Legislature(2021 - 2022)ADAMS 519
04/26/2022 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB71 | |
| HB135 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 71 | TELECONFERENCED | |
| += | HB 135 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 135
"An Act relating to geothermal resources; relating to
the definition of 'geothermal resources'; and
providing for an effective date."
9:09:32 AM
Co-Chair Merrick relayed that the committee last considered
the bill on March 17, 2022.
KALEY PAINE, DEPUTY DIRECTOR, DIVISION OF OIL AND GAS,
DEPARTMENT OF NATURAL RESOURCES (via teleconference),
thanked the committee for hearing the bill and provided a
brief recap of the bill. She explained that the bill would
modernize the states geothermal licensing program to
enable more efficient development of geothermal resources.
The legislation would lead to more successful exploration
of geothermal resources. In addition, HB 135 modernized
geothermal definitions to match current technologies in
exploration and development.
Representative Wool referenced the use and definitions of
geothermal and ocean sourced or ground heat pumps that was
the latent temperature of the earth. He understood the
bill did not cover noncommercial applications. He asked if
heat pumps would count as geothermal and what was the
difference between noncommercial and commercial use. Ms.
Paine answered that when the Division of Oil and Gas (DOG)
regulated geothermal resources it regulated the mineral
estate that was the heat sourced from the mineral core
space of the earth. She deduced that Representative Wool
was referencing the heat differentials in the water, which
would be regulated more by Federal Energy Regulatory
Commission (FERC) that was similar to hydropower. She added
that the bill looked to regulate subsurface minerals; the
geology of the earth itself. Representative Wool surmised
that a ground source heat pump that did not go too deep did
not count under the bill. Ms. Paine answered in the
affirmative.
9:13:33 AM
Representative Johnson recalled that the committee had
taken up a bill where the legislature took a temperature
requirement for geothermal out of the definition. Ms. Paine
agreed that HB 135 modernized the definition of geothermal
resources and removed a specific energy threshold. She
indicated that technology had evolved to the point where
there was not a specific temperature threshold from which
geothermal energy may be produced. She exemplified the
Chena Hot Springs that produced energy at 90 degrees
Celsius versus the 120 degrees that was currently in
statute and the bill would change. The bill addressed
temperatures and sought to define geothermal resources
based on the location of the heat from the earth as well as
for the specific uses of geothermal energy such as,
commercial, large scale, and for sale. Representative Wool
asked about the delineation between commercial and
noncommercial. He wondered whether there was a power
capacity or threshold. Ms. Paine responded that the
threshold would be based on commerciality and was
predicated on whether it was for sale for economic purposes
to multiple end users. She communicated that a megawatt and
kilowatt threshold would not be enshrined in statute at the
time because it may vary depending on use.
9:16:03 AM
Representative Wool hypothesized that if a fish processing
plant in a remote location with access to geothermal power
sold surplus power to a neighboring village it would then
be considered commercial use. Ms. Paine replied that under
the described situation provided by Representative Wool it
would not involve an exploration license or permit, but it
would involve other permits for drilling, water, etc. She
confirmed that under the example, if the plant sold the
power to a community utility, it would qualify as
commercial use.
9:17:35 AM
Co-Chair Merrick OPENED public testimony.
GEOFF SIMPSON, SERC ENERGY, COLORADO (via teleconference),
spoke in support of the bill. He shared information about
the geothermal development and operation company,
Sustainable Energy Resources for Consumers (SERC) Energy.
He related that the company produced 200 megawatts of
energy at 6 facilities in the western United States (U.S.)
and was a subsidiary of Macquarie Infrastructure Holdings,
LLC, which was one of the worlds largest infrastructure
companies. He indicated that SERC was seeking to develop an
additional 250 megawatts of geothermal energy projects in
the next 8 to 10 years including in Alaska. The company
currently held a prospecting permit at Mt. Spur which
encompassed approximately 8,000 acres. He pointed out that
SERC favored allowing a five year exploration license
versus a two-year prospecting permit. He explained that it
was difficult to mount a geothermal exploration program in
Alaska with only a two-year window. It could take up to a
year to define and plan an exploration program that may
lead to producing commercial quantities of energy. He added
that it could easily take another two to three years to
develop the site and plant infrastructure. He indicated
that a five-year license was much more realistic. A
developer could commit a significant budget towards a
discovery effort with the awareness that a 10-year non-
competitive lease would be issued.
9:20:24 AM
ERIC ANDERSON, GEO ALASKA, LLC, GIRDWOOD (via
teleconference), shared that the company had a commercial
geothermal prospecting permit of over 6,000 acres on Mt.
Spur with the goal of developing 50 to 100 megawatts of
stable power for the Railbelt grid. He indicated that his
group supported the bill.
9:21:29 AM
Co-Chair Merrick CLOSED public testimony.
Representative Carpenter asked if the two companies that
had testified were looking at separate or the same land.
Ms. Paine answered that the two geothermal prospectees were
in the same region but were on separate tracks. She
expounded that neither company wanted to compete against
each other for the same track and were exploring different
regions.
9:23:08 AM
Co-Chair Foster MOVED to REPORT CSHB 135(RES) out of
committee with individual recommendations and the
accompanying fiscal notes.
There being NO OBJECTION, it was so ordered.
CSHB 135(RES) was REPORTED out of committee with eight "do
pass" recommendations and two "no recommendation"
recommendations and with one previously published zero
fiscal note: FN3 (DNR); and one previously published fiscal
impact note: FN4 (DNR).
9:23:34 AM
AT EASE
9:23:59 AM
RECONVENED
Co-Chair Merrick reviewed the schedule for the afternoon
meeting.
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