HB 301: "An Act relating to the establishment of a renewable portfolio standard for regulated electric utilities; and providing for an effective date."
00 HOUSE BILL NO. 301 01 "An Act relating to the establishment of a renewable portfolio standard for regulated 02 electric utilities; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 PURPOSE AND INTENT. The purpose of this Act is to establish a renewable 07 portfolio standard that requires certain regulated electric utilities to derive increasing 08 percentages of the utility's net electricity sales from renewable energy resources. Nothing in 09 this Act is intended to constitute implementation by the Regulatory Commission of Alaska of 10 the federal Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2705). 11 * Sec. 2. AS 42.05.770 is amended to read: 12 Sec. 42.05.770. Regulations. The commission shall adopt regulations 13 governing electric reliability organizations, reliability standards, and modifications to 14 reliability standards consistent with this section. Regulations under AS 42.05.760 -
01 42.05.790 must 02 (1) require that an electric reliability organization's tariff include 03 (A) standards for nondiscriminatory open access transmission 04 and interconnection; 05 (B) standards for the purchase and sale of the services 06 necessary for the transmission of electric energy over the interconnected 07 electric energy transmission network that prohibit sales of those necessary 08 services for an amount greater than the cost to the load-serving entity 09 providing the services; and 10 (C) standards for transmission system cost recovery; 11 (2) provide a process to identify and resolve conflicts between a 12 reliability standard and a function, rule, tariff, rate schedule, or agreement that has 13 been accepted, approved, adopted, or ordered by the commission; 14 (3) allow an electric reliability organization to recover its costs through 15 surcharges added to the rate for each participating load-serving entity. 16 * Sec. 3. AS 42.05.780(a) is amended to read: 17 (a) An electric reliability organization shall file with the commission in a 18 petition for approval an integrated resource plan for meeting the reliability 19 requirements of all customers within its interconnected electric energy transmission 20 network in a manner that provides the greatest value, consistent with the load-serving 21 entities' obligations. An integrated resource plan must contain an evaluation of the full 22 range of cost-effective means for load-serving entities to meet the service 23 requirements of all customers, including additional generation, transmission, battery 24 storage, and conservation or similar improvements in efficiency. An integrated 25 resource plan must include options to meet customers' collective needs in a manner 26 that provides the greatest value, consistent with the public interest, regardless of the 27 location or ownership of new facilities or conservation activities. An integrated 28 resource plan must also include options for each load-serving entity to meet the 29 renewable portfolio standard under AS 42.05.900 and an evaluation of each 30 option. 31 * Sec. 4. AS 42.05.785(a) is amended to read:
01 (a) A public utility, including a public utility that is exempt from other 02 regulation under AS 42.05.711 or another provision of this chapter, that is 03 interconnected with an interconnected electric energy transmission network served by 04 an electric reliability organization certificated by the commission may not construct a 05 large energy facility unless the commission determines that the facility 06 (1) is necessary to the interconnected electric energy transmission 07 network with which it would be interconnected; 08 (2) complies with reliability standards; [AND] 09 (3) would, in a cost-effective manner, meet the needs of a load-serving 10 entity that is substantially served by the facility; and 11 (4) is not detrimental to a load-serving entity's ability to meet the 12 renewable portfolio standard under AS 42.05.900. 13 * Sec. 5. AS 42.05 is amended by adding new sections to read: 14 Article 11A. Renewable Portfolio Standard. 15 Sec. 42.05.900. Renewable portfolio standard. (a) A load-serving entity that 16 is subject to the standards of an electric reliability organization under AS 42.05.760 17 shall comply with the renewable portfolio standard established in this section. The 18 renewable portfolio standard requires that the entity's portfolio consist of net 19 electricity sales from renewable energy resources in percentages as follows: 20 (1) 20 percent by December 31, 2025; 21 (2) 30 percent by December 31, 2030; 22 (3) 55 percent by December 31, 2035; 23 (4) 80 percent by December 31, 2040. 24 (b) A purchase power agreement entered into between a load-serving entity 25 and a renewable electrical energy producer will be considered to satisfy all or part of 26 the quantities required under (a) of this section by the end of a compliance period if 27 (1) the effective date of the purchase power agreement is on or before 28 the date of the compliance period; 29 (2) the purchase power agreement guarantees that the renewable 30 electrical energy will be delivered to the load-serving entity not later than two years 31 after the compliance period; and
01 (3) the purchase power agreement is approved by the commission in 02 accordance with AS 42.05.381 and 42.05.431(a) and (b). The time period required for 03 the commission to consider approval of the purchase power agreement may not be a 04 factor in determining whether a load-serving entity has complied with (a) of this 05 section, but if the purchase power agreement is not approved by the commission, the 06 load-serving entity may be subject to a noncompliance fine under AS 42.05.915. 07 (c) To qualify as part of a load-serving entity's portfolio, renewable energy 08 resources utilized by a load-serving entity must be located within the load-serving 09 entity's service area or be connected to the same interconnected electric energy 10 transmission network that serves the load-serving entity's customers in the state. 11 (d) A load-serving entity may satisfy the renewable portfolio standard through 12 net electricity sales derived from the entity's purchase of excess renewable electrical 13 energy from distributive energy systems. 14 (e) A load-serving entity's compliance with the renewable portfolio standard 15 shall be based on historical data, collected in a manner consistent with industry 16 standards and commission regulations. 17 (f) A load-serving entity shall design and implement an accounting system to 18 verify compliance with the renewable portfolio standard to ensure that renewable 19 electrical energy is counted only once for the purpose of meeting the renewable 20 portfolio standard. 21 Sec. 42.05.905. Reporting. (a) Beginning March 1, 2025, a load-serving entity 22 subject to the renewable portfolio standard shall submit an annual report to the 23 commission that documents the load-serving entity's progress toward satisfying the 24 renewable portfolio standard in the preceding calendar year. The annual report must 25 demonstrate compliance with the renewable portfolio standard, document the entity's 26 net electricity sales from renewable energy resources for the applicable calendar year, 27 and include the information required by the commission. 28 (b) The commission shall adopt regulations governing the reporting 29 requirements under (a) of this section to document compliance and minimize the 30 administrative costs and burden on the load-serving entities. 31 (c) The commission may investigate a load-serving entity's compliance with
01 (a) of this section and collect any information necessary to verify and audit the 02 information provided to the commission by the load-serving entity. 03 Sec. 42.05.910. Renewable energy credits. (a) To qualify as part of a load- 04 serving entity's portfolio, renewable energy credits must be bundled renewable energy 05 credits from generation located within a load-serving entity's service area or from 06 generation connected to the interconnected electric energy transmission network that 07 serves a load-serving entity's customers. 08 (b) A renewable energy credit may be used only once and then must be 09 retired. 10 (c) Each load-serving entity is responsible for tracking and demonstrating that 11 a renewable energy credit used to comply with the renewable portfolio standard is 12 derived from a renewable energy resource, that the load-serving entity has not 13 previously used, traded, sold, or otherwise transferred the renewable energy credit, and 14 that the renewable energy credit is retired upon its use. 15 (d) Renewable energy credits may be traded, sold, or otherwise transferred for 16 value. 17 (e) Revenue received by a load-serving entity for the trade, sale, or transfer of 18 a renewable energy credit shall be credited to the load-serving entity's cost of power 19 adjustment to the benefit of the load-serving entity's customers. 20 Sec. 42.05.915. Noncompliance fine; waiver. (a) If the commission 21 determines that a load-serving entity failed to meet the renewable portfolio standard, 22 after notice and an opportunity for hearing, the entity is subject to a fine of $20 for 23 every megawatt hour that the entity is below the renewable portfolio standard. The 24 commission may waive the noncompliance fine in whole or in part upon determination 25 that a load-serving entity is unable to meet the renewable portfolio standard because of 26 reasons outside the reasonable control of the load-serving entity as set out in (b) of this 27 section or the entity establishes a good cause for noncompliance as set out in (c) of 28 this section. 29 (b) Events or circumstances that are outside of a load-serving entity's 30 reasonable control may include 31 (1) weather-related damage;
01 (2) natural disasters; 02 (3) mechanical or resource failure; 03 (4) failure of renewable electrical energy producers to meet contractual 04 obligations to the load-serving entity; 05 (5) labor strikes or lockouts; 06 (6) transmission network constraint that prevented the load-serving 07 entity from partially or fully utilizing renewable electrical energy for net electricity 08 sales; and 09 (7) other similar events and circumstances. 10 (c) Factors for establishing good cause for noncompliance may include 11 (1) the actions taken by the load-serving entity to procure the 12 renewable electrical energy; 13 (2) the extent of good faith efforts by the load-serving entity to 14 comply; 15 (3) the lack of past failures to comply; 16 (4) the likelihood and amount of future renewable electrical energy to 17 be procured by the load-serving entity; 18 (5) the impact of the noncompliance fine on the load-serving entity 19 considering the size or ownership of the load-serving entity; 20 (6) other similar information. 21 (d) If the commission waives all or part of a noncompliance fine, it may 22 require additional reporting from the load-serving entity to demonstrate the entity is 23 taking all reasonable actions under its control to satisfy the renewable portfolio 24 standard. 25 (e) A fine paid by a load-serving entity under this section may not be included 26 or recovered in rates paid by the load-serving entity's customers unless the 27 commission determines that 28 (1) payment of the fine would be at less cost to the customers than the 29 purchase of a renewable energy resource to comply with the renewable portfolio 30 standard; or 31 (2) there are insufficient renewable energy resources available for the
01 load-serving entity to comply with the renewable portfolio standard. 02 Sec. 42.05.920. Exemptions. (a) A load-serving entity is exempt from 03 compliance with the renewable portfolio standard if the aggregate net electricity sales 04 for all load-serving entities on the interconnected electric energy transmission network 05 meets or exceeds the aggregate renewable portfolio standard for all load-serving 06 entities on the interconnected electric energy transmission network. If the aggregate 07 net electricity sales for all load-serving entities on the interconnected electric energy 08 transmission network fails to meet the aggregate renewable portfolio standard, there 09 will not be an exemption for each individual load-serving entity that does not meet the 10 renewable portfolio standard. 11 (b) If an exemption under (a) of this section does not apply, a load-serving 12 entity is exempt from its first noncompliance with the renewable portfolio standard. 13 (c) An exemption under (a) or (b) of this section may not be granted for the 14 compliance period ending December 31, 2040. 15 Sec. 42.05.925. Definitions. In AS 42.05.900 - 42.05.925, 16 (1) "bundled renewable energy credits" means renewable energy 17 credits that are sold or used together with their associated energy; 18 (2) "compliance period" means each five year period identified in 19 AS 42.05.900(a); 20 (3) "distributive energy system" means a renewable energy resource or 21 renewable energy storage that is located on any property owned or leased by a 22 customer within the service territory of the load-serving entity that is interconnected 23 on the customer's side of the utility meter; 24 (4) "interconnected electric energy transmission network" has the 25 meaning given in AS 42.05.790; 26 (5) "load-serving entity" has the meaning given in AS 42.05.790; 27 (6) "megawatt hour" means one million watts of electricity being used 28 in one hour and includes the steam equivalent of a megawatt hour; 29 (7) "renewable electrical energy" means electricity or energy generated 30 from renewable energy resources; 31 (8) "renewable energy credit" means one credit equal to the generation
01 attributes of one megawatt hour that is derived from a renewable energy resource 02 located within the load-serving entity's service area or within the interconnected 03 electric energy transmission network where a load-serving entity's service area is 04 located; where fossil and renewable fuels are co-fired in the same generating unit, the 05 unit is considered to generate renewable electrical energy in direct proportion to the 06 percentage of the total heat input value represented by the heat input value of the 07 renewable fuels; 08 (9) "renewable energy resource" means a resource that naturally 09 replenishes over a human, not a geological, time frame and that is ultimately derived 10 from solar power, water power, or wind power; a "renewable energy resource" comes 11 from the sun or from thermal inertia of the earth, minimizes the output of toxic 12 material in the conversion of the energy, and 13 (A) includes solar and solar thermal energy, wind energy, and 14 kinetic energy of moving water, including 15 (i) waves, tides, or currents; 16 (ii) run-of-river hydropower, in-river hydrokinetic; 17 (iii) conventional hydropower, lake tap hydropower; 18 (iv) water released through a dam; and 19 (v) geothermal energy; 20 (B) includes waste to energy systems, including 21 (i) wood; 22 (ii) landfill gas produced by municipal solid waste, or 23 fuel that has been manufactured in whole or significant part from 24 waste; 25 (iii) biofuels; and 26 (iv) thermal energy produced from a geothermal heat 27 pump utilizing municipal solid waste, including biogenic and 28 anthropogenic factions; and 29 (C) does not include petroleum, nuclear, natural gas, or coal; 30 (10) "renewable energy storage" means the capture of energy produced 31 at one time for use at a later time;
01 (11) "renewable portfolio standard" means the required percentage of a 02 load-serving entity's net electrical energy sales to customers in the entity's service area 03 that is represented by renewable electrical energy as required under AS 42.05.900(a); 04 (12) "transmission network constraint" means a lack of transmission 05 line capacity to deliver electricity without exceeding thermal, voltage, and stability 06 limits designed to ensure reliability of the interconnected electric energy transmission 07 network. 08 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 TRANSITION: REGULATIONS. Within two years of the effective date of this Act, 11 the Regulatory Commission of Alaska shall adopt regulations necessary to implement the 12 changes made by this Act. The regulations take effect under AS 44.62 (Administrative 13 Procedure Act), but not before the effective date of the law implemented by the regulation. 14 * Sec. 7. This Act takes effect July 1, 2022.