SB 285: "An Act relating to the Rural Energy Infrastructure Organization; relating to the Alaska affordable energy fund; relating to the Alaska Energy Authority; and providing for an effective date."
00 SENATE BILL NO. 285 01 "An Act relating to the Rural Energy Infrastructure Organization; relating to the 02 Alaska affordable energy fund; relating to the Alaska Energy Authority; and providing 03 for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 37.05.610(a) is amended to read: 06 (a) The Alaska affordable energy fund is created as a special account in the 07 general fund. The fund consists of the amount determined and deposited in the fund 08 under (b) of this section and interest earned on the fund balance. The purpose of the 09 fund is to provide a source from which the legislature may appropriate money to 10 develop energy infrastructure in communities in the unorganized borough that are 11 eligible for power cost equalization under AS 42.45.100 - 42.45.150 and that do 12 not have, and [TO DELIVER ENERGY TO AREAS OF THE STATE THAT] are 13 not expected to have, [OR DO NOT HAVE] direct access to a North Slope natural gas 14 pipeline.
01 * Sec. 2. AS 44.83.030(a) is amended to read: 02 (a) The members of the board of directors of the authority are 03 (1) the commissioner of revenue; 04 (2) the commissioner of commerce, community, and economic 05 development; and 06 (3) seven [SIX] public members appointed by the governor as follows: 07 (A) one member with expertise or experience in managing or 08 operating an electric utility that is not connected to an interconnected electric 09 energy transmission network as defined in AS 42.05.790; 10 (B) one member with expertise or experience in developing 11 energy projects in rural communities; 12 (C) one member with expertise or experience in managing or 13 operating an electric utility connected to an interconnected electric energy 14 transmission network as defined in AS 42.05.790; 15 (D) one member with expertise or experience in managing a 16 municipally owned utility located off the interconnected road system or joint 17 action agency established under AS 42.45.310 located off the interconnected 18 road system; 19 (E) one member with financial expertise in large power 20 generation project development; [AND] 21 (F) one member with expertise or experience in finance, energy 22 policy, energy technology, engineering, law, or economics; and 23 (G) one member with expertise or experience in industrial 24 energy use, large-scale electric load development, or long-term electric 25 power procurement for major commercial or resource development 26 projects. 27 * Sec. 3. AS 44.83.070 is amended to read: 28 Sec. 44.83.070. Purpose of the authority. The purpose of the authority is to 29 promote, develop, and advance the general prosperity and economic welfare of the 30 people of the state by providing a means of financing and operating power projects, 31 including electric transmission and generation infrastructure in rural priority
01 areas and facilities that recover and use waste energy, and by carrying out the powers 02 and duties assigned to it under AS 42.45. 03 * Sec. 4. AS 44.83.080 is amended to read: 04 Sec. 44.83.080. Powers of the authority. In furtherance of its corporate 05 purposes, the authority has the following powers in addition to its other powers: 06 (1) to sue and be sued; 07 (2) to have a seal and alter it at pleasure; 08 (3) to make and alter bylaws for its organization and internal 09 management; 10 (4) to adopt regulations governing the exercise of its corporate powers; 11 (5) to improve, equip, operate, and maintain power projects and bulk 12 fuel, waste energy, energy conservation, energy efficiency, and alternative energy 13 facilities and equipment; 14 (6) to issue bonds to carry out any of its corporate purposes and 15 powers, including the establishment or increase of reserves to secure or to pay the 16 bonds or interest on them, and the payment of all other costs or expenses of the 17 authority incident to and necessary or convenient to carry out its corporate purposes 18 and powers; 19 (7) to sell, lease as lessor or lessee, exchange, donate, convey, or 20 encumber in any manner by mortgage or by creation of any other security interest, real 21 or personal property owned by it, or in which it has an interest, when, in the judgment 22 of the authority, the action is in furtherance of its corporate purposes; 23 (8) to accept gifts, grants, or loans from, and enter into contracts or 24 other transactions regarding them, with any person; 25 (9) to deposit or invest its funds, subject to agreements with 26 bondholders; 27 (10) to enter into contracts with the United States or any person and, 28 subject to the laws of the United States and subject to concurrence of the legislature, 29 with a foreign country or its agencies, for the construction, financing, operation, and 30 maintenance of all or any part of a power project or bulk fuel, waste energy, energy 31 conservation, energy efficiency, or alternative energy facilities or equipment, either
01 inside or outside the state, and for the sale or transmission of power from a project or 02 any right to the capacity of it or for the security of any bonds of the authority issued or 03 to be issued for the project; 04 (11) to enter into contracts with any person and with the United States 05 and, subject to the laws of the United States and subject to the concurrence of the 06 legislature, with a foreign country or its agencies for the purchase, sale, exchange, 07 transmission, or use of power from a project, or any right to the capacity of it; 08 (12) to apply to the appropriate agencies of the state, the United States, 09 and a foreign country and any other proper agency for the permits, licenses, or 10 approvals as may be necessary, to acquire, construct, maintain, and operate power 11 projects in accordance with the licenses or permits, and to obtain, hold, and use the 12 licenses and permits in the same manner as any other person or operating unit; 13 (13) to enter into contracts or agreements with respect to the exercise 14 of any of its powers, and do all things necessary or convenient to carry out its 15 corporate purposes and exercise the powers granted in this chapter; 16 (14) to recommend to the legislature 17 (A) the pledge of the credit of the state to guarantee repayment 18 of all or any portion of revenue bonds issued to assist in construction of power 19 projects; 20 (B) an appropriation from the general fund 21 (i) for debt service on bonds or other project purposes; 22 or 23 (ii) to reduce the amount of debt financing for the 24 project; 25 (15) to carry out the powers and duties assigned to it under AS 42.45 26 and AS 44.83.700 - 44.83.720; 27 (16) to make grants or loans to any person and enter into contracts or 28 other transactions regarding the grants or loans; 29 (17) to promote energy conservation, energy efficiency, and alternative 30 energy through training and public education; 31 (18) to acquire a Susitna River power project, whether by construction,
01 purchase, gift, or lease, including the acquisition of property rights and interests by 02 eminent domain under AS 09; 03 (19) to perform feasibility studies and engineering and design with 04 respect to power projects; 05 (20) to acquire battery and other energy storage systems, whether by 06 direct ownership, purchase, grant, gift, or lease; 07 (21) through the Rural Energy Infrastructure Organization 08 established under AS 44.83.750, to plan, finance, develop, own, operate, manage, 09 maintain, repair, and replace electric transmission and generation infrastructure 10 in rural priority areas. 11 * Sec. 5. AS 44.83.090(a) is amended to read: 12 (a) The authority shall, in addition to the other methods that it may find 13 advantageous, provide a method by which municipal electric, rural electric, 14 cooperative electric, or private electric utilities and regional electric authorities, or 15 other persons authorized by law to engage in the distribution of electricity may secure 16 a reasonable share of the power generated by a project, or any interest in a project, or 17 for any right to the power and shall sell the power or cause the power to be sold at the 18 lowest reasonable prices that cover the full cost of the electricity or services, including 19 capital and operating costs, debt coverage as considered appropriate by the authority, 20 and other charges that may be authorized by this chapter. Except for a contract or lease 21 entered into under former AS 44.83.380 - 44.83.425 and a contract related to a 22 power project by the Rural Energy Infrastructure Organization established 23 under AS 44.83.750, a contract or lease for the sale, transmission, and distribution of 24 power generated by a project or any right to the capacity of it shall provide: 25 (1) for payment of all operating and maintenance expenses of a project 26 and costs of renewals, replacements, and improvements of it; 27 (2) for interest on and amortization charges sufficient to retire bonds of 28 the authority issued for the project and reserves for them, plus a debt service coverage 29 factor as may be determined by the authority to be necessary for the marketability of 30 its bonds; 31 (3) for monitoring of the project by the authority or its agents;
01 (4) for full and complete disclosure to the authority of all factors of 02 costs in the transmission and distribution of power, so that rates to any persons may be 03 fixed initially in the contract or lease and may be adjusted from time to time on the 04 basis of true cost data; 05 (5) for periodic revisions of the service and rates to persons on the 06 basis of accurate cost data obtained by the accounting methods and systems approved 07 by the directors and in furtherance and effectuation of the policy declared in this 08 chapter; 09 (6) for the cancellation and termination of a contract or lease upon 10 violation of its terms by any person; 11 (7) for security for performance as the authority may consider 12 practicable and advisable, including provisions assuring the continuance of the 13 distribution and transmission of power generated by a project and the use of its 14 facilities for these purposes; and 15 (8) other terms not inconsistent with the provisions and policy of this 16 chapter as the authority may consider advisable. 17 * Sec. 6. AS 44.83 is amended by adding new sections to read: 18 Article 6A. Rural Energy Infrastructure Organization. 19 Sec. 44.83.750. Creation of organization. The Rural Energy Infrastructure 20 Organization is created as a division of the Alaska Energy Authority managed by the 21 board in consultation with the rural energy infrastructure advisory body. 22 Sec. 44.83.760. Purpose of organization. (a) The purpose of the organization 23 is to plan, finance, develop, own, operate, manage, maintain, repair, and replace 24 electric transmission and generation facilities in rural priority areas to bring affordable 25 and reliable power to rural areas of the state. 26 (b) A power project by the organization may include electric transmission 27 facilities that enable interconnection with the backbone transmission system as that 28 term is defined in AS 44.83.720. 29 Sec. 44.83.770. Rural energy infrastructure advisory body. (a) The rural 30 energy infrastructure advisory body is established in the organization. 31 (b) The advisory body consists of seven members appointed by the board as
01 follows: 02 (1) one member with experience as a rural energy consumer who 03 resides in or has substantial professional experience serving a rural community; 04 (2) one member with expertise in rural energy systems with 05 demonstrated knowledge of the challenges and opportunities for energy development 06 in rural areas of the state; 07 (3) one member who represents an Alaska Native regional corporation 08 established under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act); 09 (4) one member who represents a nonprofit organization that serves a 10 rural community, an Alaska tribal health organization, or a regional housing authority 11 established under AS 18.55.996; 12 (5) one member who represents an Alaska Native village corporation 13 established under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act) that 14 provides power or bulk fuel to a rural community or a tribal government that provides 15 power or bulk fuel to a rural community; 16 (6) one member who represents an anchor tenant; and 17 (7) one member who represents an electric cooperative or nonprofit 18 utility with substantial and sustained energy delivery operations across multiple rural 19 communities. 20 (c) Members of the advisory body serve at the pleasure of the board. 21 (d) The provisions of AS 44.62.310 - 44.62.319 (Open Meetings Act) do not 22 apply to the advisory body. 23 (e) The advisory body shall advise the board on matters related to the 24 organization and make recommendations to the board about project selection and 25 prioritization, electric infrastructure planning, and strategic development in rural 26 priority areas. The advisory body's recommendations must consider the financial 27 viability and sustainability of projects, including the risk of default, insolvency, or 28 termination of anchor tenants or other key project participants. The advisory body 29 may, in coordination with employees of the authority, 30 (1) conduct technical, environmental, feasibility, and economic 31 analyses of power projects in rural priority areas, within the limits of available
01 funding; 02 (2) identify potential electric transmission corridors, electric generation 03 sites, interconnections, and other critical infrastructure needs in rural priority areas; 04 and 05 (3) coordinate with federal, state, local, and tribal governments, Alaska 06 Native corporations established under 43 U.S.C. 1601 et seq. (Alaska Native Claims 07 Settlement Act), corporations organized under 25 U.S.C. 5124 (sec. 17 of the Indian 08 Reorganization Act), utilities, anchor tenants, and other stakeholders to facilitate 09 planning, development, financing, and operation of power projects in rural priority 10 areas. 11 (f) The advisory body may only advise and make recommendations to the 12 board and may not exercise the powers of the board or the authority. 13 Sec. 44.83.780. Rural energy infrastructure fund. (a) The rural energy 14 infrastructure fund is established in the authority. 15 (b) The authority shall separately account for all money, assets, income, and 16 receipts of the fund. The authority shall manage and invest the fund assets as provided 17 in AS 37.10.071. The legislature may appropriate to the fund 18 (1) interest and other income earned on money and assets of the fund; 19 (2) money received by the authority for the purposes of the 20 organization from federal, state, or other governmental units; 21 (3) gifts, grants, loans, and other contributions to the authority for the 22 purposes of the organization; 23 (4) revenue, receipts, and other money received from the organization's 24 power projects; and 25 (5) any other money received by the authority for the purposes of the 26 organization. 27 (c) Money in the fund may be used without further appropriation only to carry 28 out the purposes of the organization and to secure bonds of the authority issued to 29 finance the organization's power projects. Money in the fund does not lapse. 30 (d) Nothing in this section creates a dedicated fund. 31 Sec. 44.83.790. Definitions. In AS 44.83.750 - 44.83.790,
01 (1) "anchor tenant" means an entity with substantial and sustained 02 energy needs whose long-term energy purchases have the potential to support the 03 organization's power projects in rural areas of the state; 04 (2) "board" means the board of directors of the authority; 05 (3) "commission" means the Regulatory Commission of Alaska; 06 (4) "organization" means the Rural Energy Infrastructure Organization 07 established by AS 44.83.750; 08 (5) "rural area of the state" means any area of the state located in the 09 unorganized borough; 10 (6) "rural priority area" means an area of the state in the unorganized 11 borough that 12 (A) includes or is reasonably expected to include an anchor 13 tenant with an electric load capable of supporting long-term development and 14 operation of electric transmission or generation infrastructure; 15 (B) demonstrates projected population stability or growth, or 16 other indicators of sustained or increasing electric demand; and 17 (C) is not served by the backbone transmission system as that 18 term is defined in AS 44.83.720. 19 * Sec. 7. AS 44.83.930(a) is amended to read: 20 (a) When a project is operated by the authority, the authority shall enter into 21 one or more contracts for the sale of electrical power, energy, transmission capacity, 22 or service from the project. Unless the contract is entered into under former 23 AS 44.83.380 - 44.83.425 or the contract is related to a power project by the Rural 24 Energy Infrastructure Organization established under AS 44.83.750, a contract 25 entered into under this section must meet all requirements of AS 44.83.090. 26 * Sec. 8. This Act takes effect July 1, 2026.