Legislature(2025 - 2026)GRUENBERG 120
04/24/2025 01:00 PM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB153 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 196 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 153 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
April 24, 2025
1:03 p.m.
MEMBERS PRESENT
Representative Ky Holland, Co-Chair
Representative Donna Mears, Co-Chair
Representative Bryce Edgmon
Representative Chuck Kopp
Representative Cathy Tilton
Representative George Rauscher
Representative Mia Costello
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 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."
- HEARD & HELD
HOUSE BILL NO. 196
"An Act relating to carbon offset revenue; and relating to the
renewable energy grant fund."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 153
SHORT TITLE: UTILITIES: RENEWABLE PORTFOLIO STANDARD
SPONSOR(s): REPRESENTATIVE(s) HOLLAND
03/24/25 (H) READ THE FIRST TIME - REFERRALS
03/24/25 (H) ENE, RES
03/26/25 (H) FIN REFERRAL ADDED AFTER RES
04/01/25 (H) ENE AT 1:00 PM GRUENBERG 120
04/01/25 (H) Heard & Held
04/01/25 (H) MINUTE(ENE)
04/03/25 (H) ENE AT 1:00 PM GRUENBERG 120
04/03/25 (H) Heard & Held
04/03/25 (H) MINUTE(ENE)
04/10/25 (H) ENE AT 1:00 PM GRUENBERG 120
04/10/25 (H) Heard & Held
04/10/25 (H) MINUTE(ENE)
04/22/25 (H) ENE AT 1:00 PM GRUENBERG 120
04/22/25 (H) -- MEETING CANCELED --
04/24/25 (H) ENE AT 1:00 PM GRUENBERG 120
WITNESS REGISTER
JOHN ESPINDOLA, Commissioner & Chair
Regulatory Commission of Alaska
Anchorage, Alaska
POSITION STATEMENT: Answered committee questions during the
hearing on HB 153.
ACTION NARRATIVE
1:03:03 PM
CO-CHAIR HOLLAND called the House Special Committee on Energy
meeting to order at 12:48 p.m. Representatives Mears, Kopp,
Tilton, Rauscher, Edgmon, Costello, and Holland were present at
the call to order.
HB 153-UTILITIES: RENEWABLE PORTFOLIO STANDARD
1:04:09 PM
CO-CHAIR HOLLAND announced that the only order of business would
be HOUSE BILL NO. 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."
[Co-Chair Holland handed the gavel to Co-Chair Mears.]
1:04:48 PM
CO-CHAIR MEARS opened public testimony on HB 153. After
ascertaining that there was no one who wished to testify, she
closed public testimony.
1:05:41 PM
REPRESENTATIVE RAUSCHER moved to adopt Amendment 1 to HB 153,
labeled 34-LS0501\G.1, Walsh, 4/11/25, which read:
Page 3, lines 20 - 21:
Delete "that is subject to the standards of an
electric reliability organization under AS 42.05.760"
Page 5, lines 3 - 4:
Delete "subject to the standards of an electric
reliability organization under AS 42.05.760"
CO-CHAIR MEARS objected for the purpose of discussion.
1:05:50 PM
REPRESENTATIVE RAUSCHER explained that Amendment 1 would expand
the effects of HB 153 beyond the Railbelt Region of Alaska to
include the entire state by insuring uniform regulatory
treatment across the state. This was drawn up concerning the
effects of the provisions within HB 153 regarding fines charged
if a utility does not meet its renewable transition goals. In
past versions of the bill, the fine would go directly to the
renewable energy fund (REF) for use within the effected utility
or energy co-operative ("co-op"). Under this amendment, the
funds could be used on any project regardless of the utility
company or energy co-op within the state of Alaska.
Representative Rauscher said that he wrote the amendment with
the understanding that utility companies would not be able to
meet their transition targets and that the fines would be passed
on to ratepayers. He also raised concerns over the rise in the
cost of living and the effects of tariffs as reasons for his
support of the amendment, as these headwinds may lead to delays
in initiating renewable energy projects.
1:09:10 PM
CO-CHAIR HOLLAND, as prime sponsor, presented HB 153. He said
that the purpose of the renewable portfolio standard (RPS) is to
help larger utilities integrate renewable energy production into
their power grids. Therefore, Co-Chair Holland said that
Amendment 1 would add a requirement that would burden smaller
utilities with a task they cannot accomplish. This is largely
because such utilities are not connected to a larger grid as
opposed to how larger utility companies and co-ops are. Thus,
Amendment 1 would, Co-Chair Holland argued, be counter to the
intent of HB 153, as the REF wasn't meant to be a source for
building new renewable energy projects. Rather, the REF was set
up because larger utilities along the Railbelt were
uncomfortable with fines being awarded to the unrestricted
general fund (UGF) and preferred that such funds "stay within
the sphere of doing good for our energy ecosystem."
REPRESENTATIVE RAUSCHER responded that he wasn't quite sure of
what the definition of a "small utility" was, as some large
utilities are not within the Railbelt Region, while some small
utilities are. He then questioned the purpose of the RPS
provision within HB 153.
CO-CHAIR HOLLAND said that the purpose of the RPS provision was
to help utilities along the Railbelt transition to more
renewable energy production within their integrated grid.
Therefore, placing fines on smaller, disconnected grids would,
according to Co-Chair Holland, not be consistent with the intent
of HB 153. He further stated that utilities outside of the
Railbelt Region, particularly in Southeast Alaska and Kodiak,
were far beyond the benchmarks outlined in HB 153.
1:12:46 PM
REPRESENTATIVE KOPP opined that the RPS provision within HB 153
should not be applied to smaller utility companies. These
utility companies, according to Representative Kopp, serve small
towns and villages and have a limited technical capacity to
change their power generation. While he said that he
appreciated the equity that Representative Rauscher was seeking
in introducing this amendment, Representative Kopp elaborated
that he had reservations on applying the RPS standard to
Railbelt Utilities and had even more when it came to smaller
"off-grid" utilities, as such entities were "realistically going
to be on diesel for a very long time."
1:14:01 PM
A roll call vote was taken. Representatives Costello, Tilton,
and Rauscher voted in favor of Amendment 1. Representatives
Kopp, Edgmon, Mears, and Holland voted against it. Therefore,
Amendment 1 failed by a vote of 3-4.
1:14:30 PM
REPRESENTATIVE RAUSCHER moved to adopt Amendment 2 to HB 153,
labeled 34-LS0501\G.2, Walsh, 4/11/25, which read:
Page 4, following line 3:
Insert a new subsection to read:
"(d) A load-serving entity may not recover costs
to comply with the renewable portfolio standard by
increasing customer rates or imposing additional
surcharges or other charges on customers."
Page 5, lines 27 - 28:
Delete "shall itemize the effect of a
noncompliance fine on the entity's monthly customer
bills"
Insert "may not increase customer rates or impose
additional surcharges or other charges on customers to
satisfy a noncompliance remittance requirement"
CO-CHAIR MEARS objected for the purpose of discussion.
1:14:38 PM
REPRESENTATIVE RAUSCHER explained that Amendment 2 would require
utilities that do not meet their renewable energy transition
requisite not to push the cost of associated fines onto
ratepayers. He said that due to the dominance of large energy
co-ops within the Railbelt grid, there would be a high risk that
such costs would be passed directly to ratepayers. He continued
to express doubts about the ability of utilities to meet the
standards for renewable energy transition within HB 153, adding,
"So I can almost assure myself that I'm going to have to start
to chip in on the cost of the fines." Therefore, such a
provision, according to Representative Rauscher, was necessary
to make utilities "try very hard," not to pass on fines to
ratepayers if they do not meet the renewable energy transition
goals set out in HB 153.
1:15:36 PM
CO-CHAIR HOLLAND said that the issue of the rate payers paying
the cost of attaining an RPS standard was considered, yet "the
reality is that ratepayers pay all of the costs of all of the
increases." He pointed to current rate increases due to gas
prices as an example of this phenomenon. Thus, such a provision
would be treating renewable energy costs as different from other
sources of energy and would be contrary to the intent of HB 153.
He continued:
We're trying to create a leveler playing field, when
all this is done, for renewables to advance, and
having renewables be carved out so that ratepayers are
not ... expected to pay the cost of renewables, and
yet we expect them to pay all of the other rate
increases isn't creating a level playing field for
that.
CO-CHAIR HOLLAND therefore opposed Amendment 2 on the grounds
that such a measure would unnecessarily differentiate the cost
increases for renewable energy production as opposed to
conventional sources.
1:17:02 PM
REPRESENTATIVE KOPP said that he would like to hear the opinion
of the utilities on the proposed amendment. He asked if
ratepayers would still be responsible for the recovery of a
utilities fine cost regardless of whether Amendment 2 were to be
passed or not. He referenced AARP leaflets urging
representatives not to allow rate increases to continue, and
many of the constituents represented by that organization living
on fixed incomes as a source of his concern. Representative
Kopp said that he saw this issue as putting the utility
companies in a difficult position.
1:20:10 PM
JOHN ESPINDOLA, Commissioner & Chair, Regulatory Commission of
Alaska, responded that since HB 153 as written would apply to
Railbelt utilities and co-ops, if fines could not be recovered
through rate increases, utilities would still somehow have to
assume those costs. However, because many utilities along the
Railbelt are co-ops, the costs would ultimately be passed on to
ratepayers.
REPRESENTATIVE KOPP asked Mr. Espindola if ratepayers would have
to recover the costs of fines associated with the RPS provision
under HB 153 by other means whether or not Amendment was
adopted.
MR. ESPINDOLA answered that it would make the recovery of such
fines less transparent, but utilities on the Railbelt could not
remain solvent without passing such expenses on to ratepayers.
His main caveat was he wished not to speak for the utilities.
1:22:12 PM
REPRESENTATIVE EDGMON stated that in essence, Amendment 2 was
"really not material" because these costs could be recovered in
an indirect manner. He said, "It's almost like it's embedded in
the bill no matter what we would do with amendments."
1:22:50 PM
REPRESENTATIVE COSTELLO added that she thought the Amendment 2
"kind of gets to the heart of the conundrum here, which is that
it will all be passed on to the rate payer; ... the cost of the
underlying bill."
1:23:22 PM
CO-CHAIR HOLLAND said that there was no question that having a
fee associated with the RPS provision within HB 153 is going to
be paid by somebody, most likely the ratepayers in the case of
Railbelt co-op utilities. However, he said that members of his
staff were working very hard to ensure that no fines would be
charged. Rather, the fine provisions for the RPS within HB 153
were an accountability standard, much like for air and water
pollution, safety standards, building insulation standards, and
so forth. He pointed out that several Railbelt utilities have
already increased their rates, so such fines would be in line
with recent events. But the provisions with HB 153, Co-Chair
Holland argued, were aimed at controlling the rate of increase
for ratepayers. To illustrate his point, Co-Chair Holland cited
a comment made by one of the utilities saying that if no action
was taken on the transition to renewables, rates would increase
by 4 percent by 2032 and 7 percent by 2035, less than current
rate rises within the Railbelt Region of Alaska. Therefore, the
fines proposed under HB 153 were important to Co-Chair Holland
for the sake of accountability for utilities' transition to
renewable energy.
1:25:30 PM
REPRESENTATIVE KOPP posited that while a measure that requires a
utility not to recover the costs of a fine through rate
increases may sound attractive, residents living off the road
system may have the most to lose from its implementation. He
added that the measure would unfairly put "utilities in a bind"
but should the amendment serve as a "messaging amendment," he
would support it.
1:26:40 PM
REPRESENTATIVE RAUSCHER asked Co-Chair Holland if he could say
with authority which utility company gave him the 7 percent rate
increase estimate he cited earlier.
CO-CHAIR HOLLAND answered that he could not at this point,
because he and his staff had been working with all four major
Railbelt utilities for them to understand the bill and it's
unintended consequences and to put its provisions more in line
with the utilities' previous actions on renewable energy. He
said that he would rather have the utilities speak for
themselves on the rate increases they estimate. He mentioned
the "seven percent" rate increase figure to illustrate the
magnitude of the effect of such inaction.
REPRESENTATIVE RAUSCHER asked if members of the committee would
be able to hear from the utility companies about rate increases
before the bill moves from committee.
CO-CHAIR HOLLAND said that they were still meeting to discuss HB
153 and to change the bill to best address their needs for
renewable energy. Co-Chair Holland then said that it was his
hope to get HB 153 into the House Resources Standing Committee
and have the utilities testify there after various changes were
made to HB 153, where there would be a more "clean bill"
presented.
1:28:03 PM
CO-CHAIR MEARS noted that compliance fines for the RPS
provisions within HB 153 were a "last ditch" measure for
compliance with renewable energy transition targets within HB
153. Other provisions towards the same goal were opportunities
for application of renewable energy technology and improvement
of infrastructure within the utility. Further, she said that
the "driving force" behind HB 153 was to reduce costs and
increasing stability in pricing for utilities within the
Railbelt region.
CO-CHAIR HOLLAND commented that the RCA implements fines as it
relates to their rules; however, the language within HB 153 has
been changed to place a greater emphasis on fees than in
previous drafts. Therefore, with the language for HB 153, the
compliance fee was not intended to function as a "fine" as it
would be understood in the context of RCA, rather that this
would function as a fee that would go into an account for the
effected utility which could be used for future projects. The
fine would be charged only years past the transition goals date,
which would then be awarded to the REF.
1:29:24 PM
REPRESENTATIVE TILTON asked which exact entity within the
legislature was working with the utilities in crafting HB 153,
particularly so that utilities would avoid paying fines.
CO-CHAIR HOLLAND said that is was mostly his office doing so at
this point. He said that he and his staff were trying to
determine how utilities would be impacted and benefit under HB
153, as well as how they would be addressing concerns about
renewable energy transition.
REPRESENTATIVE TILTON expressed appreciation for the work Co-
Chair Holland and his staff are doing with the utilities
companies crafting HB 153. She then stated that because the
deadline for energy transition was set for 2035 and 2040,
perhaps members of the legislature would no longer be present to
see HB 153 provisions fully implemented. She also stated that
Amendment 2 would effect all the utilities and rate payers.
Members of the committee were trying to ensure that utilities
and ratepayers were not in a position to pay fines associated
with not hitting transition targets, and she was concerned that
she did not have an opportunity to meet with anyone from the
utilities in a public manner. Therefore, Co-Chair Holland's
extensive work with utilities on HB 153 and his desire to see a
more complete version of HB 153 be transferred to the House
Resources Committee did not address the concerns that she would
have about HB 153.
CO-CHAIR HOLLAND said that Representative Tilton's comments were
appropriate, because members of the committee should consider
the provisions of HB 153 carefully and that the legislative
process was "not just pushing agendas forward." He did say
though that the RPS provision within HB 153 was "not new" and
that the idea was introduced by former Governors Sarah Palin and
Frank Murkowski during their respective tenures, in addition to
an attempt to pass legislation similar to HB 153 during the
previous legislature. The version of the RPS provision within
HB 153 was simply the latest version of an older idea and would
incorporate measures from past legislative sessions to enact the
best version of HB 153 as could be expected.
1:32:43 PM
REPRESENTATIVE KOPP concurred with Representative Tilton's
comments, as he did want to hear from the utility companies on
HB 153. Though he has worked closely with them on various
projects in the past, as a member of the House Special Committee
on Energy, it was his desire to hear from utilities on a bill
that would impact their business operations so greatly.
1:33:35 PM
A roll call vote was taken. Representatives Costello, Tilton,
Kopp, and Rauscher voted in favor of Amendment 2.
Representatives Edgmon, Holland, and Mears voted against it.
Therefore, Amendment 2 was adopted by a vote of 4-3.
1:34:00 PM
The committee took an at-ease from 1:34 p.m. to 1:41 p.m.
1:41:20 PM
CO-CHAIR MEARS announced that HB 153 was held over.
1:42:22 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 1:42 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 153 Amendments Compiled 4.22.25.pdf |
HENE 4/24/2025 1:00:00 PM |
HB 153 |