05/10/2024 09:00 AM Senate FINANCE

SENATE BILL NO. 217                                                                                                           
                                                                                                                                
     "An Act  relating to the taxation  of independent power                                                                    
     producers; and increasing  the efficiency of integrated                                                                    
     transmission system charges and  use for the benefit of                                                                    
     ratepayers."                                                                                                               
                                                                                                                                
9:33:25 AM                                                                                                                    
                                                                                                                                
Senator Bishop MOVED to ADOPT the committee substitute for                                                                      
SB 217, Work Draft 33-GS2489\D (Walsh, 5/9/24).                                                                                 
                                                                                                                                
Co-Chair Olson OBJECTED for discussion.                                                                                         
                                                                                                                                
KEN ALPER, STAFF, SENATOR DONNY OLSON, explained the CS. He                                                                     
addressed the Explanation of Changes (copy on file):                                                                            
                                                                                                                                
     Change  1  Removed  the  increased  qualifications  for                                                                  
     Regulatory  Commission of  Alaska (RCA)  commissioners,                                                                    
     that   required  a   specific   number   of  years   of                                                                    
     professional experience.                                                                                                   
                                                                                                                                
     Change 2  Add a technical correction  to the regulation                                                                  
     of    telecommunications,     which    is    preventing                                                                    
     implementation of SB83 as passed in 2019.                                                                                  
                                                                                                                                
     Change 3 Clarified and  expanded sections that describe                                                                  
     how  the  Railbelt   Transmission  Organization  (RTO),                                                                    
     while housed within the  Alaska Energy Authority (AEA),                                                                    
     is  a regulated  utility  for the  specific purpose  of                                                                    
     filing  a single  cost recovery  tariff to  replace the                                                                    
     current system  of multiple wheeling rates.  This is in                                                                    
    Sections 2,15, and 16 of the committee substitute.                                                                          
                                                                                                                                
     Change 4  Added an immediate effective  date to Section                                                                  
     4  of  the  bill,  which allows  the  RCA  to  consider                                                                    
     factors  other than  cost when  determining whether  an                                                                    
     electric utility's rate is just and reasonable.                                                                            
                                                                                                                                
     Change 5  Removed the section related  to net metering,                                                                  
     which required power companies  to credit customers who                                                                    
     generate excess  power and provide that  power into the                                                                    
     utility's system.                                                                                                          
                                                                                                                                
     Change 6  Removed sections  that said  the RCA  may not                                                                  
     require  pre-approval  for certain  smaller  electrical                                                                    
     generation or storage projects.                                                                                            
                                                                                                                                
     Change  7   Removed  sections  that   exempted  certain                                                                  
     independent  power  producers   from  state  and  local                                                                    
     property, income,  and excise taxes if  they sold their                                                                    
     power only to cooperative or municipal utilities.                                                                          
                                                                                                                                
     Change  8  Added  a  requirement one  of  the  new  AEA                                                                  
     Board's  members  must  have  expertise  or  experience                                                                    
     managing a  municipally owned  utility located  off the                                                                    
     road system.                                                                                                               
                                                                                                                                
     Change 9  Removed several powers and  duties previously                                                                  
     given  to   the  Railbelt   Transmission  Organization,                                                                    
     including   managing   and   operating   the   backbone                                                                    
     transmission    assets   and    performing   integrated                                                                    
     transmission planning. Eliminated  a separate board for                                                                    
     the RTO,  providing a governance  structure made  up of                                                                    
     the Railbelt  utilities, the  AEA, and  the CEO  of the                                                                    
     Electric Reliability Organization                                                                                          
                                                                                                                                
9:37:58 AM                                                                                                                    
                                                                                                                                
Co-Chair  Olson  WITHDREW  his  objection.  There  being  NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
9:38:02 AM                                                                                                                    
                                                                                                                                
Co-Chair   Stedman  noted   that   there  were   significant                                                                    
differences between  the current  bill version  and previous                                                                    
versions.                                                                                                                       
                                                                                                                                
9:38:28 AM                                                                                                                    
                                                                                                                                
Mr. Alper  replied that the  most substantial piece  was the                                                                    
pulling  back  of  the  expanded   powers  to  the  Railbelt                                                                    
Transmission Organization  (RTO). He noted that  the RTO had                                                                    
not been in the original bill  version but had been added in                                                                    
previous  committee,  and  then  curtailed  in  the  current                                                                    
version.                                                                                                                        
                                                                                                                                
9:39:57 AM                                                                                                                    
                                                                                                                                
Senator  Kiehl asked  whether the  Regulatory Commission  of                                                                    
Alaska's  consideration of  cost had  been removed  from the                                                                    
bill.                                                                                                                           
                                                                                                                                
9:40:15 AM                                                                                                                    
                                                                                                                                
Mr.  Alper  replied that  the  cost  remained a  factor  and                                                                    
explained that  the intention of  the section was  to ensure                                                                    
that cost was not the primary factor.                                                                                           
                                                                                                                                
9:40:53 AM                                                                                                                    
                                                                                                                                
SB  217  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:41:09 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:42:34 AM                                                                                                                    
RECONVENED