Legislature(2023 - 2024)SENATE FINANCE 532
05/01/2024 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Integrated Railbelt Transmission Systems | |
| HB219 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 219 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
May 1, 2024
9:09 a.m.
9:09:05 AM
CALL TO ORDER
Co-Chair Olson called the Senate Finance Committee meeting
to order at 9:09 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Dan Saddler, Sponsor; Melodie Wilterdink,
Staff, Representative Dan Saddler; David Kirstien,
Administrative Operations Manager, Division of Vocational
Rehabilitation, Department of Labor and Workforce
Development;
PRESENT VIA TELECONFERENCE
Joel Groves, Chair, Railbelt Reliability Council; Mystie
Rail, Executive Director, Assistive Technology of Alaska;
Jamie Kokoszka, Program Coordinator, Governor's Council on
Disabilities and Special Eduation, Department of Health;
SUMMARY
HB 219 REPEAL ASSISTIVE TECHNOLOGY LOAN PROGRAM
HB 219 was Heard and Held in committee for further
consideration.
PRESENTATION: INTEGRATED RAILBELT TRANSMISSION SYSTEMS
JOEL GROVES, CHAIR, RAILBELT RELIABILITY COUNCIL
^PRESENTATION: INTEGRATED RAILBELT TRANSMISSION SYSTEMS
JOEL GROVES, CHAIR, RAILBELT RELIABILITY COUNCIL
9:09:38 AM
Co-Chair Olson relayed that the committee had considered a
background presentation on the Railbelt Transmission System
during the previous days meeting.
9:10:23 AM
AT EASE
9:11:00 AM
RECONVENED
Co-Chair Olson clarified that SB 217 would be heard during
the afternoon meeting.
9:11:11 AM
JOEL GROVES, CHAIR, RAILBELT RELIABILITY COUNCIL (via
teleconference), introduced himself and explained that he
was a professional engineer working in the private sector.
He provided a brief background to his work and board
experience.
Mr. Groves discussed a presentation entitled "Railbelt
Reliability Council - Presentation to Alaska Legislature,
Senate Finance Committee - May 1, 2024" (copy on file). He
reviewed slide 2, "Presentation Outline":
1. RRC Mandate under SB 123
2. RRC Implementation / Status
3. RRC Lessons Learned for Next Reforms
9:14:09 AM
Co-Chair Stedman suggested that the speaker slow his
presentation and refrain from using acronyms. He explained
that the audience was not the committee, rather the public.
Co-Chair Olson urged Mr. Grove to remember his audience.
Mr. Grove agreed to do so.
9:15:16 AM
Mr. Grove explained that the Railbelt Reliability Council
(RRC) had been created to serve as the Electric Reliability
Organization (ERO) for the Railbelt electric grid.
Co-Chair Olson asked how long the council had been in
existence.
Mr. Grove recounted that the predecessor to the RRC was the
Implementation Committee, organized by utilities in
December 2019 and fully realized in July 2020. He said that
the group was organized as a non-profit in January 2022.
Co-Chair Olson asked about the mission of the council.
Mr. Grove cited that RRC's mission was to serve as the ERO
for the Railbelt. He said that the council was certified to
serve the ERO for the Railbelt bulk electric system.
9:16:50 AM
Co-Chair Stedman reminded the presenter that the
presentation was for the public, and the information and
language must be presented in an understandable form.
Co-Chair Olson agreed with Co-Chair Stedman's comments. He
stressed the importance of breaking the subject down into
laymans terms to accommodate the public.
9:17:46 AM
Mr. Groves addressed slide 3, "ERO Statutory Mandate - SB
st
123 31 Legislature (May 2020)":
1. Develop / Enforce Reliability/ Security Standards.
AS 42.05.762(1); AS 42.05.765(a)(2)
2. Develop a comprehensive Integrated Resource Plan
(IRP) for the Railbelt Bulk Electric System. AS
42.05.762(2)
3. Develop / administer non-discriminatory open access
transmission and interconnection standards. AS
42.05.770(1)(A)
4. Develop / administer transmission system cost
recovery standards. AS 42.05.770(1)(B)
Mr. Groves identified that item 2 on the slide included a
planning document that defined what the system needed to
look like in the future.
Mr. Groves continued to address slide 3. He noted that the
rd
3 mandate spoke to access and movement on transmission
systems.
9:21:40 AM
Senator Kiehl asked for more detail regarding the meaning
of "open access." He mentioned a wind farm between Chugiak
and Matanuska Electric.
Mr. Groves thought Senator Kiehl referenced the Fire Island
Wind Farm, which was a 17 mega-watt windfarm near
Anchorage. He relayed that the farm was located within the
territory of Chugiak Electric and interconnected within
that system. He shared that phase two for that project had
been under negotiations but a contractual means of moving
power through the various systems was necessary and
unlikely without open access transmission.
9:24:17 AM
Senator Kiehl asked whether open access indicated a person
could pick and choose who power was sold to.
Mr. Groves said that utilities had a monopoly within their
service territory. He presented a hypothetical and noted
that power had to be sold to a utility and not directly to
an end user.
9:26:33 AM
Co-Chair Olson referenced cost recovery standards mentioned
on slide 3. He asked whether the ERO set the rate for power
moving on the transmission line.
Mr. Groves identified that the ERO developed and
administered transmission system cost recovery standards.
He thought the task was like some of the provisions
proposed in SB 217. He noted that current law did not
stipulate what cost recovery should look but gave the ERO
the authority to develop and administer transmission system
cost recover or cost allocation standard but did not
address the cost of energy, only the cost to transmit the
energy. He said that because the RRC was fully realized and
had full regulatory approval to develop cost recovery
standards, should the legislature allow, "pancake rates" as
mentioned by a testifier the previous day could be avoided.
He said a quick way to achieve reforms should be
considered.
9:28:52 AM
Senator Bishop asked whether the RRC analyzed how much
renewables could be absorbed into the system and queried
the amount. He mentioned the state of California, which had
high utility rates due to the use of renewables.
Mr. Groves affirmed that what Senator Bishop described was
part of the Integrated Resource Plan (IRP). He explained
that the criteria established in SB 123 was to provide the
greatest value at the lowest cost. He said that cost was
core to the discussion. He stated that the plan would
identify the best resource mix to serve the people of
Alaska.
Senator Bishop commented that Power Cost Equalization (PCE)
rates were based on Railbelt energy prices and expressed
concern that the price could become imbalanced due to
renewables.
Mr. Groves agreed with Senator Bishop's comments and noted
he had worked quite a bit in rural Alaska and understood
PCEs connection to Railbelt rates. He agreed that the key
challenge was that the rates needed to be balanced.
9:32:00 AM
Co-Chair Stedman brought up the issue of end-ownership of
the transmission line upgrade. He mentioned receiving
federal funds and the question of whether the state should
be the end-owner of the intertie. He asked Mr. Groves to
comment on his involvement in the development of the
transition systems.
Mr. Groves explained that the RRC would never be an owner
of electrical generation or transmission but would rather
be an umbrella entity engaging in planning of systems. He
did not have a strong opinion on who owned the assets. He
considered that there were many "business-level pros and
cons" involved but admitted he did not have the expertise
to speak about who should retain ownership.
Co-Chair Olson stressed that the issue of ownership was a
priority for the committee, particularly as the expense
related to the maintenance of the lines could fall on the
state.
Co-Chair Olson asked whether other states had a similar
structure.
Mr. Groves said that the cost of operating the system would
come from the rate payers and the job of the RRC would be
to define where the revenue came from. He shared that it
would be necessary to determine how much revenue was
necessary to keep the lines in good service for their full
working lives. He said that in the lower 48 there was more
diversity of assets and described it as "a diverse mosaic
of ownership."
9:35:40 AM
Co-Chair Stedman recalled that yesterday the committee
heard testimony about expansion of the electrical grid and
the difference in capital structures. He mentioned debt
service payments and thought the matter needed to be
considered as systems were integrated. He suggested that if
Golden Valley were energized with less cost per kilowatt
how it would impact the service and maintenance of its
assets. He considered helping utilities with install
generation assets that had not been fully amortized.
Mr. Groves relayed that he was not well-positioned to
answer Co-Chair Stedman's question.
Co-Chair Stedman believed that the issue should be
discussed as the committee considered any legislation
pertaining to the subject matter.
Co-Chair Olson agreed.
9:37:59 AM
Mr. Groves displayed slide 4, "A BRIEF HISTORY OF THE
ALASKA ERO PROJECT," which showed a timeline of key
milestones of the Electric Reliability Organization (ERO)
Project. He identified that the dark blue items denoted
Higher Authorities, the yellow items denoted RRC
Organizational Work, and the light blue denoted RRC
Mission Work:
Higher Authorities:
April 2020 SB 123 signed into law
December 2021 Regulatory Commission of Alaska notice
of ERO requirement
September 2022 Regulatory Commission of Alaska
issues ERO Cert. 9001
January 2023 Regulatory Commission of Alaska
approves rules ER1 to ER 13
November 2023 Regulatory Commission of Alaska
approves RRC tariff
9:42:19 AM
Mr. Groves continued to discuss slide 4:
RRC Organizational Work:
December 2019 - LSEs sign MOU forming RRC IC
st
July 2020 1 meeting of full RRC IC
January 2022 RRC incorporates
April 2022 RRC submits ERO application
October and November 2022 RRC files 2023 budget and
tariff
February 2023 RRC negotiates stipulated settlement
March 2023 RRC surcharge begins
May 2024 submit ER-14 to RCA
RRC Mission Work:
January 2024 CAO hired
March 2024 CTO hired
June 2024 CEO starts CAO/CTO sunset
Mr. Groves spoke of the journey to find a CEO, which had
proved difficult. He said that a professional recruiter had
been hired to find a CEO. He shared that a candidate had
been found and was in the process of moving to the
leadership position. He said that support staff had been
hired to get the work of the commission done even while the
CEO search is ongoing.
Key milestones Predecessors to Fulfilling Mandates
Funded April 2023 (12 months ago)
Rules approved Jan. 2023 (15 months ago)
Tariff approved Nov. 2023 (5 months ago)
Final 2023 surcharge approval Nov 2023 (5 mon.
ago)
CEO & Staff hiring (in progress)
9:47:11 AM
Senator Wilson asked about the candidate for CEO that Mr.
Groves mentioned, and whether the individual had experience
in Alaska.
Mr. Groves noted that he could not speak about the matter
because of confidentiality. He said that the person was not
an Alaskan but did have a work history that would benefit
them in the position.
9:48:05 AM
Senator Kiehl referenced Mr. Groves discussion about
tariffs. He asked about the cost and what benefits RRC
would bring.
Mr. Groves responded that the board had expectations of how
the work would be done and wanted the CEO to embrace those
expectations. He said it was difficult to budget without a
CEO in place. He said that the annual cost of the RRC was
projected at $5 million. He admitted that the number was
high and said that he hoped it would come down as economies
of scale were developed within the organization. He
compared EROs in the lower 48 with a combined budget of
$166 million. He said that the scale of the grid was
greater in the lower 48. He stated that the $5 million cost
for the RRC would result in a half-cent per kilowatt hour
to the ratepayer. He said that the RRC was interested in
finding cost efficiencies.
9:51:21 AM
Mr. Groves turned to slide 5, "RRC Structure & Governance":
• 501(c)(4) Non-Profit Corporation
• Combination balanced stakeholder / independent Board
of Directors
• 13 Voting Directors
o 6 utilities (CEA, GVEA, HEA, MEA, Seward, Doyon
Utilities)
o Alaska Energy Authority
o 2 independent power producers
o 1 seat advocating for residential-small
commercial ratepayer interests
o 1 seat large commercial and/or industrial
ratepayer interests
o 1 seat representing environmental ratepayer
interests
o 1 independent, non-affiliated seat
• 2 Ex-Officio Directors -RCA and RAPA
• Each seat consists of two individuals, a primary and
an alternate Director
9:54:00 AM
Mr. Groves referenced slide 6, "RRC Lessons Learned & Key
Takeaways":
New Regulations, Certificate, Tariff TAKE TIME
SB 123: 3+ years to a fully authorized ERO (5/2020 to
11/2023)
New reforms should manage expectations. RTO ready by
2027??
New reforms should not:
Drag the RRC back behind the starting line.
Delay work the RRC is already primed to do under
current law.
Mr. Groves noted that navigating new regulations was time
consuming. He expressed exhaustion with the amount of time
and work to advance the organization. He mentioned
testimony the previous day about reforms that were needed.
He thought there had been frustration about securing
approvals. He fully supported the reforms supported in SB
217. He claimed that the additional institutional reforms
were necessary to take the Railbelt where it needed to go
but that the reforms should be informed by the experience
of the RRC.
Mr. Groves pondered whether the RTO would be prepared to do
the work in 2027. He argued that new reforms should not
drag his organization back behind the starting line
waiting for new regulations and recertification. He thought
that some of the duties that had been assigned to the RTO
were already charged to RRC. He thought that it was in the
best interest of the state that the RRC retain those
duties. He expressed concern that if the duties were
transferred then reforms would be delayed.
9:59:09 AM
Mr. Groves showed slide 7, "ERO (SB123-2020) vs. RTO (SB
217B-2024)," which showed a table that was a high-level
analysis of the existing and proposed authorities for an
ERO, versus an RTO:
Function
Regulatory approvals
-regulations: 44.83.710(e),~720(e),~730(c),
-certificate: 44.83.700(c)
-tariff: 44.83.710(a)(8); ~720(a)
ERO Under SB123 (2020)
SB 123 signed 5/2020
Regulations issued 12/2021
Certificated 9/2022
Tariff approved 11/2023
RTO Under SB217B (2024)
SB 217B signed 5/2024(?)
Schedule TBD.
Schedule TBD.
Schedule TBD.
Function
Perform integrated transmission planning
ERO Under SB123 (2020)
Yes. 42.05.780
RTO Under SB217B (2024)
Yes. 44.83.710(a)(6)
10:02:53 AM
Function
Non-discriminatory open access transmission
ERO Under SB123 (2020)
Yes. 42.05.770(1)(A)
RTO Under SB217B (2024)
Yes. 44.83.710(a)(4),(8);~720(a)
Function
Transmission cost allocation tariff
ERO Under SB123 (2020)
Yes. 42.05.770(1)(B)
RTO Under SB217B (2024)
Yes. 44.83.710(e)
Mr. Groves contended that while both an ERO and the RTO
under SB 217 could perform similar functions the ERO
would get the work done faster.
Mr. Groves continued to address slide 7. He identified the
bottom table on the chart, which listed functions he
believed would be better suited to an RTO:
• Manage backbone transmission assets
• Prioritize legacy transmission rights
• Prioritize transmission upgrades to LSEs
• Adopt its own regulations
• Acquire ownership/operational control of backbone
transmission assets
10:05:42 AM
Co-Chair Olson thanked Mr. Groves for his presentation.
Mr. Groves appreciated the opportunity to provide the
background information.
10:06:15 AM
AT EASE
10:07:54 AM
RECONVENED
HOUSE BILL NO. 219
"An Act repealing the assistive technology loan guarantee
and interest subsidy program; and providing for an
effective date."
10:07:59 AM
Co-Chair Olson announced that the was the first hearing for
HB 219.
10:08:17 AM
REPRESENTATIVE DAN SADDLER, SPONSOR, explained that in
1995, when the state sought and received a federal grant to
be utilized to back loans, through a financial institution,
for individuals with disabilities, so they could buy
assistive technology that could help them to get or keep a
job, or to live more independently in our state. He shared
that assistive technology included wheelchairs, computers,
prosthetics, hearing aids, communication devices or
software. The Alaska Legislature chose to use the funding
to establish the "assistive technology loan guarantee
fund." This fund was intended to guarantee the principal
amount or subsidize the interest rate of loans to
Alaskans so they could buy assistive technology. However,
despite the Legislature's good intentions, few people have
taken advantage of this program since its inception. HB 219
seeks to fulfill the grant's original aim by repealing this
moribund grant program and directing the fund's $450,000
balance to Assistive Technology of Alaska, the non-profit
empowered to administer such grants. Repeal of the
underlying statute will be contingent on the Legislature's
reappropriation of these funds, through separate budget
legislation.
10:11:08 AM
MELODIE WILTERDINK, STAFF, REPRESENTATIVE DAN SADDLER,
addressed a Sectional Analysis (copy on file):
House Bill 219, Version B
"An Act repealing the assistive technology loan
guarantee and interest subsidy program; and providing
for an effective date."
Section 1 Page 1, Line 4
Section 1 repeals AS 23.15.125 the assistive
technology loan guarantee and interest subsidy program
which established the "assistive technology loan
guarantee fund." The fund can be used to guarantee the
principal amount or subsidize the interest rate of a
loan for purchasing assistive technology that enables
an individual to obtain or maintain employment or live
more independently.
Section 2 Page 1, Lines 5-9
Section 2 adds conditional language to Alaska's
uncodified law stipulating that this act only takes
effect if the Legislature reappropriates the balance
of the assistive technology loan fund for the purpose
of improving access to assistive technology.
Section 3 Page 1, Line 10
Section 3 provides for an immediate effective date.
10:13:09 AM
Senator Kiehl asked what assurances could be had that the
grantee would use the fund as a revolving grant fund rather
than a one-time grant.
Representative Saddler deferred to Mr. Kirstien from the
Department of Labor and Workforce Development.
10:13:49 AM
DAVID KIRSTIEN, ADMINISTRATIVE OPERATIONS MANAGER, DIVISION
OF VOCATIONAL REHABILITATION, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, responded that the original intent
was for loans to be given for the purpose of purchasing
assistive technology. He did not see it as a revolving fund
but as a large grant that would be used to fund assistive
technologies.
Senator Kiehl asked whether the potential grantee was
online for questions.
Representative Saddler noted that the executive director of
Assistive Technology of Alaska was online for questions.
10:15:39 AM
AT EASE
10:16:11 AM
RECONVENED
Senator Merrick asked whether there would be administrative
costs to administer the program.
10:16:28 AM
MYSTIE RAIL, EXECUTIVE DIRECTOR, ASSISTIVE TECHNOLOGY OF
ALASKA (ATLA) (via teleconference), explained that the
purpose of the funds once they came to ATLA was to support
the activities that ATLA had provided for 30 years. The
funds would not be a loan for clients, or a grant, the
funds would support the activities ATLA provided under the
Federal Assistive Technology Act which would include
administrative activities.
Senator Kiehl recalled that the sponsor had mentioned
hearing aids and other assistive technology. He noted that
Ms. Rail had mentioned "activities" and expressed confusion
as to how the money would be used.
Ms. Rail noted that ATLA did not provide durable medical
equipment or anything prescribed. She clarified that
assistive technology was defined as any item, piece of
equipment, software program, or product system that was
used to increase, maintain, or improve the functional
capabilities of a person with a disability. She offered
examples.
10:20:57 AM
Ms. Rail continued her description of assistive
technologies. She said that the equipment could be a
solution that was designed and created by ATLA or another
manufacturer, or an item off the shelf. She stressed that
assistive technology was not a one-size-fits-all solution
but was crafted to the specific individual.
Ms. Rail noted that ATLA was also tasked with loaning
equipment and devices so the client could determine whether
it fit their needs before purchasing. The intent of the
bill would be to support the activities that ATLA was
already providing. She noted that technology was rapidly
changing and ATLA supported the refurbishing and
redistribution of equipment. She relayed that ATLA provide
outreach and awareness as well as collaboration with
partner agencies across the state. She reiterated that the
legislation would support work already done by ATLA under
the current Assisted Technology Act. She said that as
technology evolved, so did the needs of Alaskans served,
and the bill would ensure that ATLA had the funds to meet
the increasing needs of clients in the state.
10:25:16 AM
Senator Kiehl thanked Ms. Rail for ATLA's tremendous
mission. He asked about the specific uses of the grant
funds as proposed in the bill. He asked whether the grant
would cover most activities of ATLA or specific things
within the mission.
Ms. Rail said it would be used across the board to fund all
activities.
10:27:25 AM
Senator Bishop asked for Ms. Rail to provide a list of what
was and what was not funded by ATLA.
Ms. Rail agreed to provide the information.
Senator Bishop ruminated on the matter. He recognized that
ATLA was not tasked with helping to provide wheelchairs but
felt compelled to relay a personal experience of the
difficulty of getting a repair part for a wheelchair. He
lamented that many of the chairs and replacement parts were
made in China.
10:30:16 AM
Representative Saddler riffed on Co-Chair Bishops comment
and the difficulty of finding spare parts.
10:30:54 AM
Senator Merrick asked about the requirements for ATLA
applicants.
Ms. Rail relayed that there were no real requirements. She
said that any person in Alaska who needed assistive
technology and was living could receive support.
Senator Merrick asked whether applicants needed to provide
any kind of medical documentation.
Ms. Rail explained that the process was based on the honor
system. She estimated that there had been a 99 percent
return rate for borrowed equipment.
Representative Saddler thought ATLA provided proof of
concept and loaned equipment, they did not provide grants.
He stressed that they had served numerus Alaskans.
10:33:41 AM
JAMIE KOKOSZKA, PROGRAM COORDINATOR, GOVERNOR'S COUNCIL ON
DISABILITIES AND SPECIAL EDUATION, DEPARTMENT OF HEALTH
(via teleconference), read from prepared testimony. She
stressed that assistive technology was critical for
Alaskans with disabilities to live healthy, productive,
independent, and dignified lives and to participate in
education, the labor market, and civic life. She shared
that the council believed ATLA was the best organization to
take over the remaining funds of the unrestricted Title 1
funding. She added that ATLA had a proven track record of
managing funds and aiding Alaskans. She referred to the
position paper sent by the council (copy on file).
10:35:50 AM
Co-Chair Olson OPENED public testimony.
10:36:00 AM
Co-Chair Olson CLOSED public testimony.
10:36:12 AM
Representative Saddler lamented that he had to get down to
the House Chambers.
HB 219 was heard and HELD in Committee for further
consideration.
Co-Chair Olson discussed housekeeping.
ADJOURNMENT
10:37:00 AM
The meeting was adjourned at 10:36 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 219 Sponsor Statement 2.6.24.pdf |
HFIN 3/22/2024 1:30:00 PM SFIN 5/1/2024 9:00:00 AM |
HB 219 |
| HB 219 Sectional Analysis ver B 2.6.24.pdf |
HFIN 3/22/2024 1:30:00 PM SFIN 5/1/2024 9:00:00 AM |
HB 219 |
| HB 219 Public Testimony Rec'd by 040424.pdf |
HFIN 4/12/2024 1:30:00 PM SFIN 5/1/2024 9:00:00 AM |
HB 219 |
| SB 217 (2024-05-01) RRC Presentation to Senate Finance.pdf |
SFIN 5/1/2024 9:00:00 AM |
SB 217 |