Legislature(2025 - 2026)GRUENBERG 120
04/01/2025 01:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB153 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 153 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
April 1, 2025
1:04 p.m.
DRAFT
MEMBERS PRESENT
Representative Ky Holland, Co-Chair
Representative Donna Mears, Co-Chair
Representative Bryce Edgmon
Representative Cathy Tilton
Representative George Rauscher
Representative Mia Costello
MEMBERS ABSENT
Representative Chuck Kopp
OTHER MEMBERS PRESENT
Representative Zach Fields
COMMITTEE CALENDAR
HOUSE BILL NO. 153
"An Act relating to generation of electricity from renewable
energy resources; relating to a renewable portfolio standard;
relating to power cost equalization; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 153
SHORT TITLE: UTILITIES: RENEWABLE PORTFOLIO STANDARD
SPONSOR(s): REPRESENTATIVE(s) HOLLAND
03/24/25 (H) READ THE FIRST TIME - REFERRALS
03/24/25 (H) ENE, RES
03/26/25 (H) FIN REFERRAL ADDED AFTER RES
04/01/25 (H) ENE AT 1:00 PM GRUENBERG 120
WITNESS REGISTER
SHAINA KILCOYNE, Staff
Representative Ky Holland
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 153 and gave the sectional
analysis on behalf of Representative Holland, prime sponsor.
TOM ATKINSON, General Manager and CEO
Kotzebue Electric Association
Kotzebue, Alaska
POSITION STATEMENT: Gave invited testimony during the hearing
on HB 153.
ERIN MCKITTRICK, Independent Energy Analyst
Seldovia, Alaska
POSITION STATEMENT: Gave invited testimony during the hearing
on HB 153.
ACTION NARRATIVE
1:04:40 PM
CO-CHAIR DONNA MEARS called the House Special Committee on
Energy meeting to order at 1:04 p.m. Representatives Holland,
Edgmon, Tilton, Rauscher, Costello, and Mears were present at
the call to order. Also present was Representative Fields.
HB 153-UTILITIES: RENEWABLE PORTFOLIO STANDARD
1:06:04 PM
CO-CHAIR MEARS announced that the only order of business would
be HOUSE BILL NO. 153, "An Act relating to generation of
electricity from renewable energy resources; relating to a
renewable portfolio standard; relating to power cost
equalization; and providing for an effective date."
1:06:26 PM
CO-CHAIR HOLLAND, as prime sponsor, presented HB 153. He said
the proposed legislation introduces a renewable portfolio policy
standard designed to diversify the state's "electricity mix" and
reduce long-term costs while creating new opportunity. It would
apply only to the Railbelt grid, which he noted [brings power
to] over 75 percent of Alaskans while providing benefits to
rural communities by controlling or reducing future Railbelt
energy costs and providing a revenue stream for power cost
equalization (PCE) utilities to sell credits that he emphasized
would not reduce PCE benefits. Co-Chair Holland outlined that
HB 153 would not shut down natural gas, eliminate power plants,
or obstruct a natural gas pipeline. He said the proposed
legislation would "position Alaska for investment,
modernization, and stability."
CO-CHAIR HOLLAND explained a reason to support HB 153 is because
an 80 percent reliance on a single fuel source is risky and
expensive. The bill sets modest targets for renewable energy:
40 percent by 2030 and 55 percent by 2035. Further, it would
create certainty for investors and reduce long-term fuel costs,
with a potential savings of $1.3 billion over the next 15 years.
He stated that combined with emerging tidal and geothermal
projects, renewable sources of energy ("renewables") "offer even
more potential for powering large-scale new industries seeking
renewable energy to power data centers, synthetic clean jet
fuel, and hydrogen fuel exports." He shared some history
illustrating Alaska's interest in renewables. He noted that
rural communities have pioneered hybrid energy grids; the state
leads the nation in microgrid deployment and integration of
renewables with conventional energy generation. He said the
challenge now is "to bring those innovations to scale on the
Railbelt." He described HB 153 as "a step forward - not a leap
into the unknown." He said rural communities have expressed
they are desperate to "move off of diesel," businesses seek
relief from high rates, and residents have asked for stable,
affordable energy sources.
1:12:07 PM
SHAINA KILCOYNE, Staff, Representative Ky Holland, Alaska State
Legislature, on behalf of Representative Holland, prime sponsor,
offered further introduction to HB 153 via a PowerPoint, titled
"HB 153 Renewable Portfolio Standard" [included in the committee
file]. She reiterated the targets of HB 153, as previously
stated by the bill sponsor. She moved to slide 3 where a pie
chart shows 15 percent renewable energy in 2022, and she
indicated that the number was about the same currently. The
chart on the right shows that the price of gas will jump
significantly in the next few years. Imported gas cost
projections range from $12 to $16 per unit. The aim of the
proposed legislation is to promote energy independence, long-
term cost reductions, and development of competitive markets.
She highlighted the 76 percent Railbelt scenario that would save
an accumulative $1.3 billion over the next 15 years, and she
explained that [HB 153] "does not get us to that scenario."
MS. KILCOYNE moved to slide 4, a map of energy standards: Green
reflects states and territories with renewable portfolio
standards; blue reflects states and territories with a voluntary
renewable energy standard of target; and gold reflects states or
territories with expired energy standards. Further information
on slide 4 read as follows [original punctuation provided]:
With 585 GW of capacity additions, renewables
accounted for over 90% of total power expansion
globally. Renewables account for 93% of planned
capacity growth in 2025 in the U.S.-International
Renewable Energy Agency and Energy Information
Administration
MS. KILCOYNE shared slide 5, which read as follows [original
punctuation provided]:
Why is an RPS necessary?
Attract new investment and create competition in
largescale renewable energy to reduce reliance on
imported gas and lower energy costs for all Alaskans.
Foster a new energy economy to create jobs and
economic opportunities for the next generation of
Alaskans.
Offer incentives to maximize economies of scale,
encourage collaboration, and leverage federal tax
credits.
MS. KILCOYNE moved to slide 6, which lists the following
renewable energy sources: water, geothermal, wind, solar, and
waste to energy. She brought attention to slide 7, "Carrots,"
which read as follows [original punctuation provided]:
• Allows utilities to meet the target through
Renewable Energy Credits (RECs), which can be
purchased from Railbelt utilities or PCE communities
without negative impact to PCE calculation.
• 1.25x multiplier for wind projects >100 MW installed
before 2033 when energy is purchase by multiple
utilities: Acknowledges projects in the queue,
leverages federal energy tax incentives, fosters
utility collaboration.
• 2x multiplier for distributed energy systems , from
small-scale sources like solar panels, wind turbines,
and batteries to encourage consumer investment.
• Allows for energy efficiency investments and
distributed renewable energy systems to reduce
transmission impacts.
MS. KILCOYNE brought attention to the first part of slide 8,
"Sticks," which read as follows [original punctuation provided]:
Noncompliance Penalties & Waivers
Noncompliance fines of $45 / MWh may be waived by the
RCA:
If the utility has entered into a power purchase
agreement (PPA) before the next compliance period,
begins receiving renewable electricity within two
years of the prior compliance period, and files an
estimate of purchased energy from said PPA with the
RCA.
1:19:23 PM
MS. KILCOYNE responded to questions from Representative
Rauscher. She confirmed that non-compliance fines are paid by
the utilities. She talked about flexibility and economic
incentive to meet standards.
1:21:10 PM
MS. KILCOYNE returned to the remaining portion of slide 8, which
lists the remaining reasons for a waiver related to
noncompliance as follows [original punctuation provided]:
• For reasons outside the reasonable control of the
utility including weather-related or natural disaster
damage, lower than expected energy generation, global
pandemics, acts of war
• Due to transmission constraints that prevent
delivery of renewable electricity from a third party
agreement.
• The utility otherwise establishes good cause for
noncompliance.
MS. KILCOYNCE acknowledged that there are legitimate concerns
regarding cooperatives ("co-ops") being fined for noncompliance.
To that, she stated, "This policy is intended to help improve
the environment and condition for projects that the utilities
are already working to implement, not to fine utilities."
MS. KILCOYNE moved on to slide 9, "Flexibility," which read as
follows [original punctuation provided]:
Compliance Alternatives
• Utilities may satisfy a fine by paying a customer
all or a portion of the customer's costs of installing
a distributed energy system or energy efficiency
technology.
• Utilities may avoid fines if they have met the 40%
target by using the fine amount for future renewable
projects.
• Allows exemptions if aggregate grid-wide renewable
generation meets the overall standard.
MS. KILCOYNE explained that slide 10 shows the differences
between HB 153 and a previous renewable power source (RPS) bill,
House Bill 121 from the Thirty-Third Alaska State Legislature.
The previous bill had targets of 25 percent by 2027, 55 percent
by 2035, and 80 percent by 2040; fines of $20/MWh; and an
exemption for a utility's first noncompliance, not applicable
after 2040. The proposed HB 153 includes the aforementioned
targets of 40 percent by 2030 and 55 percent by 2035; a 1.25x
multiplier for wind projects >100 MW installed before 2033; a 2x
multiplier for distributed energy systems, reducing transmission
needs; fines of $45/MWh; and utilities may avoid fines if they
have met the 40 percent target by using the fine amount for
future renewable projects. Shared provisions include the
following compliance mechanisms and incentives, as shown on
slide 10 [original punctuation provided]:
• Both bills allow compliance via renewable energy
credits (RECs), energy efficiency investments, and
distributed renewable energy systems from small-scale
sources like solar panels, wind turbines, and
batteries located close to where the power is used.
• Both bills allow Railbelt utilities to purchase RECs
from PCE communities without negative impact to their
PCE calculation.
• Both bills allow the RCA to waive noncompliance
fines for reasons outside the reasonable control of
the utility or if the utility establishes good cause
for noncompliance.
• Both bills allow exemptions if aggregate grid-wide
renewable generation meets the overall standard.
• Both bills allow utilities to satisfy a fine by
paying a customer all or a portion of the customer's
costs of installing a distributed energy system or
energy efficiency technologies.
MS. KILCOYNE next addressed renewable energy credits (RECs), as
shown on slide 11, which read as follows [original punctuation
provided]:
A market-based instrument that represents the property
rights to the environmental, social, and other non-
power attributes of renewable electricity generation.
RECs are issued when one megawatt-hour (MWh) of
electricity is generated and delivered to the
electricity grid from a renewable energy resource.
1:24:42 PM
MS. KILCOYNE, in response to Representative Rauscher, confirmed
that rooftop solar energy is a renewable energy resource that
would qualify and "would be eligible under distributed energy
for a multiplier of two." She then highlighted the remainder of
slide 11, which read as follows [original punctuation provided]:
Utilities may purchase RECs to help meet targets from:
• Renewable energy from another Railbelt utility
• Renewable energy generated in a system serving a
community receiving Power Cost Equalization (PCE)
credits. This is meant to encourage the development of
renewable power outside the Railbelt and help lower
the cost of energy in PCE communities.
MS. KILCOYNE brought attention to slide 12, "PCE Components,"
which read as follows [original punctuation provided]:
Sec. 42.05.910 Allows PCE communities to build
renewable energy projects and sell RECs to the
Railbelt communities for an added revenue stream.
Sec. 42.45.110(a) Excludes revenue from the sale of
recovered heat and renewable energy credits when
calculating PCE so as not to negatively impact PCE.
1:26:59 PM
MS. KILCOYNE next covered the sectional analysis, found on
slides 13-23 of the PowerPoint, which read as follows:
Sectional Analysis
Modifications to AS 42.05.780 42.45.110 Public
Utilities & Energy Programs
• Sec. 1 (42.05.780(a)) An Integrated Resource Plan
shall include RPS options
• Sec. 2 (42.05.785(a)) New projects must be
compatible with RPS targets
• Sec. 3 (42.05.785(c))Removes renewable electric
projects from pre-approval
• Sec. 4 (42.05.785(e)) Defines "renewable energy
resource"
• Sec. 5 (42.05.900 42.05.925) Outlines RPS goals:
40% by 2030, 55% by 2035
• Compliance Incentives, Renewable Energy Credits,
Noncompliance fines and waivers, Exemptions,
Definitions
• Sec. 6 (42.45.110(a)) - Excludes revenue from RECs
or the sale of recovered heat from the PCE calculation
• Sec. 7 (42.05.785(c)(3) Repeals pre-approval for
renewable projects in 2030 14
• Sec. 8 Establishes effectivity on July 1, 2025
Section 1 - Integrated resources plans must include
options by which each Railbelt utility may satisfy the
renewable portfolio standard.
Section 2 - A Railbelt utility may not construct a
large energy facility unless the Regulatory Commission
of Alaska determines that the facility is not
detrimental to a load-serving entity's ability to meet
the renewable portfolio standard.
Section 3 - Establishes an exception from the
Regulatory Commission of Alaska preapproval provisions
for renewable energy projects that help a load-serving
entity meet the renewable portfolio standard. Section
7 repeals this exception on December 31, 2030.
Section 4 - Adjusts the numbering of section
42.05.785(e) and adds the definition for "renewable
energy resource" within the pre-approval for large
energy facilities section.
Section 5 - Adds new article under Sec. 42.05 entitled
Article 11A. Renewable Portfolio Standard (RPS). AS
42.05.900 requires a load-serving entity that is
subject to the standards of an electric reliability
organization (commonly "Railbelt utilities") to comply
with the RPS and requires those electric utilities to
diversify their current generation portfolio by
increasing the proportion of MWh of renewable
electricity generated, or deemed generated, that
results in no less than:
• 40 percent by the end of 2030 • 55 percent by the
end of 2035
Sec. 42.05.905 Incentivizes the development of
larger grid-scale wind energy projects that have
greater economies of scale, take maximal advantage of
existing federal tax credits and encourage utility
partnerships. Incentivizes utilities to facilitate
investments in energy efficiency and in renewable
energy by their end-use customers. Further facilitates
PCE communities to install renewable energy generation
by allowing those utilities to sell renewable energy
credits (RECs) to Railbelt utilities.
Sec. 42.05.910 - Governs the use of renewable energy
credits (RECs). To qualify as part of a load-serving
entity's portfolio, RECs must be from generation
connected to the same interconnected electric
transmission network. Credits can also qualify if they
are purchased from renewable sources located within
the service area of an electric utility that serves
customers who receive PCE.
Sec. 42.05.915 Establishes a noncompliance fine for
a Railbelt utility that fails to meet the RPS, set at
$45 for every megawatt hour (MWh) that the entity is
below the standard. The Regulatory Commission of
Alaska (RCA) may waive fines if
• A Railbelt utility has entered into a power purchase
agreement before the deadline and expects to receive
the electricity no more than two years after the
deadline.
It determines that a Railbelt utility is unable to
meet the RPS for reasons outside the reasonable
control of the utility, as set out in (b), (c), and
(e) of this section, or the entity otherwise
establishes good cause for noncompliance as set out in
(f) of this section.
Sec. 42.05.915 cont Within one year after the RCA
imposes a noncompliance fine, a Railbelt utility may
satisfy a fine by paying all or a portion of a
customer's costs of installing a distributed energy
system or an energy efficiency technology. If a
Railbelt utility has met the 40% threshold, then a
fine that results from noncompliance of the 55% target
may be avoided by instead depositing $45 for every MWh
that the is short in an RCA-approved account for use
by the utility to defray the cost of future renewable
electricity purchases or projects.
Sec. 42.05.920 - Establishes an exemption from
compliance with the RPS by Railbelt utilities if the
aggregate generation of renewable electricity in an
interconnected electric transmission network meets or
exceeds the percentage required by the standard. Sec.
42.05.925 - Provides for definitions used under
Article 11A.
Section 6 Amends Sec. AS 42.45.110(a) to exclude
revenue from the sale of recovered heat, or revenue
from the sale of renewable energy credits, when
calculating PCE.
Section 7 Establishes a sunset by repeal of section
42.05.785(c)(3), which provides an exception from the
provisions of pre-approval for renewable energy
projects that help a load-serving entity meet the
renewable portfolio standard.
Section 8 Establishes an effective date of July 1,
2025.
1:30:51 PM
MS. KILCOYNE, in response to Representative Costello, confirmed
the feasibility of Section 5.
1:34:06 PM
MS. KILCOYNE, in response to Representative Rauscher, noted the
rates align with national standards. She added that the
committee could make adjustments. She emphasized that the goal
is to reduce long-term costs, not to fine consumers.
1:35:48 PM
CO-CHAIR HOLLAND added that the intent is that there would be
enough savings to cover a shortfall; there could be a penalty,
but the focus is on the aggregate benefit.
1:37:42 PM
MS. KILCOYNE, in response to Representative Costello, indicated
there would be no administrative burden because the first
targeted goal is not until 2030. She speculated that if
utilities had a setback, it would be their responsibility to
explain that to the Regulatory Commission of Alaska (RCA). She
offered her understanding that the RCA can address any issues
within its existing capacity.
1:39:55 PM
MS. KILCOYNE wrapped up the sectional analysis [text provided
previously].
1:45:46 PM
TOM ATKINSON, General Manager and CEO, Kotzebue Electric
Association, as invited testifier, began a PowerPoint
presentation [included in the committee file], titled "Kotzebue
Electric Association; Leading the Way in Renewable Energy." He
gave a rundown of the timing of KEA's addition of the various
renewable energy systems, shown on slide 3, which read as
follows [original punctuation provided]:
Current Hybrid Power Plant
• Diesel Consumption: ~1.2 Million Gallons/year #2USLD
(with a 5+ month reserve) Electricity Cost:
• .44c/kWh for electricity, $4-5 million per year for
energy
• Winter Load (2-3.5 MW) and Summer Load (1.5-2.5 MW)
• Automated -12MW Diesel Plant: 3x3 MW and 3 smaller
units (1.4 MW, 1.1 MW & 725 kW)
• Wind Turbines: 2x900 kW (EWT))
• Solar PV Array: 1072 kW (AC)
• Reactive Power: 1 MVAr ABB Statcom inverter
• Battery Storage: 950 kwh/1.225 MW SAFT Li-ion
Battery (BESS)
Electric Boiler: 450 kW (15 kW x 30 stages) for hot
water and heat at local hospital from excess wind
energy
~4.5 million kWh annual wind/PV production 20-25%
capacity factor
MR. ATKINSON stated that KEA's goal is to displace diesel with
renewable energy and to be free of dependency on outside energy
sources. He moved on to slide 4, which read as follows
[original punctuation provided]:
Current 900 kW EWT Wind Turbines Installed 2012 12
million cost
• KEA is working with the Native Village of Kotzebue
to install 2 more 1MW wind turbine
• The cost of purchasing 2 wind turbines and
installing them is estimated to be $20 million
• These turbines are a newer version of KEA's 2
existing EWT 900-54 turbines
• The 1MW wind turbine has a larger, optimized rotor
to capture roughly 15% more energy annually
• KEA's entire fleet of 17 smaller, first-generation
turbines are decommissioned
• 1 new EWT 1,000 is expected to produce approximately
2,500,000 kWh per year
• Installing wind turbines is expensive because of the
special cranes and equipment that must be shipped in
to lift and secure the turbines into place
• It is more economical to install multiple turbines
at one time, thus saving on installation costs
MR. ATKINSON brought attention to slides 5 and 6, which read as
follows [original punctuation provided]:
Phase I Solar
Phase I of the project began operating in July 2020
and integrated solar energy into the Kotzebue Electric
Association (KEA) system
• The project replaced 532 kilowatts (kW) of first-
generation wind turbines with 532 kW of solar. Co-
located at the KEA wind site
• The cost of this project was $1.9 million
• U.S. Department of Energy through the NANA Regional
Corporation, Tribal Energy Program, provided $600,000
in funding
• The Northwest Arctic Borough, through the Village
Initiative Fund, provided an additional $600,000 in
funding
• KEA provided $700,000 of capital funds for the
project 532 kW Project Completed in July 2020 ($1.9
million project cost)
Phase II Solar
• KEA is now collecting solar energy and learning to
maximize the solar resource
• KEA installed an additional 540 to 650 kW of solar
power. This project was completed in July of 2023
making KEA's Solar Farm the second largest solar farm
in Alaska. (2 million project cost).
Funding for this project came from Round 14 of the
Renewable Energy Fund.
MR. ATKINSON moved on to slide 7, which shows photos of a SAFT
950kWh battery container in a substation and a new 4 MW battery
and read as follows [original punctuation provided]:
• KEA currently has a 1-megawatt 950kwh lithium ion
battery that was installed in 2015 that is nearing the
end of its useful life.
• Kotzebue Electric Association (KEA) will be
increasing energy storage by purchasing an additional
4-megawatt (MW)/8 - 12 (MWh) lithium-ion battery
• This additional capacity will allow the battery
system to power all of Kotzebue for approximately 120
minutes.
• The "grid-forming" ability of the battery will allow
KEA to shut off the diesel generators when sufficient
renewable power is available
Project Cost: $15 million, awarded 9 million from OCED
in NWAB Regional Grant, awarded 3 million Lisa
Murkowski CDS appropriation, awarded $800,000 from
Denali Commission for non-federal matching, awarded
$150,000 NWAB VIF for Design funding, & $400,000 AEA
R13
MR. ATKINSON projected slide 8, which read as follows [original
punctuation provided]:
Benefits of Renewable Energy
• Reduce Cost to Generate Electricity Up to 50%
Savings
• Reduced Maintenance Costs
• Reduced Costs in Regulatory Compliance
• Reduced Costs for Heating With Beneficial
Electrification
1:55:40 PM
CO-CHAIR MEARS called KEA a model for complex renewable energy
systems use.
1:56:20 PM
MR. ATKINSON, in response to Representative Rauscher, talked
about the ability of battery power to be used during power
outages, of which he said Kotzebue has few. In response to Co-
Chair Mears, he reported that KEA has been able to go off diesel
with the use of battery power, but only for a short period of
time.
1:59:49 PM
MR. ATKINSON, in response to Representative Costello, said the
push for alternative energy sources came from the community of
Kotzebue. He indicated that in other areas of the state where
there may be more options, there has been "an avoidance to talk
about this issue." He stated support for HB 153 because the
time for avoiding the conversation is over. He allowed that the
bill is not perfect, and he recommended that stakeholders be
brought together to discuss this issue, that everyone has "a
seat at the table" before implementing a plan that will affect
everyone.
2:02:15 PM
ERIN MCKITTRICK, Independent Energy Analyst, specified that
although she sits on the board of Homer Electric Association,
she is providing invited testimony today on her own behalf. She
began a PowerPoint presentation [included in the committee
file], titled "Preliminary Feasibility and Cost Analysis of the
HB 153 Renewable Portfolio Standard." Slide 2 read as follows
[original punctuation provided]:
Primary questions
? Are the goals in HB 153 achievable?
? What are the potential savings or costs to
customers?
MS. MCKITTRICK covered slide 3, which outlines that the proposed
legislation requires increased renewable energy used by 2030 and
again by 2035 and shows present and projected energy sources for
the Railbelt. Currently, approximately 15 percent of the
Railbelt's energy generation is derived from renewable energy
sources, mostly hydro, with some gas and oil. Slide 4 shows one
way the targeted standards could be met. It lists two wind
projects of Alaska Renewables, which would be enough to meet the
first target for 2030. Then it shows the Puppy Dog Lake solar
project, a concept that was recently canceled but which could be
replicated; however, as the smallest factor shown here, it does
not really matter in terms of reaching the first target, she
said. Finally, there is the Dixon Diversion hydro project - the
expansion of Bradley Lake hydro. She pointed to a line on the
graph chart that read "unadjusted" and explained that that would
be "the actual typical penetration of renewable energy under
this scenario." She said when all these factors are put
together, the Railbelt would be approximately 2 percent short of
the second target [for 2035].
MS. MCKITTRICK moved on to slide 5, which read as follows
[original punctuation provided]:
Projects included
? 300MW wind at Little Mount Susitna and Shovel Creek
? 1,165,000 MWh per year after curtailment
? Available in 2028 and 2029
? E3 study shows that this can be integrated on the
existing system with economic dispatch, but without
major new transmission
? Would qualify for 1.25x multiplier in HB153
? 45MW(input)/30MW(output) solar modeled on Puppy Dog
Lake
? Around 60,000 MWh/year
? Available in 2028
? Dixon Diversion
? 190,800 MWh per year
? Available 2030
? Distributed solar
? Additional 2.2MW installed per year, based on recent
averages
? Would qualify for 2x multiplier in HB153
? Wind would meet the 2030 target on its own
? All of these together would be only 2% short of the
2035 target
? Only 80,000 MWh more would be needed
MS. MCKITTRICK explained that she included these projects
because they are extensively studied, could be available by the
end of 2030, and their integration has been modeled into the
current grid. She offered further details. In response to
Representative Rauscher, she talked about the reason the Puppy
Dog Lake project was not pursued.
2:11:01 PM
MS. MCKITTRICK showed a graph on slide 6 that illustrated that
in the worst-case scenario, the renewable portfolio standard
could raise costs 5.5-8.5 percent. In response to
Representative Rauscher, she clarified information related to
Fire Island and Huston Solar. Ms. McKittrick then moved on to
slide 7, "Fines set the worst-case scenario," which read as
follows:
? Maximum fines are a straw man scenario, which
assumes
? No renewable energy projects are developed
? No contracts are signed for future projects
? No utilities make good-faith efforts to comply with
the standard
? No waivers are issued for any reason
? Railbelt utilities collect over $930 million from
their customers annually
? Maximum fines would add $51 million annually for the
first target
? $83 million for the second
? Bill impacts would be 5.5% in 2031, or 8.5% in 2036
? For the first target, this is equal to a 1.2 cent
rate increase, or around $6 on an average residential
bill
? If the first target is met, potential fines from the
second can be spent on renewable projects
? Those cost impacts don't include any savings from
fines paid towards customer efficiency or distributed
generation
2:16:16 PM
MS. MCKITTRICK discussed the bar chart on slide 8, which shows a
comparison of existing and potential future electricity
generation costs broken down into fuel cost, other fixed cost,
and potential. Current sources of energy, shown on the left,
are natural gas, which is approximately 8 cents per kilowatt
hour (kWh); the new contract bar shows the price at which power
is produced. She pointed to the categories on the left of the
chart, which included: natural gas, Healy coal, North Pole oil,
Bradley Lake hydro, [Huston] solar, and Fire Island wind. The
potential sources on the right side of the graph include:
liquid natural gas (LNG) import, NREL renewables plus tax
credits, NREL renewables, wind, solar, and Dixon Diversion. She
highlighted that these are predictions and said she held a
"pessimistic" view when selecting these. She noted that the
maximum potential cost impact of the first target funds would be
approximately 1.2 cents per kWh; the imported gas costs would
raise rates 3 to 5 cents per kWh.
MS. MCKITTRICK showed slide 9, which read as follows [original
punctuation provided]:
Costs may range from similar to significantly cheaper
? Future gas generation costs are expected to be
substantially higher than current costs. ? New Cook
Inlet gas contracts start at $12.30/Mcf ? Imported gas
cost projections range from $12-16/Mcf
? Other fossil generation costs are already quite high
? All current renewable energy is cheaper than future
gas energy projections
? Future renewable energy projects with tax credits
are probably substantially cheaper than imported gas
energy.
? If tax credits end, the costs are more similar.
There are likely small savings available, depending on
project details and exact fuel prices.
MS. MCKITTRICK concluded on slide 10, which read as follows
[original punctuation provided]:
? Current plans will mostly satisfy the standard.
? Diversification may save money, and any potential
fines would be modest.
2:22:36 PM
REPRESENTATIVE MEARS thanked the presenters and remarked that
the challenge is to have publicly available data.
2:23:02 PM
CO-CHAIR HOLLAND made closing remarks. In response to the
invited testimony, he expressed excitement regarding the kinds
of projects that could be created by an energy sector. He
highlighted that any project done in the future will require
"significant capitalization" following which renewable projects
essentially be operated "off of free fuel." He pointed out that
imported gas is money that leaves Alaska, while renewable energy
would keep money in the state. He spoke about modifying
penalties in a way that would put money back into future
projects. He emphasized that this is a new RPS, not a reworking
of the old. He emphasized the importance of the Railbelt and
rural communities and bringing benefit between the two.
2:26:39 PM
REPRESENTATIVE RAUSCHER expressed that he would like the
Legislative Budget and Audit Committee to be asked to authorize
a preliminary feasibility cost impact analysis and a
comprehensive independent analysis of HB 153. He cited possible
cost to consumers and waning incentives as reasons for this
request.
CO-CHAIR MEARS responded that she has heard that an RPS could
remove barriers and lessen risk for investors and that the more
diverse energy sources are, the more reliable they become.
2:30:18 PM
REPRESENTATIVE TILTON questioned why, if things are already
happening, the bill sponsor thinks the legislature needs to
place restrictions on the private sector.
REPRESENTATIVE RAUSCHER, adding to his request for a third-party
consultancy, listed that which could be considered: utility
scale modeling, energy portfolio forecasting, rate payer impact
assessment, a formal request for proposal (RFP) process, and a
final report delivered with adequate time for legislative
deliberation.
REPRESENTATIVE MEARS said she foresees work being done with
stakeholders to produce a committee substitute for HB 153. She
observed that the number of attendees at the hearing indicates
that the bill would affect many.
CO-CHAIR HOLLAND said he appreciates Representative Rauscher's
recommendation for a study and noted that the issue had been
studied. He said he could catalog what has been done and return
to the committee with more information.
2:34:14 PM
CO-CHAIR MEARS announced that HB 153 was held over.
2:34:38 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 2:34 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB0153N.pdf |
HENE 4/1/2025 1:00:00 PM |
HB 153 |
| HB 153 Sponsor Statement.pdf |
HENE 4/1/2025 1:00:00 PM |
HB 153 |
| HB 153 N Sectional Analysis_Holland.pdf |
HENE 4/1/2025 1:00:00 PM |
HB 153 |
| HB 153 N FN 1 DCCED AEA.pdf |
HENE 4/1/2025 1:00:00 PM |
HB 153 |
| HB 153 N FN 2 DCCED RCA.pdf |
HENE 4/1/2025 1:00:00 PM |
HB 153 |
| HB 153 N HENE 4.1.25_RPS_Holland Intro.pdf |
HENE 4/1/2025 1:00:00 PM |
HB 153 |
| House Energy HB 153 Analysis 4_1_25 EMcKittrick.pdf |
HENE 4/1/2025 1:00:00 PM |
HB 153 |
| HB 153 Hearing Slides _Kotzebue Electric.pdf |
HENE 4/1/2025 1:00:00 PM |
HB 153 |