Legislature(2021 - 2022)BELTZ 105 (TSBldg)

02/23/2022 01:30 PM Senate LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 179 UTILITIES: RENEWABLE PORTFOLIO STANDARD TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
+ SB 132 CONTROLLED SUB. DATA: EXEMPT VETERINARIAN TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                       February 23, 2022                                                                                        
                           1:31 p.m.                                                                                            
                                                                                                                                
                             DRAFT                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Mia Costello, Chair                                                                                                     
Senator Joshua Revak, Vice Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Gary Stevens                                                                                                            
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 179                                                                                                             
"An Act relating to the establishment of a renewable portfolio                                                                  
standard for regulated electric utilities; and providing for an                                                                 
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 132                                                                                                             
"An Act exempting veterinarians from the requirements of the                                                                    
controlled substance prescription database."                                                                                    
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 179                                                                                                                  
SHORT TITLE: UTILITIES: RENEWABLE PORTFOLIO STANDARD                                                                            
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/04/22       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/22       (S)       L&C, FIN                                                                                               
02/23/22       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: SB 132                                                                                                                  
SHORT TITLE: CONTROLLED SUB. DATA: EXEMPT VETERINARIAN                                                                          
SPONSOR(s): HOLLAND                                                                                                             
                                                                                                                                
04/28/21       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/28/21       (S)       HSS, L&C                                                                                               
02/03/22       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
02/03/22       (S)       Heard & Held                                                                                           
02/03/22       (S)       MINUTE(HSS)                                                                                            
02/08/22       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
02/08/22       (S)       Moved SB 132 Out of Committee                                                                          
02/08/22       (S)       MINUTE(HSS)                                                                                            
02/09/22       (S)       HSS RPT  4DP                                                                                           
02/09/22       (S)       DP: WILSON, REINBOLD, BEGICH, HUGHES                                                                   
02/23/22       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CURTIS THAYER, Executive Director                                                                                               
Alaska Energy Authority (AEA)                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Introduced SB 179 on behalf of the                                                                        
administration                                                                                                                  
                                                                                                                                
JESS GEHIN, Ph.D. Associate Laboratory Director                                                                                 
Nuclear Science and Technology (NS&T) Directorate                                                                               
Idaho National Laboratory (INL)                                                                                                 
Idaho Falls, Idaho                                                                                                              
POSITION   STATEMENT:   Provided   information   about   advanced                                                             
microreactors during the hearing on SB 179.                                                                                     
                                                                                                                                
GWEN HOLDMANN, Director                                                                                                         
Alaska Center for Energy and Power (ACEP)                                                                                       
University of Alas a Fairbanks (UAF)                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Provided invited testimony on SB 179                                                                      
                                                                                                                                
CHRIS ROSE, Executive Director                                                                                                  
Renewable Energy Alaska Project (REAP)                                                                                          
Sutton, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 179.                                                                           
                                                                                                                                
NIKKI ROSE, Staff                                                                                                               
Senator Roger Holland                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Introduced SB 132 on behalf of the sponsor.                                                               
                                                                                                                                
DR. RACHEL BERNGARTT, Chair                                                                                                     
Board of Veterinary Examiners                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT: Testified  by  invitation in  support of  SB
132.                                                                                                                            
                                                                                                                                
DR. TRACY WARD, President                                                                                                       
Alaska Veterinary Medical Association                                                                                           
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT: Testified  by  invitation in  support of  SB
132.                                                                                                                            
                                                                                                                                
DR. MCKAYLA DICK, Past President                                                                                                
Alaska Veterinary Association                                                                                                   
North Pole, Alaska                                                                                                              
POSITION STATEMENT: Testified in support of SB 132.                                                                           
                                                                                                                                
TERRI LYONS, representing self                                                                                                  
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of SB 132.                                                                           
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                              
1:31:08 PM                                                                                                                  
CHAIR MIA COSTELLO called the  Senate Labor and Commerce Standing                                                             
Committee meeting  to order at 1:31  p.m. Present at the  call to                                                               
order  were  Senators  Gray-Jackson, Revak,  Stevens,  and  Chair                                                               
Costello. Senator Micciche arrived soon thereafter.                                                                             
                                                                                                                                
         SB 179-UTILITIES: RENEWABLE PORTFOLIO STANDARD                                                                     
                                                                                                                                
1:31:15 PM                                                                                                                  
CHAIR  COSTELLO announced  the consideration  of SENATE  BILL NO.                                                               
179  "An  Act  relating  to  the  establishment  of  a  renewable                                                               
portfolio   standard  for   regulated  electric   utilities;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
She noted  that this was  the first hearing, Curtis  Thayer would                                                               
provide the  introduction, and  then there  would be  invited and                                                               
public testimony.                                                                                                               
                                                                                                                                
1:32:04 PM                                                                                                                    
CURTIS  THAYER,  Executive   Director,  Alaska  Energy  Authority                                                               
(AEA), Anchorage,  Alaska, introduced  himself and TW  Patch, the                                                               
director of planning for AEA.                                                                                                   
                                                                                                                                
1:32:27 PM                                                                                                                    
MR. THAYER  began the presentation  with an explanation  of AEA's                                                               
programs and  services. He summarized the  following that appears                                                               
on slide 2:                                                                                                                     
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Railbelt   Energy      AEA   owns   the  Bradley   Lake                                                                  
     Hydroelectric  Project, the  Alaska  Intertie, and  the                                                                    
     Sterling  to Quartz  Creek Transmission  Line    all of                                                                    
     which benefit  Railbelt consumers by reducing  the cost                                                                    
     of power.                                                                                                                  
                                                                                                                                
     Power Cost  Equalization (PCE)    PCE reduces  the cost                                                                  
     of   electricity  in   rural  Alaska   for  residential                                                                    
     customers and community  facilities, which helps ensure                                                                    
     the sustainability of centralized power.                                                                                   
                                                                                                                                
     Rural  Energy    AEA constructs  bulk fuel  tank farms,                                                                  
     diesel powerhouses,  and electrical  distribution grids                                                                    
     in rural villages. AEA supports  the operation of these                                                                    
     facilities   through   circuit  rider   and   emergency                                                                    
     response programs.                                                                                                         
                                                                                                                                
     Alternative   Energy  and   Energy  Efficiency      AEA                                                                  
     provides  funding, technical  assistance, and  analysis                                                                    
     on   alternative   energy   technologies   to   benefit                                                                    
     Alaskans.  These include  biomass, hydro,  solar, wind,                                                                    
     and others.                                                                                                                
                                                                                                                                
     Grants  and  Loans     AEA   provides  loans  to  local                                                                  
     utilities,  local  governments, and  independent  power                                                                    
     producers  for the  construction  or  upgrade of  power                                                                    
     generation and other energy facilities.                                                                                    
                                                                                                                                
     Energy  Planning     In collaboration  with  local  and                                                                  
     regional   partners,   AEA    provides   economic   and                                                                    
     engineering analysis  to plan the development  of cost-                                                                    
     effective energy infrastructure.                                                                                           
                                                                                                                                
1:33:33 PM                                                                                                                    
MR.  THAYER turned  to slide  3,  What is  a Renewable  Portfolio                                                               
Standard?  He  explained that  it  is  a requirement  for  retail                                                               
electric suppliers  to supply a  minimum percentage or  amount of                                                               
their  retail load  with eligible  sources  of renewable  energy.                                                               
Typically, he  said it is backed  with a financial or  other form                                                               
of incentive.  Often it  is accompanied  by a  tradable renewable                                                               
energy certificate  (REC) to facilitate  compliance. Importantly,                                                               
RPS standards are unique to each of the 32 states that have                                                                     
them. They are never designed the same. He offered his                                                                          
expectation that Alaska's would be different going forward.                                                                     
                                                                                                                                
MR. THAYER paraphrased slide 4 that read as follows:                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Senate Bill 179                                                                                                          
                                                                                                                                
     • Senate Bill (SB) 179 promotes  energy independence,                                                                      
        long-term cost reductions, and competitive markets                                                                      
        in Alaska's Railbelt.                                                                                                   
                                                                                                                                
     • SB 179  aligns  Alaska  with  30   states  and  two                                                                      
        territories in creating a renewable portfolio                                                                           
        standard on the Railbelt.                                                                                               
                                                                                                                                
     • A key element  of  the  Governor's  RPS is  a  firm                                                                      
        commitment to transition to 30% renewable power by                                                                      
        2030 and 80% by 2040.                                                                                                   
                                                                                                                                
     • Expanding our renewable energy portfolio is the best                                                                     
        way to diversify our supply thus increasing Alaska's                                                                    
        energy security.                                                                                                        
                                                                                                                                
1:35:00 PM                                                                                                                    
MR. THAYER stated that in 2010 the legislature passed An Act                                                                    
Declaring a State Energy Policy. He read the legislative intent                                                                 
in that bill:                                                                                                                   
                                                                                                                                
     LEGISLATIVE   INTENT.  It   is   the   intent  of   the                                                                    
     legislature that                                                                                                           
                                                                                                                                
     (1) the state  achieve a 15 percent  increase in energy                                                                    
          efficiency on a per capita basis between 2010 and                                                                     
          2020;                                                                                                                 
                                                                                                                                
     (2)  the  state  receive  50 percent  of  its  electric                                                                    
          generation from renewable and alternative energy                                                                      
          sources by 2025;                                                                                                      
                                                                                                                                
     (3) the  state work to  ensure a reliable  in-state gas                                                                    
          supply for residents of the state;                                                                                    
                                                                                                                                
     (4) the power project fund (AS 42.45.010) serve as the                                                                     
          main source of state assistance for energy                                                                            
          projects;                                                                                                             
                                                                                                                                
     (5) the state remain a leader in petroleum and natural                                                                     
          gas production and become a leader in renewable                                                                       
          and alternative energy development.                                                                                   
                                                                                                                                
MR. THAYER displayed  slide 6 that illustrates  that from January                                                               
2012 to  September 2020,  the RPS  policies in  the participating                                                               
states have shifted more toward  standards and less toward goals.                                                               
He noted that Alaska  has been in the goal stage  and SB 179 will                                                               
take it more to standards.                                                                                                      
                                                                                                                                
MR. THAYER reviewed  the energy production profile  by source for                                                               
the U.S., Alaska, and Alaska  if Susitna-Watana were to be built.                                                               
Today, 70  percent of the  energy produced  in the U.S.  is still                                                               
coming from oil  and gas; 9 percent comes  from renewable energy,                                                               
primarily  biomass,  solar,  and   wind;  2  percent  comes  from                                                               
hydroelectric; 11 percent  from coal; and 8  percent from nuclear                                                               
power.  In Alaska  today, 65  percent of  the energy  produced is                                                               
from oil and gas; 27  percent comes from hydroelectric; 2 percent                                                               
from  renewable energy;  and 6  percent  comes from  coal. At  29                                                               
percent,  Alaska's portfolio  of  renewables falls  short of  the                                                               
goal  to  have   50  percent  of  energy   production  come  from                                                               
renewables  including  hydro,  but  it is  moving  in  the  right                                                               
direction.  He  noted  that  if   Susitna-Watana  or  some  other                                                               
renewable were to  be a reality, hydroelectric  would account for                                                               
58 percent of Alaska's energy production.                                                                                       
                                                                                                                                
1:37:06 PM                                                                                                                    
SENATOR MICCICHE joined the committee.                                                                                          
                                                                                                                                
1:38:17 PM                                                                                                                    
MR.  THAYER continued  to  slide 9  to discuss  the  30 year  old                                                               
Bradley  Lake  Hydroelectric Project  that  is  located about  25                                                               
miles from  Homer on  the Kenai  Peninsula. It  provides low-cost                                                               
energy  to the  Railbelt members  from Homer  Electric to  Golden                                                               
Valley in  Fairbanks. For example,  18 percent of the  power from                                                               
Bradley Lake  is sent  to Fairbanks consumers.  The cost  of this                                                               
power is  roughly 4 cents/kWh,  whereas natural gas is  7-8 cents                                                               
per kWh, and the wind farm  at Fire Island currently is 9.7 cents                                                               
per kWh. Bradley  Lake provides about 10 percent  of the Railbelt                                                               
energy  needs, which  is equivalent  to  54,400 homes/year.  Last                                                               
year the  $47 million  Battle Creek  diversion into  Bradley Lake                                                               
was completed and  it provides electricity for  the equivalent of                                                               
5,000 homes. That project was  done through a partnership between                                                               
the Railbelt utilities and AEA.  He highlighted that the bonds on                                                               
Bradley Lake were paid off this year.                                                                                           
                                                                                                                                
MR. THAYER continued  to slide 10 to discuss  the Dixon Diversion                                                               
Project, which would  expand the capacity of Bradley  Lake. It is                                                               
located five miles from Bradley  Lake. Two alternatives are under                                                               
consideration;  Alternative 1  is a  tunnel to  Bradley Lake  and                                                               
Alternative 2  is a  tunnel to the  Martin River  Powerhouse. The                                                               
cost estimate ranges from $160  million to $500 million. It could                                                               
provide electric energy  for 17,000 to 40,000  homes, which would                                                               
nearly double the output of Bradley Lake.                                                                                       
                                                                                                                                
1:40:39 PM                                                                                                                    
CHAIR COSTELLO noted that Senator Stevens had a question.                                                                       
                                                                                                                                
SENATOR STEVENS  asked if  a lot  of power  is lost  from Bradley                                                               
Lake  to Fairbanks  because the  lines  need improvement.  Noting                                                               
that Susitna-Watana has  always run into problems,  he asked what                                                               
the last  illustration on slide  8 would  look like if  the Dixon                                                               
Diversion Project replaced Susitna-Watana.                                                                                      
                                                                                                                                
MR. THAYER  replied it  would have  minimal affect.  Bradley Lake                                                               
currently  provides  10  percent   of  the  Railbelt  energy  and                                                               
maximizing  the Dixon  Diversion Project  would probably  add 6-7                                                               
percent.  He  noted that  subsequent  slides  address the  needed                                                               
upgrades  to the  transmission line,  but in  general, the  lines                                                               
leaving Bradley Lake are at  capacity. The Railbelt utilities are                                                               
working with AEA  to make those upgrades.  Subsequent slides talk                                                               
about how this will happen and how it will be financed.                                                                         
                                                                                                                                
1:42:33 PM                                                                                                                    
MR. THAYER  displayed slide  11 that outlines  the steps  for the                                                               
Dixon Diversion  Project for  FY2022 through  FY2024. It  read as                                                               
follows:                                                                                                                        
                                                                                                                                
     Fiscal Year 2022                                                                                                         
     •  Establish river gauge                                                                                                   
     •  Initiate Bradley Lake FERC License Amendment                                                                            
     •  Alternatives Analysis Report (Conceptual Design)                                                                        
                                                                                                                                
     Fiscal Year 2023                                                                                                         
     •  Detailed mapping/topography                                                                                             
     •  License Amendment Consultations                                                                                         
     •  Environmental Studies                                                                                                   
     •  Hydrology Studies                                                                                                       
     •  Initial Geotechnical Investigations                                                                                     
     •  Preliminary Design                                                                                                      
                                                                                                                                
     Fiscal Year 2024                                                                                                         
     •  Feasibility Design and Hydrology                                                                                        
     •  Environmental Studies                                                                                                   
     •  Draft License Amendment                                                                                                 
     •  Detailed Geotechnical Investigations                                                                                    
     •  Operations/Power Modeling                                                                                               
     •  Environmental Assessment                                                                                                
                                                                                                                                
MR.  THAYER  said  the  next  two slides  were  lifted  from  the                                                               
National Energy Lab  report. The first shows where  power for the                                                               
Railbelt  would  come from  in  a  peak  demand scenario  on  the                                                               
coldest day of the year. Hydro  would be the largest piece. Slide                                                               
13 looks at the same  scenario without Susitna-Watana. A lot more                                                               
of the  power comes from wind  and solar. He noted  that the wind                                                               
component is untested in many places  in Alaska and both wind and                                                               
solar need batteries to store the  power and put it onto the grid                                                               
as  needed. These  batteries would  likely be  located in  Homer,                                                               
Southcentral  (Anchorage),  and  Fairbanks.  He  said  AEA  looks                                                               
forward to the ever changing technologies for these resources.                                                                  
                                                                                                                                
1:44:56 PM                                                                                                                    
MR. THAYER  turned to slide 14,  Railbelt Infrastructure Upgrades                                                               
to  respond  further  to  Senator  Steven's  question  about  the                                                               
condition of  the power line  from Bradley Lake to  Fairbanks. He                                                               
listed  the  Railbelt  utilities,   which  are  Chugach  Electric                                                               
Association,  Matanuska  Electric  Association,  Seward  Electric                                                               
Association,  Homer  Electric   Association,  and  Golden  Valley                                                               
Electric  Association. Together,  they represent  550,000 Alaskan                                                               
consumers.  The  plans  to upgrade  the  infrastructure  involves                                                               
projects  to   remove  transmission  constraints,   improve  grid                                                               
resiliency, and  allow for  better use  of the  Bradley Project's                                                               
potential  by increasing  its ability  to deliver  more low-cost,                                                               
renewable energy  throughout the Railbelt grid.  The lines, which                                                               
are more than 30 years old and  pre Bradley Lake, do not have the                                                               
capacity to move additional renewables.                                                                                         
                                                                                                                                
1:46:16 PM                                                                                                                    
MR.  THAYER  directed  attention  to the  Required  Project  Work                                                               
Summary  on  slide  15.  The utilities  are  looking  at  working                                                               
together on the following projects:                                                                                             
                                                                                                                                
Upgrade Transmission Line from Bradley  Junction to Soldotna. The                                                             
transmission line would be upgraded to  230 kV or a second 115 kV                                                               
line would be constructed.                                                                                                      
                                                                                                                                
Upgrade Transmission Line from Sterling to Quartz Creek.                                                                      
                                                                                                                                
Upgrade  Transmission Line  from  Sterling to  Quartz Creek.  AEA                                                             
purchased this  transmission line  from Homer  Electric following                                                               
the Swanson  Lake fire  to extinguish a  number of  lawsuits. The                                                               
goal was to  upgrade the transmission line from 115  kV to 230 kV                                                               
and remove the 69 kV line.                                                                                                      
                                                                                                                                
Battery  Energy Storage  Systems (BESS)  for Grid  Stabilization.                                                             
This project will  upgrade the existing BESS  system in Fairbanks                                                               
and add systems in the Kenai and Southcentral regions.                                                                        
                                                                                                                                
Study of Alternative  Path to Export Energy  off Kenai Peninsula.                                                             
This might be an undersea cable.                                                                                                
                                                                                                                                
MR THAYER stated that the total  cost for these projects is about                                                               
$261  million. Because  the Bradley  Lake  power sales  agreement                                                               
from 30  years ago allows  for required project work,  the excess                                                               
from the  12.5 percent  that the utilities  are obligated  to pay                                                               
for the next 20 years can  go toward these projects. He estimated                                                               
that  this  bonding  could  pay from  $225-$250  million  of  the                                                               
upgrades. AEA is working with  the utilities on this bonding. The                                                               
ratepayers will pay  no more than they do now.  He noted that the                                                               
line  loss to  Fairbanks is  estimated to  cost ratepayers  up to                                                               
$0.5 million  per month so  this will  make a huge  difference in                                                               
that  community.  The  upgraded   transmission  lines  will  also                                                               
provide  opportunities for  wind and  solar to  serve the  entire                                                               
Railbelt.                                                                                                                       
                                                                                                                                
1:49:46 PM                                                                                                                    
MR. THAYER  briefly reviewed the  Alaska Intertie. Slide  16 read                                                               
as follows:                                                                                                                     
                                                                                                                                
     • Constructed in the mid -1980s, the Alaska Intertie                                                                       
        is a 170 mile -long, 345 kilovolt (kV) transmission                                                                     
        line from Willow to Healy                                                                                               
                                                                                                                                
He highlighted  that this  line was designed  to be  upgraded and                                                               
that work  would need to be  done for any renewable  work that is                                                               
done from Anchorage to Fairbanks.                                                                                               
                                                                                                                                
        • Operated by AEA and Railbelt utilities, the                                                                           
        transmission line improves reliability within                                                                           
        Railbelt system                                                                                                         
    • Allows Golden Valley Electric Association (GVEA) to                                                                       
        connect to and benefit from lower cost power                                                                            
      • Between 2008 and 2018, the Intertie provided an                                                                         
        average annual cost savings of $30 million to GVEA                                                                      
        customers                                                                                                               
                                                                                                                                
MR. THAYER emphasized that even  after 30 years, Bradley Lake and                                                               
the  Alaska  Intertie  continues   to  save  money.  He  directed                                                               
attention  to the  bulleted  points on  slide  17 that  highlight                                                               
clean  energy  savings  for  the  Railbelt.  The  slide  read  as                                                               
follows:                                                                                                                        
                                                                                                                                
        • Bradley Lake Expansion (Spillway Raise)      $4                                                                     
          million                                                                                                               
        • Bradley-Soldotna 115kV Line  $66 million                                                                            
        • Soldotna-Quartz Creek (and Substation)      $70                                                                     
          million                                                                                                               
        • Bernice Lake-Beluga HVDC  $185 million                                                                              
                                                                                                                                
He noted  that this is an  undersea cable to take  a line to                                                                    
Beluga and  provide a second  line into Fairbanks,  which is                                                                    
similar to what Enstar Natural  Gas does with two lines. AEA                                                                    
has just  one line  into Southcentral and  is looking  for a                                                                    
second.                                                                                                                         
                                                                                                                                
      • Dave's Creek-University 230kV Line  $58 million                                                                       
        •  Grid Stabilization  $115 million                                                                                   
                                                                                                                                
1:52:02 PM                                                                                                                    
MR.  THAYER  displayed  slide  18,  Susitna-Watana  Hydroelectric                                                               
Project History. He  recapped that the project  was first studied                                                               
as  a source  of  power in  the  1950s. In  the  1980s the  state                                                               
supported the project  and by 2010 the 50  percent renewable goal                                                               
were   established.   In   2011,  the   legislature   unanimously                                                               
authorized the  Alaska Energy Authority to  pursue Susitna-Watana                                                               
Hydro and studies  began in 2012. He reported that  the state has                                                               
spent $193  million on FERC  licenses and estimated it  will take                                                               
an additional  $100 million to  get a FERC license.  The previous                                                               
administration put licensing  of the project in  abeyance and the                                                               
current administration rescinded the abeyance in 2019.                                                                          
                                                                                                                                
MR.  THAYER highlighted  that the  utilities  along the  Railbelt                                                               
have  expressed interest  in purchasing  450  megawatts from  the                                                               
project and  that there was  interest from the private  sector to                                                               
build  Susitna-Watana. He  acknowledged that  a new  cost-benefit                                                               
analysis was needed before any more work is done.                                                                               
                                                                                                                                
MR. THAYER  paraphrased slide  19, Cook  Inlet Natural  Gas Value                                                               
into the Future. It read as follows:                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Opportunities:                                                                                                             
     • Home heating on the Railbelt (including potential                                                                        
        future expansion)                                                                                                       
    • Power generation fuel on an as-needed basis and gas                                                                       
        storage (CINGSA)                                                                                                        
     • Industrial customers in the Cook Inlet                                                                                   
          - Combined heat and power applications standalone                                                                     
             customers                                                                                                          
          - Possibility for green hydrogen production                                                                           
          - In-state industrial use                                                                                             
          - Potential pipeline transport for minerals                                                                           
              extraction                                                                                                        
                                                                                                                                
MR. THAYER  described SB 179 as  a work in progress  as the state                                                               
moves toward clean energy. This  is something that the utilities,                                                               
AEA, and the state have said they  want to do and now is the time                                                               
to work together to figure out  a path forward. He added that the                                                               
RPS is  with the Regulatory  Commission of Alaska (RCA)  and that                                                               
agency   will  be   responsible   for  both   the  statutes   and                                                               
regulations.                                                                                                                    
                                                                                                                                
1:56:02 PM                                                                                                                    
CHAIR  COSTELLO mentioned  that  while the  bill  would create  a                                                               
portfolio standard  for electric  providers to  include renewable                                                               
energy,  it  does  not  consider  other  innovative  carbon  free                                                               
options  such  as microreactors.  For  that  reason, the  invited                                                               
testimony  will  illuminate  new   opportunities  for  Alaska  to                                                               
incorporate  clean, reliable  energy  sources  into the  electric                                                               
grid                                                                                                                            
                                                                                                                                
1:57:19 PM                                                                                                                    
JESS GEHIN, Ph.D. Associate  Laboratory Director, Nuclear Science                                                               
and  Technology  (NS&T)  Directorate, Idaho  National  Laboratory                                                               
(INL),  Idaho  Falls,  Idaho, stated  that  his  testimony  would                                                               
provide  information on  nuclear energy  as a  primary source  of                                                               
clean,  low   carbon  energy.  It  provides   an  opportunity  to                                                               
complement  renewables, so  it  could be  considered  part of  an                                                               
energy  portfolio. He  explained that  INL is  the Department  of                                                               
Energy's  nuclear laboratory  that performs  research on  nuclear                                                               
energy  technologies, deployment,  and  demonstrations. He  noted                                                               
that INL  also works  closely with  other laboratories  on energy                                                               
system integration.                                                                                                             
                                                                                                                                
1:59:36 PM                                                                                                                    
DR. GEHIN  explained that  nuclear energy is  based on  a process                                                               
called  fission. A  nuclear reactor  system  harnesses the  power                                                               
from nuclear fission,  controls it, and converts  it primarily to                                                               
heat that  can be converted  to electricity. Fuel is  not burned,                                                               
so carbon emissions are comparable  to other renewable sources of                                                               
energy.  Nuclear plants  provide firm  power  24/7 or  it can  be                                                               
adjusted to meet  demand; operate in any  weather conditions; and                                                               
run for long  periods between refueling. They are  not subject to                                                               
fuel  supply disruptions.  Nuclear  plants in  the U.S.  generate                                                               
about  100  gigawatts (GWh)  or  20  percent of  the  electricity                                                               
produced in the  nation. It accounts for about 55  percent of the                                                               
low carbon electricity generation.                                                                                              
                                                                                                                                
2:02:15 PM                                                                                                                    
DR. GEHIN  recounted the significant  development in  new reactor                                                               
types  in  the  last  several  years.  Termed  advanced  reactors                                                               
because of the technologies used,  they are under development and                                                               
will be demonstrated in the  next decade and deployed after that.                                                               
The  advanced  reactors  use  fuels  and  coolants  that  can  be                                                               
operated at higher temperatures  and lower pressures, which leads                                                               
to  simpler designs,  higher efficiency  and a  broader range  of                                                               
application. One size is typically  less than 50 megawatts. Small                                                               
modular  reactors typically  range  from 500  [kilowatts] to  300                                                               
megawatts, and  modules can be  added to meet the  required power                                                               
demand. Smaller  sized reactors can  be fabricated in  a factory,                                                               
which reduces  the cost  and allows  a more  streamlined schedule                                                               
for development.                                                                                                                
                                                                                                                                
DR.  GEHIN described  three microreactor  concepts  that will  be                                                               
demonstrated in the next five years.                                                                                            
                                                                                                                                
   1)  The Department of Energy (DOE) is funding the microreactor                                                               
      development called  Marvel. The  plan  is for  it to  start                                                               
      operations  in 2023.  It  will  demonstrate  the  processes                                                               
      required  to  get  a   microreactor  designed,  authorized,                                                               
      fabricated, and started.                                                                                                  
                                                                                                                                
   2)  In the 2024 timeframe, the Department of Energy Capability                                                               
      Office will demonstrate at INL its mobile microreactor for                                                                
      remote uses.                                                                                                              
                                                                                                                                
   3)  The company Oklo is developing the microreactor called                                                                   
      Aurora. It will be demonstrated at INL in the middle of                                                                   
      this decade.                                                                                                              
                                                                                                                                
2:05:07 PM                                                                                                                    
DR.  GEHIN  related  that DOE's  Advanced  Reactor  Demonstration                                                               
Program  is  supporting  public/private  partnerships  for  other                                                               
advanced reactor systems. These include:                                                                                        
                                                                                                                                
   1)  TerraPower's Natrium Reactor, which is sodium cooled, will                                                               
      be deployed at a retired coal plant in Kemmerer, Wyoming.                                                                 
                                                                                                                                
   2)  X-energy is developing the Xe-100 gas  cooled reactor that                                                               
      will be sited in Washington state and start up in 2027.                                                                   
                                                                                                                                
   3)  Kairos salt-cooled high temperature test reactor that will                                                               
      start up in 2026.                                                                                                         
                                                                                                                                
   4)  Southern Company and TerraPower are partnering on a Molten                                                               
      Chloride Reactor Experiment that will start in 2025.                                                                      
                                                                                                                                
DR. GEHIN  also mentioned  the small  modular reactor  (SMR) that                                                               
Utah  Associated  Municipal Power  System  is  moving forward  on                                                               
deploying on the  INL site in 2029 that consists  of six modules,                                                               
each of which is 77 megawatts.                                                                                                  
                                                                                                                                
He said  the point is  that there  will be demonstrations  in the                                                               
next  decade  that will  prove  the  ability and  feasibility  of                                                               
microreactors  and small  modular reactors  to meet  clean energy                                                               
needs.                                                                                                                          
                                                                                                                                
2:06:50 PM                                                                                                                    
DR. GEHIN related  that there is increased interest  in states to                                                               
consider nuclear energy as an  option. In addition to projects in                                                               
Idaho,  Wyoming, and  Washington  state,  West Virginia  recently                                                               
removed its ban on nuclear  power plants; Indiana has legislation                                                               
to consider  small modular reactors; Nebraska  passed legislation                                                               
to  allow   nuclear  energy  to  qualify   for  renewable  energy                                                               
incentives; and SB  177 in Alaska seeks  to streamline deployment                                                               
of microreactors.                                                                                                               
                                                                                                                                
DR. GEHIN described  other things happening in  Alaska related to                                                               
nuclear power.                                                                                                                  
                                                                                                                                
   1)  Copper Valley Electric Association  is working  with Ultra                                                               
      Safe Nuclear Corporation (USNC) on a feasibility study of                                                                 
      microreactors.                                                                                                            
   2)  The U.S. Air  Force  has expressed  its  intention to  use                                                               
      nuclear energy at Eielson Air Force Base.                                                                                 
   3)  INL has supported and collaborated to look at  the role of                                                               
      nuclear energy in Alaska. This includes the study by MIT                                                                  
      and supported by the INL Market  Initiative, which included                                                               
      participation  from  the  University  of  Alaska  Anchorage                                                               
      faculty and  staff. A  finding was  that microreactors  are                                                               
      cost  effective   because  they   provide  both   heat  and                                                               
      electricity.                                                                                                              
   4)  The University of Alaska, Anchorage supported studies that                                                               
      looked at use cases for nuclear energy in Alaska.                                                                         
                                                                                                                                
DR. GEHIN  stated that the  foregoing are concrete  projects that                                                               
will  demonstrate the  feasibility  of a  wide  range of  nuclear                                                               
energy concepts.  Microreactors that provide heat  and power look                                                               
particularly attractive  for remote communities and  rural areas.                                                               
In the next ten years  these demonstration projects will show how                                                               
these reactors perform. Nuclear energy  is clean and it meets all                                                               
the  objectives of  a renewable  energy  portfolio standard,  and                                                               
because of the emerging efforts,  it warrants consideration for a                                                               
future energy source.                                                                                                           
                                                                                                                                
2:09:55 PM                                                                                                                    
CHAIR COSTELLO asked him to  talk about the safety considerations                                                               
and the small physical footprint of a microreactor.                                                                             
                                                                                                                                
DR GEHIN stated that the physical  footprint for a micro might be                                                               
the size of  a shipping container while others may  have a garage                                                               
size building.  There may  also be  support buildings  around the                                                               
facility itself. Safety  considerations include exclusionary area                                                               
emergency  planning  zones,  which   are  unoccupied  spaces.  He                                                               
relayed that  the Nuclear Regulatory Commission  (NRC) is working                                                               
to  update the  requirements for  emergency planning  zones given                                                               
the small size  and enhanced safety of these  small reactors. The                                                               
expectation is that the emergency  planning zones will be limited                                                               
to  the  physical  area  of the  reactor.  By  comparison,  large                                                               
gigawatt class reactors may occupy 50 acres.                                                                                    
                                                                                                                                
With regard  to safety, he  said a lot of  work has been  done on                                                               
light water reactors since Fukushima  to maintain cooling after a                                                               
reactor shuts down, because the  heat produced during the fission                                                               
process does not  immediately go to zero.  Existing reactors need                                                               
power  to cool  the reactor  within 72  hours if  power is  lost.                                                               
Without  power,  a  disaster  like  what  happened  at  Fukushima                                                               
occurs. New safety  measures for those reactors have  been to put                                                               
systems  in  place  to  ensure   that  power  is  maintained.  By                                                               
comparison,  decay heat  for advanced  reactors does  not require                                                               
any  operator action  to  maintain  cooling, which  significantly                                                               
enhances safety if there is an incident at a reactor.                                                                           
                                                                                                                                
2:13:28 PM                                                                                                                    
SENATOR  MICCICHE  asked  if  there  has  been  a  delay  in  the                                                               
development  of  microreactors  because he  would  have  expected                                                               
something on the market by now.                                                                                                 
                                                                                                                                
DR. GEHIN  said no; there has  been discussion for some  time but                                                               
the  development   and  deployment  timeline  for   this  nuclear                                                               
technology has been quite fast.                                                                                                 
                                                                                                                                
SENATOR MICCICHE  observed that in certain  applications in rural                                                               
Alaska, 300 megawatts was a  significant amount of generation. He                                                               
asked  what portion  could go  toward  heating structures  versus                                                               
providing electrical power.                                                                                                     
                                                                                                                                
DR. GEHIN  clarified that reactors  under design range  from less                                                               
than  a   megawatt  to  300  megawatts   or  more.  Microreactors                                                               
currently are being developed in  the megawatt range. The reactor                                                               
that will be demonstrated at INL is in the 100 kilowatt range.                                                                  
                                                                                                                                
He explained that  the 300 megawatt reactor  mentioned earlier is                                                               
the upper limit  for a small modular reactor and  it will produce                                                               
700-800  megawatts of  heat.  It  depends on  the  design of  the                                                               
reactor  and the  power  conversion system,  but  one can  decide                                                               
whether some  or all will go  directly to heat and  how much will                                                               
go to  electricity. The waste or  rejected heat can also  be used                                                               
for different processes.                                                                                                        
                                                                                                                                
SENATOR  MICCICHE asked  what  it would  take  for the  renewable                                                               
community to accept micro nuclear  reactors as a renewable source                                                               
of energy.                                                                                                                      
                                                                                                                                
DR. GEHIN offered his view  that the nuclear community is working                                                               
closely with  the renewable community. Combining  firm power from                                                               
nuclear   with  renewables   makes   it  is   easier  to   manage                                                               
variabilities. He  described it  as infinite batteries.  He added                                                               
that reactors  can also be  designed to work with  renewables for                                                               
thermal energy storage. The reactor  in Wyoming, for example, has                                                               
the ability to  maneuver power through thermal  energy storage to                                                               
adjust to variable renewables.                                                                                                  
                                                                                                                                
2:18:23 PM                                                                                                                    
SENATOR  STEVENS  noted that  hydro  power  in his  community  of                                                               
Kodiak costs  about 6 cents/kWh. He  asked what it would  cost to                                                               
run a small nuclear plant.                                                                                                      
                                                                                                                                
DR.  GEHIN said  that  it  would be  hard  to  compete with  that                                                               
because established  hydro is very cost  effective. Analyses have                                                               
been done  that show the  cost would be  from 10 cents/kWh  to as                                                               
much as  50 cents/kWh for  the very small nuclear  systems. These                                                               
systems would only  be competitive in small  rural locations that                                                               
rely on diesel that  is shipped in. He said the  goal is to match                                                               
with the appropriate market.                                                                                                    
                                                                                                                                
CHAIR COSTELLO  invited Gwen Holdmann  to comment on the  bill or                                                               
the approach it takes.                                                                                                          
                                                                                                                                
2:19:59 PM                                                                                                                    
GWEN  HOLDMANN,  Director, Alaska  Center  for  Energy and  Power                                                               
(ACEP), UAF, Fairbanks,  Alaska, stated that it  is fairly common                                                               
for nuclear to  be excluded from an RPS. No  other state includes                                                               
nuclear as  eligible under a  RPS, although a bill  introduced in                                                               
California in  2020 would  have made  nuclear eligible  under its                                                               
RPS  standard. The  European Union  (EU)  also recently  declared                                                               
nuclear  a  green  technology.  She said  Alaska  does  not  have                                                               
nuclear as part of its renewable  energy mix, but she believes it                                                               
has potential as part of a future mix.                                                                                          
                                                                                                                                
MS.  HOLDMANN agreed  with an  earlier  comment that  the use  of                                                               
nuclear has been discussed for a  long time. She noted that there                                                               
were no venders  looking at microreactors when  the Alaska Center                                                               
for  Energy  and  Power  first reported  to  the  legislature  on                                                               
modular nuclear  reactors in  2011, but that  has changed.  Now a                                                               
number  of  venders  are  actively  looking  at  smaller  reactor                                                               
designs. She highlighted that there is  a plan to install up to a                                                               
5 megawatt reactor at Eielson Air Force Base by 2027.                                                                           
                                                                                                                                
MS. HOLDMANN  stated that  ACEP has been  working with  the Idaho                                                               
National Lab to analyze opportunities  for microreactors under 50                                                               
megawatts of  electric power  output for  the Alaska  market. She                                                               
highlighted  that  including  microreactors  in  this  RPS  would                                                               
provide additional  grid resilience for  critical infrastructure.                                                               
This would be similar to the  Eielson project where both heat and                                                               
power could be  provided to critical nodes on  the Railbelt grid.                                                               
She  agreed  with  Dr.  Gehin  that there  is  the  potential  to                                                               
regulate variable  renewables. Mr.  Thayer talked about  the need                                                               
for  additional   energy  storage  on  the   Railbelt  grid,  but                                                               
microreactors could potentially be  an alternative solution since                                                               
they  have the  ability  to firm  up  renewable energy  resources                                                               
while  providing other  energy  sources like  electric power  and                                                               
heat.  This is  different  than a  battery.  There are  potential                                                               
industrial applications  as well  as for  rural hubs.  She opined                                                               
that nuclear could support other  opportunities in Alaska related                                                               
to hydrogen or synthetic fuel production.                                                                                       
                                                                                                                                
MS. HOLDMANN related that ACEP  has been working on the economics                                                               
and possible  use cases for  microreactors and hopes  to continue                                                               
to do so  as part of a statewide roadmap  for nuclear energy. She                                                               
mentioned that  many states  have a  clean energy  standard (CES)                                                               
instead  of   a  renewable  portfolio   standard  RPS.   The  key                                                               
differences  include  energy   efficiency,  carbon  capture,  and                                                               
nuclear.  She noted  that this  might exclude  biomass, which  is                                                               
considered renewable  but it does  have emissions.  She concluded                                                               
her  comments saying  that  she did  not see  that  an RPS  would                                                               
necessarily exclude nuclear.                                                                                                    
                                                                                                                                
2:25:27 PM                                                                                                                    
SENATOR REVAK  noted that the  committee heard about  hydro power                                                               
that cost about 6  cents/kWh. He asked if she had  an idea of the                                                               
cost for nuclear.                                                                                                               
                                                                                                                                
MS.  HOLDMANN said  it will  not compete  with 6  cents/kWh hydro                                                               
power. ACEP is  working with INL to understand  the value streams                                                               
that come  from a microreactor and  she believes there will  be a                                                               
place from an  economic basis for these types of  systems as part                                                               
of the state and national energy mix in the future.                                                                             
                                                                                                                                
SENATOR REVAK  asked how many  states have RPS policies  or clean                                                               
energy standards, and how that has affected the rates for users.                                                                
                                                                                                                                
MS.  HOLDMANN said  she did  not  have the  answer, although  she                                                               
recalled that  Mr. Thayer  said about half  the states  have some                                                               
type of RPS or clean energy standard.                                                                                           
                                                                                                                                
SENATOR  MICCICHE  asked  if  the   NRC  was  looking  at  tiered                                                               
permitting  such  that  the  evaluation  is  different  than  for                                                               
typical nuclear construction.                                                                                                   
                                                                                                                                
MS. HOLDMANN  answered that the  idea over  the long term  is for                                                               
the  National Regulatory  Commission  to  license the  technology                                                               
then a separate  licensing process would be specific  to the site                                                               
to ensure  that the technology  is appropriate for the  site. The                                                               
expectation  is that  the reactor  design  would not  need to  go                                                               
through  multiple  levels  of relicensing  for  every  individual                                                               
project because they will be developed  and built in a factory to                                                               
exacting specifications.                                                                                                        
                                                                                                                                
2:30:34 PM                                                                                                                    
SENATOR MICCICHE  asked if  anyone had modeled  a community  on a                                                               
megawatt Btu  balance for generation  versus heat and  waste heat                                                               
and looked for applications for  a district heating system versus                                                               
outlying electrification using waste heat heating.                                                                              
                                                                                                                                
MS. HOLDMANN  offered to meet  separately or  set up a  Lunch and                                                               
Learn  on  such  details.  She relayed  that  ACEP  currently  is                                                               
looking at  potential use cases  to better understand  the energy                                                               
streams. These  are: Fort Wainwright and  downtown Fairbanks; the                                                               
university; a remote  community; and a remote mine  site She said                                                               
ACEP  has very  good  electric  power data  but  heating data  is                                                               
lacking for  many users in the  state. She noted that  sites that                                                               
have an existing steam heat  district heating system such as Fort                                                               
Wainwright  and downtown  Fairbanks are  potentially examples  of                                                               
where one could replace a coal plant  at the end of its life with                                                               
a microreactor.  She opined that  such use cases might  have more                                                               
economic value  than just  the power  generation itself.  ACEP is                                                               
working with the  developers and manufacturers on  this model and                                                               
there is  a supplemental  request in  the university's  budget to                                                               
fund that effort.                                                                                                               
                                                                                                                                
CHAIR COSTELLO said she believes that  a Lunch and Learn would be                                                               
helpful to  give people an  idea of the  work that ACEP  is doing                                                               
with this  technology and  the potential  for application  in the                                                               
state.                                                                                                                          
                                                                                                                                
2:33:02 PM                                                                                                                    
CHAIR COSTELLO opened public testimony on SB 179.                                                                               
                                                                                                                                
2:33:15 PM                                                                                                                    
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP),  Sutton,   Alaska,  stated  support  for   the  Renewable                                                               
Portfolio  Standard (RPS)  as written.  He  agreed with  previous                                                               
comments that  RPSs typically do  not include nuclear  and opined                                                               
that there  were practical reasons  for maintaining  the existing                                                               
standard.  Some   of  the  nuclear   technology  that   is  under                                                               
discussion  will not  be available  for 5-10  years. Furthermore,                                                               
the cost of  nuclear energy from microreactors will  not be close                                                               
to 6 cents/kWh. Solar and  wind currently are the least expensive                                                               
power option  available in  the country.  He opined  that nuclear                                                               
will  not be  competitive  with wind  and solar  in  the next  19                                                               
years, which is  the range of the  RPS put forward in  SB 179. He                                                               
urged the  committee to keep  the RPS to those  technologies that                                                               
are currently available.                                                                                                        
                                                                                                                                
CHAIR  COSTELLO asked  if  he knew  why the  80  percent by  2040                                                               
requirement was set and if that is achievable.                                                                                  
                                                                                                                                
MR. ROSE explained that the  National Renewable Energy Laboratory                                                               
(NREL) looked  at whether an  80 percent standard  was achievable                                                               
and  determined  that in  the  Railbelt  that standard  could  be                                                               
achieved  without   impacting  reliability.  All   the  scenarios                                                               
included the  updated transmission and batteries  that Mr. Thayer                                                               
discussed  and continued  natural  gas generation  to supply  the                                                               
remaining 20 percent of the power.                                                                                              
                                                                                                                                
2:37:52 PM                                                                                                                    
CHAIR COSTELLO discerned  that nobody else wished  to comment and                                                               
she closed public testimony on SB 179.                                                                                          
                                                                                                                                
CHAIR COSTELLO held SB 179 for further consideration.                                                                           
                                                                                                                                
2:38:16 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
        SB 132-CONTROLLED SUB. DATA: EXEMPT VETERINARIAN                                                                    
                                                                                                                              
2:39:02 PM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration  of   SENATE  BILL   NO.  132  "An   Act  exempting                                                               
veterinarians from  the requirements of the  controlled substance                                                               
prescription database."                                                                                                         
                                                                                                                                
She stated  her intention  to move the  bill if  public testimony                                                               
didn't go beyond 3:00 p.m.                                                                                                      
                                                                                                                                
2:39:36 PM                                                                                                                    
NIKKI   ROSE,  Staff,   Senator  Roger   Holland,  Alaska   State                                                               
Legislature, Juneau, Alaska,  introduced SB 132 on  behalf of the                                                               
sponsor. She paraphrased the following sponsor statement:                                                                       
                                                                                                                                
                th                                                                                                              
     Alaska's 25   legislature created the Prescription Drug                                                                    
     Monitoring  Program  (PDMP)  in 2008.  The  legislative                                                                    
     intent  behind the  PDMP was  to create  a database  of                                                                    
     prescriptions for  controlled substances in  the state.                                                                    
     The PDMP  may create obstacles for  individuals seeking                                                                    
     opioids   to   obtain   multiple   prescriptions   from                                                                    
     registered  providers  and may  be  a  useful tool  for                                                                    
     human doctors  in combating the  opioid crisis.   Under                                                                    
     the     current    statutory     framework,    Alaska's                                                                    
     veterinarians are required to  participate in the PDMP,                                                                    
     despite  the irreconcilable  differences between  human                                                                    
     and  veterinary  medical   practice.  PDMPs  have  been                                                                    
     implemented  in  all  50 states,  but  34  states  have                                                                    
     recognized    the     unsuitability    of    veterinary                                                                    
     participation in  the PDMP and  exempted veterinarians.                                                                    
     SB 132 would add Alaska to that list.                                                                                      
                                                                                                                                
     The majority  of states exempt veterinarians  from PDMP                                                                    
     because they  have recognized  that PDMPs  are designed                                                                    
     for  use in  human medicine;  and veterinary  exclusion                                                                    
     from  PDMPs  does  not increase  risk  to  the  public.                                                                    
     Alaska's  inclusion of  veterinarians in  the PDMP  has                                                                    
     produced  no identifiable  benefit;  yet  the PDMP  has                                                                    
     created  a   multitude  of  verifiable  harms   to  the                                                                    
     veterinary profession and the  Alaskans they serve. The                                                                    
     PDMP is  inappropriate and not  effective for  use with                                                                    
     animal  patients, as  animals do  not have  identifiers                                                                    
     such  as a  social security  number, and  veterinarians                                                                    
     must  view human  owners'  private  health data  before                                                                    
     treating an animal.                                                                                                        
                                                                                                                                
     Alaska  has the  highest veterinary  licensure cost  in                                                                    
     the  United  States.  Veterinary participation  in  the                                                                    
     PDMP contributes  to this unnecessary  financial burden                                                                    
     on a  profession already experiencing  extreme staffing                                                                    
     shortages,   decreasing   availability  of   veterinary                                                                    
     services  to Alaskans.  Moreso, a  recent survey  found                                                                    
     attempted veterinary doctor  shopping across the entire                                                                    
     United States is essentially non-existent.                                                                                 
                                                                                                                                
     Veterinarians  are   tightly  regulated  by   the  Drug                                                                    
     Enforcement  Agency, the  Know Your  Customer Act,  and                                                                    
     the State licensing  board. SB 132 seeks  to correct an                                                                    
     expensive overreach  so that  Alaskans can  have access                                                                    
     to  treatment  for   their  pets  without  compromising                                                                    
     public safety.                                                                                                             
                                                                                                                                
2:42:44 PM                                                                                                                    
MS. ROSE presented the sectional analysis for SB 132 that read                                                                  
as follows:                                                                                                                     
                                                                                                                                
[Original punctuation provided with minor formatting changes.]                                                                  
                                                                                                                                
     Sec. 1                                                                                                                   
     AS 17.30.200(o),  relating to the  controlled substance                                                                    
     prescription  database,  is  amended  by  deleting  the                                                                    
     Board  of   Veterinary  Examiners  from  the   list  of                                                                    
     required notification  by the Board of  Pharmacy when a                                                                    
     practitioner registers with the database.                                                                                  
                                                                                                                                
     Sec. 2                                                                                                                   
      Adds veterinarians to the list of practitioners not                                                                       
        required to comply with the controlled substance                                                                        
     prescription database under AS 17.30.200(t).                                                                               
                                                                                                                                
     Sec. 3                                                                                                                 
     Adds a definition of "practitioner" to AS 17.30.200(u)                                                                     
                                                                                                                                
     Sec. 4                                                                                                                   
     Repeals AS 08.98.050(a)(10),  which obligates the board                                                                    
     of  veterinary   examiners  to  require   licensees  to                                                                    
     register  with  the controlled  substance  prescription                                                                    
     database.                                                                                                                  
                                                                                                                                
2:43:53 PM                                                                                                                    
SENATOR  STEVENS  shared that  he  knew  a veterinarian  who                                                                    
became addicted to  drugs that he prescribed  to animals. He                                                                    
asked if  the bill  had sideboards to  ensure that  does not                                                                    
happen in  the future  or if  that situation  is independent                                                                    
from what the bill does.                                                                                                        
                                                                                                                                
MS.  ROSE explained  that this  database  would not  capture                                                                    
that  kind of  misuse because  an individual  would not  put                                                                    
information about their own drug use into the database.                                                                         
                                                                                                                                
CHAIR COSTELLO  suggested that the invited  testifiers could                                                                    
talk  about  how  veterinarians  must look  at  pet  owners'                                                                    
personal  prescription  history  even  though  veterinarians                                                                    
have no training in human health matters.                                                                                       
                                                                                                                                
2:45:29 PM                                                                                                                    
SENATOR REVAK  mentioned the  concern about  doctor shopping                                                                    
to feed an  addiction and said he didn't  want to exacerbate                                                                    
that  problem,  but he  did  want  to  find a  solution  for                                                                    
veterinarians.                                                                                                                  
                                                                                                                                
CHAIR  COSTELLO  invited  Dr.  Tracy  Ward  and  Dr.  Rachel                                                                    
Berngartt to give their presentation.                                                                                           
                                                                                                                                
2:46:43 PM                                                                                                                    
DR. RACHEL BERNGARTT, Chair,  Board of Veterinary Examiners,                                                                    
Juneau, Alaska stated  that she has been  an Alaska licensed                                                                    
veterinarian  since  2002  working  in  a  wide  variety  of                                                                    
practice areas and she was speaking in support of SB 132.                                                                       
                                                                                                                                
2:47:24 PM                                                                                                                    
DR.  TRACY   WARD,  President,  Alaska   Veterinary  Medical                                                                    
Association,  Juneau,  Alaska stated  that  she  has been  a                                                                    
veterinarian for 32  years and has worked  in several fields                                                                    
and she  also spent considerable time  in the pharmaceutical                                                                    
industry. She  is currently a small  animal practitioner and                                                                    
in   several   months   will   transition   to   a   shelter                                                                    
veterinarian.                                                                                                                   
                                                                                                                                
SENATOR STEVENS asked Dr. Ward  and Dr. Berngartt to address                                                                    
the concern  about veterinarians who become  addicted to the                                                                    
drugs they prescribe for animals.                                                                                               
                                                                                                                                
DR.  BERNGARTT explained  the  process  when a  veterinarian                                                                    
enters  data in  the  Prescription  Drug Monitoring  Program                                                                    
(PDMP)  and said  veterinary addiction  is probably  outside                                                                    
the PDMP  because professionals who  are struggling  with an                                                                    
addiction are  very unlikely  to enter  their own  data into                                                                    
the PDMP.                                                                                                                       
                                                                                                                                
2:49:27 PM                                                                                                                    
DR. WARD  said she believes  some of the  prepared testimony                                                                    
addresses that concern a little more.                                                                                           
                                                                                                                                
DR.  WARD  stated  that both  the  Alaska  State  Veterinary                                                                    
Medical  Association, which  is the  professional body,  and                                                                    
the  Alaska  Board of  Veterinary  Examiners,  which is  the                                                                    
regulatory  body,  strongly  support  SB 132.  She  and  Dr.                                                                    
Berngartt would discuss the reasons.                                                                                            
                                                                                                                                
DR.  WARD highlighted  that just  last  Thursday the  Alaska                                                                    
Board  of  Pharmacy  met  and   voted  in  support  of  this                                                                    
exemption. They  agree with  the other  34 states  that have                                                                    
concluded that including  veterinarians dilutes and confuses                                                                    
the database. This vote was  significant because this is the                                                                    
board that  monitors, maintains, and interprets  the data in                                                                    
the PDMP.                                                                                                                       
                                                                                                                                
DR.  WARD  provided  background on  Alaska's  PDMP.  It  was                                                                    
established  in  2008. In  response  to  the growing  opioid                                                                    
epidemic,  the   PDMP  was  amended   in  2017   to  require                                                                    
participation    by    all    federal    Drug    Enforcement                                                                    
Administration     (DEA)    permit     holders,    including                                                                    
veterinarians. Neither  the Alaska State  Veterinary Medical                                                                    
Association  nor the  Alaska Board  of Veterinary  Examiners                                                                    
were not consulted when the amendment was proposed.                                                                             
                                                                                                                                
2:51:26 PM                                                                                                                    
DR. WARD  said there are a  number of reasons that  it makes                                                                    
sense  to exempt  veterinarians. She  would speak  about the                                                                    
practitioner  concerns and  Dr. Berngartt  would talk  about                                                                    
the regulatory concerns.                                                                                                        
                                                                                                                                
She  highlighted that  the PDMP  was  not intended  to be  a                                                                    
database  for animals  so it  is not  an effective  tool for                                                                    
tracking prescriptions for  veterinarians or their patients.                                                                    
The primary  reason is the  database was designed  for human                                                                    
medicine. Veterinary  patients are  animals and they  do not                                                                    
have  unique identifiers  such as  a Social  Security number                                                                    
and  the date  of birth  is often  not known.  When the  law                                                                    
passed  initially there  was some  confusion  about who  the                                                                    
veterinarian  would  query  because  the  Act  talked  about                                                                    
querying  the  patient  and the  patients  in  a  veterinary                                                                    
practice   are   animals.   It  soon   became   clear   that                                                                    
veterinarians  were supposed  to  query  the animal  owner's                                                                    
prescription   data  when   they  prescribed   a  controlled                                                                    
substance for the animal. This  is despite the fact that the                                                                    
information  in  the PDMP  is  not  useful to  veterinarians                                                                    
because they are  not trained in human  medicine and dosages                                                                    
do not translate  from human to animal medicine.  The data a                                                                    
veterinarian enters into  the PDMP for an  animal patient is                                                                    
similarly not useful for a medical doctor.                                                                                      
                                                                                                                                
DR.  WARD said  Senator Revak  brought up  the next  concern                                                                    
which is privacy. Veterinarians are  not trained in or bound                                                                    
by   the   federal    Health   Insurance   Portability   and                                                                    
Accountability  Act   (HIPPA)  Privacy   Rule.  Furthermore,                                                                    
veterinarians  often work  on shared  computers  in a  large                                                                    
treatment  area so  many people  could  see the  information                                                                    
that is  entered. This is  a concern for  both veterinarians                                                                    
and their clients. She asked  the members if they would want                                                                    
somebody  who is  not bound  by HIPPA  to see  their private                                                                    
prescription  data.  She  pointed  to  the  list  of  common                                                                    
medications that veterinarians might see.                                                                                       
                                                                                                                                
2:54:52 PM                                                                                                                    
SENATOR REVAK recalled  when they met he  was comforted that                                                                    
she  mentioned that  the dosages  prescribed for  animals is                                                                    
comparatively  small. This  would make  it much  less likely                                                                    
that  an individual  would "vet  shop" to  obtain drugs  for                                                                    
their personal use.                                                                                                             
                                                                                                                                
DR.  WARD said  that is  relevant and  she would  respond to                                                                    
that later in the presentation.                                                                                                 
                                                                                                                                
SENATOR STEVENS  noted that dosages  for large  animals such                                                                    
as  horses  could be  quite  large,  then asked  if  anybody                                                                    
tracked  excessive use  of drugs  in a  veterinary practice.                                                                    
"How can you  protect society from someone who  may not have                                                                    
scruples?"                                                                                                                      
                                                                                                                                
2:56:27 PM                                                                                                                    
DR. WARD acknowledged  he had valid concerns  and noted that                                                                    
the  next slide  discusses the  fact that  veterinarians are                                                                    
monitored by the Drug Enforcement  Agency and must adhere to                                                                    
controlled substance  regulations. She said she  also wanted                                                                    
to respond to  his comment about large  animals. She related                                                                    
that  she  has experience  with  cattle,  swine, and  equine                                                                    
practice and  can say that controlled  substances are almost                                                                    
never  used  in food  animals,  because  the cost  would  be                                                                    
prohibitive. Opioids are never  used on horses because their                                                                    
gastrointestinal tract would become  impacted and the animal                                                                    
would likely die.                                                                                                               
                                                                                                                                
SENATOR  STEVENS thanked  her  for the  response and  shared                                                                    
that  his knowledge  of veterinary  science  extends to  All                                                                    
Creatures Great and Small.                                                                                                      
                                                                                                                                
DR. WARD addressed  the concern about abuse  or diversion of                                                                    
drugs by veterinarians. First, the  PDMP was not intended to                                                                    
track that  information. It is about  stopping shopping, not                                                                    
diversion or self-use. If a  veterinarian were to purchase a                                                                    
drug for  their own use or  for diversion that would  not be                                                                    
entered  into  the  database.  There  are,  however,  strict                                                                    
regulations through  the Drug Enforcement Agency  (DEA). Any                                                                    
veterinarian   who   prescribes  or   dispenses   controlled                                                                    
substances is  licensed through the  DEA and must  adhere to                                                                    
strict  accountability,   record  keeping,   and  medication                                                                    
storage  requirements. Those  records must  be available  to                                                                    
the DEA  on demand  and local  law enforcement  agencies may                                                                    
also request access.                                                                                                            
                                                                                                                                
DR.  WARD  continued  to   explain  that  manufacturers  and                                                                    
distributors  of controlled  substances  are  bound by  Know                                                                    
Your  Customer  type  legislation   that  requires  them  to                                                                    
maintain  a   Suspicious  Order  Monitoring   System.  These                                                                    
companies must  monitor, flag,  and report  a veterinarian's                                                                    
unusual  purchase  patterns to  the  DEA.  This is  how  the                                                                    
majority  of  veterinary  diversion  is found.  She  drew  a                                                                    
parallel to  a credit  card company  calling clients  to ask                                                                    
about unusual/potentially fraudulent charges on their card.                                                                     
                                                                                                                                
3:01:13 PM                                                                                                                    
DR.   BERNGARTT   delivered   the   second   half   of   the                                                                    
presentation.  She  reported  that   34  other  states  have                                                                    
exempted  veterinarians from  participating in  the PDMP  so                                                                    
Alaska  would  not be  a  guinea  pig. Increased  veterinary                                                                    
shopping or  increased risk to  the public would  already be                                                                    
evident, but that hasn't happened.                                                                                              
                                                                                                                                
DR. BERNGARTT  made the  case that  veterinarians are  not a                                                                    
source for the drugs that  are of primary concern. She spoke                                                                    
to the following from slide 9:                                                                                                  
                                                                                                                                
        • The Board of Pharmacy reported that veterinarians                                                                     
          in Alaska from 20162018 prescribed .3% to 1% of                                                                       
          total Morphine Milligram Equivalents (MMEs).                                                                          
          • Opioid medications prescribed by veterinarians                                                                      
             (728,223) were only 0.34% of the total opioid                                                                      
             prescriptions (214 million) that were dispensed                                                                    
             by U.S. retail pharmacies in 2017.                                                                                 
          • There is a natural barrier to vet shopping                                                                          
             since costs for veterinary care are paid up                                                                        
             front by the pet owner.                                                                                            
          • There have been no identified cases of                                                                              
             veterinary shopping in Alaska.                                                                                     
                                                                                                                                
3:04:38 PM                                                                                                                    
DR. BERNGARTT said  another reason it makes  sense to exempt                                                                    
veterinarians from the  PDMP is cost. Speaking  as the chair                                                                    
of the  Board of  Veterinary Examiners,  she said  the board                                                                    
has   seen  an   exponential   increase  in   the  cost   of                                                                    
investigations   because   the   PDMP   is   unwieldy.   She                                                                    
highlighted that  the state received  a grant to  cover some                                                                    
of the cost  of the PDMP. Costs are  distributed between the                                                                    
PDMP and  the Board of  Veterinary Examiners, but  the grant                                                                    
does not cover the board side of investigations.                                                                                
                                                                                                                                
3:06:23 PM                                                                                                                    
DR.   BERNGARTT  directed   attention  to   slide  11   that                                                                    
highlights that  Alaska has the  highest licensing  fees for                                                                    
veterinarians in the country. The  state also has a critical                                                                    
shortage  of   veterinarians  and   veterinary  technicians.                                                                    
Juneau, for example,  used to have a  nine doctor veterinary                                                                    
hospital,  and  two hospitals  that  each  had two  doctors.                                                                    
Currently,  no  overnight   emergency  animal  services  are                                                                    
available in the community.  Veterinary technicians are also                                                                    
in  very  short  supply.  Further, Alaska  has  perhaps  the                                                                    
highest  licensing fees  for veterinarians  in the  country.                                                                    
This  makes it  difficult  to attract  veterinarians to  the                                                                    
state.  Alaska  currently  has  366  veterinarians  who  are                                                                    
eligible to prescribe  under the PDMP and  just 266 licensed                                                                    
technicians. That  is less than  one technician  per doctor,                                                                    
so it is  not realistic to think that  the technicians could                                                                    
be  charged with  entering  data into  the  PDMP to  provide                                                                    
relief for veterinarians.                                                                                                       
                                                                                                                                
3:08:16 PM                                                                                                                    
SENATOR STEVENS referred  to the last line on  slide 11 that                                                                    
talks  about   charging  veterinarians   for  the   cost  of                                                                    
enforcement. He asked  if she could place a  dollar value on                                                                    
this charge to veterinarians.                                                                                                   
                                                                                                                                
SR. BERNGARTT  explained that  the board  is self-supporting                                                                    
so  the cost  associated  with the  PDMP and  investigations                                                                    
comes from the fees  charged to veterinarians and veterinary                                                                    
technicians. Over  the last several years  the investigative                                                                    
fees have become  a concern and the only way  to cover those                                                                    
additional costs is to raise licensing fees.                                                                                    
                                                                                                                                
SR.  BERNGARTT concluded  the  presentation  stating that  a                                                                    
"Yes" vote on SB 132 will allow veterinarians to:                                                                               
                                                                                                                                
   • provide care for their patients;                                                                                           
   • spend time with their patients instead of needless                                                                         
     querying and reporting unusable PDMP data                                                                                  
   • increase the efficiency of the PDMP by eliminating                                                                         
     animal data that is not used                                                                                               
   • allow more efficient tracking of human data in the                                                                         
     PDMP                                                                                                                       
   • allow continued judicious use of controlled substances                                                                     
      that is already practiced by veterinarians, who are                                                                       
     regulated under the DEA                                                                                                    
   • allow veterinarians to continue to do their job                                                                            
   • eliminate unnecessary business burdens                                                                                     
                                                                                                                                
3:11:34 PM                                                                                                                    
SENATOR GRAY-JACKSON  said she  appreciates the  concerns of                                                                    
her colleagues but  since the bill was  introduced last year                                                                    
she has received many emails  in support of the legislation.                                                                    
She asked if  there was any opposition to  the bill, because                                                                    
she had  heard none. She added  that SB 132 makes  sense and                                                                    
she signed on as a co-sponsor.                                                                                                  
                                                                                                                                
DR.  WARD  replied  that the  Board  of  Pharmacy  initially                                                                    
expressed   concerns  similar   to   those  articulated   by                                                                    
committee members,  but the board recently  voted to support                                                                    
the bill.                                                                                                                       
                                                                                                                                
3:12:31 PM                                                                                                                    
CHAIR COSTELLO opened public testimony for SB 132.                                                                              
                                                                                                                                
3:12:51 PM                                                                                                                    
DR.   MCKAYLA  DICK,   Past   President  Alaska   Veterinary                                                                    
Association,  North  Pole,  Alaska,  stated that  she  is  a                                                                    
veterinarian who supports SB 132.  It will allow the PDMP to                                                                    
function as intended, which is to catch drug shoppers.                                                                          
                                                                                                                                
3:13:25 PM                                                                                                                    
TERRI  LYONS,  representing  self, Wasilla,  Alaska,  stated                                                                    
that  she is  a horse  owner and  there is  a huge  need for                                                                    
large  animal  veterinarians in  Alaska.  She  spoke to  the                                                                    
difficulties she  has when her  horse is in need  of medical                                                                    
attention in  the middle of the  night. SB 132 is  one thing                                                                    
that can be done to help this desperate situation.                                                                              
                                                                                                                                
3:14:45 PM                                                                                                                    
CHAIR COSTELLO closed public testimony on SB 132.                                                                               
                                                                                                                                
3:15:05 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
3:18:05 PM                                                                                                                    
CHAIR COSTELLO  reconvened the meeting and  stated she would                                                                    
hold SB 123 for future consideration.                                                                                           
                                                                                                                                
3:18:30 PM                                                                                                                    
SENATOR MICCICHE said the discussion  during the at-ease was                                                                    
that he  and other legislators  amended the Alaska  PDMP law                                                                    
in 2017  in the  belief that  it would  help to  stem opioid                                                                    
abuse. He said he has  come to the conclusion that including                                                                    
veterinarians  in the  PDMP is  not the  way to  manage this                                                                    
crisis.                                                                                                                         
                                                                                                                                
SENATOR STEVENS said  he was not trying to hold  the bill up                                                                    
because  everything  he  heard  makes  sense.  However,  his                                                                    
personal experience is causing him pause.                                                                                       
                                                                                                                                
CHAIR  COSTELLO said  the  veterinary  community has  worked                                                                    
hard on this legislation and  she appreciates that work. She                                                                    
said  her  office would  work  to  ensure that  everyone  is                                                                    
comfortable with the bill.                                                                                                      
                                                                                                                                
CHAIR COSTELLO held SB 132 in committee.                                                                                        
                                                                                                                                
3:21:08 PM                                                                                                                    
There being no further business to come before the                                                                              
committee, Chair Costello adjourned the Senate Labor and                                                                        
Commerce Standing Committee meeting at 3:21 p.m.                                                                                

Document Name Date/Time Subjects
SB 179 Transmittal Letter.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 Sectional Analysis version A.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 Fiscal Note 2417 - DCCED.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 AEA Presentation to SLAC - 2.22.22.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 Supporting Document - NREL Feasibility Study (2022).pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 Written Testimony received as of 2.22.22.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 132 Presentation to SLAC 2.23.22.pdf SL&C 2/23/2022 1:30:00 PM
SB 132