Legislature(2021 - 2022)BUTROVICH 205
01/24/2022 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SJR11 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SJR 11 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SJR 11-SUPPORTING ROAD BELT ELECTRICAL LINE
3:31:31 PM
CHAIR REVAK announced the consideration of SENATE JOINT
RESOLUTION NO. 11 Supporting development of the road belt
electrical transmission line; and urging members of the Alaska
delegation in Congress to pursue the development of this high-
voltage electrical line in the interior of the state.
3:33:33 PM
INTIMAYO HARBISON, Staff, Senator Joshua Revak, Alaska State
Legislature, Juneau, Alaska, introduced SJR 11 on behalf of the
sponsor. He stated that this is not the first time the
legislature has looked at this issue. Alaska has explored some
form of the road belt intertie in both the 1980s and 1990s. Most
recently, a similar resolution passed the Thirty-first
Legislature, Legislative Resolve 3, 2019, sponsored by the
former representative from house district 6. Mr. Harbison noted
that due to the influx in federal infrastructure spending, this
is an opportune time to direct the attention of federal
officials to viable infrastructure projects here in Alaska. He
said that this resolution urges our federal delegation to relook
at the viability of a rail belt project in today's market and to
explore the most effective and efficient method to provide
reliable power to people and communities along the road belt.
MR. HARBISON read the following sponsor statement into the
record.
[Original punctuation provided.]
The development of the Road Belt electrical inter-tie
transmission line would create a high voltage
electrical line running from Sutton to Glennallen,
where a sub-transmission line would extend to Gakona
and on to Tok and north through the upper Tanana
region to Delta Junction. The final leg of the project
would run from just south of Fort Greely, back down to
Gakona.
This resolution supports infrastructure development
for energy and national security, economic
development, and natural resources in the State of
Alaska. The Trans Alaska Pipeline would benefit from
the low-cost energy provided by the transmission line
in the operation of the pipeline and protection of its
off-grid pump stations.
A high-voltage electrical line would complete an
electrical transmission bus loop and establish a
second path for power transmission from Anchorage to
Fairbanks which is needed during disasters such as
earthquakes. With the infrastructure development and
the increase in population at Eielson Air Force Base,
Fort Greely and the Clear Air Force Station, the need
for power in the region will increase significantly.
This resolution urges Congress to advocate for the
security of the nation's northernmost military
installations and oil infrastructure by pursuing the
development of the Road Belt Inter-tie.
3:36:47 PM
CHAIR REVAK called for questions from the committee members.
SENATOR STEVENS requested a map with clearer detail to better
differentiate the proposed transmission lines from the existing
transmission lines.
CHAIR REVAK stated that the requested map would be produced.
3:37:17 PM
SENATOR KAWASAKI requested verification the resolution would be
held in committee.
CHAIR REVAK answered yes.
SENATOR KAWASAKI pointed out a technical issue. He said that
when this resolution was drafted there was an Acting Secretary
of Interior; now a Secretary of the Interior has been appointed.
SENATOR KAWASAKI asked what the anticipated rate increases are
for those affected by the improved transmission lines.
MR. HARBISON answered that question will be answered later by
invited testifiers.
CHAIR REVAK introduced testifiers and opened invited testimony.
3:39:28 PM
CRYSTAL ENKVIST, Executive Director, Alaska Power Association,
Anchorage, Alaska, testified in support of SJR 11. She stated
the Alaska Power Association (APA) is the statewide organization
for electric utilities whose members provide power from
Utqiagvik to Unalaska, through the Interior and Southcentral,
and down the Inside Passage. APA strongly supports the
deployment of electric transmission infrastructure that advances
the availability of reliable power to Alaskans and stimulates
economic development. She stated the road belt electrical
intertie transmission line is such a project. The major benefits
would include the electrical interconnection of the Copper
Valley - Richardson Highway region of the state with the
existing Railbelt transmission grid. Ms. Enkvist stated that
should the state receive federal funding support, this project
would:
Increase regional system reliability by providing
redundancy to the single transmission circuit that
currently links the Fairbanks area with Anchorage.
Allow for the integration of more renewable energy.
Enhance the reliability of power to military
installations in the Interior and Southcentral areas.
Increase economic development opportunities throughout
the greater Copper Valley region.
MS. ENKVIST stated the Alaska Power Association supports
exploratory efforts for the road belt project, including an
analysis of transmission infrastructure options to achieve
increased regional reliability and more affordable electric
rates for residents in the Copper Valley - Richardson Highway
region.
3:41:36 PM
SENATOR STEVENS asked what the electric rates are in Copper
Valley and other communities she mentioned.
MS. ENKVIST deferred specific rate questions to the next
testifier, Travis Million, CEO of Copper Valley Electric
Association that serves the Valdez to Glennallen area.
SENATOR STEVENS asked which communities are served by Copper
Valley.
MS. ENKVIST answered the communities she mentioned are served by
Copper Valley Electric, but some transmission lines enter the
Golden Valley service area and NEA service area.
SENATOR STEVENS said that he wants to get an idea of the rates
that are currently paid and how those rates could be improved.
MS. ENKVIST responded that she would compile that information
and provide it to the committee.
3:42:54 PM
SENATOR KIEHL referred to Ms. Enkvist's previous comments that
pertained to additional generation and moving power. He asked
how much excess generation capacity the utilities have that
could be wheeled [moved] across the line before new generation
is built.
MS. ENKVIST answered the proposed transmission system has the
capability to transfer at least 75 megawatts (MW) of firm power
with an additional 50 MW of non-firm power from Southcentral to
Fort Greely/Fairbanks.
SENATOR KIEHL commented that those numbers correlate to the
capacity of the line if he read the scoping document correctly.
He rephrased the question and asked whether Matanuska Electric,
Golden Valley, and Copper Valley have that kind of capacity to
wheel [move] or to get to that kind of transmission, or whether
new generation is needed.
MS. ENKVIST responded that she would get back to Senator Kiehl
with the answer.
CHAIR REVAK directed Ms. Enkvist to send the answer to the
Senate Resources Committee for distribution.
3:44:47 PM
TRAVIS MILLION, Chief Executive Office, Copper Valley Electric
Association, Copper Center, Alaska, testified in support of
SJR 11. Mr. Million said that Copper Valley Electric corporate
headquarters is located in Glennallen. He indicated that it has
a large service area but serves just 3800 members. The service
territory is as far south as Valdez, 160 miles north to
Sourdough, 100 miles east and west from Caribou Creek (between
Glennallen and Palmer), and up the Tok Cutoff Highway as far as
the High Frequency Active Auroral Research Program (HAARP)
Research Facility.
MR. MILLION stated that Copper Valley Electric scoped this
project and conducted a number of feasibility studies in the
past. Previously, the Copper Valley Electric study only
investigated a tie between Sutton and Glennallen. Now the
proposed transmission has expanded to include a loop through Tok
and Delta Junction.
MR. MILLION spoke to the merits of a loop feed. Currently, the
only transmission infrastructure in Alaska runs from Homer to
Fairbanks; he joked that in the industry this is called a long
extension cord, a point-to-point line without redundancy. He
said if this line were to go down due to natural disaster, an
alternative route does not exist to move power from north to
south. This proposal provides a solution to that problem. The
road belt line creates an alternate route, a redundant loop
through Glennallen, up to Tok, then over to Delta Junction.
3:46:54 PM
MR. MILLION indicated that this project would affect 75 percent
of the state's population. It would provide additional
reliability, capacity, and reduced energy cost for isolated
utilities, such as, Copper Valley Electric and Alaska Power and
Telephone. He responded to a previously asked question which
pertained to electricity rates. Mr. Million said that Copper
Valley rates during the summer, when hydro is available, are 18
cents per Kilowatt hour(kWh). This winter, due to extremely high
diesel costs, rates average nearly 40 cents per kWh in the
Copper River Basin and in Valdez. He emphasized that Copper
Valley Electric Association does not receive power cost
equalization (PCE) funds through the state of Alaska.
MR. MILLION stated the loop would provide security and
reliability for multiple Department of Defense facilities and
potentially Alyeska Pipeline Services Company. This project has
garnered a lot of broad support, including financial support,
from communities along the route, as well as from utility
companies and Native corporations. Entities that were once
opposed to this project in the 1990s have now provided letters
of support.
MR. MILLION pointed out that in 2019 the Denali Commission
performed a reconnaissance study which looked at the feasibility
for this loop feed. He read the "Conclusion" from the study into
the record:
Reconnaissance-level engineering evaluation of the
road belt intertie project indicates that it is
technically feasible. Implementing it would increase
DoD facility resilience and electric power reliability
throughout the Alaska road system.
MR. MILLION stated that the Railbelt utilities currently seek a
second transmission line; the utilities would probably consider
the road belt project for the second line. He concluded that he
supports these efforts.
3:49:52 PM
SENATOR STEVENS inquired about the factors which cause the
electricity rates to vary so much between summer and winter.
MR. MILLION responded that Copper Valley Electric has two hydro
projects. One is a high-mountain lake dam project which can be
drained throughout the year. The other is a run of river project
which only functions with flowing water, so the unit is taken
offline when it freezes. He said that typically 30 percent of
Copper Valley's electrical needs are met throughout the winter
with hydropower. This year winter hit early, so that percentage
fell from 30 to 20. The other 70 to 80 percent of electrical
needs are met from either a cogeneration project, which is a
turbine located at the Petro Star refinery, or multiple diesel
plants.
SENATOR STEVENS asked where the run of river hydropower
installation is located.
MR. MILLION answered the hydropower installation is located in
Valdez about two miles from the Solomon Gulch Project, next to
the Valdez Marine Terminal.
3:51:38 PM
SENATOR KIEHL inquired about ownership of the road belt line as
it passes through different service areas.
MR. MILLION answered that ownership of the line will be
determined if the project goes forward. He envisioned that
ownership would be similar to the existing Railbelt line and
probably involve an Electric Reliability Organization (ERO)
system. Maintenance activities and cost would probably be the
responsibility of whichever utility owned the service area, but
the process has not progressed far enough to make these
determinations.
SENATOR KIEHL stated he might pose the same question to the next
testifier.
3:52:49 PM
SENATOR BISHOP asked if the Copper Valley area population has
decreased over the years, because residents have moved to the
Mat-Su Valley for better electrical rates.
MR. MILLION answered that a reduction in residential loads has
occurred, and it is fair to say that people have been leaving
the area. He said whether due to jobs or electrical rates, a
population decrease has occurred. He noted that the loss has
been tempered by an increased industrial load. He added that
large commercial loads have picked up with fish processors and
other industries, but most of these industries are seasonal and
occur in the summer when electrical rates are competitive.
3:53:59 PM
CURTIS THAYER, Executive Director, Alaska Energy Authority,
Anchorage, Alaska, testified in support of SJR 11. Mr. Thayer
said the Alaska Energy Authority (AEA) mission is to reduce the
cost of energy in Alaska and deliver core services, such as
improved energy safety, reliability, and affordability. AEA was
established in 1976 as a public, independent corporation owned
by the state of Alaska with a seven-member board of directors.
He announced that, for context, AEA owns the Bradley Lake
Hydroelectric Project (also known as Bradley). It is the largest
hydro project in Alaska and supplies the Railbelt with 10
percent of its energy.
MR. THAYER detailed the route and ownership of each section of
the transmission line:
• Bradley Lake to Soldotna is owned by Homer Electric.
• Soldotna/Sterling to Quartz Creek, which is 40-mile segment
through Coopers Landing, is owned by AEA.
• Quartz Creek to Anchorage is owned by Chugach Electric.
• Anchorage to Southcentral is owned by Matanuska Electric
Association (MEA).
• AEA owns 170 miles of the intertie to Healy.
• Healy to Fairbanks is owned by Golden Valley.
3:55:28 PM
MR. THAYER stated that AEA has participated in various studies,
including the Denali Commission Reconnaissance Study. He stated
that, unlike previous studies, the road belt project is without
a sponsor. He said that the project is technically feasible but
has an expensive, estimated cost of $1,000,000 per mile. Mr.
Thayer said although the rail belt project is a costly piece, it
is not necessarily out of alignment with line upgrades AEA, in
coordination with the Railbelt utilities, is currently poised to
undertake.
MR. THAYER explained that AEA's focus is to upgrade the Bradley
to Anchorage line from 138 to 230 and to increase Golden
Valley's power. AEA has been in communication with the federal
delegation to obtain federal infrastructure bill funds to
finance these line upgrades. He reiterated that AEA, and the
five utilities, are currently at work to improve power and
efficiency to 550,000 Alaskans. Mr. Thayer emphasized that the
road belt project and AEA's line upgrades will not necessarily
compete for federal funds, but previously established goals are
AEA's focus.
3:56:43 PM
MR. THAYER said that the road belt project would add critically
needed redundancy to Fairbanks. He said that the size of the
line is admirable, but a concern is the limited number of
customers the line would serve in low demand. He explained that
in order to run at a capacity that allows reliability and cost
efficiency, the line has to maintain a certain power level. Ft.
Greely would be great tenant, but a couple more anchor tenants,
like mines, would be extremely helpful in the economics of the
road belt project. He said the dilemma is which should occur
first: we build and they will come, or they come and we will
build. He stated that either way, AEA is supportive of the road
belt project's long-term goals and continued studies. Mr. Thayer
suggested that in a future hearing, MEA, Chugach Electric and
Golden Valley Electric explore how the existing line upgrade
project might tie in/coordinate with the road belt project.
MR. THAYER reiterated that the focus of AEA right now is to
improve power from Bradley to Anchorage. AEA will be unable to
maximize power to Anchorage, Glennallen or elsewhere without the
existing line upgrade. He emphasized that upgrades worth $200 to
$300 million dollars are slated to begin within the next
eighteen months.
CHAIR REVAK acknowledged the presence of Representative Cronk.
3:58:51 PM
SENATOR STEVENS asked for a status update on the Bradley Lake
facility's need for an increase in readily available water.
MR. THAYER answered that the Babble Creek Diversion Project was
completed in 2020, at a cost of $47 million. The project
diverted water into Bradley and has surpassed performance
expectations; it is able to electrify 4,000 homes. Prior to the
Babble Creek Diversion Project, Bradley was able to electrify
50,000 homes, so the Babble Creek Project resulted in nearly a
10 percent increase.
MR. THAYER said that currently in the works is the Dixon
Diversion. This will be a coordinated effort between AEA and the
Railbelt utilities. He explained that it will be a similar
diversion project, but on a much larger scale. Whether it will
require new generation or existing generation, it is predicted
to increase the power from 24,000 30,000 homes, So, the power
from Bradley is expected to increase by 50 percent. He said that
AEA started to look at the Dixon Diversion Project study twelve
months ago, but at this time, it is estimated to exceed $200
million dollars.
MR. THAYER provided a power cost gauge:
• Bradley Lake is currently 4 cents per kilowatt, which is the
cheapest power on the Railbelt.
• Natural gas is 7 to 8 cents per kilowatt.
• Fire Island wind is 9.7 cents per kilowatt.
• Railbelt utilities average 20 cents per kilowatt.
MR. Thayer said that hopefully questions about the Bradley
expansion and future expansion possibilities have been answered.
SENATOR STEVENS commented that the projected 50 percent increase
would be tremendous.
4:01:09 PM
SENATOR BISHOP asked if a line upgrade is needed to maximize the
line's full potential and push Bradley's power north.
MR. THAYER answered yes, that is correct. He said to simplify
the answer, Bradley can produce up to 120 megawatts, but the
service lines are 75 megawatts. The lines that service Bradley
were installed prior to construction of the Bradley facility and
were designed to send power south, whereas the Bradley Lake
Hydroelectric Project was designed to send power north. Mr.
Thayer said that AEA acquired the Sterling Substation and the
Quartz Creek Substation (SSQ Line), in December 2020,
specifically to begin upgrades. He explained that Fairbanks
receives 18 percent of Bradley power, and at one time, had a 40
percent line loss. Mr. Thayer said at 4 cents, this is clearly
cheap power.
MR. THAYER stated AEA, in conjunction with the Railbelt
utilities, is actively engaged in line upgrades. The power sales
agreement, signed 30 years ago, authorizes required project
work, which allows AEA to make line upgrades. Mr. Thayer
mentioned that the bonds for Bradley were paid off this past
summer 2021, so the debt service normally paid to bonds, has
been rerouted to fund required project work. He said that AEA
has committed to the $250 - $300 million line upgrade, and he
noted that rerouted "required project work" funds must go
through the Department of Law.
4:02:52 PM
SENATOR KIEHL asked whether it be homeowners or industry, what
type of ownership structure on the road belt line would best
benefit rate payers.
MR. THAYER answered that an ownership structure has not yet been
identified. Whether it be a co-op or investor owned, ownership
structures need to be studied and the best benefit to the
consumer considered. The project would be a transmission asset,
so that would be part of the analysis. He said that transmission
line power can only be dropped in population centers like Ft.
Greely, Glennallen, mines and Tok; it cannot be dropped at a
nearby house just because it is located near the line.
4:05:00 PM
SENATOR KIEHL stated the cost estimates were very rough. He said
that in the past, AEA has looked at potential renewable energy
and other generation sites around the state. He asked for the
same $500 million dollars, are there other local generation
opportunities that could be brought online to provide power more
efficiently or cheaply.
MR. THAYER responded that more research is necessary, but
Bradley is already a state-owned asset and would bring on
additional power. He said that the project that would make the
greatest difference on the Railbelt is construction of the
Susitna-Watana dam. It would take the Railbelt from an average
of 15 percent renewable energy to 60-65 percent renewable energy
and, based on 2014 cost estimates, would provide power at 6
cents per kilowatt. He added that Susitna-Watana dam would have
a 100-year life. Mr. Thayer recommended that the state seriously
consider Susitna-Watana infrastructure as a long-term strategy
for a 450-to-600-megawatt plan. He stated that if there is to be
a road belt, this would encourage mine activity, because there
would be a source of cheap power.
SENATOR KIEHL asked whether the power from the Susitna-Watana
side of the valley could be sent to the communities on the
Matanuska side of the valley.
MR. THAYER answered the existing infrastructure would be
utilized to send the power north to Fairbanks and dropped down
to a road belt. Another alternative would be to send the power
south into MEA territory and cut across into the Valley or into
the Glennallen area. Susitna-Watana power would be designed to
provide the majority of power to Fairbanks and Southcentral, so
looping in with the road belt could be easily done.
SENATOR KIEHL stated that he interpreted the answer to mean no,
you would need both.
4:08:20 PM
SENATOR BISHOP commented that Susitna-Watana power would be 64
percent renewable for 75 percent of the Railbelt.
4:09:08 PM
CHAIR REVAK opened public testimony on SJR 11; finding none, he
closed public testimony.
CHAIR REVAK held SJR 11 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR 11 Sponsor Statement 1.24.2022.pdf |
SRES 1/24/2022 3:30:00 PM |
SJR 11 |
| SJR 11 Supporting Documents Map 1.pdf |
SRES 1/24/2022 3:30:00 PM |
SJR 11 |
| SJR 11 Supporting Documents Map 2.pdf |
SRES 1/24/2022 3:30:00 PM |
SJR 11 |
| SJR 11 Denali Commission Roadbelt Intertie Reconnaissance Engineering Report.pdf |
SRES 1/24/2022 3:30:00 PM |
SJR 11 |
| SJR 11 Historical HJR 10 Supporting Documents and Project Description.pdf |
SRES 1/24/2022 3:30:00 PM |
HJR 10 SJR 11 |