Legislature(2015 - 2016)CAPITOL 17
03/31/2015 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB78 | |
| Presentation: American Transmission Company | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 78 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 78-REGULATORY COMMISSION OF ALASKA
10:21:54 AM
CO-CHAIR COLVER announced that the first order of business would
be HOUSE BILL NO. 78, "An Act bearing the short title of the
'Alaska Competitive Energy Act of 2015'; and relating to the
Regulatory Commission of Alaska."
10:22:09 AM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, sponsor,
informed the committee the proposed committee substitute (CS)
for HB 78 was a much leaner bill, and comments on the CS have
been solicited from affected parties. The first part of the CS
allows independent power producers (IPPs) to know what the costs
are to generate electricity, and to request from the Regulatory
Commission of Alaska (RCA) how those costs were calculated by
the utility. The second part relates to transmission and the
costs to transmit power through transmission lines.
Representative Wilson reminded the committee of the situation
regarding [Fire Island Wind Phase 2], which was discussed at a
previous hearing, and that IPPs need to know these costs before
financing can be obtained. Further, if a utility refuses to
provide this information, as a last resort, RCA would
adjudicate. She expressed her hope that during the hearing
process there will be positive progress regarding discussions
between utilities and IPPs.
CO-CHAIR COLVER requested a sectional analysis.
REPRESENTATIVE WILSON began a sectional analysis: section 2
creates a new section to implement requirements applicable to
electric utilities with respect to qualifying facilities (QFs),
small renewable energy, and cogeneration facilities as required
under federal statutes and regulations. Subsection (a) requires
electric utilities to comply with Federal Energy Regulatory
Commission (FERC) rules related to purchasing power from QFs and
other related obligations. Subsection (b) exempts QFs from
certain state laws and regulations as required under federal
law. Subsection (c) authorizes RCA to issue orders requiring
electric utilities to comply with obligations under this
section. Subsection (d) limits the applicability of this
section to electric utilities that are subject to the RCA
ratemaking authority - this language was drawn directly from the
federal statute. Subsection (e)( 1) defines avoided cost
according to federal law. Subsection (e)(2) defines qualifying
facility by referring to definitions specified in federal law.
Representative Wilson pointed out that the aforementioned
reduces the number of costly requirements of the utilities, and
thus is "a much friendlier version to the utilities." Section
3, new subsections (d)-(f), assure open access to electric
transmission facilities as provided on a fair, reasonable, and
nondiscriminatory basis. Subsection (d) requires electric
utilities to establish joint use interconnection and
transmission service within a reasonable time and for reasonable
compensation. Subsection (e) confirms the electric utility may
recover from connecting entities costs incurred in providing for
joint use, interconnection, and transmission service, while at
the same time ensuring that the charges imposed are fair,
reasonable, and nondiscriminatory. Subsection (f)(1) defines
reasonable compensation, subsection (f)(2)-(3) define the terms
transmission and distribution. She advised this change "puts
the studies on the backs of the IPP, versus the utility."
Lastly, section 4 amends AS 42.05.321 to improve consistency and
to make clear that RCA oversight authority encompasses joint
use, interconnection, and transmission service. Representative
Wilson noted that the sponsors worked closely with RCA to align
the bill with federal law, and to make it possible for Alaska to
produce its own electricity at low cost and with less dependence
on oil.
10:29:50 AM
CO-CHAIR COLVER asked whether the legislation uses the Public
Utility Regulatory Policies Act (PURPA) as a model for
implementing joint use and provisions for buying power from
IPPs.
REPRESENTATIVE WILSON said correct. In further response to Co-
Chair Colver, she explained the avoided cost issue was addressed
by requiring that the current averages provided by utilities are
broken down into the cost of each source of energy; for example,
Golden Valley Electric Association (GVEA) generates power in
many ways, and an IPP needs to know the cost of each source in
order to compete. Secondly, IPPs need to know the cost of
transmitting power, so they can add that cost to their total
cost, and enter negotiations with a utility.
CO-CHAIR VAZQUEZ referred to RCA Dockets I-15-001 and R-13-002,
and asked how they would affect the proposed legislation.
REPRESENTATIVE WILSON responded that pending RCA rulings may
resolve the transmission issue in the bill.
CO-CHAIR VAZQUEZ said RCA has been charged with completing a
related study due 6/15.
REPRESENTATIVE WILSON said yes.
CO-CHAIR COLVER surmised the bill is not just an access to
transmission issue in regards to a transmission cooperative
(Transco) or an independent system operator (ISO), but also a
framework for RCA to provide oversight for joint use of
transmission facilities and power purchase agreements in areas
that are not on the Railbelt grid, or that are not overseen by
an ISO or a transmission cooperative.
REPRESENTATIVE WILSON agreed, and added that the bill would also
allow power to be sold in Canada should there be excess after
first serving Alaskans.
CO-CHAIR VAZQUEZ asked whether the Alaska Independent Power
Producers Association (AIPPA) is submitting comments on the
related active RCA dockets.
10:35:14 AM
REPRESENTATIVE WILSON said yes.
CO-CHAIR VAZQUEZ observed that the Alaska Power Association is
reviewing the CS.
CO-CHAIR COLVER inquired as to how the approach in the CS
differs from RCA Docket I-15-001.
REPRESENTATIVE WILSON acknowledged the approach is similar, but
until the RCA docket is adopted, the sponsors' intent remains to
ensure that there are opportunities for IPPs to invest in
Alaska.
CO-CHAIR VAZQUEZ appreciated the work accomplished by the
sponsors, RCA, and IPPs. She stated there is value in waiting
for RCA to finish its work, as there are many changes to come
for the Railbelt transmission system.
REPRESENTATIVE WILSON reminded the committee that the bill will
be vetted in the House Labor and Commerce Standing Committee for
RCA issues, and then in the House Finance Committee.
10:38:43 AM
REPRESENTATIVE TALERICO moved to adopt the proposed committee
substitute for HB 78, labeled 29-LS0259\N, Nauman, 3/18/15, as
the working draft.
10:39:09 AM
CO-CHAIR COLVER objected for the purposes of discussion.
REPRESENTATIVE TALERICO urged the committee to adopt the
proposed CS.
10:39:36 AM
CO-CHAIR COLVER removed his objection. There being no further
objection, Version N was before the committee.
HB 78 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Proposed CS for HB 78 Ver N.pdf |
HENE 3/31/2015 10:15:00 AM |
HB 78 |