Legislature(2025 - 2026)BUTROVICH 205

05/09/2025 03:30 PM Senate RESOURCES

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Audio Topic
03:33:12 PM Start
03:33:52 PM SB180
04:33:13 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 180 LNG IMPORT FACILITIES TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                          May 9, 2025                                                                                           
                           3:33 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Cathy Giessel, Chair                                                                                                    
Senator Matt Claman                                                                                                             
Senator Forrest Dunbar                                                                                                          
Senator Scott Kawasaki                                                                                                          
Senator Shelley Hughes (via teleconference)                                                                                     
Senator Robert Myers                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Bill Wielechowski, Vice Chair                                                                                           
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Ky Holland                                                                                                       
Representative Donna Mears                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 180                                                                                                             
"An Act relating to the regulation of liquefied natural gas                                                                     
import facilities by the Regulatory Commission of Alaska."                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 180                                                                                                                  
SHORT TITLE: LNG IMPORT FACILITIES                                                                                              
SPONSOR(s): RESOURCES                                                                                                           
                                                                                                                                
04/22/25       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/22/25       (S)       RES, L&C                                                                                               
04/25/25       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/25/25       (S)       Heard & Held                                                                                           
04/25/25       (S)       MINUTE(RES)                                                                                            
04/30/25       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/30/25       (S)       -- MEETING CANCELED --                                                                                 
05/05/25       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
05/05/25       (S)       Heard & Held                                                                                           
05/05/25       (S)       MINUTE(RES)                                                                                            
05/09/25       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
INTIMAYO HARBISON, Staff                                                                                                        
Senator Cathy Giessel                                                                                                           
Alaska State Legislature                                                                                                        
POSITION STATEMENT: Gave a brief overview of SB 180.                                                                          
                                                                                                                                
STEVE COLT, Research Professor                                                                                                  
Energy Economics and Policy                                                                                                     
Alaska Center for Energy and Power                                                                                              
University of Alaska Fairbanks (UAF)                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Gave a presentation on SB 180.                                                                            
                                                                                                                                
STEVE DEVRIES, Commissioner                                                                                                     
Regulatory Commission of Alaska                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions on SB 180.                                                                             
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:33:12 PM                                                                                                                    
CHAIR  GIESSEL  called  the Senate  Resources  Standing  Committee                                                              
meeting to  order at 3:33 p.m. Present  at the call to  order were                                                              
Senators  Myers,  Claman,  Kawasaki and  Chair  Giessel.  Senators                                                              
Dunbar and Hughes (via teleconference) arrived thereafter.                                                                      
                                                                                                                                
                  SB 180-LNG IMPORT FACILITIES                                                                              
                                                                                                                                
3:33:52 PM                                                                                                                    
CHAIR GIESSEL announced the consideration  of SENATE BILL NO. 180                                                               
"An  Act relating  to  the  regulation  of liquefied  natural  gas                                                              
import facilities by the Regulatory Commission of Alaska."                                                                      
                                                                                                                                
3:34:19 PM                                                                                                                    
INTIMAYO  HARBISON, Staff,  Senator  Cathy  Giessel, Alaska  State                                                              
Legislature, explained  that SB 180 would repeal  AS 42.05.711(v),                                                              
which exempts  the import  of natural gas  from regulation  by the                                                              
Regulatory Commission of Alaska (RCA).                                                                                          
                                                                                                                                
3:34:43 PM                                                                                                                    
CHAIR GIESSEL announced invited testimony on SB 180.                                                                            
                                                                                                                                
3:35:29 PM                                                                                                                    
STEVE  COLT,  Research  Professor, Energy  Economics  and  Policy,                                                              
Alaska  Center   for  Energy  and  Power,  University   of  Alaska                                                              
Fairbanks,  Fairbanks,  Alaska,  said  he would  offer  ideas  and                                                              
facts related to SB 180.                                                                                                        
                                                                                                                                
3:35:54 PM                                                                                                                    
MR.  COLT  said  his  presentation   considers  SB  180  from  the                                                              
position of  a well-informed  consumer. To  that end,  he examined                                                              
how this  legislation fits into  the larger ecosystem's  potential                                                              
transition  from  Cook  Inlet  gas   to  significant  reliance  on                                                              
liquified  natural   gas  (LNG).  He   implied  that  SB   180  is                                                              
deceptively simple. He advanced to slide 2:                                                                                     
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     This bill repeals AS 42.05.711(v)                                                                                        
     It repeals an exemption to 42.05                                                                                           
                                                                                                                                
     Chapter 05. Alaska Public Utilities Regulatory Act.                                                                      
                                                                                                                                
      Secs. 42.05.010  42.05.131. Establishment of Public                                                                     
     Utilities Commission. [Repealed, Section 5 ch 113 SLA                                                                    
     1970; Section 24 ch 25 SLA 1999.]                                                                                        
        Sec. 42.05.141. General powers and duties of the                                                                      
     commission.                                                                                                              
        a) The Regulatory Commission of Alaska may do all                                                                       
          things  necessary  or   proper  to  carry  out  the                                                                   
          purposes   and   exercise  the   powers   expressly                                                                   
          granted  or  reasonably  implied in  this  chapter,                                                                   
          including                                                                                                             
         1) regulate every public utility engaged or                                                                            
            proposing to engage in a utility business inside                                                                    
            the state, except to the extent exempted by AS                                                                      
            42.05.711;                                                                                                          
                                                                                                                                
     What are these exemptions?                                                                                               
                                                                                                                                
MR.  COLT  commented  that  AS 42.05  gives  RCA  sweeping  powers                                                              
unless otherwise  circumscribed. He  noted the list  of exemptions                                                              
in  AS  42.05.711.  He reiterated  that  AS  42.05.711(v)  is  one                                                              
exemption to a  broad mandate and turned his  consideration to the                                                              
other exemptions in AS 42.05.711.                                                                                               
                                                                                                                                
3:38:23 PM                                                                                                                    
SENATOR DUNBAR joined the meeting.                                                                                              
                                                                                                                                
3:38:29 PM                                                                                                                    
MR. COLT advanced to slide 3:                                                                                                   
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     What are these exemptions in 42.05.711?                                                                                  
                                                                                                                                
        a) Water, gas or petroleum  products by tank,  wagon,                                                                   
          or similar conveyance                                                                                                 
        b) Public  utilities   owned   and  operated   by   a                                                                   
          political subdivision of the state                                                                                    
        c) Owners of stock in a utility                                                                                         
        d) God Squad provision"The   commission may exempt  a                                                                   
          utility,  a  class  of   utilities,  or  a  utility                                                                   
          service  from all or a  portion of this  chapter if                                                                   
          the commission  finds that the exemption  is in the                                                                   
          public interest."                                                                                                     
        e) Any electric or telephone utility                                                                                    
        f) Electric or  telephone  utility <500k  revenue  is                                                                   
          NOT exempt, but can try...                                                                                            
        g) Non-electric, non-telephone <150k  is NOT  exempt,                                                                   
          but can try...                                                                                                        
        h) A cooperative organized under  AS 10.25 may  elect                                                                   
          to  be  exempt  [from rate  regulation?]  [but  not                                                                   
          from sec 221-281]                                                                                                     
        i) Trash utilities <300k revenue (but may opt in)                                                                       
        j) Waste heat sales                                                                                                     
        k) Cable TV exempt, can opt in                                                                                          
        l) No double jeopardy at the hands of  local govt:(l)                                                                   
          A  person,  utility, joint  action  agency?that  is                                                                   
          exempt from  regulation under (a), (d)    (k), (o),                                                                   
          or  (r)   of  this  section   is  not   subject  to                                                                   
          regulation by a municipality                                                                                          
        m) Municipal waste pickup                                                                                               
        n) North slope gas pipelines                                                                                            
        o) A  joint  action  agency   established  under   AS                                                                   
          42.45.310 (SEAPA?)                                                                                                    
        p) Regional solid waste management authority                                                                            
                                                                                                                                
3:39:50 PM                                                                                                                    
MR. COLT advanced to slide 4:                                                                                                   
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Exemptions in 42.05.711, continued                                                                                       
                                                                                                                              
     (q) North Slope gas storage?.                                                                                              
     (r)  Fire  Island  Wind(?):  A plant  or  facility  that                                                                   
     generates  electricity  entirely from  renewable  energy                                                                   
     resources, and also:                                                                                                       
     (s)  An in-state  natural  gas  pipeline subject  to  AS                                                                   
     42.08                                                                                                                      
     (t)   A  utility   that   provides   telecommunications                                                                    
     partially exempt? BUT                                                                                                      
     (u)  Exception  to  exemption  (t):  RCA  does  regulate                                                                   
     rates charged to prisoners                                                                                                 
                                                                                                                                
     And finally,                                                                                                             
                                                                                                                              
     (v) A  liquefied natural gas  import facility  under the                                                                   
     jurisdiction   of   the   Federal    Energy   Regulatory                                                                   
     Commission is exempt from this chapter.                                                                                    
                                                                                                                                
     SB 180 repeals this subsection (v)                                                                                       
                                                                                                                                
3:39:48 PM                                                                                                                    
CHAIR GIESSEL  clarified that  the list on  slides 3-4 are  all of                                                              
the  exceptions  from  RCA  regulation.  She  asked  Mr.  Colt  to                                                              
confirm this understanding.                                                                                                     
                                                                                                                                
3:40:09 PM                                                                                                                    
MR. COLT  confirmed this  understanding;  however, he pointed  out                                                              
that there  are many  types of exemptions,  including  partial and                                                              
total exemptions.  He directed attention  exemption (h),  which is                                                              
the   potential  exemption   from  economic   regulation  that   a                                                              
cooperative   can  achieve   through  an   election.  He   briefly                                                              
discussed this  exemption, noting  that the exemption  requires an                                                              
election.  In  addition,  there   is  a  caveat  related  to  rate                                                              
regulation.  He said the  exemptions are  not blanket  exemptions,                                                              
although some are close.                                                                                                        
                                                                                                                                
3:41:25 PM                                                                                                                    
MR.  COLT directed  attention to  subsection  (v) on  slide 4.  He                                                              
pointed  out  that   SB  180  would  repeal  this   exemption.  He                                                              
explained that the  exemption refers to the facility,  rather than                                                              
the  sale  of   gas  from  the  facility.  He   stated  that  this                                                              
distinction is a point of interest in the discussion of SB 180.                                                                 
                                                                                                                                
3:42:40 PM                                                                                                                    
MR. COLT  said he  is asking, "what  problem is  SB 180  trying to                                                              
solve." He advanced to slide 5:                                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
        So What? Can't we just live with retaining this                                                                       
     exemption?                                                                                                               
                                                                                                                                
        ? RCA addressed this at length in Order 5 of U-25-                                                                      
          004, after asking several parties for their                                                                           
          considered opinions.                                                                                                  
        ? RCA asserted that it retains jurisdiction over                                                                        
          gas sales from the import facility to be built by                                                                     
          Glenfarne, (also over stranded Enstar costs if                                                                        
          the project is not built).                                                                                            
        ? RCA found Enstar's analogy persuasive:                                                                                
               Enstar:   "Ultimately,  these  costs   are  no                                                                   
               different   from  a  Commission   jurisdiction                                                                   
               standpoint  than ENSTAR's  costs to  negotiate                                                                   
               and enter  into a gas sales agreement  with an                                                                   
               unregulated  (by  the Commission)  Cook  Inlet                                                                   
               gas  producer. Like  an  LNG import  terminal,                                                                   
               the  Commission  does  not  have  jurisdiction                                                                   
               over  the  siting   or  construction  of  Cook                                                                   
               Inlet  producers'   platforms  and  pipelines,                                                                   
               but  it  does have  jurisdiction  to  regulate                                                                   
               ENSTAR   as   a  utility-offtaker   of   those                                                                   
               facilities?any    necessary    gas    purchase                                                                   
               agreements  or  terminal use  agreements,  are                                                                   
               all    firmly   within    this    Commission's                                                                   
               jurisdiction."                                                                                                   
                                                                                                                                
        ? RCA: "We find ENSTAR's analogy to our current                                                                         
          jurisdictional boundaries for our review of Cook                                                                      
          Inlet gas supply contracts useful." (Order 5, p.                                                                      
          34)                                                                                                                   
                                                                                                                                
3:45:04 PM                                                                                                                    
MR.  COLT  added   that,  since  preparing  the   slides,  Chugach                                                              
Electric   weighed   in   and   concurred   that   RCA   maintains                                                              
jurisdiction  over  any  requests   by  ENSTAR  to  recover  costs                                                              
associated with receiving  gas from an LNG terminal.  He clarified                                                              
that  there is  not unanimity  on  the question.  He said  Chugach                                                              
Electric is  adamant that there is  a "good division of  the field                                                              
between Federal Energy Regulatory Commission (FERC) and RCA."                                                                   
                                                                                                                                
3:47:21 PM                                                                                                                    
CHAIR  GIESSEL  pointed  out  that  in Order  5  of  U-25-004,  JL                                                              
Properties,  Inc.  asserted that  RCA  did not  have  jurisdiction                                                              
over  Cook  Inlet   gas  sales  contracts.  She   stated  that  is                                                              
illustrative of the confusion created by AS 42.05.711(v).                                                                       
                                                                                                                                
3:47:59 PM                                                                                                                    
MR. COLT  concurred. He  expressed hope  that his testimony  would                                                              
not be  interpreted as alignment  with one party over  another. He                                                              
indicated that  he is  not taking a  position. However,  he agreed                                                              
that JL  Properties,  Inc. made  a persuasive  case that there  is                                                              
confusion regarding this issue.                                                                                                 
                                                                                                                                
3:48:32 PM                                                                                                                    
MR. COLT advanced to slide 6:                                                                                                   
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     RCA  said, we're  OK  with  the exemption,  because  gas                                                                   
     from the  terminal would  be like gas  from a well.  RCA                                                                   
     also  said repeal of  the exemption  would clarify  this                                                                   
     jurisdiction over costs of gas from the facility.                                                                          
                                                                                                                                
     So far,  so good. But -  the U-25-004 situation  is only                                                                   
     one scenario, a scenario now underway.                                                                                     
                                                                                                                                
     We  identified  two  other   scenarios  that  may  merit                                                                   
     consideration.                                                                                                             
                                                                                                                                
3:50:43 PM                                                                                                                    
MR. COLT advanced to slide 7:                                                                                                   
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Scenario A:                                                                                                              
                                                                                                                                
     If the  exemption is NOT  repealed, what if  Enstar, not                                                                   
     Glenfarne,   builds   an  LNG   import   facility.   (Or                                                                   
     Chugach.)                                                                                                                  
                                                                                                                                
     What if  they supply gas  to themselves without  any gas                                                                   
     sales  contract.  Would  this  exemption  insulate  them                                                                   
     from RCA scrutiny  of the rates emanating  from this gas                                                                   
     supply?                                                                                                                    
                                                                                                                                
     That is maybe one risk of not repealing.                                                                                   
                                                                                                                                
MR. COLT  said that, as a  ratepayer, he feels reassured  that RCA                                                              
is actively safeguarding  his interests via its  approval of sales                                                              
contracts  or sales  arrangements.  He expressed  confidence  that                                                              
RCA  would protect  ratepayers  such as  himself  from paying  too                                                              
much  for gas,  regardless  of where  it  comes  from. He  briefly                                                              
discussed hypothetical  scenario A, in  which the operator  of the                                                              
terminal  is also  the user  of the  gas. He  indicated that  this                                                              
scenario  could  result  in  a problem  (clouding  the  issue  and                                                              
harming  the ratepayer)  if  the legislature  does  not repeal  AS                                                              
42.05.711(v).                                                                                                                   
                                                                                                                                
3:53:36 PM                                                                                                                    
SENATOR MYERS  asked for confirmation  of his understanding  that,                                                              
in scenario A on  slide 7, while RCA would not  be able to examine                                                              
the  contracts,   RCA  would   retain  consumer  rate   regulation                                                              
authority.                                                                                                                      
                                                                                                                                
3:54:04 PM                                                                                                                    
MR.  COLT  noted  that  RCA  is   better  suited  to  answer  this                                                              
question.   He  then   replied   yes;  however,   he  added   that                                                              
determinations classified  as fait accompli are difficult  for RCA                                                              
to undo once a  rate case is under consideration.  He deferred the                                                              
question to RCA.                                                                                                                
                                                                                                                                
3:55:22 PM                                                                                                                    
STEVE  DEVRIES,  Commissioner, Regulatory  Commission  of  Alaska,                                                              
Anchorage,   Alaska,   stated   that  AS   42.05.441(c)   and   AS                                                              
42.05.511(c)    both   govern    how   RCA   governs    affiliated                                                              
transactions.  He explained  that  RCA closely  scrutinizes  those                                                              
transactions to  ensure they are realistically  cost-based without                                                              
any  unfair   dealings  as  the   costs  are  passed   through  to                                                              
ratepayers.  He  directed  his   attention  to  potential  adverse                                                              
implications   of  scenario   A.  He  stated   that  any   adverse                                                              
implications would  be proportional to  the overall impact  [of AS                                                              
42.05.711(v)]  on the  capabilities  of RCA  to  review the  rates                                                              
charged  for a  gas  sales agreement  or  terminal use  agreement.                                                              
This is  due to the  interplay between  FERC jurisdiction  and RCA                                                              
jurisdiction.                                                                                                                   
                                                                                                                                
3:57:00 PM                                                                                                                    
COMMISSIONER DEVRIES  said the potential for harm  that exists due                                                              
to  AS 42.05.711(v)  applies  to the  entirety  of the  Regulatory                                                              
Commission  of  Alaska's  (RCA)  review authority  for  gas  sales                                                              
agreements. This  includes scenario A  from slide 7.  He commented                                                              
that Mr. Colt's  presentation is thoughtful and  thorough. He went                                                              
on to explain  the potential issue related to  AS 42.05.711(v). He                                                              
stated  that RCA  has determined  the extent  of its  jurisdiction                                                              
vis-a-vis the  jurisdiction of FERC.  He emphasized that  FERC has                                                              
exclusive jurisdiction  over the siting, construction,  expansion,                                                              
and operation  of a liquified  natural gas (LNG)  import facility.                                                              
He contrasted  this with the jurisdiction  of RCA to  review rates                                                              
passed  through to  ratepayers.  However, he  emphasized that  the                                                              
courts - not RCA  - are the ultimate arbiters  of the jurisdiction                                                              
of  RCA. If  this self-determined  jurisdiction  is challenged,  a                                                              
significant lynchpin  in that argument  would be  AS 42.05.711(v).                                                              
He  stated  that  SB  180  (which  removes  the  exemption  in  AS                                                              
42.05.711(v))  would help  to remove  the  uncertainty related  to                                                              
the jurisdiction of RCA.                                                                                                        
                                                                                                                                
3:59:26 PM                                                                                                                    
SENATOR CLAMAN asked whether RCA has formally endorsed SB 180.                                                                  
                                                                                                                                
3:59:34 PM                                                                                                                    
COMMISSIONER DEVRIES replied no.                                                                                                
                                                                                                                                
4:00:10 PM                                                                                                                    
MR. COLT advanced to slide 8:                                                                                                   
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Scenario B:                                                                                                              
                                                                                                                                
       If the exemption IS repealed, might a Glenfarne be                                                                       
     subject to being declared a public utility?                                                                                
                                                                                                                                
     RCA appealed  to statutory  guidance and to  legislative                                                                   
     history  of  House  Bill  50  when  it  declined  RAPA's                                                                   
     suggestion  to   exercise  jurisdiction  over   the  LNG                                                                   
     facility  under the "Hinshaw  Amendment" to the  Natural                                                                   
     Gas Act. (Order 5 p. 31)                                                                                                   
                                                                                                                                
MR.  COLT surmised  that  the  exemption  in AS  42.05.711(v)  was                                                              
added because  it was desirable  for someone. He posed  scenario B                                                              
to  consider  whether  repealing  the exemption  would  allow  RCA                                                              
greater  regulatory   reach,  thus  potentially  resulting   in  a                                                              
negative  impact   on  the  utilities.  He  explained   that  this                                                              
scenario  considers  whether  there  is  a potential  for  RCA  to                                                              
overregulate if the exemption is removed.                                                                                       
                                                                                                                                
4:02:38 PM                                                                                                                    
MR.  COLT  continued  to  discuss   scenario  B  on  slide  8.  He                                                              
explained  that   RCA  previously  declined  an   offer  from  the                                                              
Regulatory  Affairs   and  Public   Advocacy  Section   (RAPA)  to                                                              
exercise  additional  regulatory  authority.  At  that  time,  RCA                                                              
appealed  to statutory  guidance and  legislative history  related                                                              
to the jurisdiction of RCA to support its decision.                                                                             
                                                                                                                                
4:04:00 PM                                                                                                                    
SENATOR HUGHES joined the meeting via teleconference.                                                                           
                                                                                                                                
4:04:19 PM                                                                                                                    
MR. COLT  advanced to  slide 9  and provided  a brief overview  of                                                              
the history of House Bill 50:                                                                                                   
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     House   Bill   50  history:   Senate   Resources   added                                                                   
     companion language to the exemption                                                                                        
                                                                                                                                
     SCS   CS  House   Bill  50(RES)   by  Senate   Resources                                                                   
     (5/6/2024):                                                                                                                
                                                                                                                                
     (p)  For  rate-making  purposes,  the  commission  shall                                                                   
     consider  the  investment  of  a  public  utility  in  a                                                                   
     liquefied  natural  gas  import or  export  facility  as                                                                   
     utility  property,  even if  the liquefied  natural  gas                                                                   
     import or export  facility is exempt from  regulation by                                                                   
     the commission. In this subsection,                                                                                        
                                                                                                                                
     Senate Finance took it out:                                                                                                
     5-12-24,  Amendment  4  to  Work  Draft  T.  Per  Senate                                                                   
     Finance  Minutes, "Senator  Bishop relayed  that he  had                                                                   
     problems with  the amendment. He asked that  members pay                                                                   
     close  attention   to  the   topic  going  forward.   He                                                                   
     expressed concern  that the price of imported  LNG would                                                                   
     be higher than  expected and that ratepayers  would bear                                                                   
     the burden.                                                                                                                
                                                                                                                                
MR. COLT said  that the Senate Resources Standing  Committee added                                                              
language to House  Bill 50 that would expand the  authority of RCA                                                              
with respect to  LNG import or export facility.  This language was                                                              
later  removed  by the  Senate  Finance  Committee. He  posed  the                                                              
question  of whether  the removal  of the language  in House  Bill                                                              
50,   combined  with   the   removal  of   the   language  in   AS                                                              
42.05.711(v), would allow RCA to over-regulate.                                                                                 
                                                                                                                                
4:07:21 PM                                                                                                                    
CHAIR GIESSEL referred  to slide 9, item (p) and  could not recall                                                              
adding  that  specific  language.  However, she  stated  that  she                                                              
understands the intent  of that language. She emphasized  that the                                                              
ratemaking done by  RCA is key for ensuring the  protection of the                                                              
public.  She  expressed   appreciation  that  Mr.   Colt  included                                                              
Senator Bishop's  comment on slide  9. She asked whether  slide 10                                                              
would clarify the conclusion of scenario B.                                                                                     
                                                                                                                                
4:08:28 PM                                                                                                                    
MR. COLT  indicated that  slide 10 does  not provide  a conclusion                                                              
but rather  brings forward an  additional question related  to the                                                              
legislature's policymaking duty. He advanced to slide 10:                                                                       
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Back  to  Scenario  B: If  the  exemption  IS  repealed,                                                                   
     might  a  Glenfarne  be  subject  to  being  declared  a                                                                   
     public utility, or directly regulated by RCA?                                                                              
                                                                                                                                
     RCA: "Not  only does this subsection's  express language                                                                   
     appear to  clearly bar  our assumption of  jurisdiction,                                                                   
     but  the legislative  history  underlying its  enactment                                                                   
     reinforces  this conclusion.127  Therefore,  if we  were                                                                   
     to  assert  LNG facility  oversight  under  the  Hinshaw                                                                   
     Amendment which  RAPA suggests is possible, we  would be                                                                   
     disregarding the  jurisdictional side boards  imposed on                                                                   
     us by  the legislature. We  decline to do so."  (Order 5                                                                   
     U-25-004, p. 31)                                                                                                           
                                                                                                                                
     Were  this guidance  changed,  might  current or  future                                                                   
     RCA   choose   or   be   pressured    to   assert   this                                                                   
     jurisdiction?                                                                                                              
                                                                                                                                
4:10:54 PM                                                                                                                    
COMISSIONER  DEVRIES  suggested   that  it  could  be  helpful  to                                                              
consider  the  question  from  the   jurisdictional  level.  Under                                                              
federal  law, FERC  has  exclusive  jurisdiction  with respect  to                                                              
siting, operations,  permitting,  construction, and expansion  for                                                              
LNG  facilities. He  noted that  there  is one  exception in  that                                                              
law, which  is known as the  Hinshaw amendment. He  explained that                                                              
the Hinshaw  amendment applies  to inter-state  commerce  and does                                                              
not apply  to foreign commerce.  Alaska's imported LNG  is foreign                                                              
commerce;  therefore, the  flexibility  - to  the  extent that  it                                                              
exists -  for FERC  to delegate  or permit  a state commission  to                                                              
exercise jurisdictional  oversight over the  siting, construction,                                                              
operation, etc. of an LNG facility would not apply [in Alaska].                                                                 
                                                                                                                                
4:12:33 PM                                                                                                                    
SENATOR   MYERS  shared   his  understanding   that  the   federal                                                              
government  regulates both  foreign and  inter-state commerce.  He                                                              
asked  why FERC would  not have  authority in  this situation.  He                                                              
offered  two examples  involving  LNG  import and  export  between                                                              
Alaska and Canada to illustrate his question.                                                                                   
                                                                                                                                
4:13:03 PM                                                                                                                    
COMMISSIONER DEVRIES  replied that  FERC authority would  apply in                                                              
the examples posed  by Senator Myers. He clarified  that situation                                                              
B  (slides  9-10) is  also  foreign  commerce and  FERC  authority                                                              
would  apply.  He  explained  that   FERC  would  have  regulatory                                                              
authority  over   citing,  construction,  etc.  of   the  facility                                                              
itself.  He further  clarified that  RCA does  not assert  that it                                                              
has  legal  or  constitutional   authority  (or  jurisdiction)  to                                                              
insert itself  into the regulatory  jurisdiction of FERC.  He said                                                              
U.S.C.   Art  VI.C2   (Supremacy   Clause)   would  bar   Alaska's                                                              
commission from  exercising any regulatory commission  over a FERC                                                              
jurisdictional  property  (notwithstanding   any  state  law  that                                                              
gives RCA the jurisdiction to do so).                                                                                           
                                                                                                                                
4:14:22 PM                                                                                                                    
MR.  COLT shared  his  understanding  that the  Hinshaw  amendment                                                              
applies  to situations  in which  Alaska receives  LNG via  inter-                                                              
state   commerce   (e.g.   from   Oregon).  He   asked   if   this                                                              
understanding is correct.                                                                                                       
                                                                                                                                
4:15:16 PM                                                                                                                    
COMMISSIONER DEVRIES  replied that the  Jones Act requires  LNG to                                                              
arrive from  a US  flag LNG tanker,  of which  there are  none. He                                                              
expressed uncertainty  regarding whether scenario B  could occur -                                                              
unless there  are US  flag tankers  currently under  construction.                                                              
He  is not  aware  of any  tankers currently  under  construction,                                                              
although he opined  it is a good idea. Given  this information, he                                                              
expressed  uncertainty  with  the   plausibility  of  scenario  B.                                                              
However, he stated  that if scenario B were to  occur, the Hinshaw                                                              
amendment  could  theoretically  provide FERC  the  jurisdictional                                                              
authority  under interstate  commerce.  In that  case, FERC  could                                                              
allow RCA  to exercise authority.  He stated that this  would give                                                              
RCA additional  concern regarding  the continued existence  of the                                                              
exemption  in  AS  42.05.711(v).  He  explained  that  this  could                                                              
potentially  fuel  an  argument  that RCA  lacks  the  ability  to                                                              
exercise  regulatory   authority  (despite  FERC   extending  that                                                              
authority to RCA).                                                                                                              
                                                                                                                                
4:17:12 PM                                                                                                                    
MR. COLT advanced to slide 11:                                                                                                  
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
                            Summary                                                                                           
                                                                                                                                
     In our view, SB 180:                                                                                                       
                                                                                                                                
       ? Removes a broad exemption from a broad [chapter]                                                                       
        ? Removing the exemption helps clarify that RCA has                                                                     
          jurisdiction over prices/rates for LNG supplied                                                                       
         by a 3d-party facility to a regulated utility                                                                          
        ? Hence, removing the exemption might also help the                                                                     
          RCA deal with the case where Enstar, Chugach,                                                                         
          etc. is the Builder and self-supplies.                                                                                
        ? Removes sideboards that RCA currently defers to,                                                                      
          which might enable (or force?) RCA to regulate                                                                        
          LNG facilities, potentially conflicting with                                                                          
          FERC.                                                                                                                 
                                                                                                                                
4:20:11 PM                                                                                                                    
CHAIR  GIESSEL asked  for  clarification of  the  fourth point  on                                                              
slide  11.  She   asked  whether  removing  -  or   leaving  -  AS                                                              
42.05.711(v) would remove sideboards.                                                                                           
                                                                                                                                
4:20:21 PM                                                                                                                    
MR.  COLT returned  to slide  10  and paraphrased  the quote  from                                                              
RCA:                                                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Back  to  Scenario  B: If  the  exemption  IS  repealed,                                                                   
     might  a  Glenfarne  be  subject  to  being  declared  a                                                                   
     public utility, or directly regulated by RCA?                                                                              
                                                                                                                                
     RCA: "Not  only does this subsection's  express language                                                                   
     appear to  clearly bar  our assumption of  jurisdiction,                                                                   
     but  the legislative  history  underlying its  enactment                                                                   
     reinforces  this conclusion. 127  Therefore, if  we were                                                                   
     to  assert  LNG facility  oversight  under  the  Hinshaw                                                                   
     Amendment which  RAPA suggests is possible, we  would be                                                                   
     disregarding the  jurisdictional side boards  imposed on                                                                   
     us by  the legislature. We  decline to do so."  (Order 5                                                                   
     U-25-004, p. 31)                                                                                                           
                                                                                                                                
     Were  this guidance  changed,  might  current or  future                                                                   
     RCA   choose   or   be   pressured    to   assert   this                                                                   
     jurisdiction?                                                                                                              
                                                                                                                                
MR.   COLT  offered   his  understanding   that   there  are   two                                                              
sideboards.  The first is  the legislative  history of  House Bill                                                              
50,  which  removed   language  that  would  have   given  RCA  an                                                              
affirmative  ability to regard  LNG import  facilities as  utility                                                              
property.  He   stated  that  this   would  have  made   a  direct                                                              
connection between  the facility and  the rates. He said  that the                                                              
removal of that  language placed one sideboard on  RCA. The second                                                              
sideboard  is the  continuing  existence  of AS  42.05.711(v).  He                                                              
explained  that this  exemption  ensures that  RCA  does not  have                                                              
regulatory authority over LNG facilities.                                                                                       
                                                                                                                                
4:22:17 PM                                                                                                                    
SENATOR  MYERS suggested  a  hypothetical  scenario  C. He  stated                                                              
that  there is  a proposal  for  Harvest to  purchase the  current                                                              
Marathon  plant and  convert it  to an import  facility. He  noted                                                              
that  Enstar  would  not  be  involved   in  the  deal  but  would                                                              
presumably be  a customer.  He asked if  there is any  significant                                                              
difference  between  the  scenarios  considered by  Mr.  Colt  and                                                              
scenario  C. He  pointed out  that  the latter  scenario does  not                                                              
already involve a regulated natural gas utility.                                                                                
                                                                                                                                
4:23:16 PM                                                                                                                    
MR. COLT  replied that, given  very brief consideration,  scenario                                                              
C seems  less problematic as Enstar  would be purchasing  LNG from                                                              
the  facility. He  referenced a  comment from  RCA which  proposed                                                              
that  purchasing  gas from  an  import  terminal is  analogous  to                                                              
purchasing gas  from a gas  well. He surmised  that scenario  C is                                                              
akin to  this. He  suggested that  representatives from  RCA would                                                              
be able to provide a more knowledgeable response.                                                                               
                                                                                                                                
4:24:59 PM                                                                                                                    
COMMISSIONER DEVRIES  also responded to scenario C  as proposed by                                                              
Senator  Myers.  He  said  the   jurisdictional  landscape  is  no                                                              
different.  He reiterated  that  FERC has  exclusive  jurisdiction                                                              
over  the   facilities  (i.e.  citing,  construction,   operation,                                                              
etc.).  RCA maintains  authority  to review  gas sales  agreements                                                              
and/or terminal use  agreements presented to RCA  by the utilities                                                              
using those  facilities for  the purposes  of preserving  capacity                                                              
or  obtaining gas  supplies.  He  opined that  the  jurisdictional                                                              
authority would not change as a result of changing facilities.                                                                  
                                                                                                                                
4:26:13 PM                                                                                                                    
SENATOR  KAWASAKI asked  what  the consequences  would  be if  the                                                              
legislature  does not  repeal AS  42.05.711(v). He  asked if  that                                                              
would  be sufficient  for someone  to make the  argument that  the                                                              
legislature does not want RCA to regulate LNG facilities.                                                                       
                                                                                                                                
4:27:19 PM                                                                                                                    
CHAIR  GIESSEL  echoed  Commissioner Devries'  comments  that  RCA                                                              
does  not   regulate  LNG  facilities.   She  clarified   that  AS                                                              
42.05.711(v)  has  created  confusion regarding  whether  RCA  has                                                              
jurisdiction  over   LNG  sales.  She  deferred   to  Commissioner                                                              
Devries for further comment.                                                                                                    
                                                                                                                                
4:27:50 PM                                                                                                                    
COMMISSIONER  DEVRIES  replied  that,  if  the  exemption  is  not                                                              
repealed,  RCA  believes  it still  retains  the  jurisdiction  to                                                              
review   LNG  sale   agreements   and  terminal   use   agreements                                                              
(regardless  of   what  facility  houses  those   agreements).  He                                                              
reiterated  that   RCA  is  not   the  ultimate  arbiter   of  its                                                              
jurisdiction or  the jurisdiction of  FERC. He explained  that the                                                              
continued existence  of the exemption in AS  42.05.711(v) provides                                                              
ammunition  for  an argument  that  could  be made  regarding  the                                                              
jurisdiction of RCA.  He asserted that the exemption  could be the                                                              
lynchpin  in that argument.  Repealing the  exemption removes  the                                                              
force behind  the argument (which could  be made to a  court) that                                                              
RCA  lacks the  jurisdiction  to review  gas  sale agreements  and                                                              
terminal sale agreements.                                                                                                       
                                                                                                                                
4:29:20 PM                                                                                                                    
CHAIR  GIESSEL said  that  Commissioner  Devries'  answer was  the                                                              
reason  for SB  180. She  briefly discussed  several instances  of                                                              
confusion  that   illustrate  the  need  for   clarification.  She                                                              
suggested further  discussions of  subsection (p), which  was part                                                              
of House Bill 50 and which the Senate  Finance Committee removed.                                                               
                                                                                                                                
4:30:37 PM                                                                                                                    
MR. COLT expressed  appreciation for the learning  opportunity, as                                                              
well  as  for  the  willingness  of  RCA  to  participate  in  the                                                              
discussion.  He  stated that,  as  a  ratepayer and  consumer,  he                                                              
appreciates  the  Senate Resources  Standing  Committee's  ongoing                                                              
attempts  to place  consumer protection  front  and center  during                                                              
the industry's transition.                                                                                                      
                                                                                                                                
4:31:18 PM                                                                                                                    
SENATOR  MYERS   turned  the  discussion  to  Fairbanks   gas.  He                                                              
explained that Harvest  Alaska is building an LNG  facility on the                                                              
North Slope.  That gas  would be trucked  to Fairbanks  and placed                                                              
in  the  Interior  Gas  Utility  system (which  is  owned  by  the                                                              
Fairbanks North  Star Borough). He  asked whether RCA  is involved                                                              
in regulating that system.                                                                                                      
                                                                                                                                
4:32:08 PM                                                                                                                    
COMMISSIONER  DEVRIES shared  his understanding  that the  utility                                                              
responsible   for  obtaining   the  gas   for  Fairbanks   is  not                                                              
economically regulated.                                                                                                         
                                                                                                                                
4:32:22 PM                                                                                                                    
Chair    Giessel    thanked   the    presenters    and    industry                                                              
representatives for being present and available for questions.                                                                  
                                                                                                                                
4:32:59 PM                                                                                                                    
[CHAIR GIESSEL held SB 180 in committee.]                                                                                       
                                                                                                                                
4:33:13 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Giessel adjourned the Senate Resources Standing Committee                                                                 
meeting at 4:33 p.m.                                                                                                            
                                                                                                                                

Document Name Date/Time Subjects
SB 180 ACEP Colt Testimony.pdf SRES 5/9/2025 3:30:00 PM
SB 180
SB 180 RCA Supporting Document.pdf SRES 5/9/2025 3:30:00 PM
SB 180