HB 153: "An Act relating to generation of electricity from renewable energy resources; relating to a renewable portfolio standard; relating to power cost equalization; and providing for an effective date."
00 HOUSE BILL NO. 153 01 "An Act relating to generation of electricity from renewable energy resources; relating 02 to a renewable portfolio standard; relating to power cost equalization; and providing for 03 an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 42.05.780(a) is amended to read: 06 (a) An electric reliability organization shall file with the commission in a 07 petition for approval an integrated resource plan for meeting the reliability 08 requirements of all customers within its interconnected electric energy transmission 09 network in a manner that provides the greatest value, consistent with the load-serving 10 entities' obligations. An integrated resource plan must contain an evaluation of the full 11 range of cost-effective means for load-serving entities to meet the service 12 requirements of all customers, including additional generation, transmission, battery 13 storage, and conservation or similar improvements in efficiency. An integrated 14 resource plan must include options to meet customers' collective needs in a manner
01 that provides the greatest value, consistent with the public interest, regardless of the 02 location or ownership of new facilities or conservation activities. An integrated 03 resource plan must include options for satisfying the renewable portfolio 04 standard under AS 42.05.900. 05 * Sec. 2. AS 42.05.785(a) is amended to read: 06 (a) A public utility, including a public utility that is exempt from other 07 regulation under AS 42.05.711 or another provision of this chapter, that is 08 interconnected with an interconnected electric energy transmission network served by 09 an electric reliability organization certificated by the commission may not construct a 10 large energy facility unless the commission determines that the facility 11 (1) is necessary to the interconnected electric energy transmission 12 network with which it would be interconnected; 13 (2) complies with reliability standards; [AND] 14 (3) would, in a cost-effective manner, meet the needs of a load-serving 15 entity that is substantially served by the facility; and 16 (4) is not detrimental to a load-serving entity's ability to meet the 17 renewable portfolio standard under AS 42.05.900. 18 * Sec. 3. AS 42.05.785(c) is amended to read: 19 (c) The commission may not require preapproval for a 20 (1) project for refurbishment or capitalized maintenance; 21 (2) hydropower project licensed by the Federal Energy Regulatory 22 Commission before September 30, 2016; 23 (3) project that generates electricity from a renewable energy 24 resource and helps a load-serving entity meet the renewable portfolio standard 25 under AS 42.05.900. 26 * Sec. 4. AS 42.05.785(e) is amended to read: 27 (e) In this section, 28 (1) "large energy facility" means 29 (A) [(1)] an electric power generating plant or combination of 30 plants at a single site with a combined capacity of 15,000 kilowatts or more 31 with transmission lines that directly interconnect the plant with the
01 transmission system; 02 (B) [(2)] a high-voltage, above-ground transmission line that 03 (i) [(A)] has a capacity of 69 kilovolts or more; and 04 (ii) [(B)] is longer than 10 miles; 05 (C) [(3)] a high-voltage submarine or underground cable that 06 (i) [(A)] has a capacity of 69 kilovolts or more; and 07 (ii) [(B)] is longer than three miles; 08 (D) [(4)] an energy storage device or combination of devices at 09 a single site with a combined capacity of 15,000 kilowatts and one hour or 10 more of energy storage that directly connects with the interconnected bulk- 11 electric system; and 12 (E) [(5)] a reactive compensation device or combination of 13 devices at a single site with a combined reactive capability of 15,000 kilovars 14 or more with a step-up device to regulate interconnected bulk-electric system 15 voltage; 16 (2) "renewable energy resource" has the meaning given in 17 AS 42.05.925. 18 * Sec. 5. AS 42.05 is amended by adding new sections to read: 19 Article 11A. Renewable Portfolio Standard. 20 Sec. 42.05.900. Renewable portfolio standard. The portfolio of a load- 21 serving entity that is subject to the standards of an electric reliability organization 22 under AS 42.05.760 must include megawatt hours of electricity generated from 23 renewable energy resources, adjusted according to AS 42.05.905, in the following 24 percentages: 25 (1) 40 percent by December 31, 2030; 26 (2) 55 percent by December 31, 2035. 27 Sec. 42.05.905. Compliance incentives. (a) To calculate a load-serving 28 entity's compliance with the renewable portfolio standard, the megawatt hours of 29 electricity from a project that generates electricity from wind energy are multiplied by 30 a factor of 1.25 if 31 (1) the project is operational before January 1, 2033;
01 (2) the project has a nameplate generation capacity of at least 100 02 megawatts; and 03 (3) more than one load-serving entity acquires electricity production 04 from the project and each entity acquires at least the entity's load ratio share or 20 05 percent of the project's energy output, whichever is less; in this paragraph, "load ratio 06 share" means a percentage calculated by dividing a load-serving entity's total retail 07 electricity sales by the sum of retail electricity sales from all load-serving entities that 08 acquire electricity from the project. 09 (b) A load-serving entity may satisfy the renewable portfolio standard through 10 energy produced by distributed energy systems, adjusted according to (d) of this 11 section and then multiplied by a factor of 2.0, regardless of whether the energy is 12 acquired by the load-serving entity or used by the customer. Each load-serving entity 13 shall file a tariff with the commission that establishes and justifies the average 14 capacity factor for each distributed energy system technology connected to the 15 interconnected electric energy transmission network within the entity's service area. 16 (c) A load-serving entity may satisfy the renewable portfolio standard through 17 renewable electricity credits that qualify as part of the load-serving entity's portfolio 18 under AS 42.05.910. 19 (d) A load-serving entity may satisfy the renewable portfolio standard with 20 electricity consumption displaced because of energy efficiency investments made in 21 whole or in part with payments under AS 42.05.915(g), if the displaced consumption 22 is documented under a program established by the state. 23 Sec. 42.05.910. Renewable electricity credits. (a) To qualify as part of a load- 24 serving entity's portfolio, a renewable electricity credit must be from generation 25 connected to the same interconnected electric energy transmission network that serves 26 the load-serving entity's customers or must be purchased from generation located 27 within the service area of an electric utility that serves customers who receive power 28 cost equalization under AS 42.45.100 - 42.45.150. 29 (b) A renewable electricity credit may be used only once. A renewable 30 electricity credit expires one year after it was created. 31 (c) A load-serving entity shall track the life cycle of a renewable electricity
01 credit created, transferred, or used by the load-serving entity. Each load-serving entity 02 is responsible for demonstrating that a renewable electricity credit used to comply 03 with the renewable portfolio standard is derived from a renewable energy resource and 04 that the renewable electricity credit has not been previously used or transferred. 05 (d) A renewable electricity credit may be traded, sold, or otherwise transferred 06 for value. A load-serving entity that transfers a renewable electricity credit may not 07 use the renewable electricity associated with the transferred credit to comply with the 08 renewable portfolio standard. 09 Sec. 42.05.915. Noncompliance fine; waiver. (a) A load-serving entity that 10 fails to meet the renewable portfolio standard is subject to a noncompliance fine for 11 each year that the entity fails to meet the renewable portfolio standard. After notice 12 and an opportunity for hearing, the commission may impose a fine of $45 for every 13 megawatt hour that the entity is below the renewable portfolio standard. The 14 commission shall increase the dollar amount of the noncompliance fine under this 15 subsection annually by a percentage equal to the average percentage increase over the 16 prior calendar year in all items of the Consumer Price Index for all urban consumers 17 for urban Alaska prepared by the United States Department of Labor, Bureau of Labor 18 Statistics. A load-serving entity shall itemize the effect of a noncompliance fine on the 19 entity's monthly customer bills. 20 (b) The commission shall waive all or part of a load-serving entity's 21 noncompliance fine to the extent that the load-serving entity 22 (1) has entered into a power purchase agreement for renewable 23 electricity before the next compliance period; 24 (2) begins receiving renewable electricity under the power purchase 25 agreement not later than two years after the prior compliance period; and 26 (3) files with the commission an annual estimate of the megawatt 27 hours the load-serving entity expects to receive from the power purchase agreement 28 that contribute to compliance with the renewable portfolio standard; if the megawatt 29 hours of renewable electricity received by the load-serving entity within two years 30 after the prior compliance period falls below the amount estimated under this 31 paragraph, the load-serving entity is subject to a retroactive noncompliance fine.
01 (c) If electricity transmission constraints prevent delivery of renewable 02 electricity that a load-serving entity is obligated to purchase from a third party, the 03 megawatt hours of undelivered renewable electricity, adjusted according to 04 AS 42.05.905, count toward the load-serving entity's compliance with the renewable 05 portfolio standard. 06 (d) The commission may waive the noncompliance fine in whole or in part if 07 the commission determines that a load-serving entity is unable to meet the renewable 08 portfolio standard because of reasons outside the reasonable control of the load- 09 serving entity as set out in (e) of this section, or the entity establishes good cause for 10 noncompliance as set out in (f) of this section. 11 (e) The following events or circumstances are outside of a load-serving 12 entity's reasonable control: 13 (1) weather-related damage to generation or transmission assets; 14 (2) natural disasters; 15 (3) failure of renewable electricity producers to meet contractual 16 obligations to the load-serving entity; 17 (4) lower than reasonably expected electricity production at a project 18 that generates electricity from a renewable energy resource if the lower electricity 19 production is caused by variation in renewable energy resource availability; 20 (5) global pandemics; and 21 (6) acts of war. 22 (f) The following factors may establish good cause for noncompliance: 23 (1) the extent of good faith efforts by the load-serving entity to 24 comply, including the actions taken by the load-serving entity to procure the 25 renewable electricity and the lack of past failures to comply; 26 (2) the likelihood and amount of future renewable electricity to be 27 acquired by the load-serving entity. 28 (g) A load-serving entity may, within one year after the commission imposes a 29 noncompliance fine, satisfy the fine by paying a customer all or a portion of the 30 customer's costs of installing a distributed energy system or electricity efficiency 31 technologies.
01 (h) If a load-serving entity's portfolio includes at least 40 percent of electricity 02 generated from renewable energy resources, adjusted according to AS 42.05.905, the 03 load-serving entity may, instead of paying a noncompliance fine associated with the 04 load-serving entity's failure to comply with the renewable portfolio standard by 05 December 31, 2035, deposit an amount equal to the fine into an account, approved by 06 the commission, for use by the load-serving entity to defray the costs of future 07 renewable electricity projects or purchases. 08 Sec. 42.05.920. Exemptions. A load-serving entity is exempt from compliance 09 with the renewable portfolio standard if the aggregate percentage of electricity 10 generated from renewable energy resources by all load-serving entities on the 11 interconnected electric energy transmission network, adjusted according to 12 AS 42.05.905, meets or exceeds the aggregate renewable portfolio standard for those 13 entities. 14 Sec. 42.05.925. Definitions. In AS 42.05.900 - 42.05.925, 15 (1) "compliance period" means each period identified in AS 42.05.900; 16 (2) "distributed energy system" means a renewable energy resource 17 that is located on any property owned or leased by a customer within the service 18 territory of the load-serving entity that is interconnected on the customer's side of the 19 utility meter; 20 (3) "interconnected electric energy transmission network" has the 21 meaning given in AS 42.05.790; 22 (4) "load-serving entity" has the meaning given in AS 42.05.790; 23 (5) "megawatt hour" means 1,000,000 watts of electricity being used in 24 one hour and includes the steam equivalent of a megawatt hour; 25 (6) "renewable electricity" means electricity or energy generated from 26 renewable energy resources; 27 (7) "renewable electricity credit" means one credit equal to the 28 generation attributes of one megawatt hour that is derived from a renewable energy 29 resource; where fossil and renewable fuels are co-fired in the same generating unit, the 30 unit is considered to generate renewable electricity in direct proportion to the 31 percentage of the total heat input value represented by the heat input value of the
01 renewable fuels; 02 (8) "renewable energy resource" means a resource, other than 03 petroleum, nuclear, natural gas, or coal, that naturally replenishes over a human, not a 04 geological, time frame, is ultimately derived from solar power, water power, or wind 05 power, comes from the sun or from thermal inertia of the earth, and minimizes the 06 output of toxic material in the conversion of the energy; in this paragraph, "resource" 07 includes 08 (A) solar and solar thermal energy, wind energy, and kinetic 09 energy of moving water, including 10 (i) waves, tides, or currents; 11 (ii) run-of-river hydropower, in-river hydrokinetic; 12 (iii) conventional hydropower, lake tap hydropower; 13 (iv) water released through a dam; and 14 (v) geothermal energy; 15 (B) waste to energy systems, including 16 (i) wood; 17 (ii) landfill gas produced by municipal solid waste or 18 fuel that has been manufactured in whole or significant part from 19 waste; 20 (iii) biofuels produced in the state; and 21 (iv) thermal energy produced from a geothermal heat 22 pump using municipal solid waste, including biogenic and 23 anthropogenic factions. 24 (9) "renewable portfolio standard" means the percentage of electricity 25 in a load-serving entity's portfolio that must be generated from renewable energy 26 resources under AS 42.05.900, adjusted according to AS 42.05.905. 27 * Sec. 6. AS 42.45.110(a) is amended to read: 28 (a) The costs used to calculate the amount of power cost equalization for all 29 electric utilities eligible under AS 42.45.100 - 42.45.150 include all allowable costs, 30 except return on equity, used by the commission to determine the revenue requirement 31 for electric utilities subject to rate regulation under AS 42.05. The costs used in
01 determining the power cost equalization per kilowatt-hour shall exclude any other type 02 of assistance that reduces the customer's costs of power on a kilowatt-hour basis and 03 that is provided to the electric utility within 60 days before the commission determines 04 the power cost equalization per kilowatt-hour of the electric utility. In calculating 05 power cost equalization, the commission may not consider validated costs or kilowatt- 06 hour sales associated with a United States Department of Defense facility, revenue 07 from the sale of recovered heat, or revenue from the sale of renewable electricity 08 credits acquired under AS 42.05.910. 09 * Sec. 7. AS 42.05.785(c)(3) is repealed December 31, 2030. 10 * Sec. 8. This Act takes effect July 1, 2025.