Legislature(2023 - 2024)ADAMS 519
05/03/2024 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB149 | |
| SB187 | |
| HB307 | |
| SB74 || SB75 | |
| HB232 | |
| SB104 | |
| SB118 | |
| HB122 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 187 | TELECONFERENCED | |
| += | HB 307 | TELECONFERENCED | |
| + | SB 118 | TELECONFERENCED | |
| + | HB 177 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 74 | TELECONFERENCED | |
| + | SB 75 | TELECONFERENCED | |
| += | HB 232 | TELECONFERENCED | |
| + | SB 104 | TELECONFERENCED | |
| += | HB 149 | TELECONFERENCED | |
HOUSE BILL NO. 307
"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."
3:54:53 PM
Co-Chair Foster noted the committee would consider eight
amendments and two fiscal notes.
3:55:51 PM
AT EASE
3:56:32 PM
RECONVENED
Co-Chair Foster noted the committee would review the two
fiscal notes.
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY
(via teleconference), reviewed the Alaska Energy
Authority's (AEA) zero fiscal note, OMB component number
2599. The agency did not anticipate any fiscal impact as a
result of the legislation. He relayed that AEA owned
transmission assets that were part of the Railbelt
integrated transmission system, but AEA was not regulated
by the Regulatory Commission of Alaska (RCA) according to
AS 44.83.090(b). He elaborated that the legislation did not
include costs associated with the AEA-owned Bradley Lake
hydroelectric project.
Co-Chair Foster moved to the RCA fiscal note.
NAOMI JOHNSTON, ADMINISTRATIVE OPERATIONS MANAGER,
REGULATORY COMMISSION OF ALASKA (via teleconference),
reviewed the fiscal impact note from the RCA, OMB component
number 2417. The note included $250,000 for services in FY
25 and $50,000 for services in FY 26. The funding source
was general funds. The bill would require the RCA to
establish a transmission cost recovery mechanism, develop a
process to transition to the cost recovery mechanism, and
to create an integrated transmission system association.
Additionally, the bill would require the RCA to adopt
regulations and contract services would be needed to
develop the cost recovery mechanisms and regulations for
the program to meet statutory timeframes. Other costs such
as public notices, postage cost, and any associated legal
costs resulting from investigations would be absorbed into
the RCA's operating budget.
4:01:00 PM
AT EASE
4:01:20 PM
RECONVENED
Co-Chair Foster began the amendment process.
Co-Chair Edgmon WITHDREW Amendment 1 (copy on file). He
explained that it was part of a later amendment.
Co-Chair Edgmon MOVED to ADOPT Amendment 2, 33-GH2489\A.8
(Walsh, 5/1/24) (copy on file):
Page l, line 1, following "producers;":
Insert "relating to the Alaska Energy Authority;"
Page 2, following line 7:
Insert a new bill section to read:
"* Sec. 3. AS 39.25.110(11) is amended to read:
(11) the officers and employees of the following
boards, commissions,
and authorities:
(A) [REPEALED]
(B) Alaska Permanent Fund Corporation;
(C) Alaska Industrial Development and Export
Authority;
(D) Alaska Commercial Fisheries Entry Commission;
(E) Alaska Commission on Postsecondary Education;
(F) Alaska Aerospace Corporation;
(G) [REPEALED]
(H) Alaska Gasline Development Corporation and
subsidiaries
of the Alaska Gasline Development Corporation;
(I) Alaska Energy Authority;"
Renumber the following bill section accordingly.
Page 3, following line 21:
lnse1t a new bill section to read:
"* Sec. 5. AS 44.83.040 is amended by adding a new
subsection to read:
(e) The authority may, as the authority considers
advisable, appoint persons as officers, including an
executive director, and employ professional advisors,
counsel, technical experts, agents, and other
employees. The executive director and employees of the
authority are in the exempt service under AS 39.25."
Co-Chair Foster OBJECTED for discussion.
Co-Chair Edgmon explained the amendment. He stated there
was currently a unique relationship between AEA and the
Alaska Industrial Development and Export Authority (AIDEA).
He detailed that AEA's employees were employed by AIDEA.
The amendment would enable AEA to have its own employees
once again, where the existing PCNs [position control
numbers] would be transferred with no additional cost from
AIDEA to AEA. The change would allow for accounting and
budget simplification and potential cost savings due to
efficiencies. He added there was a real possibility that
the two agencies would be served by separate and distinct
boards for the first time, which would help complete the
separation of the two entities. He elaborated that the
agencies had one board to oversee their functions.
4:03:16 PM
Representative Josephson asked if it was fair to say that
Amendment 2 was designed to do what the administration was
trying to do in January.
Co-Chair Edgmon answered, "No, but with a hint of yes." He
explained that the executive order aspired to split the two
entities into two separate boards (which was included in
another piece of legislation). The amendment accompanied
the separation of the two boards by allowing AIDEA
employees working for AEA to transfer to AEA.
Representative Josephson asked what it looked like on the
ground. He asked the employees would move their offices and
change their workload and assignments.
Co-Chair Edgmon stated the PCNs for AEA employees were
listed as AIDEA employees. He stated it had been a long
time in the making and the amendment would complete the
separation of the two facilities, assuming the provision to
separate the boards passed. He believed there was a high
probability of that taking place.
4:05:12 PM
Representative Hannan asked if the provision in Amendment 2
only worked if the separation of the two entities went
through. Alternatively, she wondered if it could function
independently.
Co-Chair Edgmon answered that AEA employees were
statutorily designated as AIDEA employees. The amendment
would move AEA employees over to AEA. It was his
understanding that the separation of the two boards
required a different vehicle. He stated that the action by
the amendment could take place while still under the
framework of one board. He believed that in time there
would be two boards.
Representative Hannan relayed that she was supportive
either way.
Co-Chair Foster WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 2 was ADOPTED.
4:06:37 PM
Representative Stapp MOVED to ADOPT Amendment 3, 33-
GH2489\A.16 (Walsh, 5/2/24) (copy on file). [Note: due to
the length of the amendment it is not included here. See
copy on file for details.]
Representative Josephson OBJECTED for discussion.
Representative Stapp explained the amendment. The amendment
was a result of numerous conversations he had with
stakeholders, power producers, utilities, and governor's
staff. He had looked at things done in the other body to
try to find the best path forward. The amendment tried to
incorporate the best ideas and concepts floating around the
legislature to move it toward the finish line. He noted it
was much closer to the original bill than the version
currently before the committee. He asked his staff Bernard
Aoto to come to the table to review the sectional analysis.
He noted that Andrew Jensen from the governor's office was
present to answer technical questions.
BERNARD AOTO, STAFF, REPRESENTATIVE WILL STAPP, reviewed
the sectional of the amendment (copy on file):
Section 1
Amends AS 42.05.020(f) to increase the salary for
Regulatory Commission of Alaska (RCA) commissioners
from Range 27 to Range 29 for purpose of improved
recruitment to positions.
Section 2
Amends AS 42.05.254(a) to increase the regulatory cost
charge for telecommunications providers to fund
operations at the RCA and the Regulatory Affairs and
Public Advocacy (RAPA) section of the Department of
Law. The increase for RCA operations is from 0.7
percent to 0.98 percent, and the increase for RAPA is
from 0.17 percent to 0.22 percent.
Representative Josephson asked if Mr. Aoto was reading from
something committee members were supposed to have. He did
not have the document.
Mr. Aoto answered that the document was provided as backup
information and he did not know whether members had it in
their packets.
Co-Chair Foster took an at ease.
4:09:10 PM
AT EASE
4:18:03 PM
RECONVENED
Co-Chair Foster relayed that committee members had received
the sectional analysis (copy on file). He asked Mr. Aoto to
continue his review. He finished reviewing Section 2 shown
above.
Section 3
Amends AS 42.05.381(e) to require the RCA to adopt
regulations specific to refuse utilities for setting a
range for adjustment of rates by a simplified rate
filing procedure. This expands the current public
utilities covered by the section that currently
includes electric cooperatives and telephone
utilities.
Section 4
Amends AS 42.05.381 to expand the criteria for a 'just
and reasonable' rate to consider whether the purpose
of the rate is to increase the diversity of supply,
promote load growth, or enhance energy reliability or
energy security.
Section 5
Amends AS 42.05.431(b) to ensure that wholesale power
contracts between a utility and an independent power
producer (IPP) must reflect a tax exemption or
government subsidy provided to a utility or IPP. The
purpose is to require that tax exemption provided for
in the bill is passed through to the ratepayers.
Section 6
Amends AS 42.05.431 to add a section allowing for cost
recovery in rates for renewable energy projects less
than 15 megawatts that have been approved by the
utility's board of directors. This cost recovery would
not require approval by the RCA, and would apply only
to utilities subject to the jurisdiction of an
Electric Reliability Organization (ERO). The only ERO
in the state covers the Railbelt, so this provision
would be limited to those utilities. The 15 MW
threshold is based on the project size that requires
pre-approval by the RCA for utilities subject to an
ERO in AS 42.05.785.
Section 7
Amends AS 42.05.762 to require that an ERO prioritizes
reliability and stability of an interconnected
electric system while considering cost to the
customer. The purpose is to provide additional clarity
to the mission of an ERO.
Section 8
Amends AS 42.05.770 to require an ERO to develop
nondiscriminatory standards for interconnection, and
it removes the requirement that an ERO develop open
access and cost recovery standards. The purpose of
this section is to clarify responsibilities as a
transmission cost recovery and open access tariff will
be transferred to the Railbelt Transmission
Organization.
Section 9
Similar to Sec. 2 in that it amends AS 42.06.286(a)
increases the regulatory cost charge on pipeline
carriers to fund operations of RCA and RAPA. The
increases are the same level, with an increase for RCA
operations is from 0.7 percent to 0.98 percent, and
the increase for RAPA is from 0.17 percent to 0.22
percent.
Section 10
Amends AS 43.98 to add a new section that would exempt
electricity generation facilities built by an
independent power producer from state and local
taxation. This exemption has several conditions: It
only applies to projects constructed and placed into
service on or after July 1, 2024; and it only applies
to projects that are only selling wholesale power to a
tax-exempt cooperative or municipal-owned utility.
Section 11
Amends AS 44.83.990 to create a new board for the
Alaska Energy Authority to include the commissioners
of Revenue and Commerce, Community and Economic
Development; and six public members to be appointed by
the Governor.
Section 12
Amends AS 44.83.030 to allow for the commissioners of
the board to delegate their responsibilities to a
designee; that public members serve for three-year
terms; and the process for filling vacancies.
Section 13
Amends 44.83.040(a) to account for the larger size of
the AEA board to update the number of members required
for a quorum and a majority vote.
Section 14
Amends AS 44.83.080 to add an additional authority
allowing for AEA to acquire battery or energy storage
systems.
Section 15
Amends AS 44.83.090(b) to make AEA subject to the
jurisdiction of the RCA solely for the purposes
outlined in the creation of the Railbelt Transmission
Organization requiring the establishment of an open
access and transmission cost recovery standard.
Section 16
Amends AS 44.83 to add a new section that creates the
Railbelt Transmission Organization (RTO) for the
purpose of establishment of an open access and
transmission cost recovery standard. This will be
accomplished by eliminating current per-unit wholesale
charges to be replaced by a new mechanism to fairly
recover the costs of operating the system.
This section establishes the RTO within the Alaska
Energy Authority, and includes representatives of the
Railbelt utilities. The RTO is subject to RCA
jurisdiction, and will be required to file tariffs to
achieve this purpose.
The section also establishes the structure for the
open access and cost recovery mechanism covering the
'backbone' transmission system, and provides a
deadline for the submission of this tariff of no later
than July 1, 2025. If the tariff is not submitted by
this date, the section requires the RCA to establish
the open access and cost recovery standard consistent
with this section.
The section requires that this commission-approved
cost will be passed directly and transparently to the
end customer. (Note that customers already pay these
costs now, but it is not a transparent on-bill
charge.)
Section 17
Provides for the transition of the new members of the
AEA board of directors with initial staggered terms of
one-, two-, and three-year terms.
Section 18
Provides for a deadline for the RTO to be formed by
Jan. 1, 2025.
Section 19
Provides for an immediate effective date for Sec. 3.
Section 20
Provides for an effective date of July 1, 2024, for
the remainder of the act.
4:25:51 PM
Co-Chair Foster asked Representative Stapp to address the
main parts that were in the Senate version and parts that
were left out.
Representative Stapp replied that one of the concepts not
included that was included by the Senate related to net
metering. He deferred to Mr. Jensen and staff to talk about
the fundamental differences in the bill.
ANDREW JENSEN, ENERGY POLICY ADVISOR, OFFICE OF THE
GOVERNOR, replied that that there were a number of things
that had been taken out. The amendment removed the RCA
qualification changes and the net metering section. He
relayed that another bill that had passed the Senate
addressed net metering and the two measures did not have
the same rate structure. He explained that the items would
have to be reconciled into a final product. For example,
there should not be one [rate structure] for single family
residential and one for multifamily. He referenced version
U of the legislation and stated that the largest change was
related to the powers of the Railbelt transmission
organization. The amendment brought the bill closer to the
original intent of the legislation, which was to create an
association tasked with eliminating "wheeling." He shared
that all of the utilities including Chugach, Homer, Golden
Valley, and Matanuska Electric Association expressed desire
to eliminate wheeling tariffs in favor of a different way
to recover costs. The concept had been narrowed down to
that function for the RTO as an initial step. The amendment
removed the responsibility for transmission planning from
the RTO and removed the provisions around the requirement
to transfer management of assets to the RTO. The amendment
would still establish an RTO, which included the Railbelt
utilities and AEA, and was tasked solely with eliminating
wheeling rates, which was the objective of the governor's
original bill.
4:28:55 PM
Representative Josephson saw that the RCA would have some
jurisdiction. He asked if the RTO would only be subject to
the jurisdiction after large new facilities could be
constructed.
Mr. Jensen answered that AEA had to be "within this"
because it was an asset owner that had already recovered
its costs, and it was positioned to be a very large asset
owner with the GRIP [Grid Resilience and Innovation
Partnerships] project. The intent was to ensure there was
economic oversight of the cost recovery. There was nothing
exempt from the RCA's jurisdiction when it came to cost
recovery standards.
Representative Josephson asked if the RCA would be able to
prohibit a major energy project for being inconsistent with
a greater integrated resource plan prior to its
construction.
Mr. Jensen asked if Representative Josephson was referring
to generation projects.
Representative Josephson agreed.
Mr. Jensen answered that AS 42.05.785 requiring preapproval
of projects would still be in place for the ERO. He
elaborated that any generation project larger than 15
megawatts would still require preapproval from the RCA.
Representative Josephson repeated the statute reference for
confirmation.
Mr. Jensen agreed. He pointed to Section 6 of the sectional
analysis that referenced where the amendment would exempt
projects smaller than 15 megawatts from cost recovery. He
stated that preapproval for projects larger than 15
megawatts would still be required.
Representative Josephson did not see the statute listed in
the amendment.
Mr. Jensen clarified that the statute was not listed in the
amendment, and he had provided it as context for the
committee. There had been some questions about where the 15
megawatts threshold had come from; it was based on existing
statute.
Representative Josephson stated that Chugach Electric did
not think an RTO was needed and that only the existing ERO
was needed. He asked if his understanding was accurate.
Mr. Jensen answered that Chugach [Electric Association] had
stated it supported the governor's original bill, which
required the creation of an association for the purposes of
transmission cost recovery standards. He clarified that the
amendment would return the bill to that one purpose, to
eliminate wheeling in favor of a new standard. He relayed
that the amendment was closer to Chugach's public comment
that it was aligned with the original bill, joining a group
with other utilities, and eliminating wheeling in favor of
a new transmission standard. He thought there would likely
be additional public comment made by Chugach to clarify.
4:33:10 PM
Representative Coulombe asked why the creation of another
organization was necessary. She wondered why the ERO was
not sufficient.
Mr. Jensen answered that the ERO statute stated that the
ERO would create a cost recovery standard for the utilities
to follow. The amendment would require the utilities to get
together to create one tariff. The ERO was still standing
as an organization where the Railbelt utilities had been
meeting weekly since November with technical experts within
their staff, in addition to attorneys and consultants to
develop what the transmission cost recovery would look
like. The administration believed the creation of the
organization was the fastest most efficient way to
eliminate wheeling rates. He stated the original purpose of
the governor's bill was to form an association [utilities]
were required to join to get rid of new tariffs.
Representative Coulombe stated her understanding that the
RTO would deal with wheeling rates and the ERO dealt with
four different tariffs. She asked why they were not
adapting the existing organization. She thought it sounded
like it was the same makeup. She asked why they were
creating another organization.
Mr. Jensen clarified that the ERO was only tasked with
developing a standard, it was not tasked with filing the
tariff with the RCA. The utilities were required to file
the tariff. The ERO did not have the authority to file a
tariff on behalf of the utilities.
Representative Coulombe read from Section 5 of the
amendment: wholesale power contracts between a utility
and an independent power producer (IPP) must reflect a tax
exemption or government subsidy provided to a utility or
IPP." She asked if it was one-for-one. She wondered if an
entity had to use all of the tax exemption to reduce the
cost to the customer.
Mr. Jensen responded that it was ultimately within the
purview of the RCA. He explained that the IPP knew it
needed to come in below the avoided cost of the utility;
therefore, there would be the potential where the IPP came
in just below that amount and could pocket the rest of the
exemption as a benefit. It was possible to calculate what a
property tax would be in terms of the overall cost to the
project. The Department of Revenue (DOR) could make the
calculation and the IPP could be required to produce the
information. He stated that it would be a topic of
negotiation between the utility and IPP. The language in
Section 5 ensured that the tax exemption was put in place
for the specific purpose of costs being returned to the
ratepayers.
4:37:10 PM
Representative Coulombe was hearing there was discretion.
She asked for verification that 100 percent did not have to
go.
Mr. Jensen surmised that there could be discretion, but the
job of the RCA was to protect the ratepayer and to ensure
the ratepayer was receiving the maximum benefit. He
explained that the RCA relied on DOR to analyze and provide
third-party input. He stated that the utilities, within the
negotiation process, would be adamant the benefit they were
receiving was reflected in the power purchase agreement. He
noted there had been testimony from Matt Perkins from
Alaska Renewables (who was working with Golden Valley to
develop a large 150 megawatt wind farm) that they already
do a side-by-side analysis to show the cost when property
taxes were paid versus not paid.
4:38:22 PM
Representative Coulombe supported the section but was
trying to determine whether 100 percent of the lower cost
would actually be passed on.
Mr. Jensen replied that the rates were reviewed by the RCA
in a public process. The general public would be able to
see the information, comment, and intervene. He explained
there was a great deal of public protection. He noted that
funding was increased for staff within the RAPA section of
the Department of Law, which was there to protect the
public. There were multiple layers of safeguards from the
negotiations including DOR, RCA, and the public to ensure
the maximum benefit flowed through.
Representative Coulombe read Section 4 of the amendment:
"to expand the criteria for a 'just and reasonable' rate to
consider whether the purpose of the rate is to increase the
diversity of supply, promote load growth, or enhance energy
reliability or energy security." She asked what the just
and reasonable rate was currently based on.
Co-Chair Edgmon asked for a repeat of the question.
Representative Coulombe repeated her question.
4:40:45 PM
Co-Chair Edgmon relayed that he was carrying the amendment
for a third party. He explained that the purpose of the
provision was to give the RCA more authority or a broader
scope when considering rates to look at the diversity of
fuel source (such as renewable energy), redundancy factor
and reliability in the near and long-term, and cost
diversity. He stated it provided a more expansive portfolio
for the RCA to consider.
Representative Coulombe looked at the language "to
consider" and noted it gave the RCA the option. She was
weary of pulling away the cost of the ratepayer. She
believed it needed to be the primary consideration. She was
concerned about a scenario where rates had to be increased
as a result of the expense of numerous new renewable
projects. She stated it was a big shift and she was
concerned it would be used as an excuse to raise rates.
Mr. Jensen responded that did not know exactly why it was
included. He noted there was a Bradley Lake exemption in
statute, and it was exempted from RCA jurisdiction because
it was more expensive than the current cost of power. Under
the RCA rules at the time, the project would not have been
approved. He elaborated that the legislature had decided to
exempt the project from RCA review. He noted that Bradley
Lake had gone from the most expensive power when it came
online to being the cheapest power at present. He believed
the provision gave the RCA some criteria that it did not
have back when Bradley Lake was being contemplated. He
noted that the provision did not require the RCA to approve
something under one of the criteria.
4:43:31 PM
Representative Galvin noted that Representative Coulombe
had asked all of her questions.
Representative Hannan wondered why the amendment did not
include the transfer of the management of the assets that
would be part of the RTO.
Mr. Jensen answered that there had been public testimony
from Chugach that morning and in the past that the transfer
of management of assets, and particularly language that
referred to acquiring operational control, was a
nonstarter. He explained in terms of transferring the
management of assets, he did not know that the legal
implications were fully flushed out. He stated that it did
not transfer ownership, but it required transferring of
asset management as well as references to operational
control. Rather than taking a step that may not be the
right one in terms of how to manage the Railbelt in the
best fashion, the amendment would remove the section from
Senate version U.
4:45:19 PM
Representative Hannan noted the committee had not discussed
or heard anything about Sections 1 through 3 related to the
RCA. Section 1 included a step and range salary increase
for the commissioners, Section 2 was a telecom surcharge
increase, and Section 3 was refuse utility regulation. She
was feeling a little blindsided about policy changes
related to a fairly complex entity. She wondered if the
changes had occurred in the Senate version. She asked for
details on the sections.
Mr. Jensen explained that the salary increase for RCA
commissioners was included due to competitiveness in a
difficult hiring environment. He noted that salary was key,
as evidenced across state government related to filling
positions. He stated that getting the best people on board
required a competitive salary. He relayed that RCA
Commissioner Doyle had testified that the only lawyer on
board was being term limited out. Hiring a qualified
lawyer, perhaps from the private sector, would require a
competitive salary. Section 2 increased revenue available
to the RCA and RAPA. He explained that the budget for the
two agencies was capped and they did not receive general
funds; they received funds strictly through the regulatory
cost charge. He expounded that staff did a tremendous
amount of work on highly technical matters and it was
difficult to retain staff without being competitive. He
noted that the RCA and RAPA were both consumer protection
agencies. The administration believed it was important to
increase the resources available to the agencies,
especially when looking into the future where additional
responsibilities continued to increase.
Mr. Jensen relayed that Section 3 was an amendment brought
forward by members of the majority. He explained there was
an existing provision in statute that allowed for telecom
and electric cooperatives to have an expedited rate filing
process. The section added refuse, which were considered
public utilities, to an existing category that was eligible
to go through some expedited rate review. He referenced RCA
workload and the length of time it took to process rate
cases. The section would provide an avenue for refuse
utilities to have the same access to an expedited review as
electric and telecom utilities.
4:49:14 PM
Representative Hannan stated that the committee had no
dialogue or public testimony on the topic. She lived in a
community where refuse was controversial and she thought
the city would want to weigh in or talk about the
regulation of refuse. She felt that some of the dialogue
was that the state would expand what the RCA had to do
because of the transmission stuff, but the increased
workload would be shared with other utility regulation
portions of their job and duties. She stated it gave her a
little heartburn.
Mr. Jensen answered that the section required the RCA to
adopt regulations through a public process. Additionally,
in a simplified rate filing process, there was still an
opportunity for public comment and review. He elaborated
that while a rate case was in place, the RCA allowed for a
temporary increase while the rate was fully investigated.
The provision was intended to hold a utility harmless while
it was going through the lengthy and cumbersome rate
process. If a utility had a need to increase its revenue
due to inflation, fuel costs, etcetera, it had the
potential to be financially harmed if it could not adjust
its rates while the rate case was being evaluated. The
process enabled an interim rate, while the case proceeded.
He explained it was the same process for electric
cooperatives and utilities. The section would extend it to
a different utility to allow for expedited rate review. He
clarified that it did not cut the public out of the
process.
4:51:43 PM
Representative Hannan stated it cut out the legislature's
public process when it was changing statute. She asked for
the difference in pay for a range 29. She remarked that it
would have an impact on the budget.
Mr. Jensen replied that he could follow up with the
information. The pay would also depend on the salary step.
He deferred to Mr. Aoto.
Mr. Aoto answered that at the base level, the salary for a
range 27 was about $113,000/year and a range 29 was about
$120,000 for an average increase of about $7,800.
Representative Josephson asked whether new large
transmission projects would need preapproval under
Amendment 3.
Mr. Jensen there were transmission project preapproval
requirements related to length, size, and capacity of a
project. He offered to follow up with the details.
Representative Josephson wanted to ensure no transmission
project above 69 kilovolts could be built without RCA
approval. His concern was that committee members would be
asked to vote on the amendment during the current meeting.
He asked for verification that nothing in the amendment
would allow the construction of such a project without RCA
approval.
Mr. Jensen answered that he would have to review the
statute. He stated that preapproval was required for large
projects over a certain threshold. He believed they would
be required to do so. He relayed that there were member-
owned cooperatives responsible to their ratepayers. The
cooperatives had fiduciary duties and prudence and
responsibilities. Ultimately, the cooperatives had to go to
the RCA for approval of cost recovery; therefore, it was
not in their best interest to put their ratepayers at risk
for uneconomic projects.
4:54:52 PM
Representative Josephson asked if the amendment would limit
the RTO's principal function to overseeing the transmission
tariff.
Mr. Jensen answered affirmatively. He confirmed that under
the statute, the RTO's only job was to eliminate wheeling
and establish a new cost recovery and open access tariff.
The RTO would not manage the assets. He clarified that
nothing would prevent the utilities from getting together
on their own. The RTO would establish the cost recovery and
open access tariff for the "backbone" asset based on
standards established by the Federal Energy Regulatory
Commission (FERC). The commission used the Mansfield Test
that included five criteria for what qualified as a
transmission asset. The statute would give the utilities
and RCA clear guidance on what the state expected them to
follow. He explained that if the utilities could not come
to an agreement by the deadline specified in the amendment,
the RCA would do it and would follow the standards to
ensure it followed industry accepted federal standards.
4:56:18 PM
Representative Galvin asked if the [RTO's] job of
overseeing a new cost recovery and open access tariff could
be done without legislation. She understood the group had
been meeting weekly for more than a year. She was trying to
understand the purpose of provision.
Mr. Jensen believed that if it was possible for utilities
to do it on their own, it would have been done decades ago.
He stated that legislation was required to make it happen,
which was the purpose of the current legislation. The
utilities had stated they were willing to join the
organization for the express purpose of eliminating
wheeling for a new cost recovery and open access tariff.
Representative Galvin stated that one utility out of Homer
seemed to think the state needed to wait a bit longer for
more distillations of what the working group had to
suggest. She asked if she had misinterpreted the testimony.
Mr. Jensen replied that Homer Electric had expressed its
concern, particularly with the bill version in the other
body. He had spoken with Homer Electric earlier in the day
and it very optimistic that the group would be able to come
up with something that worked. He relayed that Homer
Electric was in favor of the original legislation, which
included joining an association and eliminating wheeling.
He believed their concerns were being addressed by the
amendment. He explained that narrowing the focus of the
organization would start to build consensus. He explained
that legislation was required to accomplish the change.
Some utilities had "straight up said that and other
utilities had said that they're willing to do it."
4:59:43 PM
Representative Coulombe referenced an earlier comment that
Section 3 related to refuse did not have any public
testimony. She clarified that there was public testimony
offered on the subject twice in the Senate.
Co-Chair Edgmon stated it was important that the committee
understood the difference between the RTO and the Electric
Reliability Council. He felt he had an advantage because he
had gone on the Iceland trip and the Iceland model featured
a private commodity regulated by a government nonprofit
entity that dispersed the energy equally to all
beneficiaries and users. He believed the Railbelt
Transmission Organization would take whatever the source of
energy (e.g., natural gas, geothermal, wind, solar) and
distribute the energy was equally distributed to various
communities. He elaborated that it would take the private
sector energy and convert it into a regulated commodity to
be dispersed equally to different utilities. The various
utilities had different costs, business models, debt
ratios, sizes, but they would receive the power the same
way through the RTO. He stated it was the big difference
between the Electric Reliability Council.
5:02:21 PM
Mr. Jensen expanded on the statement. The concept Co-Chair
Edgmon was talking about was known as economic dispatch,
which meant the lowest cost power was what moved through
the system. He explained that true economic dispatch
required a system operator to make sure the lowest cost
power was moving. The ERO was an oversight organization,
not a system operator. He elaborated that the RTO in the
amendment was not a system operator. The administration
believed the legislation was a foundational piece of how to
get to economic dispatch down the road. The first step was
to eliminate wheeling rates because wheeling rates
prevented economic dispatch from occurring. The bill had
been scaled back from the Senate version and reflected the
foundational structure to get to economic dispatch through
better unified management of the system. He stated it was
the administration's goal and "what everybody is trying to
get." He referenced some of the tension around the bill in
the other body. He explained that it was very difficult to
take something out of an organization with transmission
planning at the ERO, but it would be easier to add
responsibilities. The goal was to start with something
everyone agreed on eliminating wheeling and continue to
work to determine what else could be agreed upon to get to
economic dispatch. The goal was moving the lowest cost
power from whatever source, from anywhere, to anywhere.
Co-Chair Edgmon relayed that the RTO would have "muscle"
and would be able to enforce all of the various sources of
power that came at different costs, some cheaper than
others. The RTO would have the economic dispatch to get the
power out to utilities at a rate that provided the cheapest
power to everyone on an equal basis including Homer
Electric, which was quite small compared to Chugach, all
the way up to the Golden Valley Electric Association (GVEA)
located in the far north. There was a functional role that
an RTO would play that was very different than the role of
an ERO. He stated that until that was clear, it was not
possible to understand the rest of the legislation.
Mr. Jensen answered that public testimony had talked about
three different constraints. The first was a physical
constraint pertaining to infrastructure. He explained that
the transmission line on the Kenai Peninsula responsible
for moving Bradley Lake power was being upgraded. The GRIP
project would provide additional capacity to address
physical constraints. Second, getting rid of wheeling rates
and providing for tax parity for independent power
producers would remove an economic constraint. Third, the
formation of the RTO would start to get rid of the
institutional constraint. All three things needed to
happen. The bill moved on the physical and economic
constraints and included the first step toward dealing with
the institutional constraint. He believed the bill was a
great foundational step toward the ultimate goal.
Co-Chair Edgmon agreed that Mr. Jensen's summary was the
intent of the goal during the current session. He stated
that everything else was ancillary. The intent was to set
the stage for GRIP projects, the expansion of Bradley Lake,
the addition of renewable energy power sources, more
natural gas for a cheaper power stability, and a grid-like
relationship that did not currently exist.
5:06:51 PM
Representative Josephson asked if committee members should
be concerned that the amendment removed the net metering
function that was included in SB 217.
Mr. Jensen asked Representative Josephson to repeat the
question.
Representative Josephson complied.
Mr. Jensen answered that the metering section had been
removed because there was a bill in the other body that
touched on net metering for multiple meters at the same
address. He explained it had a certain rate structure
instruction to the RCA that would differ from the net
metering that was in the other body. He expounded that the
two options had to be reconciled in order to avoid one rate
for multimeter locations versus a single family location.
Representative Josephson believed Mr. Jensen was referring
to SB 152.
Mr. Jensen agreed.
Representative Stapp remarked that there had been a robust
discussion on the amendment. He asked for members' support.
Representative Josephson WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 3 was ADOPTED.
Representative Josephson WITHDREW Amendments 4 and 5 (copy
on file).
Representative Hannan MOVED to ADOPT Amendment 6, 33-
GH2489\A.13 (Walsh, 5/2/24)(copy on file):
Page 1, line I:
Delete "independent power producers"
Insert "new electricity generation facilities"
Page 1, line 10, through page 2, line 7:
Delete all material. 7
Renumber the following bill section accordingly.
Page 3, following line 21:
Insert a new bill section to read:
"* Sec. 3. AS 43.98 is amended by adding a new section
to read:
Article 2A. Taxation of New Electricity Generation
Facilities.
Sec. 43.98.100. Taxation of new electricity generation
facilities. An electricity generation facility that is
constructed and placed into service on or after July
1, 2024, is not subject to state and local ad valorem,
income, and excise taxes if the electricity generation
facility provides power only to a public utility. In
this section, "public utility" has the meaning given
in AS 42.05.990."
Co-Chair Foster OBJECTED for discussion.
Representative Hannan explained that the amendment. She
stated that extending the exemption from state and local
taxes to the independent power producers would have an
unintended consequence in the future. She stated that the
hope was that electric transmission networks would grow to
connect more communities across the state. While most
electric utilities in Alaska were formed as cooperative as
municipal owned, there were also economically regulated
investor-owned utilities (IOUs). She elaborated that IOUs
paid state and local taxes and by regulation, passed the
cost of the taxes onto customers through authorized rates.
She explained that without modifying the bill to provide
tax benefits to all new generation projects, instead of
only a certain type of for-profit nonregulated entities -
IPPs - the customers of IOUs would be unfairly burdened by
state and local taxes charged to them, but not charged to
other for profit energy companies. The amendment did not
factor in the passage of Amendment 3, which was a
comprehensive rewrite. As HB 307 was written, an IPP may be
discouraged from making a sale to an IOU because it would
lose access to the proposed tax benefit. She stated that an
amendment that would extend tax benefits to IPPs for making
sales to any type of utility could still unfairly burden
the customers of an IOU by unfairly increasing its avoided
cost. She asked for members' support on the amendment.
5:11:17 PM
Co-Chair Foster asked Mr. Jensen to provide comments on
Amendment 6.
Mr. Jensen replied that the administration was neutral on
the measure. He relayed that the amendment was an expansion
on the administration's goal for the legislation. He
remarked that there had been public testimony earlier in
the day from Nils Andreassen with the Alaska Municipal
League (AML) about tax exemptions.
Co-Chair Edgmon asked if the definition of electricity
generation facility was in statute.
Representative Hannan answered it was her understanding
that the public utility definition in AS 42.05.990
addressed electric generation facilities.
Co-Chair Edgmon asked where an independent power producer
fit into the different definitions.
Mr. Jensen thought that an electricity generation facility
would appear to cover a wind or solar farm generating
electricity. He believed it would cover an IPP. He relayed
that the administration had chosen a narrow scope for the
bill to avoid things becoming a burden to its passage. The
administration deferred to the will of the committee on the
amendment.
Co-Chair Edgmon believed an electricity generation facility
was synonymous with independent power producer. He
suggested the amendment would be better suited by taking
out the lesser used term and using the term independent
power producer.
Mr. Jensen did not have any comments to provide on the
amendment. He relayed that it had not come from the
administration and there had not been time to run it by the
Department of Law. He was uncertain about the implications
and definitions.
Representative Hannan requested an "at ease."
5:14:38 PM
AT EASE
5:29:51 PM
RECONVENED
Co-Chair Foster noted the committee was hearing Amendment
6.
Representative Hannan noted it was the civilian knowledge
of a complex utility that required engineers and lawyers.
She noted that Co-Chair Edgmon had asked why not call it an
IPP. She clarified that IPPs did not currently exist in
Alaska statute; they fell under electric generation
facilities and regulated utilities. The amendment would
only impact new electrical generation projects after July
1, 2024, and would allow a tax advantage on the new
generation facility if the power was sold to a regulated
utility (e.g., private, cooperative, municipal). She
relayed that taxes paid by an IOU were entirely passed to
the consumer. She wanted to avoid situations where a
business producing power did not want to sell the power to
individual utility customers because they would lose their
tax advantage. She wanted to incorporate as much tax
incentive as possible to bring new power online to all
kinds of producers. She asked for members' support.
Representative Stapp stated that his amendment [Amendment
3] had adopted Section 10 that looked similar. He
identified two differences in Amendment 6. First, it
specified public utilities, but it did not incorporate
taxes and cooperatives. He did not know if there was a
material difference between a public utility, an electric
cooperative, or a municipal owned utility. He did not have
too much of an issue with the amendment, but he thought it
may be a little redundant. He asked to hear from Mr.
Jensen.
Mr. Jensen replied that it was a large policy change. He
stated that the administration's original bill had a narrow
exemption and had been vetted in the House and Senate as to
the particular tax exemption. He elaborated that there had
been a great deal of public comment and testimony on the
tax exemption. He stated that the amendment was a broad
expansion and large policy change for the legislature to
make. He thought it would require public comment for the
committee members to consider. He remarked that the
administration had not had a legal analysis over the
definitions or implications. He deferred to the will of the
committee.
5:34:15 PM
Representative Stapp asked Representative Hannan if there
was a fundamental difference between a municipal owned
utility and an electric cooperative and in the words public
and utility.
Representative Hannan answered that it was her
understanding that public utility incorporated all
utilities, while cooperative or municipal utilities
excluded some public utilities. She stated than an investor
owned utility was not a cooperative or municipality, but a
public utility included investor owned, cooperatives, and
municipal owned utilities.
Co-Chair Edgmon stated that public utility was a term for
something like the RCA, which regulated public utilities.
He stated that the term electricity generation facility was
not in statute, which he considered to be the Southeast
component to the Railbelt bill that had a place and a role.
He thought including the amendment in the bill may need to
be flushed out a bit more, like a definition section in the
bill that would precisely define an electricity generation
facility. He felt it had its place and should be considered
in a bill setting a structure in place for a long period of
time. He was supportive of the amendment. He noted that if
the amendment was included in the bill it would be
considered by the other body and legal counsel would likely
be consulted to do what was needed to strengthen it or in a
worst case scenario, remove it.
Representative Hannan hoped members would support the
amendment.
5:36:39 PM
Representative Coulombe OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Ortiz, Hannan, Cronk, Galvin, Johnson,
Edgmon, Foster
OPPOSED: Coulombe, Tomaszewski, Stapp
The MOTION PASSED (8/3). There being NO OBJECTION,
Amendment 6 was ADOPTED.
Representative Hannan MOVED to ADOPT Amendment 7, 33-
GH2489\A.9 (Walsh, 5/1/24) (copy on file):
Page 1, line 1, following "producers;":
Insert "relating to electric reliability
organizations;" 3
Page 2, following line 7:
Insert a new bill section to read:
"* Sec. 3. AS 42.05.760(a) is amended to read:
(a) An electric utility must participate in an
electric reliability organization if the utility
operates in an interconnected electric energy
transmission network served by an electric reliability
organization certificated by the commission. The
commission may not require an electric reliability
organization for an interconnected bulk-electric
system if (1) all of the load-serving entities
operating in the interconnected bulk-electric system
are exempt under AS 42.05.711 (b); or {2) the sum of
annual electric energy sales made by load-serving
entities operating in the interconnected bulk-electric
system is less than 3,000,000 megawatt-hours."
Renumber the following bill section accordingly.
Co-Chair Foster OBJECTED for discussion.
Representative Hannan explained the amendment would add a
new section, which would exempt all interconnected bulk
electric systems from the current requirement in statute to
form an ERO as long as the load sharing entity on the
interconnected system had an annual energy sale of less
than 3 million megawatts. She explained that the provision
would ensure that utilities from smaller communities
located outside the Railbelt that were working to become
interconnected would not face the expense of forming the
ERO that the Railbelt ERO was addressed at. She elaborated
that because of the considerably less economies of scale
for non-Railbelt systems, such costs could result in
significant burden to smaller system ratepayers.
Co-Chair Foster asked Mr. Jensen to comment on the
amendment.
5:38:51 PM
Mr. Jensen relayed that the administration was neutral on
Amendment 7. He had seen the proposal and was familiar with
the language. He believed the ERO statute was geared around
the Railbelt. He stated that the amendment did not preclude
utilities from forming an ERO, but utilities would not be
forced to do so.
Representative Stapp was not familiar with the 3 million
megawatt hours. He imagined that power in that amount would
be used by a small community in Southeast Alaska. He asked
for more information.
Mr. Jensen replied that the total load for the Railbelt was
around 4.4 million megawatt hours, while the amount for
AEL&P [in Southeast Alaska] was about 400,000 megawatt
hours. He stated that it would take quite a while before
Southeast utilities or other utilities around the state
would hit the threshold [of 3 million megawatt hours].
Representative Stapp reviewed his understanding of the
amendment. He observed that 400,000 to 3 million [megawatt
hours] seemed like a big change. He asked if there was a
ballpark for the number. He asked what the number would be
if it was possible to magically teleport all of the power
to all of the Southeast communities combined.
Mr. Jensen responded that if there were a number of
utilities with total sales of that size, something like an
ERO may make more sense to ensure the system was run
correctly, especially if there were multiple owners. He
explained that one of the reasons the ERO structure was
created was to force collaboration among utilities that
were connected but not necessarily cooperating with one
another. He believed it was the reason the amendment set
the number at such a high level.
Representative Stapp remarked that the Railbelt was
interconnected. He surmised that the amendment pertained to
things that were not interconnected. He asked if the
amendment would make it possible to carve out each
individual utility and measure their megawatt hours and
exempt them from a Railbelt RTO.
Mr. Jensen answered that multiple utilities were connected
to each other, and their combined sales reached the
threshold [outlined in the amendment]. He asked
Representative Stapp to clarify his question.
Representative Stapp cited the following language in the
amendment: "?the sum of annual electric energy sales made
by load-serving entities operating in the interconnected
bulk-electric system?" He did not interpret the language to
mean combined. He thought in theory the language could mean
individual.
Mr. Jensen clarified that the language specified the sum of
the sales by entities operating in the interconnected bulk
system. He explained it pertained to multiple utilities
combining their annual sales, which was about 4.4 million
megawatt hours for the Railbelt. The whole purpose of the
ERO was to take when there were multiple utilities
connected to each other.
Co-Chair Edgmon thought the amendment was outside the scope
of the bill topic. He believed the amendment almost
anticipated all of Southeast Alaska being on a grid. He did
not believe that would happen, especially in the near term.
He thought it would put a prescriptive feature into the
bill, whereas the previous amendment added a good tool for
the utility in Southeast that depended on hydropower. He
stated that the amendment envisioned something that would
not be in place in the near term and was theoretically
possible in the future.
5:44:16 PM
Representative Hannan outlined the concern that had been
brought to her. She stated that when the legislature first
talked about EROs about four years back it had included
multiple utilities connected together. For example, Haines
had one utility, the [nearby] community of Klukwan had a
different utility, and Mosquito Lake (located 20 miles up
the road) had yet another utility. She stated the three
utilities were small and were serving people who shopped at
the same grocery stores and attended the same schools. She
explained that the definition of "where they were" did not
really work. The communities hoped there would not be three
separate utilities serving the area in the near future and
that they may get enough generation in one of the utilities
that they would link together an ERO, but they did not need
the full structure of the Railbelt ERO. She explained that
current statute specified that utilities connected together
needed to for an ERO. She stated it was complex and each
utility had its own critical needs. The intent of the
amendment was to apply a threshold that made sure small
entities looking to cooperate together were not scooped
into it. She considered basing the amendment on geography,
but the amount of power drawn together between the
utilities involved was more recommended.
Mr. Jensen answered that if two utilities connected it
could trigger the requirement to form an ERO. He stated
that the administration wanted more utilities to connect to
each other to share load or increase their load. He stated
that on the Railbelt it had been established in statute in
2020 and it had taken a year to write the regulations,
which were about 110 pages. It had taken another year to
apply for certificate to the RCA as an ERO. There was a
requirement that if two utilities did not form an ERO, the
RCA would establish one for the utilities. He noted the
concern heard by Representative Hannan was that two
utilities hooking up could trigger the requirement to form
an ERO. He stated it was a cumbersome and costly process.
He relayed that the legislation had been written to apply
statewide, but it was aimed at the Railbelt. He elaborated
that the state wanted smaller utilities to hook together,
but if it created a burden, it may be a burden to
connecting together. He understood where the concerns
referenced by Representative Hannan were coming from.
5:47:23 PM
Representative Stapp thought if the amendment passed it
could incentivize the Railbelt utilities to potentially
kick someone out to avoid the requirement to form an ERO.
He thought they may kick GVEA out.
Mr. Jensen answered that the scenario would still require
leave three utilities connected and would require them to
be within an ERO.
Representative Stapp opposed the amendment. He stated that
his utility [GVEA] would like to be in an ERO and would not
like to be kicked out of the Railbelt.
Representative Hannan provided wrap up. She urged committee
members to consider that the current statute on EROs
required two or more utilities that were connected to form
an ERO. She stressed there were a lot of small utilities
and communities close together statewide that the state
likely did not want them to have to form an ERO for
purposes of transmission. She used Bethel and a small
nearby community as an example. She urged members' support.
Co-Chair Foster WITHDREW the OBJECTION.
Representative Stapp OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Hannan, Ortiz, Galvin, Josephson, Foster
OPPOSED: Cronk, Stapp, Coulombe, Tomaszewski, Johnson,
Edgmon
The MOTION to adopt Amendment 7 FAILED (5/6).
[Note: Action on Amendment 7 was later rescinded. Amendment
7 was amended and adopted. See approximately 5:56 p.m. for
details.]
5:49:51 PM
Representative Ortiz MOVED to ADOPT Amendment 8, 33-
GH2489\A.11 (Walsh, 5/1/24) (copy on file):
Page 2, line 7, following "utilities":
Insert "; "independent power producer" does not
include a joint action agency established under AS
42.45.310"
Co-Chair Foster OBJECTED for discussion.
Representative Ortiz explained the amendment. He noted that
the amendment narrowed the focus back to the Railbelt. He
MOVED to ADOPT conceptual Amendment 1 to Amendment 8. He
explained it would delete line one of Amendment 8 because
it was specific to the bill prior to being amended. The
conceptual amendment would insert language on lines two and
three wherever "independent power producer" was defined in
the bill.
There being NO OBJECTION, conceptual Amendment 1 to
Amendment 8 was ADOPTED.
Co-Chair Foster asked for an explanation of the amendment
as amended.
Representative Ortiz highlighted that the intent of the
bill was to not impact utilities outside the Railbelt. He
stated that the definition of the independent power
provider as currently written in the bill would reach
outside the boundary of the Railbelt. He explained that the
Southeast Alaska Power Agency (SEAPA) was a wholesale power
provider that only sold power to municipal utilities. He
relayed that SEAPA was already defined under AS 42.45.300.
The current language of HB 307 would redefine SEAPA as an
independent power provider. He stated it was a problem he
was aiming to correct. The amendment would exempt joint
action agencies from the definition of independent power
producer. He elaborated that the joint action agency
statute, AS 42.45.300 allowed for multiple utilities to
form under a single agency, reducing risk, increasing
reliability, and reducing costs, which was the overall goal
of the bill. He stated that energy legislation should be
intended to reduce cost. He elaborated that redefining a
joint action agency as an independent power producer would
constitute a tax burden on its member utilities and
increase cost, which would go against the goal of the bill
to reduce customer costs in the Railbelt area. The
amendment would ensure that statutes did not conflict with
one another and to avoid any unintended consequences.
Co-Chair Foster asked if members needed a clean amendment
reflecting the passage of the conceptual amendment.
Representative Ortiz explained that the conceptual
amendment deleted line one of Amendment 7 and inserted
language on lines 2 and 3 wherever "independent power
producer" was defined in the bill.
Mr. Jensen stated his understanding of the amendment. He
asked for verification that Representative Ortiz was
stating that without the amendment an existing entity could
have its status changed.
Representative Ortiz agreed.
Mr. Jensen deferred to the committee. The bill covered
future projects so that existing relationships were not
interrupted. He added that the goal was to avoid unintended
consequences. He deferred to the will of the committee. He
added that they did not want to retroactively change
something.
Co-Chair Foster WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 8 was ADOPTED.
5:56:31 PM
Representative Hannan MOVED to RESCIND action on Amendment
7. She wanted to offer a conceptual amendment to lower the
megawatt threshold.
There being NO OBJECTION, it was so ordered.
Representative Hannan MOVED to ADOPT Amendment 7 (copy on
file) [See 5:37 p.m. for the complete amendment]. She MOVED
conceptual Amendment 1 to Amendment 7. She explained that
the conceptual amendment would replace 3 million megawatt
hours with 1.5 million megawatt hours on line 13 of
Amendment 7.
Co-Chair Foster OBJECTED for discussion.
Co-Chair Edgmon stated his understanding that the purpose
of offering the conceptual amendment was to get enough
votes to pass Amendment 7.
Representative Hannan agreed.
Co-Chair Edgmon was considering whether it was possible. He
requested an "at ease."
5:58:06 PM
AT EASE
5:58:54 PM
RECONVENED
Mr. Jensen recalled a conversation recently about the
topic. He stated there was a regulation with a petition
process for exemption from the requirement to join an ERO.
For example, the process would enable three small
[connected] utilities to ask the RCA whether they had to
join an ERO.
Representative Stapp was not sure about the amendment, and
he would likely still be opposed at present. He noted it
did not mean he would not change his mind with some future
research.
Co-Chair Edgmon thought it was a valuable discussion. He
stated that maybe the committee set the stage for the bill
evolving and it could reach that additional step in the
next ten days or so. His one rub with the bill was that it
did not incorporate rural Alaska. He was not certain he was
able to vote in support of the amendment at present.
Representative Hannan wanted to ensure smaller utilities
outside the Railbelt that became interconnected, which was
a goal, would not face the huge expense of forming an ERO.
She remarked that even though there was a regulatory
bypass, it too was a burden. She noted that one of the
small utilities she referenced earlier was investor owned,
but the others were cooperatives with boards and local
board members. She explained that participating in the RCA
process to exempt themselves was still potentially a large
burden. She stated that the economies of scale outside the
Railbelt could result in a large burden for small utility
ratepayers. She explained that setting a threshold of power
was a solution that small utilities in Southeast Alaska had
requested (to not be covered by the EROs even though they
were striving to connect to each other).
Co-Chair Foster WITHEDREW the OBJECTION.
Representative Stapp OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Hannan, Josephson, Galvin, Ortiz, Edgmon, Foster
OPPOSED: Tomaszewski, Cronk, Stapp, Coulombe, Johnson
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendment 7 was ADOPTED as AMENDED.
Co-Chair Foster stated that he would like to move the bill
from committee. He understood there was some desire to
expedite the bill. He observed that members appeared happy
to move the bill. He requested a motion.
Co-Chair Johnson MOVED to REPORT CSHB 307(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes with permission for Legislative
Legal Services to make technical and conforming changes.
There being NO OBJECTION, it was so ordered.
CSHB 307(FIN) was REPORTED out of committee with five "do
pass" recommendations, four "no recommendation"
recommendations, and one "amend" recommendation and with
one previously published fiscal impact note: FN2 (CED); and
one previously published zero note: FN1 (CED).
6:04:56 PM
RECESSED
6:48:09 PM
RECONVENED
Co-Chair Foster recognized individuals in the room. He
relayed that there were five more bills on the calendar
that evening. He suggested the one bill scheduled the
following day could be added to the calendar and the
meeting the following day could be canceled. He continued
to discuss the plan for the evening. The committee would
begin with SB 74 and SB 75 sponsored by Senator David
Wilson. He noted the bills were similar in nature and would
be heard simultaneously.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 307 Amendments 1 - 8 050324 (2).pdf |
HFIN 5/3/2024 1:30:00 PM |
HB 307 |
| SB 118 Sponsor Statement.pdf |
HFIN 5/3/2024 1:30:00 PM |
SB 118 |
| SB 118 cs Summary of Changes.pdf |
HFIN 5/3/2024 1:30:00 PM |
SB 118 |
| SB118 Sectional.pdf |
HFIN 5/3/2024 1:30:00 PM |
SB 118 |
| SB 187 HCS FIN Amendment Pkt 1-14 050324.pdf |
HFIN 5/3/2024 1:30:00 PM |
SB 187 |
| HB307 Amendment 3 Backup 050324.pdf |
HFIN 5/3/2024 1:30:00 PM |
HB 307 |
| HB 232 Public Testimony Rec'd by 050324.pdf |
HFIN 5/3/2024 1:30:00 PM |
HB 232 |