Legislature(2015 - 2016)CAPITOL 17
02/03/2015 10:15 AM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Institute of the North | |
| HJR8 | |
| Presentation: Institute of the North - Conclusion | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HJR 8 | TELECONFERENCED | |
HJR 8-FEDS ALLOW STATE TO MAKE ENERGY CHOICES
11:02:04 AM
CO-CHAIR COLVER announced that the next order of business would
be HOUSE JOINT RESOLUTION NO. 8, Urging the federal government
to empower the state to protect the state's access to affordable
and reliable electrical generation.
11:03:19 AM
JOSHUA BANKS, Staff, Representative Dave Talerico, Alaska State
Legislature, introduced HJR 8 on behalf of Representative
Talerico, sponsor. Mr. Banks explained that the U.S.
Environmental Protection Agency (EPA) Clean Power Plan applies
to all fossil fuel power plant generation - including coal, gas,
oil, and naphtha - by plants that produce power in excess of 25
megawatts (MW), with the exception of power plants at military
bases in Alaska and at the University of Alaska (UA). Although
well-intentioned, the plan would likely lead to much higher
electricity costs as indicated by a study [entitled, "Energy
Market Impacts of Recent Federal Regulations on the Electric
Power Sector," and dated 11/14] provided within the committee
packet. He said the study states that nationwide there could be
an increase in electrical costs as high as 37 percent. The
Clean Power Plan is based on inaccurate assumptions; for
instance, that the largest source of carbon emissions in Alaska
is from power plants. In fact, power plants in Alaska account
for about 25 percent of carbon emissions. The remaining 75
percent of stationary source carbon in Alaska is from operations
on the North Slope. Another assumption is that lower cost
natural gas and renewable energy sources are available; however,
in the near-term these sources are not available in the
Interior. In fact, even if natural gas were available in
Fairbanks, the current projected cost is $20.00 per million Btu
(MMBTU). The final purpose of HJR 8 would be to protect
Alaska's sovereignty. The Tenth Amendment to the U.S.
Constitution states: "The powers not delegated to the United
States by the Constitution, nor prohibited by it to the States,
are reserved to the States respectively, or to the people." Mr.
Bates opined the powers of Congress or the executive branch do
not include the power to regulate carbon emissions in America.
Therefore, this is the states' responsibility. He expressed his
belief that the State of Alaska has the means to make effective
decisions to deal with the problems of climate change, and to do
so without hurting Alaskans. The resolution urges the federal
government to leave decisions in regulating energy production at
the state and local level in order to protect access to
affordable and reliable electrical generation. Mr. Banks said
he expected some changes would be made to HJR 8 as it was
currently written.
11:07:25 AM
REPRESENTATIVE NAGEAK directed attention to the bill on page 1,
lines 9-10, which read:
WHEREAS the Regulatory Commission of Alaska should be
empowered to make decisions with methodology based on
the lowest production costs for electrical generation;
REPRESENTATIVE NAGEAK asked whether the rationale of the
resolution was to get more coal generation.
11:08:14 AM
REPRESENTATIVE TALERICO was unsure about the intent to generate
more coal-fired power, but the intent was to maintain what is in
production at this time. In the Interior, the most affordable
power is from coal. Although power production is available from
other areas of the state, the "bottleneck" is the lack of
transmission lines at the electrical intertie. He recalled the
committee's previous discussion of "pancake" rate tariffs.
Currently in the Interior, coal-fired power costs 4.9 cents per
kilowatt hour (kWh), and hydroelectric (hydro) power costs 5.8
cents per kWh due to the pancake tariff rates. Representative
Talerico said his concern was for the cost to customers in
Fairbanks which is then passed along to surrounding remote
communities.
REPRESENTATIVE NAGEAK referred to testimony last year that the
cost of power generation in rural Alaska could be reduced by the
use of microgrids to connect nearby communities. He suggested
considering the idea proposed by the Alaska Village Electric
Cooperative, Incorporated (AVEC). He then asked for an
explanation of the benefits of placing a 1.5 percent cap on
electricity rate increases.
REPRESENTATIVE TALERICO said the issue of a cap was being
discussed with state agencies, the Regulatory Commission of
Alaska (RCA), and the utilities. He said he asked the co-chairs
to hold the resolution in order to gather more information and
create a better document; furthermore, various agencies would be
bringing recommendations to the bill sponsors.
REPRESENTATIVE NAGEAK directed attention to page 1, lines 14-15
which read:
WHEREAS utilities, communities, residents, and
commercial entities should be protected from any
attempts to close a coal-fired power plant in the
state; and
REPRESENTATIVE NAGEAK asked for examples of coal-fired plants
that would be closed.
REPRESENTATIVE TALERICO referred to an [unidentified] EPA
document provided in the committee packet, noting it is 300
pages long. His interpretation of the document - and his
primary concern - was that the plan calls for reducing carbon
pollution by focusing on the power producing industry. In
Alaska, most of the carbon produced is not from power plants,
unlike in the Lower 48. Coal power plants are the cheapest
sources of energy in the Interior, and if they become "a target"
the price of energy would rise without an impact on Alaska's
carbon emissions.
11:14:17 AM
MR. BANKS directed attention to page 23 of a study provided in
the committee packet entitled, "Energy Market Impacts of Recent
Federal Regulations on the Electric Power Sector" and dated
11/14. Energy Ventures Analysis estimated a reduction in the
generation of coal from 31 percent in 2012, to 20 percent in
2020, likely requiring the closure of coal-fired plants
throughout the country.
REPRESENTATIVE NAGEAK observed his district has the cleanest-
burning coal in the world and he supports generating power with
coal using the best technology; however, the industry needs to
be proven. Coal-fired plants should not be closed, but improved
for the benefit of the environment and consumers, and the
federal government should help pay.
CO-CHAIR VAZQUEZ informed the committee it would hear an
upcoming presentation regarding microgrids.
11:17:18 AM
CO-CHAIR COLVER opened public testimony on HJR 8. After
ascertaining no one wished to testify, public testimony was left
open.
CO-CHAIR VAZQUEZ stressed the importance of reliable and
affordable energy to the well-being and economic success of the
state.
REPRESENTATIVE WOOL directed attention to the bill on page 2,
line 2, which read:
WHEREAS the loss of other traditional electrical
generation methods may cause natural gas plants to be
overused or used in ways that exceed their engineered
design; and
REPRESENTATIVE WOOL inquired as to whether natural gas is a
traditional method of electrical generation, and if natural gas
plants have been shown to be exceeding their engineered design.
REPRESENTATIVE TALERICO advised that coal-fired generators have
been around in the Interior since before World War II; this
method is a traditional source along with diesel and naphtha.
In the event 25 MW of daily production were shut down in Healy,
and another 20 MW in Fairbanks, it would be difficult - if not
impossible - to energize the grid. He expressed his willingness
to make additions or deletions to the language of the
resolution.
REPRESENTATIVE WOOL asked if the proposed improvements to the
electrical grid would change the priorities of HJR 8.
11:23:30 AM
REPRESENTATIVE TALERICO opined improvements to the grid are
critical to the economy; however, affordability is still
important. The cost of oil and natural gas fluctuates, but the
coal market remains more stable. He stressed the value of many
diversified sources of energy production coming together to
provide stability in energy costs.
REPRESENTATIVE NAGEAK expressed his passion about lowering
energy costs. During the previous legislative session, the
committee discussed biomass, natural gas, coal, hydropower,
tidal, and geothermal sources of energy that are available on a
regional basis; in fact, most regions have different sources on
a local basis, like biomass, run-in-the-river, and coal
generation. He encouraged the committee to focus on developing
resources that are available in each region.
CO-CHAIR VAZQUEZ will request related testimony from the Alaska
Power Association. She urged for research on the use of coal.
11:29:52 AM
HJR 8 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2015-02-03 - HENE - Agenda.pdf |
HENE 2/3/2015 10:15:00 AM |
|
| 2015-02-03 - HENE - Institute of the North Arctic Energy Summit Flyer.pdf |
HENE 2/3/2015 10:15:00 AM |
|
| 2015-02-03 - HENE - Presentation by Institute of the North.pdf |
HENE 2/3/2015 10:15:00 AM |
|
| HJR 8 - Legislation Version A.pdf |
HENE 2/3/2015 10:15:00 AM |
HJR 8 |
| HJR 8 - Sponsor Statement.pdf |
HENE 2/3/2015 10:15:00 AM |
HJR 8 |
| HJR 8 - Supporting Document - Clean Power Plan Fact Sheet.pdf |
HENE 2/3/2015 10:15:00 AM |
HJR 8 |
| HJR 8 - Supporting Document - EPA Clean Power Plan.pdf |
HENE 2/3/2015 10:15:00 AM |
HJR 8 |
| HJR 8 - Supporting Document - EVA-Energy-Market-Impacts-of-Recent-Federal-Regulations-on-the-Electric-Power-Sector.pdf |
HENE 2/3/2015 10:15:00 AM |
HJR 8 |