultural and resource protections required
under federal law must be contained in the state program. This
legislation will not preempt those protections in any way. The
small hydro-projects that would not be eligible for state
jurisdiction are those located on Indian reservations, such as
Metlakatla, conservation units as identified in ANILCA, and rivers
designated as wild and scenic.
SENATOR TAYLOR asked if the state must require something similar to
what the federal law requires.
MR. PETERSON answered that is correct.
SENATOR TAYLOR asked who has primacy in making the ultimate
decision on recommendations.
MR. PETERSON answered that FERC has veto power. RCA would take over
the role that FERC plays right now.
SENATOR ELTON said he thought another logical place for these
decisions would be in the Alaska Power Authority (APA) in the
Alaska Industrial Development and Export Authority (AIDEA).
MR. BRIAN OMANN, Sitka Electric Department, said that Sitka doesn't
have any power projects of 5 megawatts or less, but is in support
of SB 140.
MR. BRENT PETRIE, Alaska Village Electric Cooperative (AVEC), said
AVEC supports the bill and has one project that is less than 5
megawatts. That project is on federal land, so this bill wouldn't
apply to it. He suggested the committee consider the Department of
Natural Resources Water Use Act be the relevant place for this
purpose.
CHAIRMAN TORGERSON explained that the reason he decided to put the
authority with the RCA is because that is Alaska's equivalency to
FERC.
MS. NAN THOMPSON, Director, RCA, explained that this bill is
supposed to make the processing of licensing hydro-projects simpler
and the regulations more applicable to Alaska. She has talked to
FERC and she is confident that the process can be streamlined and
made more applicable to the State of Alaska. Her agency isn't
looking for work, but the RCA can do it if the legislature so
desires.
MS. THOMPSON explained that the first task for the agency that gets
this authority would be to draft regulations. The RCA has a
regulations manager at the agency who could assume responsibility
for that project. She thought SB 140 was a good bill in terms of
development of alternative energy sources in Alaska, an issue the
RCA faces regularly. Any process that would allow for more
appropriately sized hydro-projects in small communities and
delivers alternate sources of power is a good project in Alaska.
MR. ERIC YOULD, Executive Director, Alaska Rural Electric
Cooperative Association (ARECA), stated support for SB 140. He
thanked Senator Murkowski for getting this bill through Congress.
He said the federal process for licensing even small projects is a
very cumbersome one and is generally a one-size-fits-all approach.
FERC has tried to streamline its process for small projects, but at
the state level it hasn't been helpful.
He explained that recently Alaska Power and Telephone developed the
Black Bear Hydropower project in Southeast Alaska. It took them
seven years to get permitted and processed through FERC and cost
$1.2 million. They built the project in one year at a cost of $10
million. The Skagway Goat Lake project of 4 megawatts, which would
also fit under the purview of this program, took five years to get
permitted and licensed for $1 million and it took one year to
construct the project for $10 million. He stated, "This is what it
takes to get projects permitted in this day and age. I can tell you
at the federal level it's becoming more cumbersome daily."
MR. YOULD said the RCA does a good job of regulating and providing
rate review of utilities, but he didn't think it has the technical
staff this would require. He suggested using other agencies like
the Department of Transportation and Public Facilities, because it
works on permits, has engineers and develops projects such as
these. AIDEA was suggested, although it is a developing agency that
might actually be developing the hydro projects it would permit. He
highly recommended DNR because it is already in the water resource
business, allocating water to users across the state. DNR is
familiar with water conveyance systems and administers the dam
safety programs throughout the state, which means it has certain
expertise to look at dam stability. DNR would be knowledgeable
about earthquake standards the projects will be designed for and
its hydrologists would be able to look at probable maximum floods.
RCA would have to hire staff to administer the program.
MR. YOULD said if the State of Alaska takes over permitting, he
hoped the development of these small projects would accelerate.
Alaska has one-third of the untapped hydropower potential of the
United States. It is very expensive to develop on a community-by-
community basis.
He mentioned if the permit process is slower under the state's
authority, he would like the authority to go back to FERC. He
suggested inserting a clause that would make it optional for the
utilities to get their projects permitted through the federal
government or the state government.
CHAIRMAN TORGERSON asked if he thought an agency should have the
power that FERC has to stop a project.
MR. YOULD answered that the agency can't supercede any federal laws
that are in place. With issues of judgments the agencies should
have the ability to work with the Corps of Engineers to come up
with a solution. He didn't think the state would ever have veto
power over a federal agency.
CHAIRMAN TORGERSON asked if that was true within FERC.
MR. YOULD replied that they would work within the framework of
existing laws and when there are issues of judgment, they have veto
power. He presumed our state agency would have the same powers.
SENATOR TAYLOR said it appears to him this commission has the
discretion to decide how to protect energy conservation, mitigation
of damage to salmon streams and protection of recreational
opportunities. He expressed concern that jurisdiction for
enforcement of this law falls within our state courts and Alaska
courts still provide that if a person files a lawsuit and fails to
succeed, damages can be awarded against that person.
CHAIRMAN TORGERSON asked if any projects are underway right now.
MR. YOULD replied Old Harbor is an existing project and a number of
projects would be coming along.
CHAIRMAN TORGERSON suggested doing a pilot project and putting a
sunset date on the bill. He said he would hold the bill and asked
the committee to think about it.
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