SB 257: "An Act relating to the Regulatory Commission of Alaska; relating to public utilities; relating to electric reliability organizations; relating to the Alaska Energy Authority; relating to the Railbelt Transmission Organization; and providing for an effective date."
00 SENATE BILL NO. 257 01 "An Act relating to the Regulatory Commission of Alaska; relating to public utilities; 02 relating to electric reliability organizations; relating to the Alaska Energy Authority; 03 relating to the Railbelt Transmission Organization; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 42.04.020(a) is amended to read: 06 (a) The commission consists of five commissioners appointed by the governor 07 and confirmed by the legislature in joint session. To qualify for appointment as a 08 commissioner, a person must be a member in good standing of the Alaska Bar 09 Association or have a degree from an accredited college or university with a major in 10 engineering, finance, economics, accounting, business administration, or public 11 administration and must have at least five years of actual experience in the 12 practice of law or in the field associated with the degree. [ACTUAL 13 EXPERIENCE FOR A PERIOD OF FIVE YEARS IN THE PRACTICE OF LAW 14 OR IN THE FIELD OF ENGINEERING, FINANCE, ECONOMICS,
01 ACCOUNTING, BUSINESS ADMINISTRATION, OR PUBLIC 02 ADMINISTRATION IS EQUIVALENT TO A DEGREE.] 03 * Sec. 2. AS 42.05.381 is amended by adding a new subsection to read: 04 (p) A determination of whether an electric utility's rate is just and reasonable 05 may consider whether the purpose of the rate is to increase diversity of supply, 06 promote load growth, or enhance energy reliability or energy security. 07 * Sec. 3. AS 42.05.762 is amended to read: 08 Sec. 42.05.762. Duties of an electric reliability organization. An electric 09 reliability organization shall 10 (1) develop reliability standards that provide for an adequate level of 11 reliability of an interconnected electric energy transmission network; 12 (2) participate in integrated grid planning conducted by the 13 Railbelt Transmission Organization under AS 44.83.730 [DEVELOP 14 INTEGRATED RESOURCE PLANS UNDER AS 42.05.780(a)]; 15 (3) establish rules to 16 (A) ensure that the directors of the electric reliability 17 organization and the electric reliability organization act independently from 18 users, owners, and operators of the interconnected electric energy transmission 19 network; 20 (B) equitably allocate reasonable dues, fees, and other charges 21 among all load-serving entities connected to the interconnected electric energy 22 transmission network for all activities under AS 42.05.760 - 42.05.790; 23 (C) provide fair and impartial procedures for the enforcement 24 of reliability standards; 25 (D) provide for reasonable notice and opportunity for public 26 comment, due process, openness, and balancing of interests in exercising its 27 duties; [AND] 28 (4) be governed by a board that 29 (A) includes as nonvoting members the chair of the 30 commission or the chair's designee and the attorney general or the attorney 31 general's designee; and
01 (B) is formed as 02 (i) an independent board; 03 (ii) a balanced stakeholder board; or 04 (iii) a combination independent and balanced 05 stakeholder board; and 06 (5) prioritize the reliability and stability of the interconnected 07 bulk-electric system served by the electric reliability organization while 08 considering cost to the consumer. 09 * Sec. 4. AS 42.05.765(a) is amended to read: 10 (a) An electric reliability organization shall develop, monitor, and enforce 11 reliability standards that ensure the stable operation of the interconnected bulk- 12 electric system served by the electric reliability organization, coordinate with the 13 Railbelt Transmission Organization when developing reliability standards if the 14 electric reliability organization serves the Railbelt, and file each reliability standard 15 or modification to a reliability standard with the commission as a new or revised tariff 16 provision. All users, owners, and operators of an interconnected electric energy 17 transmission network served by an electric reliability organization, including a user, 18 owner, or operator that is exempt from other regulation under AS 42.05.711 or another 19 provision of this chapter, shall comply with reliability standards contained in a tariff 20 that is approved by the commission. The commission may enforce a reliability 21 standard approved under this section. A reliability standard approved under this 22 section 23 (1) shall provide for the reliable operation of the interconnected 24 electric energy transmission network or of an interconnected electric energy 25 transmission network facility; 26 (2) may provide for 27 (A) protection from a cybersecurity incident; 28 (B) facility security; 29 (C) additions or modifications to an interconnected bulk- 30 electric system facility to the extent necessary to provide for reliable operation 31 of the interconnected electric energy transmission network;
01 (3) may result in, but may not be designed for the purpose of, requiring 02 enlargement of interconnected bulk-electric system facilities or construction of new 03 transmission capacity or generation capacity. 04 * Sec. 5. AS 42.05.770 is amended to read: 05 Sec. 42.05.770. Regulations. The commission shall adopt regulations 06 governing electric reliability organizations, reliability standards, and modifications to 07 reliability standards consistent with this section. Regulations under AS 42.05.760 - 08 42.05.790 must 09 (1) [REQUIRE THAT AN ELECTRIC RELIABILITY 10 ORGANIZATION'S TARIFF INCLUDE 11 (A) STANDARDS FOR NONDISCRIMINATORY OPEN 12 ACCESS TRANSMISSION AND INTERCONNECTION; 13 (B) STANDARDS FOR TRANSMISSION SYSTEM COST 14 RECOVERY; 15 (2)] provide a process to identify and resolve conflicts between a 16 reliability standard and a function, rule, tariff, rate schedule, or agreement that has 17 been accepted, approved, adopted, or ordered by the commission; 18 (2) [(3)] allow an electric reliability organization to recover its costs 19 through surcharges added to the rate for each participating load-serving entity. 20 * Sec. 6. AS 42.05.772 is amended by adding a new subsection to read: 21 (b) A load-serving entity, including a load-serving entity otherwise exempt 22 from regulation under this chapter, in an interconnected bulk-electric system served by 23 an electric reliability organization shall adhere to the electric reliability organization's 24 reliability standards and coordinate with the electric reliability organization and, if 25 applicable, the Railbelt Transmission Organization to integrate the electric reliability 26 organization's reliability standards into operational procedures. 27 * Sec. 7. AS 42.05.785(d) is amended to read: 28 (d) The commission shall adopt regulations 29 (1) governing project preapproval; 30 (2) defining refurbishment and capitalized maintenance; and 31 (3) maintaining municipal jurisdiction over local planning decisions [;
01 AND 02 (4) ADDRESSING PROJECTS UNDERTAKEN BEFORE 03 INTEGRATED RESOURCE PLAN APPROVAL FOR AN INTERCONNECTED 04 ELECTRIC ENERGY TRANSMISSION NETWORK]. 05 * Sec. 8. AS 42.05.790 is amended by adding new paragraphs to read: 06 (8) "Railbelt" has the meaning given in AS 44.83.750; 07 (9) "Railbelt Transmission Organization" means the transmission 08 organization established by AS 44.83.700. 09 * Sec. 9. 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 - 44.83.750; 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 energy storage systems, whether by direct 12 ownership, purchase, grant, gift, or lease. 13 * Sec. 10. AS 44.83 is amended by adding new sections to read: 14 Article 5A. Railbelt Transmission Organization. 15 Sec. 44.83.700. Railbelt Transmission Organization. (a) The Railbelt 16 Transmission Organization is established in the Alaska Energy Authority for the 17 purpose of overseeing, managing, and developing the backbone transmission system 18 serving the Railbelt and conducting strategic planning to enhance the future transfer 19 capabilities, resilience, reliability, and efficiency of the backbone transmission system. 20 (b) The governance structure for the transmission organization must 21 (1) provide for oversight of the transmission organization by a 22 management committee that is made up of representatives from each of the Railbelt 23 utilities, the executive director of the authority, and the chief executive officer of the 24 applicable electric reliability organization; 25 (2) include a conflict resolution process; and 26 (3) facilitate public participation in the operations of the transmission 27 organization. 28 (c) Notwithstanding AS 44.83.090(b), the transmission organization is subject 29 to the jurisdiction of the commission. The commission shall adopt regulations under 30 AS 44.62 (Administrative Procedure Act) necessary to carry out its powers and duties 31 under AS 44.83.700 - 44.83.750, including defining by regulation the term "backbone
01 transmission asset." 02 Sec. 44.83.710. Powers and duties. (a) The transmission organization shall 03 (1) manage backbone transmission assets; 04 (2) follow reliability standards developed by the applicable electric 05 reliability organization; 06 (3) ensure the safe, resilient, reliable, efficient, and economical 07 operation and development of the backbone transmission system; 08 (4) preserve nondiscriminatory open access to the backbone 09 transmission system subject to legitimate technical constraints and congestion; 10 (5) maintain the capacity rights of legacy transmission owners to 11 access firm load and legacy generation resources served by the backbone transmission 12 system; 13 (6) perform integrated grid planning under AS 44.83.730; 14 (7) purchase, lease, or otherwise acquire effective operational control 15 of backbone transmission assets; 16 (8) construct, own, and operate new backbone transmission assets; and 17 (9) subject to the approval of the commission, establish tariffs related 18 to the backbone transmission system. 19 (b) The transmission organization may enter into contracts, agreements, and 20 partnerships that enhance safety, resiliency, reliability, and efficiency of the backbone 21 transmission system. 22 (c) The transmission organization may adopt regulations necessary to carry 23 out its powers and duties under this section. 24 Sec. 44.83.720. Revenue mechanism. (a) As approved by the commission, the 25 transmission organization shall 26 (1) hold and administer an open access transmission tariff that ensures 27 nondiscriminatory access to the backbone transmission system; and 28 (2) adopt a transmission cost recovery methodology that ensures the 29 reliability and sufficient capacity of the backbone transmission system to support and 30 promote state and regional energy policies and a vigorous, dynamic economy. 31 (b) The cost recovery methodology for the backbone transmission system
01 adopted by the transmission organization must pool backbone transmission system 02 costs and allocate those costs through certificated load-serving entities on a coincident 03 peak or load ratio share basis, or a combination of both, as approved by the 04 commission. 05 Sec. 44.83.730. Integrated grid planning. (a) At least once every 10 years, 06 the transmission organization shall, in consultation with stakeholders, create and 07 review an integrated grid plan for the Railbelt. 08 (b) The integrated grid plan must use a whole-system approach that integrates 09 planning across generation, transmission, and distribution resources to articulate the 10 strategic trajectory, operational blueprint, capital improvement funding requirements, 11 and developmental outlook for the interconnected electric energy system that serves 12 the Railbelt, considering projected load growth, technological advancement, fuel 13 supply projections, generation plans, safety, resiliency, reliability, efficiency, and 14 economic impacts. 15 (c) The transmission organization shall seek feedback and input from the 16 public throughout the integrated grid plan development process to ensure that the plan 17 reflects a broad range of perspectives and addresses community and industry concerns. 18 Sec. 44.83.740. Transfer management of assets. (a) To achieve the integrated 19 and streamlined governance of the backbone transmission system, the transmission 20 organization shall identify the existing backbone transmission assets that are part of 21 the backbone transmission system, and the Railbelt utilities shall transfer management 22 of those assets to the transmission organization on or before July 1, 2026. 23 (b) The authority shall transfer backbone transmission assets identified under 24 (a) of this section that are owned or managed by the authority to the transmission 25 organization. 26 (c) A Railbelt utility shall pay penalties as determined by the commission for 27 failure to transfer management of backbone transmission assets to the transmission 28 organization as required under this section. 29 Sec. 44.83.750. Definitions. In AS 44.83.700 - 44.83.750, 30 (1) "backbone transmission system" means the backbone transmission 31 assets of the interconnected electric energy transmission network that serves the
01 Railbelt; 02 (2) "commission" means the Regulatory Commission of Alaska; 03 (3) "interconnected electric energy transmission network" has the 04 meaning given in AS 42.05.790; 05 (4) "Railbelt" means the geographic region from the Kenai Peninsula 06 to Interior Alaska that is connected to a common electric transmission backbone; 07 (5) "Railbelt utility" means a public electric utility certificated to 08 operate in the Railbelt; 09 (6) "transmission organization" means the Railbelt Transmission 10 Organization established by AS 44.83.700. 11 * Sec. 11. AS 42.05.780 and 42.05.785(b) are repealed. 12 * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 TRANSITION: REGULATIONS. (a) The Alaska Energy Authority and the 15 Regulatory Commission of Alaska shall adopt regulations necessary to implement the changes 16 made by sec. 10 of this Act. The regulations take effect under AS 44.62 (Administrative 17 Procedure Act), but not before the effective date of the law implemented by the regulation. 18 (b) Regulations adopted by the Alaska Energy Authority under (a) of this section 19 must include a governance structure for the Railbelt Transmission Organization established 20 under AS 44.83.700, added by sec. 10 of this Act, that is based on the governance structure of 21 the Bradley Lake Hydroelectric Project and the Bradley Lake Project Management 22 Committee, with modifications as the authority determines necessary after consulting with 23 other participants in the management committee under AS 44.83.700(b)(1), added by sec. 10 24 of this Act. 25 (c) Regulations adopted by the Regulatory Commission of Alaska under (a) of this 26 section must define by regulation the term "backbone transmission asset" to include assets 27 that facilitate the transfer of large-scale electrical power between or across separate 28 geographical areas but not assets that are distribution facilities or radial facilities, considering 29 the standards established by the Federal Energy Regulatory Commission. 30 (d) Regulations adopted under (a) of this section must include a backbone 31 transmission system revenue mechanism under AS 44.83.720, added by sec. 10 of this Act,
01 that is modeled after the provisions governing backbone transmission in 16 Texas 02 Administrative Code 25.192, as it reads on the effective date of this section, with 03 modifications as necessary. 04 * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 TRANSITION: INITIAL INTEGRATED GRID PLAN AND CAPITAL 07 IMPROVEMENT PROGRAM. The Alaska Energy Authority shall immediately assume the 08 integrated grid planning duties under AS 44.83.730, added by sec. 10 of this Act, develop an 09 initial integrated grid plan as soon as practicable, and begin execution of a five-year grid 10 capital improvement program based on the plan as soon as practicable. The authority shall 11 transfer the responsibility for the plan and program to the Railbelt Transmission Organization 12 established under AS 44.83.700, added by sec. 10 of this Act, after the authority has adopted 13 regulations for the governance structure of the organization under sec. 12 of this Act. 14 * Sec. 14. Sections 12 and 13 of this Act take effect immediately under AS 01.10.070(c). 15 * Sec. 15. Except as provided in sec. 14 of this Act, this Act takes effect July 1, 2024.