Enrolled HB 307: 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 electric reliability organizations; relating to loans for renewable energy resources projects from the power project fund; relating to the taxation of new electricity generation and storage facilities; relating to the Alaska Energy Authority; relating to the Railbelt Transmission Organization; and providing for an effective date.
00Enrolled HB 307 01 Relating to the Regulatory Commission of Alaska; relating to regulation of public utilities and 02 pipeline carriers; relating to approval of wholesale power agreements; relating to electric 03 reliability organizations; relating to loans for renewable energy resources projects from the 04 power project fund; relating to the taxation of new electricity generation and storage facilities; 05 relating to the Alaska Energy Authority; relating to the Railbelt Transmission Organization; 06 and providing for an effective date. 07 _______________ 08 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 09 to read: 10 LEGISLATIVE INTENT. It is the intent of the legislature that ownership of state- 11 funded new or upgraded backbone transmission assets in the Railbelt be decided when the 12 financing for the new or upgraded transmission assets is approved by the state. 13 * Sec. 2. AS 39.25.110(11) is amended to read: 14 (11) the officers and employees of the following boards, commissions, 15 and authorities:
01 (A) [REPEALED] 02 (B) Alaska Permanent Fund Corporation; 03 (C) Alaska Industrial Development and Export Authority; 04 (D) Alaska Commercial Fisheries Entry Commission; 05 (E) Alaska Commission on Postsecondary Education; 06 (F) Alaska Aerospace Corporation; 07 (G) [REPEALED] 08 (H) Alaska Gasline Development Corporation and subsidiaries 09 of the Alaska Gasline Development Corporation; 10 (I) Alaska Energy Authority; 11 * Sec. 3. AS 42.04.020(a) is amended to read: 12 (a) The commission consists of five commissioners appointed by the governor 13 and confirmed by the legislature in joint session. To qualify for appointment as a 14 commissioner, a person must 15 (1) be a member in good standing of the Alaska Bar Association with 16 at least five years of actual experience in the practice of law; 17 (2) be a professional engineer registered under AS 08.48; or 18 (3) have a degree from an accredited college or university with a major 19 in [ENGINEERING,] finance, economics, accounting, business administration, or 20 public administration and at least five years of actual experience in the field 21 associated with the degree [ACTUAL EXPERIENCE FOR A PERIOD OF FIVE 22 YEARS IN THE PRACTICE OF LAW OR IN THE FIELD OF ENGINEERING, 23 FINANCE, ECONOMICS, ACCOUNTING, BUSINESS ADMINISTRATION, OR 24 PUBLIC ADMINISTRATION IS EQUIVALENT TO A DEGREE]. 25 * Sec. 4. AS 42.04.020(f) is amended to read: 26 (f) Members of the commission are in the exempt service and are entitled to a 27 monthly salary equal to a step in Range 29 [RANGE 27] of the salary schedule in 28 AS 39.27.011(a) for Juneau, Alaska. The chair of the commission is entitled to a 29 monthly salary equal to a step in Range 29 [RANGE 27] of the salary schedule in 30 AS 39.27.011(a) for Juneau, Alaska. 31 * Sec. 5. AS 42.05.141(b) is amended to read:
01 (b) The commission shall perform the duties assigned to it under 02 AS 42.45.100 - 42.45.190 and AS 44.83.700 - 44.83.720. 03 * Sec. 6. AS 42.05.141 is amended by adding a new subsection to read: 04 (g) Nothing in this chapter limits the authority of the commission under this 05 section or AS 42.05.151 necessary to implement provisions that remain applicable 06 under AS 42.05.321(b) or 42.05.711. 07 * Sec. 7. AS 42.05.254(a) is amended to read: 08 (a) A regulated public utility or a certificated utility that provides 09 telecommunications services operating in the state shall pay to the commission an 10 annual regulatory cost charge in an amount not to exceed the maximum percentage of 11 adjusted gross revenue that applies to the utility sector of which the utility is a part. 12 The regulatory cost charges that the commission expects to collect from all regulated 13 utilities and certificated utilities providing telecommunications services may not 14 exceed the sum of the following percentages of the total adjusted gross revenue of all 15 regulated public utilities and certificated utilities providing telecommunications 16 services derived from operations in the state: (1) not more than .98 [.7] percent to fund 17 the operations of the commission, and (2) not more than .22 [.17] percent to fund 18 operations of the public advocacy function under AS 42.04.070(c) and 19 AS 44.23.020(e) within the Department of Law. An exempt utility that does not 20 provide telecommunications services shall pay the actual cost of services provided to 21 it by the commission. 22 * Sec. 8. AS 42.05.381 is amended by adding a new subsection to read: 23 (p) A determination of whether an electric utility's rate is just and reasonable 24 may consider whether the purpose of the rate is to increase diversity of supply, 25 promote load growth, or enhance energy reliability or energy security. 26 * Sec. 9. AS 42.05.431(b) is amended to read: 27 (b) A wholesale power agreement between public utilities, or between a 28 public utility and an independent power producer, is subject to advance approval 29 of the commission. A rate set in accordance with a wholesale power agreement 30 must disclose a state or local tax exemption provided to a utility or independent 31 power producer. After a wholesale power agreement is in effect, the commission
01 may not invalidate any purchase or sale obligation under the agreement. However, if 02 the commission finds that rates set in accordance with the agreement violate this 03 subsection or are not just and reasonable, the commission may order the parties to 04 negotiate an amendment to the agreement and if the parties fail to agree, to use the 05 dispute resolution procedures contained in the contract. In this subsection, 06 "independent power producer" means a legal entity, other than a public utility 07 or a joint action agency established under AS 42.45.310, that owns or operates a 08 facility for the generation of electricity. 09 * Sec. 10. AS 42.05.711(b) is amended to read: 10 (b) Except as otherwise provided in this subsection, [AND IN] (o) of this 11 section, and AS 44.83.700(d), public utilities owned and operated by a political 12 subdivision of the state, or electric operating entities established as the instrumentality 13 of two or more public utilities owned and operated by political subdivisions of the 14 state, are exempt from this chapter, other than AS 42.05.221 - 42.05.281 and 15 42.05.385. However, 16 (1) the governing body of a political subdivision may elect to be 17 subject to this chapter; and 18 (2) a utility or electric operating entity that is owned and operated by a 19 political subdivision and that directly competes with another utility or electric 20 operating entity is subject to this chapter and any other utility or electric operating 21 entity owned and operated by the political subdivision is also subject to this chapter; 22 this paragraph does not apply to a utility or electric operating entity owned and 23 operated by a political subdivision that competes with a telecommunications utility. 24 * Sec. 11. AS 42.05.760(a) is amended to read: 25 (a) An electric utility must participate in an electric reliability organization if 26 the utility operates in an interconnected electric energy transmission network served 27 by an electric reliability organization certificated by the commission. The commission 28 may not require an electric reliability organization for an interconnected bulk-electric 29 system if 30 (1) all of the load-serving entities operating in the interconnected bulk- 31 electric system are exempt under AS 42.05.711(b); or
01 (2) the sum of annual electric energy sales made by load-serving 02 entities operating in the interconnected bulk-electric system is less than 3,000,000 03 megawatt-hours. 04 * Sec. 12. AS 42.05.762 is amended to read: 05 Sec. 42.05.762. Duties of an electric reliability organization. An electric 06 reliability organization shall 07 (1) develop reliability standards that provide for an adequate level of 08 reliability of an interconnected electric energy transmission network; 09 (2) develop integrated resource plans under AS 42.05.780(a); 10 (3) establish rules to 11 (A) ensure that the directors of the electric reliability 12 organization and the electric reliability organization act independently from 13 users, owners, and operators of the interconnected electric energy transmission 14 network; 15 (B) equitably allocate reasonable dues, fees, and other charges 16 among all load-serving entities connected to the interconnected electric energy 17 transmission network for all activities under AS 42.05.760 - 42.05.790; 18 (C) provide fair and impartial procedures for the enforcement 19 of reliability standards; 20 (D) provide for reasonable notice and opportunity for public 21 comment, due process, openness, and balancing of interests in exercising its 22 duties; [AND] 23 (4) be governed by a board that 24 (A) includes as nonvoting members the chair of the 25 commission or the chair's designee and the attorney general or the attorney 26 general's designee; and 27 (B) is formed as 28 (i) an independent board; 29 (ii) a balanced stakeholder board; or 30 (iii) a combination independent and balanced 31 stakeholder board; and
01 (5) prioritize the reliability, stability, and cost to consumers of the 02 interconnected bulk-electric system served by the electric reliability organization. 03 * Sec. 13. AS 42.05.770 is amended to read: 04 Sec. 42.05.770. Regulations. The commission shall adopt regulations 05 governing electric reliability organizations, reliability standards, and modifications to 06 reliability standards consistent with this section. Regulations under AS 42.05.760 - 07 42.05.790 must 08 (1) require that an electric reliability organization's tariff include 09 [(A) STANDARDS FOR] nondiscriminatory standards for 10 [OPEN ACCESS TRANSMISSION AND] interconnection; 11 [(B) STANDARDS FOR TRANSMISSION SYSTEM COST 12 RECOVERY;] 13 (2) provide a process to identify and resolve conflicts between a 14 reliability standard and a function, rule, tariff, rate schedule, or agreement that has 15 been accepted, approved, adopted, or ordered by the commission; 16 (3) allow an electric reliability organization to recover its costs through 17 surcharges added to the rate for each participating load-serving entity. 18 * Sec. 14. AS 42.06.286(a) is amended to read: 19 (a) A pipeline carrier operating in the state shall pay to the commission an 20 annual regulatory cost charge in an amount not to exceed the sum of the following 21 percentages of gross revenue derived from operations in the state: (1) not more than 22 .98 [.7] percent to fund the operations of the commission, and (2) not more than .22 23 [.17] percent to fund operations of the public advocacy function under 24 AS 42.04.070(c) and AS 44.23.020(e) within the Department of Law. A regulatory 25 cost charge may not be assessed on pipeline carrier operations unless the operations 26 are within the jurisdiction of the commission. 27 * Sec. 15. AS 42.45.010 is amended by adding new subsections to read: 28 (m) A loan for a renewable energy resources project in which the cumulative 29 state monetary involvement, through loans, grants, and bonds, is at least $5,000,000 30 may not be granted for a term that exceeds 50 years and may, notwithstanding (f)(2) of 31 this section, be granted at an interest rate that is the lesser of
01 (1) three percent lower than the rate determined under (f)(2)(A) of this 02 section, but not less than one percent; or 03 (2) a rate equivalent to the rate determined under (f)(2)(B) of this 04 section. 05 (n) In (m) of this section, "renewable energy resources" has the meaning given 06 in AS 42.45.045(l). 07 * Sec. 16. AS 43.98 is amended by adding a new section to read: 08 Article 2A. Taxation of New Electricity Generation and Storage Facilities. 09 Sec. 43.98.100. Taxation of new electricity generation and storage 10 facilities. (a) An electricity generation facility or electricity storage facility that is 11 constructed and placed into service on or after July 1, 2024, is not subject to state and 12 local ad valorem, income, and excise taxes if the electricity generation facility is 13 (1) operated by a public utility or joint action agency established under 14 AS 42.45.310; or 15 (2) operated by an entity other than a public utility and provides power 16 only to a public utility. 17 (b) In this section, "public utility" has the meaning given in AS 42.05.990. 18 * Sec. 17. AS 44.83.030 is amended to read: 19 Sec. 44.83.030. Membership of the authority. The members of the board of 20 directors of the authority [ALASKA ENERGY AUTHORITY] are 21 (1) the commissioner of revenue; 22 (2) the commissioner of commerce, community, and economic 23 development; and 24 (3) six public members appointed by the governor as follows: 25 (A) one member with expertise or experience in managing 26 or operating an electric utility that is not connected to an interconnected 27 electric energy transmission network as defined in AS 42.05.790; 28 (B) one member with expertise or experience in developing 29 energy projects in rural communities; 30 (C) one member with expertise or experience in managing 31 or operating an electric utility connected to an interconnected electric
01 energy transmission network as defined in AS 42.05.790; 02 (D) one member with expertise or experience in managing a 03 municipally owned utility located off the interconnected road system or 04 joint action agency established under AS 42.45.310 located off the 05 interconnected road system; 06 (E) one member with financial expertise in large power 07 generation project development; and 08 (F) one member with expertise or experience in finance, 09 energy policy, energy technology, engineering, law, or economics [THE 10 MEMBERS OF THE ALASKA INDUSTRIAL DEVELOPMENT AND 11 EXPORT AUTHORITY]. 12 * Sec. 18. AS 44.83.030 is amended by adding new subsections to read: 13 (b) If the commissioner described in (a)(1) or (a)(2) of this section is unable to 14 attend a meeting of the authority, the commissioner may, by an instrument in writing 15 filed with the authority, designate a deputy or director to act in the commissioner's 16 place as a member of the board at the meeting. For all purposes of this chapter, the 17 designee is a member of the board at the meeting. 18 (c) Public board members described in (a)(3) of this section serve for three- 19 year terms. 20 (d) If a vacancy occurs in the membership of the board, the governor shall 21 immediately appoint a member for the unexpired portion of the term. 22 * Sec. 19. AS 44.83.040(a) is amended to read: 23 (a) The board of directors of the authority shall elect a chair and vice-chair 24 every two years from among its members [OF THE ALASKA INDUSTRIAL 25 DEVELOPMENT AND EXPORT AUTHORITY SHALL SERVE AS OFFICERS 26 OF THE ALASKA ENERGY AUTHORITY]. The powers of the authority 27 [ALASKA ENERGY AUTHORITY] are vested in the board of directors, and five 28 board members [FOUR DIRECTORS OF THE AUTHORITY] constitute a quorum. 29 Action may be taken and motions and resolutions adopted by the authority 30 [ALASKA ENERGY AUTHORITY] at a meeting by the affirmative vote of at least 31 five board members [A MAJORITY OF THE DIRECTORS]. The members of the
01 board of directors of the authority [ALASKA ENERGY AUTHORITY] serve 02 without compensation, but they shall receive the same travel pay and per diem as 03 provided by law for board members under AS 39.20.180. 04 * Sec. 20. AS 44.83.040 is amended by adding a new subsection to read: 05 (e) The authority may, as the authority considers advisable, appoint persons as 06 officers, including an executive director, and employ professional advisors, counsel, 07 technical experts, agents, and other employees. The executive director and employees 08 of the authority are in the exempt service under AS 39.25. 09 * Sec. 21. AS 44.83.080 is amended to read: 10 Sec. 44.83.080. Powers of the authority. In furtherance of its corporate 11 purposes, the authority has the following powers in addition to its other powers: 12 (1) to sue and be sued; 13 (2) to have a seal and alter it at pleasure; 14 (3) to make and alter bylaws for its organization and internal 15 management; 16 (4) to adopt regulations governing the exercise of its corporate powers; 17 (5) to improve, equip, operate, and maintain power projects and bulk 18 fuel, waste energy, energy conservation, energy efficiency, and alternative energy 19 facilities and equipment; 20 (6) to issue bonds to carry out any of its corporate purposes and 21 powers, including the establishment or increase of reserves to secure or to pay the 22 bonds or interest on them, and the payment of all other costs or expenses of the 23 authority incident to and necessary or convenient to carry out its corporate purposes 24 and powers; 25 (7) to sell, lease as lessor or lessee, exchange, donate, convey, or 26 encumber in any manner by mortgage or by creation of any other security interest, real 27 or personal property owned by it, or in which it has an interest, when, in the judgment 28 of the authority, the action is in furtherance of its corporate purposes; 29 (8) to accept gifts, grants, or loans from, and enter into contracts or 30 other transactions regarding them, with any person; 31 (9) to deposit or invest its funds, subject to agreements with
01 bondholders; 02 (10) to enter into contracts with the United States or any person and, 03 subject to the laws of the United States and subject to concurrence of the legislature, 04 with a foreign country or its agencies, for the construction, financing, operation, and 05 maintenance of all or any part of a power project or bulk fuel, waste energy, energy 06 conservation, energy efficiency, or alternative energy facilities or equipment, either 07 inside or outside the state, and for the sale or transmission of power from a project or 08 any right to the capacity of it or for the security of any bonds of the authority issued or 09 to be issued for the project; 10 (11) to enter into contracts with any person and with the United States 11 and, subject to the laws of the United States and subject to the concurrence of the 12 legislature, with a foreign country or its agencies for the purchase, sale, exchange, 13 transmission, or use of power from a project, or any right to the capacity of it; 14 (12) to apply to the appropriate agencies of the state, the United States, 15 and a foreign country and any other proper agency for the permits, licenses, or 16 approvals as may be necessary, to acquire, construct, maintain, and operate power 17 projects in accordance with the licenses or permits, and to obtain, hold, and use the 18 licenses and permits in the same manner as any other person or operating unit; 19 (13) to enter into contracts or agreements with respect to the exercise 20 of any of its powers, and do all things necessary or convenient to carry out its 21 corporate purposes and exercise the powers granted in this chapter; 22 (14) to recommend to the legislature 23 (A) the pledge of the credit of the state to guarantee repayment 24 of all or any portion of revenue bonds issued to assist in construction of power 25 projects; 26 (B) an appropriation from the general fund 27 (i) for debt service on bonds or other project purposes; 28 or 29 (ii) to reduce the amount of debt financing for the 30 project; 31 (15) to carry out the powers and duties assigned to it under AS 42.45
01 and AS 44.83.700 - 44.83.720; 02 (16) to make grants or loans to any person and enter into contracts or 03 other transactions regarding the grants or loans; 04 (17) to promote energy conservation, energy efficiency, and alternative 05 energy through training and public education; 06 (18) to acquire a Susitna River power project, whether by construction, 07 purchase, gift, or lease, including the acquisition of property rights and interests by 08 eminent domain under AS 09; 09 (19) to perform feasibility studies and engineering and design with 10 respect to power projects; 11 (20) to acquire battery and other energy storage systems, whether 12 by direct ownership, purchase, grant, gift, or lease. 13 * Sec. 22. AS 44.83.090(b) is amended to read: 14 (b) The authority is not subject to the jurisdiction of the Regulatory 15 Commission of Alaska, except as provided in AS 44.83.700(d). Nothing in this 16 chapter, except as provided in AS 44.83.700 - 44.83.720, grants the authority 17 jurisdiction over the services or rates of a public utility or diminishes or otherwise 18 alters the jurisdiction of the Regulatory Commission of Alaska with respect to a public 19 utility, including any right the commission may have to review and approve or 20 disapprove contracts for the purchase of electricity by a public utility other than 21 wholesale agreements and contracts described in AS 42.05.431(c)(1). 22 * Sec. 23. AS 44.83 is amended by adding new sections to read: 23 Article 5A. Railbelt Transmission Organization. 24 Sec. 44.83.700. Railbelt Transmission Organization. (a) The Railbelt 25 Transmission Organization is created for the purpose of establishing an open access 26 transmission tariff that 27 (1) provides for recovery of transmission costs and related ancillary 28 services; and 29 (2) replaces wholesale charges assessed by unit by each utility in the 30 Railbelt with a new mechanism that fairly recovers and equitably allocates the costs of 31 operating the backbone transmission system.
01 (b) For administrative purposes, the transmission organization is a division of 02 the Alaska Energy Authority. 03 (c) To assist in administering the open access transmission tariff, the 04 governance structure for the transmission organization must be made up of a 05 representative from the authority, a representative from each Railbelt utility, and, as an 06 ex officio nonvoting representative, the chief executive officer of the applicable 07 electric reliability organization or the chief executive officer's designee. 08 (d) Notwithstanding AS 42.05.711(b) and AS 44.83.090(b), the transmission 09 organization is subject to the jurisdiction of the commission for the purposes of 10 AS 44.83.700 - 44.83.720. The commission shall require the transmission organization 11 to apply for a certificate under AS 42.05.221 and file tariffs to achieve the purposes of 12 AS 44.83.700 - 44.83.720. 13 Sec. 44.83.710. Revenue mechanism. (a) The transmission organization shall 14 hold and administer a commission-approved nondiscriminatory open access 15 transmission tariff for the backbone transmission system. 16 (b) The transmission organization shall file with the commission a 17 nondiscriminatory open access transmission tariff consistent with Federal Energy 18 Regulatory Commission standards to remove impediments to competition in the 19 wholesale bulk power marketplace in the state. If the transmission organization does 20 not file a nondiscriminatory open access transmission tariff with the commission on or 21 before July 1, 2025, the commission shall, after notice and opportunity for public 22 comment, establish a nondiscriminatory open access transmission tariff consistent 23 with this section. 24 (c) The nondiscriminatory open access transmission tariff must, as approved 25 by the commission, 26 (1) pool backbone transmission system costs and allocate those costs 27 through certificated load-serving entities on a coincident peak or load ratio share basis, 28 or a combination of both; and 29 (2) account for 30 (A) required backbone transmission system ancillary services; 31 (B) backbone transmission system congestion;
01 (C) disruptions to the backbone transmission system that result 02 in the isolation of one geographical area of the backbone transmission system 03 from another for more than 24 hours; and 04 (D) costs to own and operate the backbone transmission 05 system, as established by the commission or by contract, including 06 transmission costs associated with the Bradley Lake hydroelectric project. 07 (d) A Railbelt utility shall pass the commission-approved transmission costs 08 directly and transparently to the utility's customers. 09 Sec. 44.83.720. Definitions. In AS 44.83.700 - 44.83.720, 10 (1) "backbone transmission system" means the transmission assets in 11 the Railbelt that facilitate the transmission of electrical power under the standards 12 established by the Federal Energy Regulatory Commission; 13 (2) "commission" means the Regulatory Commission of Alaska; 14 (3) "Railbelt" means the geographic region from the Kenai Peninsula 15 to Interior Alaska that is connected to a common electric transmission backbone; 16 (4) "Railbelt utility" means a public electric utility certificated to 17 operate in the Railbelt that operates backbone transmission system assets; 18 (5) "transmission organization" means the Railbelt Transmission 19 Organization established by AS 44.83.700. 20 * Sec. 24. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 TRANSITION: REGULATORY COMMISSION OF ALASKA MEMBERS. An 23 individual who is a member of the Regulatory Commission of Alaska on the day before the 24 effective date of sec. 3 of this Act continues to serve on the Regulatory Commission of Alaska 25 until the member's term expires and a successor is appointed and qualified. The governor shall 26 make appointments for vacancies that occur on or after the effective date of sec. 3 of this Act 27 in accordance with AS 42.04.020(a), as amended by sec. 3 of this Act. 28 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 TRANSITION: ALASKA ENERGY AUTHORITY BOARD MEMBERS. 31 Notwithstanding AS 44.83.030(c), added by sec. 18 of this Act, the governor shall appoint
01 two public members of the initial Alaska Energy Authority board of directors to one-year 02 terms, two public members to two-year terms, and two public members to three-year terms. 03 * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 TRANSITION: RAILBELT TRANSMISSION ORGANIZATION. To facilitate the 06 development and management of the Railbelt backbone transmission system open access 07 transmission tariff, the Alaska Energy Authority and the Railbelt utilities, as defined in 08 AS 44.83.720, added by sec. 23 of this Act, shall form the Railbelt Transmission Organization 09 under AS 44.83.700, added by sec. 23 of this Act, on or before January 1, 2025, modeled after 10 the governance structure of the Bradley Lake Hydroelectric Project, as outlined in the Bradley 11 Lake Power Sales Agreement, including the creation, duties, and methods of the Bradley Lake 12 Project Management Committee, with any adjustments the parties to the agreement determine 13 are necessary. On or before January 1, 2025, the Railbelt Transmission Organization shall 14 apply to the Regulatory Commission of Alaska for a certificate under AS 42.05.221 to 15 achieve the purposes of AS 44.83.700 - 44.83.720, added by sec. 23 of this Act. 16 * Sec. 27. Section 8 of this Act takes effect immediately under AS 01.10.070(c). 17 * Sec. 28. Except as provided in sec. 27 of this Act, this Act takes effect July 1, 2024.