CSSB 257(L&C): "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 CS FOR SENATE BILL NO. 257(L&C) 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) develop integrated resource plans under AS 42.05.780(a); 13 (3) establish rules to 14 (A) ensure that the directors of the electric reliability 15 organization and the electric reliability organization act independently from 16 users, owners, and operators of the interconnected electric energy transmission 17 network; 18 (B) equitably allocate reasonable dues, fees, and other charges 19 among all load-serving entities connected to the interconnected electric energy 20 transmission network for all activities under AS 42.05.760 - 42.05.790; 21 (C) provide fair and impartial procedures for the enforcement 22 of reliability standards; 23 (D) provide for reasonable notice and opportunity for public 24 comment, due process, openness, and balancing of interests in exercising its 25 duties; and 26 (4) prioritize the reliability and stability of the interconnected 27 bulk-electric system served by the electric reliability organization while 28 considering cost to the consumer [BE GOVERNED BY A BOARD THAT 29 (A) INCLUDES AS NONVOTING MEMBERS THE CHAIR 30 OF THE COMMISSION OR THE CHAIR'S DESIGNEE AND THE 31 ATTORNEY GENERAL OR THE ATTORNEY GENERAL'S DESIGNEE;
01 AND 02 (B) IS FORMED AS 03 (i) AN INDEPENDENT BOARD; 04 (ii) A BALANCED STAKEHOLDER BOARD; OR 05 (iii) A COMBINATION INDEPENDENT AND BALANCED 06 STAKEHOLDER BOARD]. 07 * Sec. 4. AS 42.05 is amended by adding a new section to read: 08 Sec. 42.05.763. Governance of an electric reliability organization. (a) An 09 electric reliability organization shall be governed by a board of directors that is 10 (1) an independent board; 11 (2) a balanced stakeholder board; or 12 (3) a combination independent and balanced stakeholder board. 13 (b) The chair of the commission or the chair's designee and the attorney 14 general or the attorney general's designee shall serve as nonvoting members of the 15 board of directors of an electric reliability organization. 16 (c) A voting member of the board of an electric reliability organization must 17 (1) be appointed by a utility that participates in the electric reliability 18 organization; 19 (2) be a member in good standing of the Alaska Bar Association with 20 at least five years of actual experience in the practice of law; 21 (3) have a degree in engineering, finance, economics, accounting, 22 business administration, or public administration and at least five years of actual 23 experience in the field associated with the degree; or 24 (4) have owned, operated, overseen, or developed, for a period of at 25 least five years, a generation facility of at least 10 megawatts connecting at a 26 transmission voltage of 69 kilovolts or higher. 27 * Sec. 5. AS 42.05.765(a) is amended to read: 28 (a) An electric reliability organization shall develop, monitor, and enforce 29 reliability standards that ensure the stable operation of the interconnected bulk- 30 electric system served by the electric reliability organization, coordinate with the 31 Railbelt Transmission Organization when developing reliability standards if the
01 electric reliability organization serves the Railbelt, and file each reliability standard 02 or modification to a reliability standard with the commission as a new or revised tariff 03 provision. All users, owners, and operators of an interconnected electric energy 04 transmission network served by an electric reliability organization, including a user, 05 owner, or operator that is exempt from other regulation under AS 42.05.711 or another 06 provision of this chapter, shall comply with reliability standards contained in a tariff 07 that is approved by the commission. The commission may enforce a reliability 08 standard approved under this section. A reliability standard approved under this 09 section 10 (1) shall provide for the reliable operation of the interconnected 11 electric energy transmission network or of an interconnected electric energy 12 transmission network facility; 13 (2) may provide for 14 (A) protection from a cybersecurity incident; 15 (B) facility security; 16 (C) additions or modifications to an interconnected bulk- 17 electric system facility to the extent necessary to provide for reliable operation 18 of the interconnected electric energy transmission network; 19 (3) may result in, but may not be designed for the purpose of, requiring 20 enlargement of interconnected bulk-electric system facilities or construction of new 21 transmission capacity or generation capacity. 22 * Sec. 6. AS 42.05.770 is amended to read: 23 Sec. 42.05.770. Regulations. The commission shall adopt regulations 24 governing electric reliability organizations, reliability standards, and modifications to 25 reliability standards consistent with this section. Regulations under AS 42.05.760 - 26 42.05.790 must 27 (1) require that an electric reliability organization's tariff include 28 [(A) STANDARDS FOR] nondiscriminatory standards for 29 [OPEN ACCESS TRANSMISSION AND] interconnection; 30 [(B) STANDARDS FOR TRANSMISSION SYSTEM COST 31 RECOVERY;]
01 (2) provide a process to identify and resolve conflicts between a 02 reliability standard and a function, rule, tariff, rate schedule, or agreement that has 03 been accepted, approved, adopted, or ordered by the commission; 04 (3) allow an electric reliability organization to recover its costs through 05 surcharges added to the rate for each participating load-serving entity; costs 06 recovered each year under regulations adopted under this paragraph may not 07 exceed $1,200,000. 08 * Sec. 7. AS 42.05.772 is amended by adding a new subsection to read: 09 (b) A load-serving entity, including a load-serving entity otherwise exempt 10 from regulation under this chapter, in an interconnected bulk-electric system served by 11 an electric reliability organization shall adhere to the electric reliability organization's 12 reliability standards and coordinate with the electric reliability organization and, if 13 applicable, the Railbelt Transmission Organization to integrate the electric reliability 14 organization's reliability standards into operational procedures. 15 * Sec. 8. AS 42.05.790 is amended by adding new paragraphs to read: 16 (8) "Railbelt" has the meaning given in AS 44.83.750; 17 (9) "Railbelt Transmission Organization" means the transmission 18 organization established by AS 44.83.700. 19 * Sec. 9. AS 44.83.080 is amended to read: 20 Sec. 44.83.080. Powers of the authority. In furtherance of its corporate 21 purposes, the authority has the following powers in addition to its other powers: 22 (1) to sue and be sued; 23 (2) to have a seal and alter it at pleasure; 24 (3) to make and alter bylaws for its organization and internal 25 management; 26 (4) to adopt regulations governing the exercise of its corporate powers; 27 (5) to improve, equip, operate, and maintain power projects and bulk 28 fuel, waste energy, energy conservation, energy efficiency, and alternative energy 29 facilities and equipment; 30 (6) to issue bonds to carry out any of its corporate purposes and 31 powers, including the establishment or increase of reserves to secure or to pay the
01 bonds or interest on them, and the payment of all other costs or expenses of the 02 authority incident to and necessary or convenient to carry out its corporate purposes 03 and powers; 04 (7) to sell, lease as lessor or lessee, exchange, donate, convey, or 05 encumber in any manner by mortgage or by creation of any other security interest, real 06 or personal property owned by it, or in which it has an interest, when, in the judgment 07 of the authority, the action is in furtherance of its corporate purposes; 08 (8) to accept gifts, grants, or loans from, and enter into contracts or 09 other transactions regarding them, with any person; 10 (9) to deposit or invest its funds, subject to agreements with 11 bondholders; 12 (10) to enter into contracts with the United States or any person and, 13 subject to the laws of the United States and subject to concurrence of the legislature, 14 with a foreign country or its agencies, for the construction, financing, operation, and 15 maintenance of all or any part of a power project or bulk fuel, waste energy, energy 16 conservation, energy efficiency, or alternative energy facilities or equipment, either 17 inside or outside the state, and for the sale or transmission of power from a project or 18 any right to the capacity of it or for the security of any bonds of the authority issued or 19 to be issued for the project; 20 (11) to enter into contracts with any person and with the United States 21 and, subject to the laws of the United States and subject to the concurrence of the 22 legislature, with a foreign country or its agencies for the purchase, sale, exchange, 23 transmission, or use of power from a project, or any right to the capacity of it; 24 (12) to apply to the appropriate agencies of the state, the United States, 25 and a foreign country and any other proper agency for the permits, licenses, or 26 approvals as may be necessary, to acquire, construct, maintain, and operate power 27 projects in accordance with the licenses or permits, and to obtain, hold, and use the 28 licenses and permits in the same manner as any other person or operating unit; 29 (13) to enter into contracts or agreements with respect to the exercise 30 of any of its powers, and do all things necessary or convenient to carry out its 31 corporate purposes and exercise the powers granted in this chapter;
01 (14) to recommend to the legislature 02 (A) the pledge of the credit of the state to guarantee repayment 03 of all or any portion of revenue bonds issued to assist in construction of power 04 projects; 05 (B) an appropriation from the general fund 06 (i) for debt service on bonds or other project purposes; 07 or 08 (ii) to reduce the amount of debt financing for the 09 project; 10 (15) to carry out the powers and duties assigned to it under AS 42.45 11 and AS 44.83.700 - 44.83.750; 12 (16) to make grants or loans to any person and enter into contracts or 13 other transactions regarding the grants or loans; 14 (17) to promote energy conservation, energy efficiency, and alternative 15 energy through training and public education; 16 (18) to acquire a Susitna River power project, whether by construction, 17 purchase, gift, or lease, including the acquisition of property rights and interests by 18 eminent domain under AS 09; 19 (19) to perform feasibility studies and engineering and design with 20 respect to power projects; 21 (20) to acquire battery energy storage systems, whether by direct 22 ownership, purchase, grant, gift, or lease. 23 * Sec. 10. AS 44.83 is amended by adding new sections to read: 24 Article 5A. Railbelt Transmission Organization. 25 Sec. 44.83.700. Railbelt Transmission Organization. (a) The Railbelt 26 Transmission Organization is established in the Alaska Energy Authority for the 27 purpose of overseeing, managing, and developing the backbone transmission system 28 serving the Railbelt and conducting strategic planning to enhance the future transfer 29 capabilities, resilience, reliability, and efficiency of the backbone transmission system. 30 (b) The governance structure for the transmission organization must 31 (1) provide for oversight of the transmission organization by a
01 management committee that is made up of 02 (A) representatives from each of the Railbelt utilities; 03 (B) the executive director of the authority; 04 (C) the chief executive officer of the applicable electric 05 reliability organization, or the chief executive officer's designee; 06 (D) an individual who represents a person, other than a public 07 utility, that owns or operates a facility for the generation of electricity; and 08 (E) an individual who represents a labor organization engaged 09 in collective bargaining with a Railbelt utility; 10 (2) include a conflict resolution process; and 11 (3) facilitate public participation in the operations of the transmission 12 organization. 13 (c) The provisions of AS 44.83.700 - 44.83.750 do not limit, extend, or 14 otherwise alter the rights and obligations as provided in AS 42.05.221 - 42.05.281 of a 15 public utility certificated under AS 42.05.221. 16 (d) Notwithstanding AS 44.83.090(b), the transmission organization is subject 17 to the jurisdiction of the commission. The commission shall adopt regulations under 18 AS 44.62 (Administrative Procedure Act) necessary to carry out its powers and duties 19 under AS 44.83.700 - 44.83.750, including defining by regulation the term "backbone 20 transmission asset." 21 Sec. 44.83.710. Powers and duties. (a) The transmission organization shall 22 (1) manage backbone transmission assets; 23 (2) follow reliability standards developed by the applicable electric 24 reliability organization; 25 (3) ensure the safe, resilient, reliable, efficient, and economical 26 operation and development of the backbone transmission system; 27 (4) preserve nondiscriminatory open access to the backbone 28 transmission system subject to legitimate technical constraints and congestion; 29 (5) maintain the capacity rights of legacy transmission owners to 30 access firm load and legacy generation resources served by the backbone transmission 31 system;
01 (6) perform integrated transmission planning under AS 44.83.730; 02 (7) purchase, lease, or otherwise acquire effective operational control 03 of backbone transmission assets; 04 (8) subject to the approval of the commission, establish tariffs related 05 to the backbone transmission system under AS 44.83.720. 06 (b) The transmission organization may 07 (1) construct, own, and operate new backbone transmission assets; and 08 (2) enter into contracts, agreements, and partnerships that enhance 09 safety, resiliency, reliability, and efficiency of the backbone transmission system. 10 (c) The transmission organization may not exchange, donate, sell, or otherwise 11 convey a backbone transmission asset owned by the transmission organization without 12 approval of the legislature in advance of the effective date of the conveyance. 13 (d) The transmission organization shall ensure that work performed on new 14 construction and maintenance of backbone transmission assets controlled by the 15 transmission organization is prioritized to give first preference to the Railbelt utility 16 that serves the area in which the work is performed. The transmission organization 17 shall compensate the utility for reasonable and necessary expenses the utility incurs in 18 performing the work. The work must be performed subject to the terms and conditions 19 of any existing collective bargaining agreements. 20 (e) The transmission organization may adopt regulations necessary to 21 implement AS 44.83.700 - 44.83.750. 22 Sec. 44.83.720. Revenue mechanism. (a) The transmission organization shall 23 hold and administer a commission-approved open access transmission tariff that 24 ensures nondiscriminatory access to the backbone transmission system. 25 (b) The transmission organization shall adopt a commission-approved 26 transmission cost recovery methodology that ensures the reliability and sufficient 27 capacity of the backbone transmission system to support and promote state and 28 regional energy policies and a rigorous, dynamic economy. 29 (c) The cost recovery methodology for the transmission organization must, as 30 approved by the commission, 31 (1) pool backbone transmission system costs and allocate those costs
01 through certificated load-serving entities on a coincident peak or load ratio share basis, 02 or a combination of both; and 03 (2) account for 04 (A) required backbone transmission system ancillary services; 05 (B) backbone transmission system congestion; and 06 (C) disruptions to the backbone transmission system that result 07 in the isolation of one geographical area of the backbone transmission system 08 from another for more than 24 hours. 09 (d) A Railbelt utility shall pass the commission-approved transmission costs 10 directly and transparently to the utility's customers. 11 (e) A Railbelt utility that provides service exclusively on the Kenai Peninsula 12 is not subject to the cost recovery methodology for the transmission organization until 13 (1) the transmission line between the Kenai Peninsula and Anchorage 14 is upgraded to a capacity of 230 kilovolts; or 15 (2) a high-voltage submarine cable between the Kenai Peninsula and 16 the area near Beluga is operational. 17 Sec. 44.83.730. Integrated transmission planning. (a) At least once every 10 18 years, the transmission organization shall, in consultation with stakeholders, create and 19 review an integrated transmission plan for the backbone transmission system. 20 (b) The integrated transmission plan must articulate the strategic trajectory, 21 operational blueprint, capital improvement funding requirements, and developmental 22 outlook for the backbone transmission system, considering projected load growth, 23 technological advancement, fuel supply projections, generation plans, safety, 24 resiliency, reliability, efficiency, and economic impacts. 25 (c) The transmission organization shall seek feedback and input from the 26 public throughout the integrated transmission plan development process to ensure that 27 the plan reflects a broad range of perspectives and addresses community and industry 28 concerns. 29 Sec. 44.83.740. Transfer management of assets. (a) To achieve the integrated 30 and streamlined governance of the backbone transmission system, the transmission 31 organization shall identify the existing backbone transmission assets that are part of
01 the backbone transmission system, and the Railbelt utilities shall transfer management 02 of those assets to the transmission organization on or before July 1, 2026. 03 (b) The authority shall transfer backbone transmission assets identified under 04 (a) of this section that are owned or managed by the authority to the transmission 05 organization. 06 (c) A Railbelt utility shall pay penalties as determined by the commission for 07 failure to transfer management of backbone transmission assets to the transmission 08 organization as required under this section. 09 Sec. 44.83.750. Definitions. In AS 44.83.700 - 44.83.750, 10 (1) "backbone transmission system" means the backbone transmission 11 assets in the Railbelt that facilitate the transfer of large-scale electrical power between 12 or across separate geographical areas; "backbone transmission system" does not 13 include assets that would be considered distribution facilities or radial facilities under 14 the standards established by the Federal Energy Regulatory Commission; 15 (2) "commission" means the Regulatory Commission of Alaska; 16 (3) "interconnected electric energy transmission network" has the 17 meaning given in AS 42.05.790; 18 (4) "Railbelt" means the geographic region from the Kenai Peninsula 19 to Interior Alaska that is connected to a common electric transmission backbone; 20 (5) "Railbelt utility" means a public electric utility certificated to 21 operate in the Railbelt; 22 (6) "transmission organization" means the Railbelt Transmission 23 Organization established by AS 44.83.700. 24 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 APPLICABILITY AND TRANSITION: ELECTRIC RELIABILITY 27 ORGANIZATIONS. (a) AS 42.05.763, added by sec. 4 of this Act, applies to an electric 28 reliability organization with a certificate issued or renewed by the Regulatory Commission of 29 Alaska on or after the effective date of sec. 4 of this Act, except that an existing member of 30 the board of a certificated electric reliability organization who does not meet the qualifications 31 may continue to serve until the member's successor is appointed.
01 (b) AS 42.05.770(3), as amended by sec. 6 of this Act, applies to costs incurred by an 02 electric reliability organization on or after the effective date of sec. 6 of this Act. 03 * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 TRANSITION: AGREEMENT BETWEEN ALASKA ENERGY AUTHORITY 06 AND RAILBELT UTILITIES. To ensure the successful implementation of AS 44.83.700 - 07 44.83.750, added by sec. 10 of this Act, on or before July 1, 2025, the Alaska Energy 08 Authority and the Railbelt utilities, as defined in AS 44.83.750, added by sec. 10 of this Act, 09 shall develop an agreement to implement AS 44.83.700 - 44.83.750, added by sec. 10 of this 10 Act. The agreement must establish a governance structure for the Railbelt Transmission 11 Organization established under AS 44.83.700, added by sec. 10 of this Act, that is modeled 12 after the governance structure of the Bradley Lake Hydroelectric Project, as outlined in the 13 Bradley Lake Power Sales Agreement, including the creation, duties, and methods of the 14 Bradley Lake Project Management Committee, dispute resolution, budgeting, financing, and 15 delegation of operations, with any adjustments the parties to the agreement determine are 16 necessary to accommodate the requirements of AS 44.83.700 - 44.83.750, added by sec. 10 of 17 this Act. 18 * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 TRANSITION: INITIAL INTEGRATED TRANSMISSION PLAN AND CAPITAL 21 IMPROVEMENT PROGRAM. The Alaska Energy Authority shall immediately assume the 22 integrated transmission planning duties under AS 44.83.730, added by sec. 10 of this Act, 23 develop an initial integrated transmission plan as soon as practicable, and begin execution of a 24 five-year transmission capital improvement program based on the plan as soon as practicable. 25 The authority shall transfer the responsibility for the plan and program to the Railbelt 26 Transmission Organization established under AS 44.83.700, added by sec. 10 of this Act, 27 after the agreement establishing the governance structure of the organization under sec. 12 of 28 this Act has been executed. 29 * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 TRANSITION: REGULATORY COMMISSION OF ALASKA MEMBERS. An
01 individual who is a member of the Regulatory Commission of Alaska on the day before the 02 effective date of sec. 1 of this Act continues to serve on the Regulatory Commission of Alaska 03 until the member's term expires and a successor is appointed and qualified. The governor shall 04 make appointments for vacancies that occur on or after the effective date of sec. 1 of this Act 05 in accordance with AS 42.04.020(a), as amended by sec. 1 of this Act. 06 * Sec. 15. Sections 12 and 13 of this Act take effect immediately under AS 01.10.070(c). 07 * Sec. 16. Except as provided in sec. 15 of this Act, this Act takes effect July 1, 2024.