CSHB 307(FIN): "An Act relating to the Regulatory Commission of Alaska; relating to regulation of public utilities and pipeline carriers; relating to approval of wholesale power agreements; relating to preapproval for construction of energy facilities; relating to electric reliability organizations; relating to the taxation of new electricity generation facilities; relating to the Alaska Energy Authority; relating to the Railbelt Transmission Organization; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 307(FIN) 01 "An Act relating to the Regulatory Commission of Alaska; relating to regulation of 02 public utilities and pipeline carriers; relating to approval of wholesale power 03 agreements; relating to preapproval for construction of energy facilities; relating to 04 electric reliability organizations; relating to the taxation of new electricity generation 05 facilities; relating to the Alaska Energy Authority; relating to the Railbelt Transmission 06 Organization; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 39.25.110(11) is amended to read: 09 (11) the officers and employees of the following boards, commissions, 10 and authorities: 11 (A) [REPEALED] 12 (B) Alaska Permanent Fund Corporation; 13 (C) Alaska Industrial Development and Export Authority;
01 (D) Alaska Commercial Fisheries Entry Commission; 02 (E) Alaska Commission on Postsecondary Education; 03 (F) Alaska Aerospace Corporation; 04 (G) [REPEALED] 05 (H) Alaska Gasline Development Corporation and subsidiaries 06 of the Alaska Gasline Development Corporation; 07 (I) Alaska Energy Authority; 08 * Sec. 2. AS 42.04.020(f) is amended to read: 09 (f) Members of the commission are in the exempt service and are entitled to a 10 monthly salary equal to a step in Range 29 [RANGE 27] of the salary schedule in 11 AS 39.27.011(a) for Juneau, Alaska. The chair of the commission is entitled to a 12 monthly salary equal to a step in Range 29 [RANGE 27] of the salary schedule in 13 AS 39.27.011(a) for Juneau, Alaska. 14 * Sec. 3. AS 42.05.254(a) is amended to read: 15 (a) A regulated public utility or a certificated utility that provides 16 telecommunications services operating in the state shall pay to the commission an 17 annual regulatory cost charge in an amount not to exceed the maximum percentage of 18 adjusted gross revenue that applies to the utility sector of which the utility is a part. 19 The regulatory cost charges that the commission expects to collect from all regulated 20 utilities and certificated utilities providing telecommunications services may not 21 exceed the sum of the following percentages of the total adjusted gross revenue of all 22 regulated public utilities and certificated utilities providing telecommunications 23 services derived from operations in the state: (1) not more than .98 [.7] percent to fund 24 the operations of the commission, and (2) not more than .22 [.17] percent to fund 25 operations of the public advocacy function under AS 42.04.070(c) and 26 AS 44.23.020(e) within the Department of Law. An exempt utility that does not 27 provide telecommunications services shall pay the actual cost of services provided to 28 it by the commission. 29 * Sec. 4. AS 42.05.381(e) is amended to read: 30 (e) The commission shall adopt regulations for electric cooperatives, [AND 31 FOR] local exchange telephone utilities, and refuse utilities, setting a range for
01 adjustment of rates by a simplified rate filing procedure. A cooperative, [OR] 02 telephone utility, or refuse utility may apply for permission to adjust its rates over a 03 period of time under the simplified rate filing procedure regulations. The commission 04 shall grant the application if the cooperative, [OR] telephone utility, or refuse utility 05 satisfies the requirements of the regulations. The commission shall adopt 06 regulations specific to refuse utilities that provide for sufficient public notice and 07 an opportunity for ratepayers to meaningfully comment on rate filings. The 08 commission may review implementation of the simplified rate filing procedure at 09 reasonable intervals and may revoke permission to use the procedure or require 10 modification of the rates to correct an error. In this subsection, "refuse utility" 11 means a utility furnishing collection and disposal service of garbage, refuse, 12 trash, or other waste material to the public for compensation. 13 * Sec. 5. AS 42.05.381 is amended by adding a new subsection to read: 14 (p) A determination of whether an electric utility's rate is just and reasonable 15 may consider whether the purpose of the rate is to increase diversity of supply, 16 promote load growth, or enhance energy reliability or energy security. 17 * Sec. 6. AS 42.05.431(b) is amended to read: 18 (b) A wholesale power agreement between public utilities, or between a 19 public utility and an independent power producer, is subject to advance approval 20 of the commission. A rate set in accordance with a wholesale power agreement 21 must reflect a tax exemption or government subsidy provided to a utility or 22 independent power producer. After a wholesale power agreement is in effect, the 23 commission may not invalidate any purchase or sale obligation under the agreement. 24 However, if the commission finds that rates set in accordance with the agreement 25 violate this subsection or are not just and reasonable, the commission may order the 26 parties to negotiate an amendment to the agreement and if the parties fail to agree, to 27 use the dispute resolution procedures contained in the contract. In this subsection, 28 "independent power producer" means a person, other than a public utility, that 29 owns or operates a facility for the generation of electricity; "independent power 30 producer" does not include a joint action agency established under AS 42.45.310. 31 * Sec. 7. AS 42.05.431 is amended by adding a new subsection to read:
01 (i) Costs incurred by an electric cooperative utility organized under AS 10.25 02 that participates in an electric reliability organization certificated by the commission 03 under AS 42.05.760 must be allowed in the rates charged by the utility if the costs are 04 approved by the utility's board of directors in connection with a new or purchased 05 renewable energy facility with a nameplate capacity of less than 15,000 kilowatts or 06 power purchased from a renewable energy facility with a nameplate capacity of less 07 than 15,000 kilowatts. In this subsection, "renewable energy facility" means a facility 08 that generates electricity from renewable and alternative energy resources, including 09 geothermal, wind, solar, hydroelectric, hydrokinetic, tidal, and biomass energy. 10 * Sec. 8. AS 42.05.760(a) is amended to read: 11 (a) An electric utility must participate in an electric reliability organization if 12 the utility operates in an interconnected electric energy transmission network served 13 by an electric reliability organization certificated by the commission. The commission 14 may not require an electric reliability organization for an interconnected bulk-electric 15 system if 16 (1) all of the load-serving entities operating in the interconnected bulk- 17 electric system are exempt under AS 42.05.711(b); or 18 (2) the sum of annual electric energy sales made by load-serving 19 entities operating in the interconnected bulk-electric system is less than 1,500,000 20 megawatt-hours. 21 * Sec. 9. AS 42.05.762 is amended to read: 22 Sec. 42.05.762. Duties of an electric reliability organization. An electric 23 reliability organization shall 24 (1) develop reliability standards that provide for an adequate level of 25 reliability of an interconnected electric energy transmission network; 26 (2) develop integrated resource plans under AS 42.05.780(a); 27 (3) establish rules to 28 (A) ensure that the directors of the electric reliability 29 organization and the electric reliability organization act independently from 30 users, owners, and operators of the interconnected electric energy transmission 31 network;
01 (B) equitably allocate reasonable dues, fees, and other charges 02 among all load-serving entities connected to the interconnected electric energy 03 transmission network for all activities under AS 42.05.760 - 42.05.790; 04 (C) provide fair and impartial procedures for the enforcement 05 of reliability standards; 06 (D) provide for reasonable notice and opportunity for public 07 comment, due process, openness, and balancing of interests in exercising its 08 duties; [AND] 09 (4) be governed by a board that 10 (A) includes as nonvoting members the chair of the 11 commission or the chair's designee and the attorney general or the attorney 12 general's designee; and 13 (B) is formed as 14 (i) an independent board; 15 (ii) a balanced stakeholder board; or 16 (iii) a combination independent and balanced 17 stakeholder board; and 18 (5) prioritize the reliability and stability of the interconnected 19 bulk-electric system served by the electric reliability organization while 20 considering cost to the consumer. 21 * Sec. 10. AS 42.05.770 is amended to read: 22 Sec. 42.05.770. Regulations. The commission shall adopt regulations 23 governing electric reliability organizations, reliability standards, and modifications to 24 reliability standards consistent with this section. Regulations under AS 42.05.760 - 25 42.05.790 must 26 (1) require that an electric reliability organization's tariff include 27 [(A) STANDARDS FOR] nondiscriminatory standards for 28 [OPEN ACCESS TRANSMISSION AND] interconnection; 29 [(B) STANDARDS FOR TRANSMISSION SYSTEM COST 30 RECOVERY;] 31 (2) provide a process to identify and resolve conflicts between a
01 reliability standard and a function, rule, tariff, rate schedule, or agreement that has 02 been accepted, approved, adopted, or ordered by the commission; 03 (3) allow an electric reliability organization to recover its costs through 04 surcharges added to the rate for each participating load-serving entity. 05 * Sec. 11. AS 42.06.286(a) is amended to read: 06 (a) A pipeline carrier operating in the state shall pay to the commission an 07 annual regulatory cost charge in an amount not to exceed the sum of the following 08 percentages of gross revenue derived from operations in the state: (1) not more than 09 .98 [.7] percent to fund the operations of the commission, and (2) not more than .22 10 [.17] percent to fund operations of the public advocacy function under 11 AS 42.04.070(c) and AS 44.23.020(e) within the Department of Law. A regulatory 12 cost charge may not be assessed on pipeline carrier operations unless the operations 13 are within the jurisdiction of the commission. 14 * Sec. 12. AS 43.98 is amended by adding a new section to read: 15 Article 2A. Taxation of New Electricity Generation Facilities. 16 Sec. 43.98.100. Taxation of new electricity generation facilities. An 17 electricity generation facility that is constructed and placed into service on or after 18 July 1, 2024, is not subject to state and local ad valorem, income, and excise taxes if 19 the electricity generation facility provides power only to a public utility. In this 20 section, "public utility" has the meaning given in AS 42.05.990. 21 * Sec. 13. AS 44.83.030 is amended to read: 22 Sec. 44.83.030. Membership of the authority. The members of the board of 23 directors of the authority [ALASKA ENERGY AUTHORITY] are 24 (1) the commissioner of revenue; 25 (2) the commissioner of commerce, community, and economic 26 development; and 27 (3) six public members appointed by the governor as follows: 28 (A) one member with expertise or experience in managing 29 or operating an electric utility that is not connected to an interconnected 30 electric energy transmission network as defined in AS 42.05.790; 31 (B) one member with expertise or experience in developing
01 energy projects in rural communities; 02 (C) one member with expertise or experience in managing 03 or operating an electric utility connected to an interconnected electric 04 energy transmission network as defined in AS 42.05.790; 05 (D) one member with financial expertise in large power 06 generation project development; and 07 (E) two members with expertise or experience in finance, 08 energy policy, energy technology, engineering, law, or economics [THE 09 MEMBERS OF THE ALASKA INDUSTRIAL DEVELOPMENT AND 10 EXPORT AUTHORITY]. 11 * Sec. 14. AS 44.83.030 is amended by adding new subsections to read: 12 (b) If the commissioner described in (a)(1) or (2) of this section is unable to 13 attend a meeting of the authority, the commissioner may, by an instrument in writing 14 filed with the authority, designate a deputy or director to act in the commissioner's 15 place as a member of the board at the meeting. For all purposes of this chapter, the 16 designee is a member of the board at the meeting. 17 (c) Public board members described in (a)(3) of this section serve for three- 18 year terms. 19 (d) If a vacancy occurs in the membership of the board, the governor shall 20 immediately appoint a member for the unexpired portion of the term. 21 * Sec. 15. AS 44.83.040(a) is amended to read: 22 (a) The board of directors of the authority shall elect a chair and vice-chair 23 every two years from among its members [OF THE ALASKA INDUSTRIAL 24 DEVELOPMENT AND EXPORT AUTHORITY SHALL SERVE AS OFFICERS 25 OF THE ALASKA ENERGY AUTHORITY]. The powers of the authority 26 [ALASKA ENERGY AUTHORITY] are vested in the board of directors, and five 27 board members [FOUR DIRECTORS OF THE AUTHORITY] constitute a quorum. 28 Action may be taken and motions and resolutions adopted by the authority 29 [ALASKA ENERGY AUTHORITY] at a meeting by the affirmative vote of at least 30 five board members [A MAJORITY OF THE DIRECTORS]. The members of the 31 board of directors of the authority [ALASKA ENERGY AUTHORITY] serve
01 without compensation, but they shall receive the same travel pay and per diem as 02 provided by law for board members under AS 39.20.180. 03 * Sec. 16. AS 44.83.040 is amended by adding a new subsection to read: 04 (e) The authority may, as the authority considers advisable, appoint persons as 05 officers, including an executive director, and employ professional advisors, counsel, 06 technical experts, agents, and other employees. The executive director and employees 07 of the authority are in the exempt service under AS 39.25. 08 * Sec. 17. AS 44.83.080 is amended to read: 09 Sec. 44.83.080. Powers of the authority. In furtherance of its corporate 10 purposes, the authority has the following powers in addition to its other powers: 11 (1) to sue and be sued; 12 (2) to have a seal and alter it at pleasure; 13 (3) to make and alter bylaws for its organization and internal 14 management; 15 (4) to adopt regulations governing the exercise of its corporate powers; 16 (5) to improve, equip, operate, and maintain power projects and bulk 17 fuel, waste energy, energy conservation, energy efficiency, and alternative energy 18 facilities and equipment; 19 (6) to issue bonds to carry out any of its corporate purposes and 20 powers, including the establishment or increase of reserves to secure or to pay the 21 bonds or interest on them, and the payment of all other costs or expenses of the 22 authority incident to and necessary or convenient to carry out its corporate purposes 23 and powers; 24 (7) to sell, lease as lessor or lessee, exchange, donate, convey, or 25 encumber in any manner by mortgage or by creation of any other security interest, real 26 or personal property owned by it, or in which it has an interest, when, in the judgment 27 of the authority, the action is in furtherance of its corporate purposes; 28 (8) to accept gifts, grants, or loans from, and enter into contracts or 29 other transactions regarding them, with any person; 30 (9) to deposit or invest its funds, subject to agreements with 31 bondholders;
01 (10) to enter into contracts with the United States or any person and, 02 subject to the laws of the United States and subject to concurrence of the legislature, 03 with a foreign country or its agencies, for the construction, financing, operation, and 04 maintenance of all or any part of a power project or bulk fuel, waste energy, energy 05 conservation, energy efficiency, or alternative energy facilities or equipment, either 06 inside or outside the state, and for the sale or transmission of power from a project or 07 any right to the capacity of it or for the security of any bonds of the authority issued or 08 to be issued for the project; 09 (11) to enter into contracts with any person and with the United States 10 and, subject to the laws of the United States and subject to the concurrence of the 11 legislature, with a foreign country or its agencies for the purchase, sale, exchange, 12 transmission, or use of power from a project, or any right to the capacity of it; 13 (12) to apply to the appropriate agencies of the state, the United States, 14 and a foreign country and any other proper agency for the permits, licenses, or 15 approvals as may be necessary, to acquire, construct, maintain, and operate power 16 projects in accordance with the licenses or permits, and to obtain, hold, and use the 17 licenses and permits in the same manner as any other person or operating unit; 18 (13) to enter into contracts or agreements with respect to the exercise 19 of any of its powers, and do all things necessary or convenient to carry out its 20 corporate purposes and exercise the powers granted in this chapter; 21 (14) to recommend to the legislature 22 (A) the pledge of the credit of the state to guarantee repayment 23 of all or any portion of revenue bonds issued to assist in construction of power 24 projects; 25 (B) an appropriation from the general fund 26 (i) for debt service on bonds or other project purposes; 27 or 28 (ii) to reduce the amount of debt financing for the 29 project; 30 (15) to carry out the powers and duties assigned to it under AS 42.45 31 and AS 44.83.700 - 44.83.720;
01 (16) to make grants or loans to any person and enter into contracts or 02 other transactions regarding the grants or loans; 03 (17) to promote energy conservation, energy efficiency, and alternative 04 energy through training and public education; 05 (18) to acquire a Susitna River power project, whether by construction, 06 purchase, gift, or lease, including the acquisition of property rights and interests by 07 eminent domain under AS 09; 08 (19) to perform feasibility studies and engineering and design with 09 respect to power projects; 10 (20) to acquire battery and other energy storage systems, whether 11 by direct ownership, purchase, grant, gift, or lease. 12 * Sec. 18. AS 44.83.090(b) is amended to read: 13 (b) The authority is not subject to the jurisdiction of the Regulatory 14 Commission of Alaska, except as provided in AS 44.83.700(d). Nothing in this 15 chapter, except as provided in AS 44.83.700 - 44.83.720, grants the authority 16 jurisdiction over the services or rates of a public utility or diminishes or otherwise 17 alters the jurisdiction of the Regulatory Commission of Alaska with respect to a public 18 utility, including any right the commission may have to review and approve or 19 disapprove contracts for the purchase of electricity by a public utility other than 20 wholesale agreements and contracts described in AS 42.05.431(c)(1). 21 * Sec. 19. AS 44.83 is amended by adding new sections to read: 22 Article 5A. Railbelt Transmission Organization. 23 Sec. 44.83.700. Railbelt Transmission Organization. (a) The Railbelt 24 Transmission Organization is created for the purpose of establishing a transmission 25 cost recovery mechanism that ensures the actual, reasonable costs of owning and 26 operating the backbone transmission system are recovered in a manner that 27 (1) eliminates per-unit wholesale transmission charges to increase the 28 efficiency by which electricity service is provided; 29 (2) eliminates multiple pancaked rates; and 30 (3) equitably allocates costs among the load-serving entities connected 31 to the backbone transmission system.
01 (b) For administrative purposes, the transmission organization is in the Alaska 02 Energy Authority. 03 (c) The governance structure for the transmission organization must be made 04 up of representatives from each of the Railbelt utilities to assist in administering the 05 system of transmission cost recovery. 06 (d) Notwithstanding AS 44.83.090(b), the transmission organization is subject 07 to the jurisdiction of the commission for the purposes of AS 44.83.700 - 44.83.720. 08 The commission shall require the transmission organization to file tariffs to achieve 09 the purposes of AS 44.83.700 - 44.83.720. 10 Sec. 44.83.710. Revenue mechanism. (a) The transmission organization shall 11 hold and administer a commission-approved open access transmission tariff that 12 ensures nondiscriminatory access to the backbone transmission system. 13 (b) The transmission organization shall file with the commission a 14 transmission cost recovery methodology that ensures the reliability and sufficient 15 capacity of the backbone transmission system to support and promote state and 16 regional energy policies and a rigorous, dynamic economy. If the transmission 17 organization does not file a transmission cost recovery methodology with the 18 commission on or before July 1, 2025, the commission shall, after notice and 19 opportunity for public comment, establish a transmission cost recovery methodology 20 consistent with this section. 21 (c) The cost recovery methodology for the transmission organization must, as 22 approved by the commission, 23 (1) pool backbone transmission system costs and allocate those costs 24 through certificated load-serving entities on a coincident peak or load ratio share basis, 25 or a combination of both; and 26 (2) account for 27 (A) required backbone transmission system ancillary services; 28 (B) backbone transmission system congestion; 29 (C) disruptions to the backbone transmission system that result 30 in the isolation of one geographical area of the backbone transmission system 31 from another for more than 24 hours; and
01 (D) costs to own and operate the backbone transmission 02 system, as established by the commission or by contract, including 03 transmission costs associated with the Bradley Lake hydroelectric project. 04 (d) A Railbelt utility shall pass the commission-approved transmission costs 05 directly and transparently to the utility's customers. 06 Sec. 44.83.720. Definitions. In AS 44.83.700 - 44.83.720, 07 (1) "backbone transmission system" means the transmission assets in 08 the Railbelt that facilitate the transfer of large-scale electrical power between or across 09 separate geographical areas; "backbone transmission system" does not include assets 10 that would be considered distribution facilities or radial facilities under the standards 11 established by the Federal Energy Regulatory Commission; 12 (2) "commission" means the Regulatory Commission of Alaska; 13 (3) "Railbelt" means the geographic region from the Kenai Peninsula 14 to Interior Alaska that is connected to a common electric transmission backbone; 15 (4) "Railbelt utility" means a public electric utility certificated to 16 operate in the Railbelt; 17 (5) "transmission organization" means the Railbelt Transmission 18 Organization established by AS 44.83.700. 19 * Sec. 20. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 TRANSITION: ALASKA ENERGY AUTHORITY BOARD MEMBERS. 22 Notwithstanding AS 44.83.030(c), added by sec. 14 of this Act, the governor shall appoint 23 two public members of the initial Alaska Energy Authority board of directors to one-year 24 terms, two public members to two-year terms, and two public members to three-year terms. 25 * Sec. 21. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 TRANSITION: RAILBELT TRANSMISSION ORGANIZATION. The Railbelt 28 utilities, as defined in AS 44.83.720, added by sec. 19 of this Act, shall form the Railbelt 29 Transmission Organization under AS 44.83.700, added by sec. 19 of this Act, on or before 30 January 1, 2025. 31 * Sec. 22. Section 4 of this Act takes effect immediately under AS 01.10.070(c).
01 * Sec. 23. Except as provided in sec. 22 of this Act, this Act takes effect July 1, 2024.