02/19/2015 10:15 AM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HJR8 | |
| Presentation: Xcel Energy Inc. | |
| Presentation: Alaska Native Tribal Health Consortium | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| = | HJR 8 |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 19, 2015
10:22 a.m.
MEMBERS PRESENT
Representative Jim Colver, Co-Chair
Representative Liz Vazquez, Co-Chair
Representative David Talerico
Representative Cathy Tilton
Representative Matt Claman
Representative Adam Wool
MEMBERS ABSENT
Representative Benjamin Nageak
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 8
Urging the federal government to empower the state to protect
the state's access to affordable and reliable electrical
generation.
- MOVED FISCAL NOTE; MOVED CSHJR 8(ENE) 2/17/15
PRESENTATION: XCEL ENERGY INC.
- HEARD
PRESENTATION: ALASKA NATIVE TRIBAL HEALTH CONSORTIUM
- HEARD
PREVIOUS COMMITTEE ACTION
BILL: HJR 8
SHORT TITLE: FEDS ALLOW STATE TO MAKE ENERGY CHOICES
SPONSOR(s): REPRESENTATIVE(s) TALERICO
01/23/15 (H) READ THE FIRST TIME - REFERRALS
01/23/15 (H) ENE, RES
02/03/15 (H) ENE AT 10:15 AM CAPITOL 17
02/03/15 (H) Heard & Held
02/03/15 (H) MINUTE(ENE)
02/17/15 (H) ENE AT 10:15 AM BARNES 124
02/17/15 (H) Moved CSHJR 8(ENE) Out of Committee
02/17/15 (H) MINUTE(ENE)
WITNESS REGISTER
TERESA MOGENSEN, Vice President Transmission
Xcel Energy Inc.
Minneapolis, Minnesota
POSITION STATEMENT: Participated in a PowerPoint presentation
by Xcel Energy Inc. entitled "Collaborative Approach to Unified
System Operations."
DANIEL KLINE, Director Strategic Transmission Initiatives
Xcel Energy Inc.
Minneapolis, Minnesota
POSITION STATEMENT: Participated in a PowerPoint presentation
by Xcel Energy Inc. entitled "Collaborative Approach to Unified
System Operations."
CHERYL BREDENBECK, Director Transmission Investment Development
Xcel Energy Inc.
Minneapolis, Minnesota
POSITION STATEMENT: Participated in a PowerPoint presentation
by Xcel Energy Inc. entitled "Collaborative Approach to Unified
System Operations."
MIKE BLACK, Director
Rural Utility Management Services
Alaska Native Tribal Health Consortium
Anchorage, Alaska
POSITION STATEMENT: Participated in a PowerPoint presentation
entitled "Reducing Energy Costs for Water Systems in Rural
Alaska."
MICHAEL NABERS, Operations Engineer
Alaska Rural Utility Collaborative
Alaska Native Tribal Health Consortium
Anchorage, Alaska
POSITION STATEMENT: Participated in a PowerPoint presentation
entitled "Reducing Energy Costs for Water Systems in Rural
Alaska."
ACTION NARRATIVE
10:22:20 AM
CO-CHAIR LIZ VAZQUEZ called the House Special Committee on
Energy meeting to order at 10:22 a.m. Representatives Wool,
Talerico, Tilton, Claman, and Vazquez were present at the call
to order. Representative Colver arrived as the meeting was in
progress.
HJR 8-FEDS ALLOW STATE TO MAKE ENERGY CHOICES
10:22:51 AM
CO-CHAIR VAZQUEZ announced that the first order of business
would be HOUSE JOINT RESOLUTION NO. 8, Urging the federal
government to empower the state to protect the state's access to
affordable and reliable electrical generation. She stated the
committee would move the fiscal note to accompany CSHJR 8(ENE).
[CSHJR 8(ENE) was previously reported from committee on
2/17/15.]
10:23:14 AM
REPRESENTATIVE TILTON moved to report out of committee Fiscal
Note, Identifier: HJR 8 HENE FN 1, to accompany CSHJR 8(ENE).
There being no objection, it was so ordered.
^PRESENTATION: XCEL ENERGY INC.
PRESENTATION: XCEL ENERGY INC.
10:23:36 AM
CO-CHAIR VAZQUEZ announced that the next order of business would
be a presentation by Xcel Energy Inc.
10:23:53 AM
The committee took an at ease from 10:23 a.m. to 10:26 a.m.
[Audio from 10:26:01 a.m. to 10:26:28 a.m. not recorded due to
technical difficulties.]
10:26:31 AM
TERESA MOGENSEN, Vice President, Transmission, Xcel Energy Inc.,
informed the committee that Xcel Energy can provide prospective,
experience, and resources helpful to Alaska. The following
presentation included a brief background on the company, its
understanding of the Alaska Railbelt, its experience in leading
collaborative transmission development, and suggestions. Xcel
Energy is a major integrated utility that provides generation,
transmission, distribution, gas, and renewable power in portions
of the Lower 48 through retail service in eight states and
through transmission in ten states. As an energy transmission
leader, Xcel Energy also provides wind energy with a focus on
energy efficiency, solar power, and voluntary emission
reductions (slide 2). Xcel Energy is part of two regional
transmission organizations (RTOs) - also known as independent
system operators (ISOs) - and additionally serves an area
without an RTO. Xcel Energy is part of three National American
Electric Reliability Corporation (NERC) regions that govern
reliability standards, and is implementing $4.5 billion of
investment. In response to Co-Chair Vazquez, she explained an
RTO is a concept of a system operator that has oversight and
control of regional functions such as planning, establishes a
single transmission tariff for all of its members, and controls
dispatch. In further response to Co-Chair Vazquez, she said
MISO stands for Midcontinent Independent System Operator and SPP
stands for Southwest Power Pool, both of which are RTOs.
MS. MOGENSEN further explained that NERC is the governing
regulator of system performance reliability standards for
transmission operations, and provides an array of mandatory
standards with which utilities must comply. Xcel Energy has the
capability to perform all aspects of an investment in
transmission such as engineering, construction, design, and
planning, and incorporates its partners for materials and
services (slide 3). She illustrated the following parallels
between Xcel Energy's experiences and situations in Alaska
(slide 4):
· establishing ISO or USO = Xcel's experience working with
ISOs
· transmission build out = Xcel's build out in New Mexico
· generation diversification = Xcel's array of programs in
Colorado and Minnesota
· renewables integration = Xcel's forecasting capabilities
to integrate renewables
· conservation & community = Xcel's focus on conservation
in community organizations
10:32:54 AM
DANIEL KLINE, Director, Strategic Transmission Initiatives, Xcel
Energy Inc., shared Xcel Energy's understanding of the situation
in the Alaska Railbelt: Currently, as a result of individual
utility system planning, the utility system lacks a planned
approach; in addition, customers and government leaders are
concerned about the cost of energy throughout Alaska. The
solution is a regionally planned transmission system with
economic dispatch which will result in lower electricity costs,
will increase system reliability, and will enable energy supply
options for the utilities and their customers (slide 6). Mr.
Kline pointed out that the committee has heard from several
organizations including the Alaska Railbelt Cooperative Electric
and Transmission Company (ARCTEC), and the Renewable Energy
Alaska Project (REAP), discussing the USO approach; in fact,
the utilities and ARCTEC have made a significant amount of
progress toward establishing the foundation for a USO, and the
guiding principles are sound. He opined establishing a USO is
necessary to deliver certain economic benefits (slide 7). Study
efforts by the utilities and the Alaska Energy Authority (AEA),
Department of Commerce, Community & Economic Development, have
led to the Railbelt Transmission Integration Plan, which
identified $903 million in transmission projects; furthermore,
completing these projects and implementing regional economic
dispatch would result in benefits 3.4 times the cost of the
projects. He said an estimated cost benefit ratio of 3.4
demonstrates that there is an opportunity to "make the Alaska
Railbelt energy system function better" (slide 8).
MR. KLINE advised considerations for the legislature include
support from policymakers, regulators, and state leaders; in
addition, it is important that the legislature ensure that the
Regulatory Commission of Alaska (RCA) holds the needed
regulatory authority, which is unclear at this time.
Historically, state funding has been provided to finance utility
projects in the Railbelt region; however, a new financing model
is now necessary. Finally, Mr. Kline urged that the legislature
review lessons to be learned from endeavors elsewhere in the
nation (slide 9).
10:38:39 AM
CHERYL BREDENBECK, Director, Transmission Investment
Development, Xcel Energy Inc., described a region in the Midwest
that experienced over ten years of failed efforts to organize
transmission development because the affected utilities resisted
giving control to a single entity, such as an ISO. In addition,
transmission investment decisions in the region were paralyzed,
and the transmission system was stressed by business
development, area growth, generation diversification,
congestion, and reliability problems. At this point, state and
federal regulators sought to stimulate transmission investment
(slide 11). In 2004, stakeholders began a collaborative
approach to grid expansion, beginning with four utilities and
growing to eleven organizations including electric cooperatives,
municipal generation and transmission entities, and investor-
owned utilities. The collaborative organization covered areas
of Minnesota, Wisconsin, North Dakota, and South Dakota. Xcel
Energy led the effort, which may have been the first coordinated
regional approach in the Lower 48 (slide 12).
10:41:45 AM
REPRESENTATIVE TALERICO asked whether private power producers
were involved in the collaboration.
MS. BREDENBECK answered that there were no independents. She
continued to explain that the eleven utilities invested $2
billion to build 700 miles of 345 kilovolt (kV) transmission and
70 miles of 230 kV transmission; in order to complete these
projects, regulators and policymakers came to a "no regrets"
agreement that the projects were critical to address common
needs and to accommodate future growth in the region. Also, the
projects provided transmission capacity to support energy supply
options and to implement energy policies (slide 13). The
structure for collaboration was for four projects and required
that the group of eleven utilities adopt core principles on how
to implement the projects. Overarching the projects was a team
designated CapX2020, whereby all parties participated in long-
term planning and stakeholder management under a committee
structure; however, each stakeholder could elect to contribute
capital to projects selected by the stakeholder. Participation
in each project was not all the same, there was a construction
lead on each project, and only Xcel Energy participated in each
project in some leadership role. She stressed there was
continued collaboration and a committee management structure
which led to a group of agreements to administer the projects,
including an owner agreement, a construction management
agreement, a capacity exchange agreement, and an operation and
maintenance agreement. Further, the entities took ratios of
ownership in proportion to their investment of capital (slide
14). The expansion's key success factors were the enactment of
enabling legislation, such as revenue measures and incentives,
and collaboration throughout all phases by the stakeholders.
She noted that CapX2020 Phase 1 implementation is nearing
completion and its economic impact has been estimated at $4
billion. In addition, stakeholders continue to collaborate
(slide 15).
REPRESENTATIVE WOOL asked whether Xcel Energy began as a power
provider and then expanded into a USO.
10:47:42 AM
MS. BREDENBECK answered that Xcel Energy ultimately became an
RTO in the area and performed some of the USO functions as a
member of the USO, but was not the administrator. The projects
are planned through the RTO planning process, and reviewed
through the USO structure, to determine their worthiness. In
further response to Representative Wool, she said Xcel Energy is
a power provider.
MS. MORGENSEN expressed Xcel Energy's willingness to establish a
long-term partnership with Alaska utilities and stakeholders to
transform the transmission system in a manner similar to the
CapX2020 case study. In the case study, Xcel Energy was one of
the utilities and MISO was the ISO, thus Xcel Energy can use its
experience to speed implementation in Alaska. Xcel Energy is
willing to invest with Alaska utilities to construct identified
- and not yet identified - transmission facilities in order to
alleviate state funding. Also in a manner similar to CapX2020,
Xcel Energy would address system operations and economies of
scale (slide 17). The model for implementation offered by Xcel
Energy proposes the legislature would set the energy policy for
Alaska, RCA would implement the policy, and the function of a
USO would be to have independent power system operational
oversight and control. She clarified that the USO would not run
the system, but would hold governance independent of either
generation owners or transmission owners. The transmission
owners are invested in transmission assets and run day-to day
operations; generation owners provide energy supply options to
power plants (slide 18).
MS. MORGENSEN described the tasks undertaken by each entity
(slide 19):
· the legislature would define a model for the Railbelt
electrical system based on the [forthcoming RCA
cost/benefit report due 6/25/15], clarify RCA authority,
and incent utility participation
· RCA would define the attributes of a USO, validate and
adopt the "Railbelt Plan", set resource planning and
reliability standards
· the USO would perform economic generation dispatch,
administer transmission tariff and revenue requirements,
run generator interconnection processes and regional
transmission planning processes
· transmission owners would construct, operate, and maintain
the transmission grid, and the utilities would hold assets
· generation owners would negotiate power purchase
agreements, respond to dispatch instructions by the USO,
pay tariff
· Xcel Energy proposes to provide assistance to speed
implementation, and to become a transmission owner in
conjunction with Alaska utilities
10:56:58 AM
REPRESENTATIVE WOOL surmised that Xcel Energy would invest in
transmission system infrastructure and partner with local
utilities in owning proportionate shares of the transmission
system.
MS. MORGENSEN said Xcel Energy proposes that if the state
proceeds with the "Railbelt Plan," Xcel Energy would construct
portions of the plan in collaboration with others. Regardless
of ownership, all of the assets would be under the governance of
the USO. In addition, Xcel Energy proposes to lead the
collaborative transmission-owner approach; however, all entities
maintain ownership of their assets.
CO-CHAIR VAZQUEZ asked about the membership of the USO board of
directors.
MS. MORGENSEN responded that a USO is usually governed by a
board of directors - which is independent from market
participants - in conjunction with stakeholders, advisory
committees comprised of transmission and generation owners, and
renewable energy and consumer advocates.
CO-CHAIR VAZQUEZ concluded that utilities would not be voting
members of the board.
MS. MORGENSEN said no. In further response to Co-Chair Vazquez,
she explained the purpose is to assure independence from market
participants and make decisions that seek the lowest cost energy
and provide fair and impartial administration of operations.
11:01:21 AM
REPRESENTATIVE WOOL recalled previous testimony that utilities
may have seats on the board of directors, but would not dominate
the board.
MS. MORGENSEN acknowledged that organizations often evolve to an
independent board.
11:02:49 AM
The committee took an at ease from 11:02 a.m. to 11:13 a.m.
^PRESENTATION: ALASKA NATIVE TRIBAL HEALTH CONSORTIUM
PRESENTATION: ALASKA NATIVE TRIBAL HEALTH CONSORTIUM
11:13:21 AM
CO-CHAIR VAZQUEZ announced that the next order of business would
be a presentation by the Alaska Native Tribal Health Consortium.
11:13:25 AM
MIKE BLACK, Director, Rural Utility Management Services, Alaska
Native Tribal Health Consortium (ANTHC), provided a PowerPoint
presentation entitled "Reducing Energy Costs for Water Systems
in Rural Alaska." Mr. Black informed the committee ANTHC is a
large organization interested in Native health issues - one of
which is sanitation - and in the energy issues of small
communities. He advised that energy is a huge issue in rural
Alaska; ANTHC builds water and sewer services that require large
amounts of energy due to the environment. He stated that ANTHC
is comprised of 220 tribes across the state, organized within 12
regional health organizations which serve on ANTHC's board, and
direct its policy and activities (slide 1). Within ANTHC, the
Division of Environmental Health and Engineering (DEHE) builds
sanitation systems, operates and maintains some systems,
provides training for local operators, provides environmental
health services, builds health facilities and health clinics,
and administers the Alaska Rural Utility Collaborative (ARUC)
and an energy program. The Alaska Rural Utility Collaborative
is a group of 27 communities that have agreed to allow ANTHC to
support their water and sewer operations, maintenance,
engineering, and management. He advised that working with these
communities reveals "the real life opportunity to find out how
difficult - and what are - the issues of running water and sewer
in rural Alaska." In fact, ANTHC is the only organization,
outside of the communities, that operates water and sewer
services, and understands the financial picture faced by
communities (slide 2).
11:17:41 AM
MR. BLACK provided a map of ANTHC's active construction
projects, projects undertaken in partnership with the state
Village Safe Water Program, Division of Water, Department of
Environmental Conservation (DEC), and a few projects in
partnership with larger municipalities (slide 3). In 2010,
ANTHC became interested in developing a program to look at the
energy use of operating water and sewer systems. The rise in
the cost of fuel affected the cost of water and sewer due to
both the rates of electricity, as well as that of heat, that are
needed to prevent freezing. The Rural Energy Initiative was
created to utilize the experiences of knowledgeable engineers
who took the following approach toward energy efficiency
improvements (slides 4 and 5):
· audit existing systems
· field analysis led to a work plan
· implement and train
· savings
MR. BLACK, in order to illustrate the value of certain changes,
presented a pie chart of the average finances of the Alaska
Rural Utility Collaborative based on its [27] communities, most
of which are located in cold climates and possess varying levels
of technology. He stressed that nearly 40 percent of the total
operating cost was energy, either to pay for fuel oil or
electricity (slide 6). A copy of a typical bill was presented
(slide 7). Mr. Black turned to indications of the value of
energy efficiency in water and sewer services: From fiscal year
2012-2014 (FY 12-FY 14), ANTHC has decreased the volume of fuel
and the cost of fuel, thereby reducing the cost of water and
sewer. Savings are then used to strengthen the operation of the
system, or to reduce the cost to customers (slide 8). He
advised that ANTHC has used both renewable energy and energy
efficiency projects for savings: The approach to savings for
renewable energy projects is primarily in heat recovery,
biomass, and wind to heat; the approach to savings for energy
efficiency projects is retrofit, remote monitoring, and
training, which is very important (slide 9).
11:25:13 AM
MICHAEL NABERS, Operations Engineer, ARUC, ANTHC, said he is
Inupiat Eskimo from Wainwright, a Mississippian, and a
University of Alaska, Alaska Native Science and Engineering
Program (ANCEP) alumnus. He said ARUC is utilizing biomass by
burning wood to heat systems and water, and reduce dependency on
fuel oil; in fact, Elim has reduced its demand for fuel oil by
5,000 gallons annually, which has saved the community $9,000 on
utility bills while paying local wood cutters $15,000 (slides 10
and 11). A biomass system is planned for Kobuk, and any
community surrounded by a large wooded area could benefit from
this type of renewable energy source.
REPRESENTATIVE WOOL clarified that included in the $9,000
savings is $15,000 to purchase the wood.
MR. NABERS confirmed that the total savings was $24,000, and
$15,000 stays in the community. He turned to heat recovery and
explained that diesel generators waste almost 70 percent of the
heat that is produced during the generation of electricity
(slide 12). In order to use waste heat, heat exchangers store
heat and at some installations, boilers to heat water have not
been needed since a heat recovery system was initiated. In
Deering, residents are saving $150 per month due to the reduced
fuel use, and Minto has not needed to run its boilers except for
annual maintenance (slide 13).
CO-CHAIR COLVER asked for further information.
MR. NABERS said heat exchangers are tied into the existing
system between the power plant and the water treatment plant,
but the systems remain independent. In further response to Co-
Chair Colver, he said in Deering, the water plant and the power
plant are very close, but in Ambler, the plants are separated by
about 1,000 feet. Installation expense can vary, depending on
whether the lines are buried and the distance; however, the
savings are tremendous and the systems can be paid for in three
to five years.
REPRESENTATIVE WOOL questioned whether the aforementioned
boilers are located in houses.
11:30:23 AM
MR. NABERS said in many communities boilers are required at the
water plant to keep the water circulation system from freezing,
including water storage tanks and distribution systems, and
these are the boilers that are no longer required, thereby
saving fuel. Mr. Nabers described wind to heat systems, which
apply to systems that incorporate wind power: During times when
there is excess power from the wind turbines, the power is used
to heat water (slide 14). In Mekoryuk, diverting wind to heat
has saved about $40,000 per year, and systems are under
construction in Chevak, Shaktoolik, and Gambell (slide 15).
CO-CHAIR COLVER asked whether battery storage could be utilized.
11:32:17 AM
MR. NABERS agreed that batteries could be utilized, perhaps by
the Alaska Village Electrical Cooperative (AVEC). In general,
ARUC focuses on efficiency first by retrofitting a water
treatment plant and making improvements. The next step is to
install remote monitors that track the operations of the plant
and watch for potential dangers in the absence of the main
operator. Following that, ARUC provides training for operators
so systems are maintained and operated correctly (slide 16).
For example, in Selawik a new vacuum pump was installed that was
more efficient and required less maintenance, resulting in
substantial savings on energy and labor (slide 17).
MR. BLACK directed attention to those who benefit from energy
efficiency projects such as the community and the consumer, who
save both on fuel and electricity. In addition, the state
benefits by savings to the Power Cost Equalization Program,
Alaska Energy Authority (AEA), Department of Commerce, Community
& Economic Development (slide 18). He closed, noting that
ANTHC's energy initiative has many partners, including the state
which has funded renewable systems through the Renewable Energy
Fund, AEA, and others (slide 19).
11:37:56 AM
CO-CHAIR COLVER asked how reductions in state funding would
impact the ANTHC programs under discussion.
MR. BLACK acknowledged ANTHC is aware that state sources of
income may be reduced, and hopes to attain equal federal
funding.
CO-CHAIR COLVER requested a list of projects by district that
are poised for funding.
MR. BLACK expressed ANTHC's intention to audit an additional 40
communities and to continue to monitor results and provide
training (slide 20). He provided a list of ANTHC's projects
including completed projects, audits, types of construction, and
types of renewable energy, and offered to provide additional
details (slides 21-23).
11:40:52 AM
REPRESENTATIVE TILTON asked whether $156 per month is a typical
bill.
MR. BLACK said that amount is typical of a northern community,
but not of Southcentral, Bristol Bay, or Southeast. In further
response to Representative Tilton, he said a typical bill in the
more temperate communities would be $50-$75 per month, and the
$156 bill was before energy costs were reduced.
REPRESENTATIVE TILTON asked whether weatherization programs were
available to consumers.
MR. BLACK said yes; for example, hardware such as heat tape can
affect homeowners' costs considerably.
CO-CHAIR VAZQUEZ pointed out that Alaska Housing Finance
Corporation has a loan fund for local governments and government
entities for the installation of energy efficient appliances.
MR. BLACK was unsure whether that program could be used in
individual homes.
CO-CHAIR VAZQUEZ advised the loan fund is currently
underutilized.
11:45:07 AM
The committee took an at ease from ll:45 a.m. to 11:56 a.m.
11:57:14 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:57 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2015-02-19 - HENE - Presentation - Xcel Energy.pdf |
HENE 2/19/2015 10:15:00 AM |
|
| HJR 8 Fiscal Note - HJR 8 HENE FN 1.pdf |
HENE 2/19/2015 10:15:00 AM |
HJR 8 |
| 2015-02-19 - HENE - ANTHC PowerPoint.pdf |
HENE 2/19/2015 10:15:00 AM |
|
| 2015-02-19 - HENE - ANTHC PowerPoint.pptx |
HENE 2/19/2015 10:15:00 AM |
|
| 2015-02-19 - HENE - ANTHC PowerPoint.pptx |
HENE 2/19/2015 10:15:00 AM |
|
| 2015-02-19 - HENE - Ahtna Presentation.pdf |
HENE 2/19/2015 10:15:00 AM |
|
| 2015-02-19 - HENE - Ahtna Presentation.pptx |
HENE 2/19/2015 10:15:00 AM |
|
| 2015-02-19 - HENE - ANTHC PowerPoint.pdf |
HENE 2/19/2015 10:15:00 AM |
|
| 2015-02-19 - HENE - Agenda.pdf |
HENE 2/19/2015 10:15:00 AM |
|
| 2015-02-19 - HENE - Presentation (UPDATED) - Xcel Energy.pdf |
HENE 2/19/2015 10:15:00 AM |