Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/14/2019 03:30 PM COMMUNITY & REGIONAL AFFAIRS

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Audio Topic
03:30:12 PM Start
03:30:57 PM Overview: Road Belt Inter-tie - Expanding Alaska's Infrastructure and Development
04:27:56 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: TELECONFERENCED
Road Belt Inter Tie by:
- Jason Hoke, Copper Valley Development
Association
- John Duhamel, Copper Valley Electric
Association
- Bruce Cain, Ahtna
- Chris Rose, Renewable Energy Alaska Project
(REAP) - Removed from Agenda
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         March 14, 2019                                                                                         
                           3:30 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Click Bishop, Chair                                                                                                     
Senator Chris Birch, Vice Chair                                                                                                 
Senator Mia Costello                                                                                                            
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW:    ROAD   BELT    INTER-TIE   -    EXPANDING   ALASKA'S                                                               
INFRASTRUCTURE AND DEVELOPMENT                                                                                                  
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                              
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JASON HOKE, Executive Director                                                                                                  
Copper Valley Development Association                                                                                           
Glennallen, Alaska                                                                                                              
POSITION STATEMENT: Provided on overview of the Road Belt Inter-                                                              
Tie.                                                                                                                            
                                                                                                                                
JOHN DUHAMEL, Chief Executive Officer                                                                                           
Copper Valley Electric Association                                                                                              
Glennallen, Alaska                                                                                                              
POSITION STATEMENT: Provided on overview of the Road Belt Inter-                                                              
Tie.                                                                                                                            
                                                                                                                                
BRUCE CAIN, President                                                                                                           
Copper Valley Chamber of Commerce                                                                                               
Glennallen, Alaska                                                                                                              
POSITION STATEMENT: Testified in support  of the Road Belt Inter-                                                             
Tie.                                                                                                                            
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
3:30:12 PM                                                                                                                    
CHAIR  CLICK  BISHOP called  the  Senate  Community and  Regional                                                             
Affairs Standing Committee meeting to  order at 3:30 p.m. Present                                                               
at  the  call  to  order were  Senators  Costello,  Gray-Jackson,                                                               
Birch, and Chair Bishop.                                                                                                        
                                                                                                                                
^OVERVIEW:   Road    Belt   Inter-Tie   -    Expanding   Alaska's                                                               
Infrastructure and Development                                                                                                  
       OVERVIEW: Road Belt Inter-Tie - Expanding Alaska's                                                                   
                 Infrastructure and Development                                                                             
                                                                                                                                
3:30:57 PM                                                                                                                    
CHAIR BISHOP announced  that the committee will  hear an overview                                                               
of the Road Belt Inter-Tie (RBIT).                                                                                              
                                                                                                                                
3:31:33 PM                                                                                                                    
JASON  HOKE,   Executive  Director,  Copper   Valley  Development                                                               
Association, Glennallen,  Alaska, said  he has been  the regional                                                               
ARDOR  (Alaska Regional  Development  Organizations) through  the                                                               
Department  of  Commerce,  Community,  and  Economic  Development                                                               
(DCCED)  for the  Copper Valley  Development  Association for  10                                                               
years. He  explained that the organization  is quasi-governmental                                                               
and works  to advocate  as a liaison  between public  and private                                                               
business as well  as state and federal government.  He added that                                                               
he  is also  the  Programs Director  for  the Ahtna  Inter-Tribal                                                               
Resource Commission in charge of energy and biomass resources.                                                                  
                                                                                                                                
He commenced  with his RBIT  overview and reviewed the  slide Not                                                               
RBIT'S First Rodeo. He said RBIT  was studied in the 80s and 90s,                                                               
noting that RBIT was partially  funded by the legislature to some                                                               
degree. RBIT  was looked at  by the Alaska Energy  Authority when                                                               
the  Susitna-Watana  Dam project  considered  RBIT  as well.  The                                                               
Copper  Valley Electric  Association  has  everything written  or                                                               
studied about RBIT on its website.                                                                                              
                                                                                                                                
3:33:11 PM                                                                                                                    
He reviewed the slide Current  Project Proposed Transmission Runs                                                               
as follows:                                                                                                                     
                                                                                                                                
   • Phase 1:                                                                                                                   
        o Sutton-Glennallen-Delta Junction.                                                                                     
        o 286 miles at 138 kilovolts (kV) to 245kV range.                                                                       
                                                                                                                                
   • Phase 2:                                                                                                                   
        o Gakona-Tok-Delta.                                                                                                     
        o 227 miles at 65kV.                                                                                                    
                                                                                                                                
   • RBIT could utilize preexisting Rights-of-Way (ROWs) with                                                                   
     the exception of approximately 100 miles of gaps.                                                                          
                                                                                                                                
   • RBIT completes a bus loop around the road system of                                                                        
     interior Alaska and connect to the "Railbelt" electrical                                                                   
     transmission line.                                                                                                         
                                                                                                                                
   • The RBIT electrical grid will be the size of Montana.                                                                      
                                                                                                                                
MR.  HOKE   explained  that  RBIT   could  utilize  all   of  the                                                               
preexisting  ROWs;  where  Matanuska Electric  Association  (MEA)                                                               
runs and Copper Valley Electric  comes in, where Alaska Power and                                                               
Telephone (AP&T) runs out and  Golden Valley Electric Association                                                               
(GVEA) runs down. There's only about  100 miles of gaps that span                                                               
between  the  lines.  RBIT  is  not  reinventing  the  wheel  and                                                               
breaking new territory. RBIT is something that already exists.                                                                  
                                                                                                                                
He detailed  that RBIT will complete  a bus loop around  the road                                                               
system for the  interior of Alaska to connect to  the Railbelt. A                                                               
bus  loop is  where power  can go  one way  or it  can come  back                                                               
another. For  example, when an  avalanche occurs  someplace along                                                               
the Railbelt, power can come  from the other direction. RBIT will                                                               
electrify  an  area  the  size   of  Montana  that  is  currently                                                               
supported by small microgrids.                                                                                                  
                                                                                                                                
3:35:01 PM                                                                                                                    
SENATOR GRAY-JACKSON asked him to  explain the difference between                                                               
Road Belt and Railbelt.                                                                                                         
                                                                                                                                
MR. HOKE answered that the Road  Belt follows the road system and                                                               
Railbelt is  a term used  for many years regarding  the railroad.                                                               
RBIT will follow the road.                                                                                                      
                                                                                                                                
SENATOR  GRAY-JACKSON   noted  that  regional   power  utilities'                                                               
nomenclature for the region used the term Railbelt.                                                                             
                                                                                                                                
MR. HOKE replied that RBIT will follow the road.                                                                                
                                                                                                                                
He reviewed  the Current  Concept slide  for RBIT  detailing that                                                               
phase-1 runs  along the road to  Glennallen and up to  Delta, and                                                               
Fort Greely.  Phase-2 would follow the  Tok Cutoff to Tok  and up                                                               
to Delta Junction creating an  additional loop. He noted that the                                                               
larger map displayed  on the Current Concept  slide shows several                                                               
potential mining  sites, renewable  energy sites,  pump stations,                                                               
military  bases, and  communities  that can  be  served that  are                                                               
currently on an island with microgrids.                                                                                         
                                                                                                                                
CHAIR BISHOP  pointed out  that the  mining sites  are historical                                                               
mining districts so if the bigger  mines open, they are not a one                                                               
off, there already  is a history of mining for  the last 100-plus                                                               
years.                                                                                                                          
                                                                                                                                
MR. HOKE concurred with Chair Bishop.                                                                                           
                                                                                                                                
SENATOR BIRCH recalled past discussions  on RBIT via the Railbelt                                                               
Energy Fund, noting  that he worked with Alyeska  Pipeline at one                                                               
time. He  asked if  the Alyeska Pipeline  pump stations  are tied                                                               
into Copper Valley  Electric and if one of the  pump stations has                                                               
been retired.                                                                                                                   
                                                                                                                                
3:38:08 PM                                                                                                                    
JOHN  DUHAMEL, Chief  Executive Officer,  Copper Valley  Electric                                                               
Association, Glennallen, Alaska,  explained that Alyeska Pipeline                                                               
semi-retired Pump  Station 12  some time  ago. He  confirmed that                                                               
Copper Valley Electric does provide power to Alyeska Pipeline.                                                                  
                                                                                                                                
SENATOR BIRCH  noted that Alyeska  was trying to  electrify their                                                               
pump stations rather than having them operate off jet fuel.                                                                     
                                                                                                                                
MR.  HOKE  pointed out  that  pump  stations  8  and 9  are  both                                                               
isolated, stand-alone facilities generating power.                                                                              
                                                                                                                                
He noted that  one thing he failed to put  on the Current Concept                                                               
map  was  the  High  Frequency Active  Auroral  Research  Program                                                               
(HAARP)  that is  owned  by the  University of  Alaska.  It is  a                                                               
facility  that burns  600  gallons  of fuel  per  hour. RBIT  can                                                               
provide considerable savings to the university system for HAARP.                                                                
                                                                                                                                
He addressed  the slide  Public Planning  and Vetting  Process as                                                               
follows:                                                                                                                        
                                                                                                                                
   • Copper Valley Regional Energy Plan with Alaska Energy                                                                      
     Authority (AEA) number-one priority.                                                                                       
                                                                                                                                
   • Statewide energy planning with AEA top priorities.                                                                         
   • Copper Valley Regional CEDS (Comprehensive Economic                                                                        
     Development Strategy- U.S. Economic Development Authority                                                                  
     (USEDA)) top priority.                                                                                                     
                                                                                                                                
   • Statewide CEDS top priority (with USEDA and Alaska                                                                         
     Department    of   Commerce,    Community,   and    Economic                                                               
     Development).                                                                                                              
                                                                                                                                
   • Ahtna Tribal Energy Plan number-one priority (Office of                                                                    
     Indian Energy Policy and Programs, U.S. Department of                                                                      
     Energy).                                                                                                                   
                                                                                                                                
   • Tanana Chiefs Conference Energy Planning Priority (Office                                                                  
     of Indian Energy Policy and Programs, U.S. Department of                                                                   
     Energy).Tanana Chiefs Conference CEDS Top Priority.                                                                        
                                                                                                                                
   • Fairbanks North Star Borough CEDS top priority.                                                                            
MR.  HOKE said  he is  a firm  believer in  the Five  Ps: "Proper                                                               
planning prevents poor performance. He  opined that RBIT has been                                                               
planned  and   vetted  through  and  through   both  locally  and                                                               
regionally.                                                                                                                     
                                                                                                                                
He noted  that RBIT  is the  number one  priority for  the Copper                                                               
Valley  Regional  Energy Plan,  a  top  priority for  the  Copper                                                               
Valley  Regional  Comprehensive   Economic  Development  Strategy                                                               
(CEDS) with  the U.S.  Economic Development  Administration (EDA)                                                               
and the Alaska  Division of Economic Development,  and a priority                                                               
three for  the statewide CEDS.  RBIT is  also a top  priority for                                                               
the Ahtna Tribal Energy Plan,  Tanana Chiefs Conference CEDS, and                                                               
the Fairbanks North Star Borough CEDS.                                                                                          
                                                                                                                                
3:40:57 PM                                                                                                                    
He reviewed the slide Support and Resolutions as follows:                                                                       
                                                                                                                                
   • Alaska Federation of Natives' only energy resolution in                                                                    
     2017 was RBIT.                                                                                                             
                                                                                                                                
   • Native organizations impacted and supportive of this                                                                       
     project effort are approximately:                                                                                          
        o 12 tribal governments;                                                                                                
        o 12 village corporations,                                                                                              
        o 4 Alaska Native Claims Settlement Act (ANSCA)                                                                         
          corporations (Ahtna, CIRI, Doyon, Chitina);                                                                           
        o Ahtna Intertribal Resource Commission;                                                                                
        o Tanana Chiefs Conference;                                                                                             
        o Copper River Native Association;                                                                                      
        o Chickaloon Native Village [Nay'dini'aa Na' Kayax'] and                                                                
          many more.                                                                                                            
                                                                                                                                
   • CVEA, AP&T, MEA, Golden Valley, and the APA (Alaska Power                                                                  
     Association) signed board resolutions supporting RBIT.                                                                     
                                                                                                                                
   • Copper Valley Development Association (ARDOR).                                                                             
                                                                                                                                
   • Copper Valley Chamber of Commerce.                                                                                         
                                                                                                                                
   • Meetings and discussions indicative of support with the                                                                    
     communities that are impacted by RBIT.                                                                                     
                                                                                                                                
MR.  HOKE said  energy  is the  tie that  binds.  When energy  is                                                               
squeezing the  state, Alaskans seem  to come together to  try and                                                               
fix it.  When RBIT  was addressed  in the 90s,  no one  talked to                                                               
Alaskans  to see  how  they felt  about RBIT,  Now,  most of  the                                                               
communities  impacted by  RBIT have  been approached  to see  how                                                               
they feel.  He opined that 97  percent of all business  deals are                                                               
negotiable and  can be worked out,  and that is part  of what the                                                               
engineering process for RBIT is all about.                                                                                      
                                                                                                                                
3:42:51 PM                                                                                                                    
He discussed the slide Current  Costs and Consumptions Inhibiting                                                               
Development as follows:                                                                                                         
                                                                                                                                
   • Most communities in this project area are paying 300-500                                                                   
     percent more than the national average which is                                                                            
     $.12/kilowatt hour (kWh).                                                                                                  
                                                                                                                                
   • Communities are   electrified   by   multiple   microgrids                                                                 
     consuming approximately 4 million gallons of diesel per                                                                    
     year. Emissions and other issues plague these small grids.                                                                 
                                                                                                                                
   • Power Cost Equalization (PCE) does not cover commercial                                                                    
     electricity which is approximately 60 percent of all                                                                       
     electrical consumption in these communities.                                                                               
                                                                                                                                
   • Electrical costs directly correlate to business and                                                                        
     resident closure and relocation.                                                                                           
                                                                                                                                
He noted  that a  lot of  times when a  generator goes  out, it's                                                               
going to be a long time before someone can work on it.                                                                          
                                                                                                                                
3:44:21 PM                                                                                                                    
MR.  HOKE  addressed  the slide  Economic  and  Natural  Resource                                                               
Development as follows:                                                                                                         
                                                                                                                                
   • Cheaper electrical power opens the door for Business                                                                       
     Retention and Expansion (BRE) and allows business plans to                                                                 
     pencil out.                                                                                                                
                                                                                                                                
   • It is necessary infrastructure for economic development.                                                                   
                                                                                                                                
   • Timber and lumber industry (e.g. OSB manufacturing, lumber                                                                 
     mills, biomass pellet and brick plants, etc.)                                                                              
                                                                                                                                
   • Mining operations that could open benefit: Fort Knox, Pogo,                                                                
     Stellar Mine, Ahtell Creek Mine, Tetlin Mine, Fourth of                                                                    
     July Creek Mine, and others.                                                                                               
                                                                                                                                
   • Tourism, fishing, and transportation industry benefits.                                                                    
                                                                                                                                
   • Alyeska Pipeline benefit with cheaper energy for pumping                                                                   
     oil and cathodic protection at its non-grid connected pump                                                                 
     stations 8 and 9.                                                                                                          
                                                                                                                                
He  summarized that  businesses in  the Road  Belt region  cannot                                                               
grow  without cheaper  energy. An  executive  with Doyon  Limited                                                               
wrote eight business  plans based on their microgrid  and none of                                                               
the plans  penciled out. Electricity  costs were too high  for an                                                               
Oriented Strand  Board (OSB) manufacturer in  the Glennallen area                                                               
to start up. Multiple other  things are queued up, biomass plants                                                               
for bricks and pellets, lumber  mills, but they just won't happen                                                               
without RBIT.  Mining operations in traditional  mining districts                                                               
can benefit from  cheap power, creating jobs and  revenue for the                                                               
state. The  City of Valdez  significantly expanded its  port with                                                               
plans for  expansion that  requires a  lot of  power and  RBIT is                                                               
needed to keep their power cost down.                                                                                           
                                                                                                                                
He said  he forgot  to mention  a regional  agricultural program,                                                               
Tonsina North Agriculture  Land Project, a project set  up by the                                                               
State of Alaska.  He noted that the federal  government paid $2.7                                                               
million  to divert  an underground  pipeline for  the project  in                                                               
2002. RBIT will  help the Tonsina Project  develop agriculture as                                                               
well as  other processing facilities  and food hubs  that require                                                               
massive amounts of electricity.                                                                                                 
                                                                                                                                
3:47:18 PM                                                                                                                    
He reviewed the slide Military Benefits and Build Up as follows:                                                                
                                                                                                                                
   • Energy is national security.                                                                                               
                                                                                                                                
   • Military bases that would benefit from RBIT:                                                                               
        o Black Rapids Training Facility,                                                                                       
        o Donnelly Dome Range,                                                                                                  
        o Fort Greeley,                                                                                                         
        o Eielson AFB,                                                                                                          
        o Fort Wainwright,                                                                                                      
        o Clear Lidar AFB.                                                                                                      
                                                                                                                                
   • Redundant and reliable energy necessary. Currently an 80                                                                   
     megawatts (MW) bottleneck at Eva Creek on the Railbelt.                                                                    
     RBIT offers a redundant loop with more power capacity.                                                                     
                                                                                                                                
   • Reduced cost for military with cheaper energy and                                                                          
     redundancy.                                                                                                                
                                                                                                                                
   • Signs of continued defense buildup and growth.                                                                             
                                                                                                                                
   • 25 percent renewable needed and can be supplemented with                                                                   
     RBIT.                                                                                                                      
                                                                                                                                
MR.  HOKE opined  that military  benefits  from RBIT  is the  big                                                               
kahuna. Energy  is national security.  All military bases  are in                                                               
dire need  for more power.  He noted  that the commander  of U.S.                                                               
Pacific  Command (PACOM)  told  him that  the  military is  under                                                               
mandate to  have 25 percent  renewable for most of  their funding                                                               
and RBIT opens renewable energy sources.                                                                                        
                                                                                                                                
He discussed the slide Other Information as follows:                                                                            
                                                                                                                                
   • Hierarchy of needs for infrastructure:                                                                                     
        o Energy,                                                                                                               
        o Transportation,                                                                                                       
        o Communication.                                                                                                        
        o Already have two of the three.                                                                                        
                                                                                                                                
   • New industry and economic development means potentially new                                                                
     revenue for the state.                                                                                                     
                                                                                                                                
   • The region is an Unorganized Borough and the legislature is                                                                
     the governing body.                                                                                                        
                                                                                                                                
   • RBIT is about people making hard choices:                                                                                  
        o Groceries or electric bill.                                                                                           
        o Stay in homeland or migrate outside.                                                                                  
                                                                                                                                
MR.  HOKE said  the Road  Belt region  already has  the road  for                                                               
transportation,   fiber  optics   and   fourth  generation   (4G)                                                               
broadband  cellular  network  technology,   but  it  lacks  cheap                                                               
energy. He said  RBIT is not just about industry;  the project is                                                               
about people.                                                                                                                   
                                                                                                                                
3:50:33 PM                                                                                                                    
SENATOR BIRCH  asked if the  Unorganized Borough within  the Road                                                               
Belt has  indicated an appetite  for a mill rate  assessment like                                                               
Anchorage and Fairbanks have.                                                                                                   
                                                                                                                                
MR. HOKE answered no.                                                                                                           
                                                                                                                                
SENATOR  BIRCH  said he  realizes  that  the legislature  is  the                                                               
governing  body for  the  Unorganized Borough  but  he has  never                                                               
detected any appetite  from the Unorganized Borough  for any sort                                                               
of   mill   rate   assessment  to   provide   for   schools   and                                                               
infrastructure.                                                                                                                 
                                                                                                                                
MR.  HOKE  pointed   out  that  the  State   of  Alaska  receives                                                               
approximately   $34  million   annually  from   the  Trans-Alaska                                                               
Pipeline System (TAPS) running through the Copper Valley.                                                                       
                                                                                                                                
SENATOR  BIRCH noted  that the  legislature  is currently  taking                                                               
about the topic that Mr. Hoke noted.                                                                                            
                                                                                                                                
MR. HOKE addressed  the slide What's Needed as follows:                                                                         
                                                                                                                                
   • Support from the Alaska State Legislature.                                                                                 
                                                                                                                                
   • Reconnaissance study estimated at approximately $2 Million                                                                 
     "soup to nuts" for engineer's report.                                                                                      
                                                                                                                                
   • Outcome of the proposed RBIT reconnaissance study would be                                                                 
     an actionable document to define  a path forward for project                                                               
     development, a timeline  and milestones table, beneficiaries                                                               
     and  project   participants,  and  indicative   pricing  and                                                               
     budget, (9 months).                                                                                                        
                                                                                                                                
   • Total cost of project estimates:                                                                                           
        o Phase 1:                                                                                                              
             square4 Approximately $200-$300 Million (about 2 F-22s).                                                           
        o Phase 2:                                                                                                              
             square4 Approximately $100 Million (about an Abrams                                                                
               Tank).                                                                                                           
                                                                                                                                
   • Where's this coming from?                                                                                                  
        o The expectation is that U.S. Departments of: Defense,                                                                 
          Energy, Interior, Commerce, and Agriculture, along                                                                    
          with Alaska state agencies, would be approached to                                                                    
          contribute toward project deployment and construction,                                                                
          as well as beneficiary utilities, communities, and                                                                    
          organizations.                                                                                                        
                                                                                                                                
MR.  HOKE disclosed  that the  Denali Commission  is open  to the                                                               
idea of setting up an account for RBIT.                                                                                         
                                                                                                                                
He summarized  that the legislature's support,  whether verbal or                                                               
written, will go far for RBIT.                                                                                                  
                                                                                                                                
3:53:31 PM                                                                                                                    
SENATOR  GRAY-JACKSON asked  if the  federal government  has been                                                               
approached regarding RBIT.                                                                                                      
                                                                                                                                
MR.  HOKE   answered  that  the   federal  government   has  been                                                               
approached to some degree.                                                                                                      
                                                                                                                                
SENATOR  GRAY-JACKSON asked  the degree  to which  RBIT has  been                                                               
discussed with the federal government.                                                                                          
                                                                                                                                
MR.  HOKE  answered  that U.S.  Senator  Murkowski  assisted  the                                                               
previous  year in  hearings  with the  Office  of Indian  Energy.                                                               
However, the  federal definition of Indian  country inhibited any                                                               
money  from  being  spent  on energy  going  across  other  lands                                                               
besides Native owned lands.                                                                                                     
                                                                                                                                
He  said  the  [U.S.  Department   of  Agriculture  (USDA)  Rural                                                               
Development Innovation  Center] is  coming to  Alaska to  talk to                                                               
telecommunication   and   electric    utilities   about   federal                                                               
government   programs   for    building   broadband   fiber   and                                                               
transmission line infrastructure.                                                                                               
                                                                                                                                
He added that Anne Hazlett,  Assistant to the Secretary for Rural                                                               
Development at  the USDA, has  been approached and  she indicated                                                               
that RBIT is a great project.                                                                                                   
                                                                                                                                
He  asked if  Senator  Gray-Jackson wants  more  examples of  the                                                               
federal government being approached about RBIT.                                                                                 
                                                                                                                                
3:55:00 PM                                                                                                                    
SENATOR GRAY-JACKSON answered yes.                                                                                              
                                                                                                                                
MR. HOKE  detailed that  Joe Balash,  Assistant Secretary  of the                                                               
Interior,  has been  approached  on  several occasions  regarding                                                               
multiple funding sources for RBIT.                                                                                              
                                                                                                                                
He  said John  Torgerson, Denali  Commission Interim  Federal Co-                                                               
Chair, indicated that  an account can be set up  for a project in                                                               
which multiple  federal agencies  through different  projects and                                                               
programs could be used toward RBIT.                                                                                             
                                                                                                                                
He added  that the Office  of Electrification (OE) with  the U.S.                                                               
Department of  Energy has programs  that can  possibly contribute                                                               
towards RBIT.                                                                                                                   
                                                                                                                                
He said has been working  with U.S. Senator Sullivan's office and                                                               
Mr.  Niemeyer,   Assistant  Secretary  of  Defense   for  Energy,                                                               
Installations,  and  Environment.  Assistant  Secretary  Niemeyer                                                               
stated during his  confirmation hearing that he  would be working                                                               
with  people  involved  with  RBIT   if  the  infrastructure  was                                                               
necessitated for the military. He  reiterated that RBIT addresses                                                               
a people need and said he  believes it is the number-one need for                                                               
military support and the defense of the country.                                                                                
                                                                                                                                
SENATOR  GRAY-JACKSON opined  that  RBIT  is not  a  just a  good                                                               
project, RBIT is a much-needed project.  She said a lot of people                                                               
who  do  not experience  the  high  cost  of energy  realize  how                                                               
significant and  urgent this  is. She noted  that she  worked for                                                               
the City of Akutan and knows the cost of energy in rural Alaska.                                                                
                                                                                                                                
3:57:23 PM                                                                                                                    
CHAIR BISHOP thanked Mr. Hoke  for his presentation. He asked Mr.                                                               
Duhamel to proceed with his presentation on RBIT.                                                                               
                                                                                                                                
MR. DUHAMEL explained his multiple  roles regarding the Road Belt                                                               
Intertie (RBIT) Concept as follows:                                                                                             
                                                                                                                                
   • Copper Valley electric Association - CEO.                                                                                  
                                                                                                                                
   • Alaska Power Association - Director.                                                                                       
                                                                                                                                
   • APA Hydropower - Chairman.                                                                                                 
                                                                                                                                
He said  his role  is the validation  from the  utility community                                                               
for  RBIT. The  Alaska Power  Association has  already sanctioned                                                               
RBIT and  submitted a resolution from  the board to Mr.  Hoke and                                                               
the stakeholders  in the RBIT concept.  He added that he  is also                                                               
the  chairman  for  the  APA   Hydropower  group  and  represents                                                               
hydropower interests as well. He  said the community of utilities                                                               
obviously supports  RBIT quite heavily.  The resolution  from the                                                               
Matanuska Electric  Association (MEA) and Golden  Valley Electric                                                               
shows that  the two  adjoining utilities believe  that RBIT  is a                                                               
good project.                                                                                                                   
                                                                                                                                
3:58:31 PM                                                                                                                    
MR. DUHAMEL  described the slide Transmission  vs Distribution as                                                               
follows:                                                                                                                        
                                                                                                                                
   • Distribution Power:                                                                                                        
        o Lower Voltages.                                                                                                       
        o Power  moves to end user:                                                                                             
             square4 Residential,                                                                                               
             square4 Commercial,                                                                                                
             square4 Industrial.                                                                                                
        o Managed and maintained by the utility.                                                                                
                                                                                                                                
   • Transmission and Sub-transmission Power:                                                                                   
        o High Voltages.                                                                                                        
        o Moves power between communities (substation to                                                                        
          substation).                                                                                                          
        o In Alaska, both utilities and the state manage                                                                        
          transmission.                                                                                                         
                                                                                                                                
 • Road Belt Intertie is Transmission/Sub-transmission Only:                                                                    
        o State managed.                                                                                                        
                                                                                                                                
   • Like airports and roads, transmission is infrastructure.                                                                   
                                                                                                                                
He explained that  utilities label power that is  moved around as                                                               
either  distribution power  or  transmission or  sub-transmission                                                               
power. Under a distribution system,  utilities push lower voltage                                                               
power to the residential, commercial, or industrial end users.                                                                  
                                                                                                                                
He explained that distribution power  is managed by utilities, it                                                               
is  not something  that  the  utilities consider  as  a state  or                                                               
federal  infrastructure. Transmission  power  is different.  High                                                               
voltage lines  with big  structures keeps the  lines in  the air.                                                               
The infrastructure  for transmission  power is expensive,  as Mr.                                                               
Hoke indicated.  A reconnaissance study for  RBIT would determine                                                               
some  accuracy in  the  project's numbers,  but  the numbers  are                                                               
large  because  the infrastructure  will  move  large amounts  of                                                               
power to different communities.                                                                                                 
                                                                                                                                
MR.    DUHAMEL   reiterated    that    power   transmission    is                                                               
infrastructure, the  same as airports  and roads. He  opined that                                                               
moving power from  one utility to another, from  one community or                                                               
another, is a  role that is bigger than the  utility, either as a                                                               
state role or  federal role. The electric  utilities' vision with                                                               
RBIT  is that  the project  is transmission  only with  some sub-                                                               
transmission and RBIT would be state managed.                                                                                   
                                                                                                                                
4:01:25 PM                                                                                                                    
He  addressed  the  slide  Electric   Power  System  Overview  as                                                               
follows:                                                                                                                        
                                                                                                                                
   • Transmission:                                                                                                              
        o 230/138kV,                                                                                                            
        o High Voltage Direct Current (DC).                                                                                     
                                                                                                                                
   • Sub Transmission:                                                                                                          
        o 69/45kV.                                                                                                              
                                                                                                                                
   • Distribution:                                                                                                              
        o 14.4/7.2kV.                                                                                                           
                                                                                                                                
He said  the reconnaissance  study for  RBIT will  determine what                                                               
the power system will look like.                                                                                                
                                                                                                                                
He reviewed the slide Power Principles as follows:                                                                              
                                                                                                                                
   • A grid is a network of interconnected power lines.                                                                         
                                                                                                                                
   • The bigger the grid, the more resilient it becomes:                                                                        
        o Fluctuations are absorbed more easily with a bigger                                                                   
          grid.                                                                                                                 
                                                                                                                                
   • Some renewable energy sources fluctuate significantly:                                                                     
        o A bigger grid allows more renewable energy sources.                                                                   
                                                                                                                                
   • Power can move in any direction:                                                                                           
        o Depends on where generated and where used.                                                                            
                                                                                                                                
   • Quantities of Scale is key to cheaper power.                                                                               
                                                                                                                                
He  explained   that  a  bigger   grid  is  important.   A  small                                                               
fluctuation in  a small  grid can bring  the entire  system down.                                                               
For example, one tree could  take Copper Valley Electric's entire                                                               
system down for  its 3,800 customers whereas a  larger grid would                                                               
hardly see a blip  on the system when a tree gets  into a line. A                                                               
larger grid  is resilient  and allows  a utility  to give  a more                                                               
reliable product  to the customer  by adapting to any  problem or                                                               
breaks in the transmission or distribution system.                                                                              
                                                                                                                                
MR.  DUHAMEL noted  that renewable  energy, especially  with wind                                                               
and solar, fluctuates. Variable energy  is still good energy, but                                                               
fluctuations need to be controlled.  The bigger the grid the more                                                               
fluctuations  can   be  controlled  and  that   allows  for  more                                                               
renewable energy.  Power moves in any  direction, so transmission                                                               
with a  loop feed  allows power  to be  rerouted in  the opposite                                                               
direction. That  means reliability goes up,  customers don't have                                                               
outages, and the system can adapt to problems much more easily.                                                                 
                                                                                                                                
He said quantities of scale  is important. RBIT not only benefits                                                               
the  area that  the  project is  claiming,  the project  actually                                                               
benefits  everywhere. For  example, if  a generator  in Anchorage                                                               
can run  more efficiently because  it is feeding  more customers,                                                               
then the  base cost is spread  out over more people  and the cost                                                               
comes down. Thus,  RBIT not only does a great  thing for the area                                                               
it serves, the project actually  brings cost down in the Railbelt                                                               
as well.                                                                                                                        
                                                                                                                                
4:05:42 PM                                                                                                                    
He reviewed the slide RBIT Concept as follows:                                                                                  
                                                                                                                                
   • Not a New Concept.                                                                                                         
                                                                                                                                
   • Alaska Energy Policy Task Force Finding in 2003.                                                                           
                                                                                                                                
He referenced a map that shows  that the window of opportunity is                                                               
entirely  composed  of isolated  grids.  When  power can  not  be                                                               
generated within  the isolated grids,  there is no power  at all.                                                               
RBIT will bring the isolated grids together.                                                                                    
                                                                                                                                
SENATOR BIRCH  addressed redundancy  and asked if  direct current                                                               
(DC) power has a possible role in RBIT.                                                                                         
                                                                                                                                
MR. DUHAMEL  answered that direct current  technology is changing                                                               
daily  and getting  better. The  project's reconnaissance  study,                                                               
via  an electrical  engineer,  will determine  which  one of  the                                                               
technologies will be  best for RBIT to move energy  with the most                                                               
efficiency. High  Voltage Direct Current (HVDC)  is normally best                                                               
for  moving a  lot of  power over  great distances,  but that  is                                                               
something that  the project does not  have a need for.  He opined                                                               
that the  need for a HVDC  system might occur if  power was being                                                               
moved from the North Slope down to the Anchorage area.                                                                          
                                                                                                                                
4:09:09 PM                                                                                                                    
He reviewed the slide Concept Benefits as follows:                                                                              
                                                                                                                                
   • Grid Resilience:                                                                                                           
        o  Larger the grid, better reaction to fluctuations.                                                                    
                                                                                                                                
   • Overage of capacity, shortage of customers.                                                                                
   • Bring together isolated grids for mutual benefit.                                                                          
                                                                                                                                
   • Provide a looping route for major power generators in the                                                                  
     Railbelt.                                                                                                                  
                                                                                                                                
   • Allows more renewable opportunities:                                                                                       
        o Wind,                                                                                                                 
        o Solar,                                                                                                                
        o Hydro:                                                                                                                
             square4 Delta,                                                                                                     
             square4 Tiekel River.                                                                                              
                                                                                                                                
   • Brings the cost of power down for the entire grid.                                                                         
                                                                                                                                
   • Give choices to areas that otherwise have no choices for                                                                   
     power use.                                                                                                                 
                                                                                                                                
MR. DUHAMEL explained  that grid resilience is  the basic premise                                                               
of why  utilities support  RBIT. There  is a  lot of  natural gas                                                               
generation that  is not  running at  its full  efficiency because                                                               
the isolated grids  do not have a lot of  customers to push power                                                               
to. A  larger grid can better  utilize power plants and  push the                                                               
cheapest,  most  efficient  plants  to take  advantage  of  over-                                                               
capacity generation.                                                                                                            
                                                                                                                                
He  said the  isolated grids  have  the single  option of  diesel                                                               
fuel,  which   has  issues  due   to  expense,   difficulty,  and                                                               
emissions. RBIT  will provide choices  for a utility to  run some                                                               
of  its  own power  and  to  build  renewable energy.  RBIT  will                                                               
provide a  grid that is  more resilient and can  absorb renewable                                                               
energy, or power can be purchased right from the grid.                                                                          
                                                                                                                                
He noted  that the federal  government could set  renewable goals                                                               
and those  goals are not  going to  be achieved unless  the power                                                               
system can get more renewable energy.                                                                                           
                                                                                                                                
He summarized that RBIT will bring  the cost of power down to the                                                               
window of opportunity and Anchorage  because power plants will be                                                               
used at their highest efficiency.                                                                                               
                                                                                                                                
4:12:25 PM                                                                                                                    
MR. DUHAMEL discussed the slide Why Support RBIT as follows:                                                                    
                                                                                                                                
   • Legislative support gives credibility to the concept.                                                                      
                                                                                                                                
   • Helps the project approach the congressional delegation,                                                                   
     federal departments and the White House.                                                                                   
   • RBIT will grow renewable opportunities (wind, solar, hydro)                                                                
     to meet renewable goals.                                                                                                   
                                                                                                                                
   • Legislative support helps RBIT's requests for federal funds                                                                
     (to expand the grid) with more credibility.                                                                                
                                                                                                                                
   • Legislative support revitalizes a concept that has already                                                                 
     been validated.                                                                                                            
                                                                                                                                
   • Legislative support   will   help   Alaska   get   federal                                                                 
     infrastructure funds.                                                                                                      
                                                                                                                                
He said the utilities will go  to Washington, D.C. to get funding                                                               
for  RBIT, there  is no  expectation for  the state  to fund  the                                                               
project. The utilities' job is  to convince federal agencies that                                                               
RBIT  is  something  that  is  good for  the  state  and  a  good                                                               
utilization of  infrastructure dollar. The  legislature's support                                                               
of RBIT gives  credibility to the concept  when the congressional                                                               
delegation,  federal  departments,  and  the  administration  are                                                               
approached for federal funds.                                                                                                   
                                                                                                                                
4:14:20 PM                                                                                                                    
SENATOR   BIRCH   recalled  that   Fort   Greely   had  a   small                                                               
demonstration nuclear plant. He asked  if the nuclear power plant                                                               
generated power and how widely was the power distributed.                                                                       
                                                                                                                                
SENATOR  BISHOP   explained  that  Fort  Greely   was  the  first                                                               
operational  nuclear  power  plant   in  the  United  States.  It                                                               
provided power  for the Fort  Greely military base and  the Allen                                                               
Army Airfield. He  noted that a nuclear power  plant was proposed                                                               
for Galena as well.                                                                                                             
                                                                                                                                
SENATOR  BIRCH  noted  that  a Toshiba  4S  Nuclear  Battery  was                                                               
proposed for Galena.                                                                                                            
                                                                                                                                
SENATOR BISHOP asked  if all the rights-of-way for  RBIT had been                                                               
acquired.                                                                                                                       
                                                                                                                                
MR.  DUHAMEL  answered  that  rights-of-way   for  RBIT  will  be                                                               
addressed  in  the  project reconnaissance  study.  For  example,                                                               
there   is  distribution   right-of-way  between   Copper  Valley                                                               
Electric and MEA. There is only  a three-mile gap, but the gap is                                                               
distribution.  Transmission  demands   different  structures  and                                                               
requirements.  Distribution   rights-of-way  are  30   feet  wide                                                               
whereas transmission  rights-of-ways are 100 feet  wide. All land                                                               
agreements  for RBIT  will  have to  be  reestablished. Road  and                                                               
pipeline rights-of-way  can be considered  for the  project. Land                                                               
work  and right-of-ways  work  are  one of  the  reasons for  the                                                               
estimated expenses. He  conceded that a lot  of rights-of-way and                                                               
possibly  even some  purchasing of  lands are  necessary for  the                                                               
project.                                                                                                                        
                                                                                                                                
4:18:11 PM                                                                                                                    
CHAIR  BISHOP  asked  if  $25  million to  $50  million  will  be                                                               
required  for  a  project-ready   estimate  on  a  Class-5  Final                                                               
Investment Decision (FID).                                                                                                      
                                                                                                                                
MR. DUHAMEL  replied that he does  not know, but $50  million may                                                               
be in the ballpark.                                                                                                             
                                                                                                                                
CHAIR BISHOP announced that the  next presenter is Mr. Bruce Cain                                                               
with the Copper Valley Chamber of Commerce and Ahtna, Inc.                                                                      
                                                                                                                                
4:20:14 PM                                                                                                                    
BRUCE  CAIN,  President,  Copper   Valley  Chamber  of  Commerce,                                                               
Glennallen, Alaska,  testified in  support of  RBIT. He  said the                                                               
Copper  Valley Chamber  of Commerce  has designated  RBIT as  its                                                               
number  one priority  for economic  development.  He pointed  out                                                               
that the chamber's businesses do  not qualify for the state's PCE                                                               
and  they  are  paying  up  to $1.00  per  kWh.  He  opined  that                                                               
consideration must be given about  having infrastructure in place                                                               
for a better life for future generations.                                                                                       
                                                                                                                                
4:25:59 PM                                                                                                                    
CHAIR BISHOP asked if there were any closing comments.                                                                          
                                                                                                                                
MR. HOKE advised that the  first initial reconnaissance study for                                                               
RBIT was  submitted by Dryden  & LaRue, an engineering  firm that                                                               
does  transmission  lines  project  services.  The  estimate  was                                                               
approximately $2 million.                                                                                                       
                                                                                                                                
CHAIR  BISHOP   thanked  Mr.  Hoke   and  Mr.  Duhamel   for  the                                                               
presentations.                                                                                                                  
                                                                                                                                
4:27:56 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Bishop adjourned the Senate  Community and Regional Affairs                                                               
Standing Committee meeting at 4:27 p.m.                                                                                         

Document Name Date/Time Subjects
RBIT- Jason Hoke.pdf SCRA 3/14/2019 3:30:00 PM
Road Belt Inter Tie
Alaska Interie Project- DuhamelSenate.pdf SCRA 3/14/2019 3:30:00 PM
Road Belt Inter Tie