03/29/2019 01:00 PM House RESOURCES

          HJR 10-SUPPORTING ROAD BELT ELECTRICAL LINE                                                                       
                                                                                                                                
1:09:37 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR announced that the next order of business would be                                                                
HOUSE  JOINT RESOLUTION  NO. 10,  Supporting  development of  the                                                               
road  belt electrical  transmission line;  and urging  members of                                                               
the Alaska  delegation in Congress  to pursue the  development of                                                               
this high- voltage electrical line in the interior of the state.                                                                
                                                                                                                                
[Before the committee  was the committee substitute  (CS) for HJR
(ENE), reported  out of the  House Special Committee  on Energy                                                               
on 3/15/19.]                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO, sponsor of  HJR 10, paraphrased from the                                                               
following   written  sponsor   statement  [original   punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     The Development  of the road belt  electrical inter-tie                                                                    
     transmission   line   would   create   a   high-voltage                                                                    
     electrical  line  running  from Sutton  to  Glennallen,                                                                    
     where  a subtransmission  line would  extend to  Gakona                                                                    
     and  on  to Tok  and  north  through the  upper  Tanana                                                                    
     region  to Delta  Junction, and  the final  leg of  the                                                                    
     project would run from near  Delta Junction, just south                                                                    
     of  Fort  Greely,  back   to  Gakona.  This  resolution                                                                    
     supports  infrastructure  development  for  energy  and                                                                    
     national  security, economic  development, and  natural                                                                    
     resource development in the State  of Alaska. The Trans                                                                    
     Alaska Pipeline (TAPS) would benefit  by using the low-                                                                    
     cost energy  provided by the  transmission line  in the                                                                    
     operation of  the pipeline and  protection of  its off-                                                                    
     grid  pump  stations.  A high-voltage  electrical  line                                                                    
     would complete an electrical  transmission bus loop and                                                                    
     establish  a second  path for  power transmission  from                                                                    
     Anchorage   to  Fairbanks   which   is  needed   during                                                                    
     disasters such as  earthquakes. With the infrastructure                                                                    
     development and  the increase in population  at Eielson                                                                    
     Air  Force  Base,  Fort Greeley  and  Clear  Air  Force                                                                    
     Station,  the  need  for  power   in  the  region  will                                                                    
     increase significantly. This  resolution urges Congress                                                                    
     to   advocate  for   the  security   of  the   nation's                                                                    
     northernmost   military  and   oil  infrastructure   by                                                                    
     pursuing the  development of  the Road  Belt Inter-tie.                                                                    
      This is a project long overdue for Alaska and I ask                                                                       
     for your support for this resolution.                                                                                      
                                                                                                                                
REPRESENTATIVE TALERICO  continued, noting  Alaska is  becoming a                                                               
national  security stronghold  for the  U.S. as  evidenced by  an                                                               
increased military  presence in the state.   He said he  seeks to                                                               
ensure a supply of power to  military and other facilities in the                                                               
Interior of Alaska.                                                                                                             
                                                                                                                                
1:14:40 PM                                                                                                                    
                                                                                                                                
JASON  HOKE,   President,  Board  of  Directors,   Copper  Valley                                                               
Development  Association  (CVDA),   Alaska  Regional  Development                                                               
Organizations,  Division of  Economic Development,  Department of                                                               
Commerce, Community  & Economic Development (DCCED),  and Program                                                               
Director,  Ahtna   Inter-Tribal  Resource   Commission,  directed                                                               
attention  to  a  PowerPoint presentation  entitled,  "Road  Belt                                                               
Inter-Tie."  Mr.  Hoke provided a short history of  the Rail Belt                                                               
Inter-Tie (RBIT), beginning  in the late 1980s (slide  2).  Phase                                                               
1 of the  project would transmit 138-245 kilovolts  (kV) of power                                                               
from  Sutton to  Glennallen to  Delta.   Phase  2 would  transmit                                                               
power via a subtransmission line 227  miles from Gakona to Tok to                                                               
Delta.   Mr. Hoke noted  the lines could utilize  existing rights                                                               
of way  as there are  already distribution powerlines  running in                                                               
the  area  with  the  exception  of  100  miles.    He  explained                                                               
completion of a "bus loop"  of transmission lines around the road                                                               
system of  Interior Alaska is  necessary to create  redundancy in                                                               
the  event  of  an  earthquake,  an  avalanche,  or  other  power                                                               
emergency.   The  project would  electrify  an area  the size  of                                                               
Montana (slide 3).   Slide 4 illustrated two maps  of the current                                                               
concept,  one of  which  showed the  project  and connections  to                                                               
renewable  energy   resources  and  potential   natural  resource                                                               
development  opportunities.   A  smaller map  showed the  current                                                               
Railbelt  transmission  line and  phase  1  and  phase 2  of  the                                                               
proposed project.   Mr. Hoke stated the project  has been studied                                                               
and  vetted;  he  provided  a  list  of  local  utilities,  local                                                               
governments, state  agencies, and  Tribal organizations  that are                                                               
in strong support of the project (slide 5).                                                                                     
                                                                                                                                
1:19:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN asked  for a description of  the sources of                                                               
current power  generation, and levels  of production,  within the                                                               
affected area.                                                                                                                  
                                                                                                                                
MR.  HOKE  explained the  existing  power  generation sources  of                                                               
power  beyond Sutton  are primarily  diesel-generated microgrids.                                                               
Slide 6 listed  additional support and resolutions  in support of                                                               
the  project; he  described  how contacts  were  made with  local                                                               
communities.  Slide  7 listed how current costs  of power inhibit                                                               
development;  for example,  electrical  microgrids are  expensive                                                               
and  consume approximately  four million  gallons of  diesel fuel                                                               
per year.   Further,  the Power  Cost Equalization  (PCE) program                                                               
does not  cover commercial or  state and federal  facilities; the                                                               
University  of  Alaska  Fairbanks   power  plant  consumes  6,000                                                               
gallons of diesel fuel per hour.                                                                                                
                                                                                                                                
MR. HOKE  turned to  the topic of  economic and  natural resource                                                               
development; he  said cheaper  electrical power  expands business                                                               
retention  and  expansion and  he  provided  several examples  of                                                               
proposed   manufacturing,  mining,   agricultural,  and   tourism                                                               
opportunities  currently prohibited  by the  cost of  electricity                                                               
(slide  8).    Because  energy  is  national  security,  military                                                               
benefits  include power  to Alaska  military bases  and stations,                                                               
redundancy  and  reliable  energy,  reduced  costs,  support  for                                                               
growth  in   defense  installations,  and  compliance   with  the                                                               
military guideline of 25 percent  renewable power (slide 9).  Mr.                                                               
Hoke  opined   energy,  transportation,  and   communication  are                                                               
necessary for  infrastructure and  Alaska's road  system supplies                                                               
transportation and  communication, however, lower cost  energy is                                                               
lacking:  new industry and  economic development mean new revenue                                                               
for the state; the legislature  is the Interior's governing body;                                                               
residents must  choose between buying groceries  and paying their                                                               
electric bill;  residents must choose  between living at  home or                                                               
moving to cities (slide 10).   To advance the project, $2 million                                                               
is needed  from the legislature  for a  reconnaissance engineer's                                                               
study/report,  after  which the  project  would  be submitted  to                                                               
state and federal agencies for funding (slide 11).                                                                              
                                                                                                                                
1:32:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN questioned  whether the  project would  be                                                               
completely funded with  federal funds and if  the U.S. Department                                                               
of Defense is "on board with this conceptually ...."                                                                            
                                                                                                                                
MR.  HOKE  stated the  majority  of  funding  may come  from  the                                                               
federal government; he  referred to a letter to  U.S. Senator Dan                                                               
Sullivan included  in the committee  packet.  In  addition, there                                                               
is interest from the Rural  Utilities Service, Rural Development,                                                               
U.S. Department  of Agriculture,  the U.S. Department  of Energy,                                                               
and the U.S. Department of Commerce.                                                                                            
                                                                                                                                
REPRESENTATIVE  HANNAN  surmised  Sutton is  the  starting  point                                                               
because the existing transmission lines end there.                                                                              
                                                                                                                                
MR. HOKE  affirmed the transmission line  from Matanuska Electric                                                               
Association,  Inc.  (MEA)  ends  in   Sutton.    In  response  to                                                               
Representative  Rauscher, he  said the  reconnaissance engineer's                                                               
study/report  would  define the  location  of  the start  of  the                                                               
transmission line.                                                                                                              
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  questioned whether the next  step is to                                                               
obtain funding for the project subsequent to passage of HJR 10.                                                                 
                                                                                                                                
MR. HOKE advised  he is working to obtain $2  million in state or                                                               
federal funding  for the reconnaissance  engineer's study/report;                                                               
in fact,  HJR 10 would  remind Alaska's  congressional delegation                                                               
and federal  agencies that  most of the  Lower 48  has benefitted                                                               
from years of  federal funding for infrastructure  prior to 1959.                                                               
In further response  to Representative Spohnholz, he  said he has                                                               
met with Alaska's congressional delegation.                                                                                     
                                                                                                                                
1:39:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  asked whether  there is  any opposition                                                               
to the project from affected communities.                                                                                       
                                                                                                                                
MR. HOKE acknowledged  there has been some  opposition to details                                                               
of the  project; for  example, residents  of Sutton  would prefer                                                               
the underground  installation of  transmission lines.   He opined                                                               
these are mitigating issues and not opposition to the project.                                                                  
                                                                                                                                
REPRESENTATIVE  RAUSCHER  confirmed  Sutton  residents  want  the                                                               
transmission  line installed  underground following  the existing                                                               
line; he stated his support for HJR 10.                                                                                         
                                                                                                                                
1:43:16 PM                                                                                                                    
                                                                                                                                
JOHN  DUHAMEL, Chief  Executive Officer,  Copper Valley  Electric                                                               
Association, provided  a PowerPoint presentation  entitled, "Road                                                               
Belt Intertie  (RBIT) Concept."   He said the Road  Belt Intertie                                                               
(RBIT) would benefit  the power utilities and  the isolated power                                                               
grids  along  the  Richardson Highway.    Mr.  Duhamel  explained                                                               
moving electricity  includes distribution power  and transmission                                                               
power.     Distribution  power  are   lower  voltages   moved  to                                                               
residential, commercial, and industrial  customers and managed by                                                               
a  power utility.   Transmission  and sub-transmission  power are                                                               
high voltages moved between communities  and managed by utilities                                                               
or the state.  The proposed project is a transmission and sub-                                                                  
transmission  project that  would be  managed by  the state.   He                                                               
stressed  transmission,   similar  to  airports  and   roads,  is                                                               
infrastructure (slide 2).                                                                                                       
                                                                                                                                
MR. DUHAMEL continued  to slide 3 - which was  an illustration of                                                               
an  electric  power  system overview  -  and  described  expenses                                                               
associated with  high voltage transmission.   Slide 4  listed the                                                               
power  principles  of  a  grid,  which  is  a  system  of  wires,                                                               
structures and substations:  a  bigger grid is more resilient and                                                               
can   absorb  interruptions   caused   by  a   falling  tree   or                                                               
fluctuations  from  renewable energy  sources  such  as wind  and                                                               
solar; a grid  set in a loop  can move power in  any direction; a                                                               
bigger grid  is economical  for all users.   Mr.  Duhamel advised                                                               
RBIT is  not a new concept  and was studied by  the Alaska Energy                                                               
Policy Task Force  in 2003 (slide 5).   Slide 6 was a  map of the                                                               
region that  would benefit from  RBIT.  Currently, the  region is                                                               
supplied by isolated grids, or  there is no power; most available                                                               
power is produced by fossil fuel.                                                                                               
                                                                                                                                
1:50:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN asked whether  any of the existing isolated                                                               
grids produce excess power.                                                                                                     
                                                                                                                                
MR.  DUHAMEL said  some  produce  surplus power,  but  it is  not                                                               
cheap;  for example,  Copper Valley  Electric Association  (CVEA)                                                               
has  additional  capacity  generated  by  diesel,  and  a  slight                                                               
overage of  hydropower in the summer.   If RBIT were  built, CVEA                                                               
could  provide  hydropower  to  more  customers  and  could  also                                                               
connect with excess power generated by natural gas.                                                                             
                                                                                                                                
REPRESENTATIVE  HANNAN questioned  whether Chickaloon  Wind, Five                                                               
Mile Hydro, Chitina Wind, and  Gulkana Pellet Mill were currently                                                               
producing power.                                                                                                                
                                                                                                                                
MR. DUHAMEL  expressed his understanding they  are isolated grids                                                               
that are  producing power.   He then  summarized RBIT  key points                                                               
from the  power utility point of  view (slide 7):   a larger grid                                                               
is better for all; capacity  available to more customers; connect                                                               
isolated  grids;  improved   reliability;  allow  more  renewable                                                               
energy  and other  sources  of energy;  provide  more choice  for                                                               
customers.    Mr.  Duhamel  stated  the  power  utility  industry                                                               
supports HJR 10 for the  following reasons:  gives credibility to                                                               
RBIT; informs  Alaska's congressional delegation and  the federal                                                               
government;  allows   more  renewable  opportunity;   supports  a                                                               
request  for  federal  funds;  revitalizes  RBIT;  seeks  federal                                                               
infrastructure funds.  He concluded  there is renewed interest in                                                               
RBIT  because   federal  money  for  infrastructure   may  become                                                               
available.                                                                                                                      
                                                                                                                                
1:56:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN asked  whether transmission  lines can  be                                                               
buried.                                                                                                                         
                                                                                                                                
MR.  DUHAMEL  advised  there  are  many  methods  that  would  be                                                               
studied; however, in Alaska, power  utilities prefer above ground                                                               
lines  because  of  permafrost   and  winter  maintenance.    The                                                               
technology to bury  transmission lines is available  and has been                                                               
used in the Lower 48.                                                                                                           
                                                                                                                                
CO-CHAIR  TARR referred  to forthcoming  changes to  the existing                                                               
Railbelt grid  and asked whether  RBIT and the Railbelt  would be                                                               
integrated  into "a  statewide plan"  or whether  the grid  would                                                               
thereby become too big to maximize efficiencies.                                                                                
                                                                                                                                
MR.  DUHAMEL restated  a bigger  grid is  better; however,  it is                                                               
necessary  to have  an entity  managing the  power to  obtain the                                                               
lowest cost and he gave an example.                                                                                             
                                                                                                                                
CO-CHAIR  TARR  asked  if there  are  geographic  limitations  to                                                               
transmitting power.                                                                                                             
                                                                                                                                
MR.  DUHAMEL acknowledged  a  very large  grid  has minimal  line                                                               
loss.    Further,  the  volume  of  kilowatt  hour  use  is  more                                                               
important  than the  number  of customers  to  affect economy  of                                                               
scale.                                                                                                                          
                                                                                                                                
REPRESENTATIVE   SPOHNHOLZ  asked   for   clarification  of   the                                                               
project's connection to the Railbelt system.                                                                                    
                                                                                                                                
MR. DUHAMEL  further explained  the Railbelt  loop would  be from                                                               
Delta  to Fairbanks  to Palmer  to  Sutton; the  RBIT loop  would                                                               
continue from Sutton back to Delta.                                                                                             
                                                                                                                                
2:06:29 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR opened public testimony on HJR 10.                                                                                
                                                                                                                                
2:06:37 PM                                                                                                                    
                                                                                                                                
CRYSTAL  ENKVIST, Executive  Director,  Alaska Power  Association                                                               
(APA),  informed  the committee  APA  is  the statewide  electric                                                               
utility trade  association.  She  expressed APA's  strong support                                                               
for an  electric transmission  infrastructure.   The transmission                                                               
line project  proposed by the Copper  Valley Electric Association                                                               
and others  would connect to  the Railbelt transmission  grid and                                                               
would increase  Alaska's electric  system reliability,  allow for                                                               
the  integration  of  sources of  renewable  energy,  provide  an                                                               
alternate route  for power, and create  economic opportunities in                                                               
the greater Copper Valley region.   Ms. Enkvist said APA supports                                                               
RBIT and analysis of transmission infrastructure options.                                                                       
                                                                                                                                
2:08:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR,  after  ascertaining  no one  further  wished  to                                                               
testify, closed public testimony.                                                                                               
                                                                                                                                
HJR 10 was held over.