Legislature(2015 - 2016)CAPITOL 17
04/05/2016 05:00 PM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB363 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 187 | TELECONFERENCED | |
| *+ | HB 363 | TELECONFERENCED | |
HB 363-EXTEND EXEMPTION FOR SMALL POWER PLANTS
5:19:29 PM
CO-CHAIR VAZQUEZ announced that the first order of business
would be HOUSE BILL NO. 363, "An Act extending the exemption
from regulation by the Regulatory Commission of Alaska for
certain facilities or plants generating energy from renewable
energy resources."
[CO-CHAIR VAZQUEZ passed the gavel to Co-Chair Colver.]
5:20:43 PM
MATT DEAN, staff to Representative Vazquez, sponsor, informed
the committee HB 363 extends the sunset date of AS 42.05.7119(r)
to January 1, 2025. The purpose of the bill is to encourage the
continued exploration of renewable resources, private investment
into the use of renewable resources to produce power, and to
lower the barrier costs of entry into power production. In
order to qualify for the exemption, interested parties must
produce power from renewable resources, produce 65 megawatts or
less per year, sell power to utilities regulated by the
Regulatory Commission of Alaska (RCA), and must not have
received a grant or tax credit that supports the use of
renewable resources. The bill has received support from the
renewable energy sector, and the bill has a zero fiscal note.
CO-CHAIR VAZQUEZ stated her support for the bill which
encourages renewable energy production.
CO-CHAIR COLVER opened public testimony on HB 363.
5:23:46 PM
DUFF MITCHELL, Executive Director, Alaska Independent Power
Producers Association (AIPPA), stated AIPPA fully supports HB
363 as an extension of 2010 legislation which resulted in
increased development by small, independent power producers
(IPPs). He noted that permitting for hydropower takes as long
as ten years, as do wind and solar regimes. Alaska is the only
state that regulates power producers under 80 megawatts, thus
the bill simply extends the sunset of the previous legislation,
and he urged for the committee's support.
CO-CHAIR COLVER asked whether there is a project underway.
MR. MITCHELL said yes.
CO-CHAIR VAZQUEZ questioned whether the bill is consistent with
federal statute.
5:25:50 PM
MR. MITCHELL said yes, and added that prior to the existing
exemption, Fishhook Renewable Energy spent thousands of dollars
on regulation.
5:26:08 PM
ETHAN SCHUTT, Senior Vice President, Land and Energy
Development, Cook Inlet Region, Inc. (CIRI) said he is also the
president of CIRI's wholly-owned subsidiary, Fire Island Wind.
Mr. Schutt expressed CIRI's support for HB 363, noting that the
legislation makes common sense, encourages private investment in
small- or modest-sized renewable power projects in Alaska,
benefits the public, and does not burden the state government,
but simply provides a more certain path for project developers
related to regulation.
5:27:50 PM
KEITH COMSTOCK said he is President/CEO of Juneau Hydropower
Inc., (JHI) which is a private hydropower developer based in
Juneau. His company is committed to the IPP model, where
private capital and industry are used to develop energy projects
such as the Sweetheart Lake Hydroelectric Project and the Juneau
District Energy System project. Sweetheart Lake Hydroelectric
Project (Sweetheart Lake) was begun in 2009, and final permits
and licenses are expected this summer, with construction to
begin this fall. Mr. Comstock stated that JHI would benefit
from the bill, and the legislation is also important to future
projects by lowering risk and encouraging outside investors.
Along with clarification on regulations from RCA, the bill
should encourage needed economic investment.
CO-CHAIR COLVER asked about the financing for the project.
MR. COMSTOCK responded that during the regulatory process the
project has been privately funded. After receiving a license
from the Federal Energy Regulatory Commission (FERC) and
permits, financing will be a combination of equity investment
and loans. Proposed HB 143 would enable the Alaska Industrial
Development and Export Authority (AIDEA), Department of
Commerce, Community & Economic Development, to consider bonding
for the project, and the rest is possible with good credit and a
20 percent down payment. In further response to Co-Chair
Colver, Mr. Comstock said the project is about six miles from
state-owned AIDEA transmission line facilities, thus six miles
of overland and underwater new transmission is needed. In
further response, he explained Sweetheart Lake is a storage
project which involves raising a five and one-half mile-long
lake by one hundred feet, unlike many hydroelectric projects in
Alaska that have high levels of power in the summer and problems
with production in the winter. The project was first identified
in 1906 for its hydropower potential; in 1975, the federal
government decided to build the larger Snettisham Hydroelectric
Project, and now market conditions are right for Sweetheart
Lake. The project will store a lot of water and will run at
level operations to produce the same amount of power summer and
winter.
5:33:56 PM
CO-CHAIR COLVER asked whether the project will supply power to
the Kensington Gold Mine and to the proposed heat loop in
Juneau.
MR. COMSTOCK explained that about 60 percent of the project's
output will supply the Kensington Gold Mine and the balance of
power will go to the Juneau District Energy System project. In
further response to Co-Chair Colver, he said the District Energy
System project is being developed by a subsidiary and will be
the first seawater heat pump in North America or South America;
there are several in Europe and projects are underway in Norway
and Scotland, but "we'll be the third in the world who basically
will heat a town with seawater." In further response to Co-
Chair Colver, Mr. Comstock said the intent is to bring the two
projects online concurrently. The technology was developed by
Emerson and its subsidiary Vilter, and a seawater heat pump runs
like a refrigerator on an industrial scale. Advances in
refrigerant technology and metallurgy now allow higher pressures
and higher heat. Previous seawater installations have used a
low-heat system which has little value in retrofitting
buildings, however, the new technology allows for conversions in
existing facilities at a low cost. He described the design of
the boiler, and urged the committee to visit a similar power
system at the Ted Stevens Marine Research Institute Laboratory.
CO-CHAIR COLVER inquired as to the billing system.
MR. COMSTOCK said the systems are metered by British thermal
units (Btus) in a manner similar to that of oil or electric
metered systems. In further response to Co-Chair Colver, he
responded that the heat loop works well in Juneau because there
is a densely-compacted customer base which makes a cost-
effective and ideal central loop of approximately two miles.
Experts have recommended a focus on the downtown area, with
possible expansion to West Juneau and Douglas, but not as far as
Bartlett Regional Hospital.
5:43:06 PM
CO-CHAIR VAZQUEZ asked for the projected timeframe to supply
power to the Kensington Gold Mine.
MR. COMSTOCK estimated 2018, assuming the receipt of federal
permits and mild weather. In further response to Co-Chair
Vazquez, he advised that the power will replace diesel fuel at
the mine and in Juneau, as 78 percent of Juneau homes are heated
with diesel fuel.
5:44:51 PM
CO-CHAIR COLVER after ascertaining no one further wished to
testify on HB 363, closed public testimony.
REPRESENTATIVE WOOL observed that the maximum generation of 65
megawatts is more than that generated by any plant in Fairbanks,
and seems like a large production facility to not be regulated.
MR. DEAN answered that 65 megawatts was a compromise made in the
legislation passed in 2010; under federal standards, any power
plant generating under 80 megawatts is not regulated.
MR. MITCHELL added that the bill is an extension of the sunset
to existing legislation. He restated that the regulatory
process is expensive, and it is unlikely that future IPP power
plants would be that large, however, the state is "more
restrictive than what the federal government is."
REPRESENTATIVE WOOL surmised that in the Lower 48 there are many
large power plants; Healy [Unit 2] plant is 50 megawatts, and in
Alaska, 65 megawatts is a big power plant.
REPRESENTATIVE TALERICO reminded the committee the bill relates
to power generated by renewable energy resources and does not
affect power plants utilizing coal, gas, or oil. He observed
that the state - but not the federal government - considers
hydroelectric power as a renewable source of energy.
MR. MITCHELL agreed.
REPRESENTATIVE NAGEAK expressed his support for the bill.
5:49:59 PM
REPRESENTATIVE TALERICO moved to report HB 363 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 363 was reported out of the
House Special Committee on Energy.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB363 Sponsor Statement.pdf |
HENE 4/5/2016 5:00:00 PM |
HB 363 |
| HB363 ver A.PDF |
HENE 4/5/2016 5:00:00 PM |
HB 363 |
| HB363 Supporting Documents-Letter CIRI 3-4-2016.pdf |
HENE 4/5/2016 5:00:00 PM |
HB 363 |
| HB363 Supporting Documents-Letter AIPPA 3-4-2016.pdf |
HENE 4/5/2016 5:00:00 PM |
HB 363 |
| HB363 Supporting Documents-Letter APA 3-4-2016.pdf |
HENE 4/5/2016 5:00:00 PM |
HB 363 |
| HB363 Supporting Documents-Letter Juneau Hydropower 4-4-16.pdf |
HENE 4/5/2016 5:00:00 PM |
HB 363 |
| HB363 Fiscal Note-DCCED-RCA-04-01-16.pdf |
HENE 4/5/2016 5:00:00 PM |
HB 363 |
| HB363 Supporting Documents-Letter FRE 4-4-16.PDF |
HENE 4/5/2016 5:00:00 PM |
HB 363 |