Legislature(2023 - 2024)BELTZ 105 (TSBldg)
04/05/2024 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB115 | |
| SB135 | |
| SB257 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 115 | TELECONFERENCED | |
| += | SB 135 | TELECONFERENCED | |
| += | SB 257 | TELECONFERENCED | |
SB 257-ELECTRIC UTILITY REGULATION
[Contains discussion of SB 117 and SB 123]
2:41:35 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 257 "An Act relating to the
Regulatory Commission of Alaska; relating to public utilities;
relating to electric reliability organizations; relating to the
Alaska Energy Authority; relating to the Rail belt Transmission
Organization; and providing for an effective date."
2:41:58 PM
SENATOR CATHY GIESSEL, District E, Alaska State Legislature,
Juneau, Alaska, Sponsor of SB 257; gave a brief overview of SB
257. She said SB 257 creates a unified transmission system with
the goal of expediting the lowest cost energy access and
movement. It creates a Rail belt Transmission Organization
(RTO), which will work in collaboration with the Rail belt
Reliability Council. They will manage transmission, planning,
possibly construction of transmission in the future and applying
for grants to fund and upgrade Alaska's transmission system.
They will work under the Regulatory Commission of Alaska (RCA)
oversight related to tariffs.
2:42:42 PM
CHAIR BJORKMAN announced invited testimony for SB 257.
2:43:00 PM
JENNIFER MILLER, CEO/Manager, Renewable Independent Power
Producers, Anchorage, Alaska, introduced herself and said
Renewable Independent Power Producers (RIPP) develops, builds
and operates utility-scale solar farms in Alaska, for example
the Willow and Houston Solar Farm projects. She said RIPP's
mission is to diversify Alaska's energy generation mix and to
suppress energy prices for Alaskans through cost-competitive
renewable energy projects.
MS. MILLER said she was speaking as an Independent Power
Producer (IPP) and that she recently had the honor of serving on
the Governor's Energy Security Task Force and was the co-chair
for the railbelt subcommittee. She described the Task Force as
diverse, yet with significant areas of agreement. She said they
were able to align and define a common goal: Alaska's future
energy would be more reliable, more diverse and more affordable.
She said SB 257 is the enabler for that long-term future.
2:44:54 PM
MS. MILLER described the current energy transmission system. She
said there is a diverse group of owners such as the Homer
Electric Association, Alaska Energy Authority, Chugach Electric
Association, Matanuska Electric Association, etc. The system is
broken up and regionally managed by those owners which creates
inefficient oversight. She said SB 257 forms the Rail belt
Transmission Organization (RTO), which will create a common
unifying oversight structure, allowing wholistic management of
the grid and will facilitate the reliable, diverse and
affordable future envisioned by the Task Force. The goal is to
move energy from wherever it is most efficiently generated to
the user base. Wholistic management will open opportunities to
apply for and leverage federal grant money to upgrade
infrastructure, improving energy access for all.
MS. MILLER said SB 257 would also eliminate wheeling charges.
She explained that wheeling charges are fees paid to move energy
from one management area to another. She said the fees are
sometimes called "pancake" wheeling charges, [because they stack
up, like pancakes] charging each time energy is moved through.
These charges drive up the energy cost and create uncertainty
when developing new projects because the rates and cost base are
difficult to forecast.
MS. MILLER mentioned SB 217 which also eliminates wheeling
charges and equalizes the tax treatment for IPPs with utilities.
She expressed her support for both SB 257 and SB 217 and her
hope they would pass quickly.
2:48:10 PM
CHAIR BJORKMAN asked whether policies under consideration in SB
257 and SB 217 add or subtract barriers for the permitting and
process to start a new renewable energy project. He asked
whether the bills get rid of red tape or add more steps to the
process for IPPs.
2:48:38 PM
MS. MILLER said the current project approval process for IPPs
that would tie into the transmission [grid] is facilitated
through the Electric Reliability Organization (ERO). The project
approval step is part of the integrated resource planning
process. SB 257 would move that approval and planning under the
RTO. That approval step should only be in one place, the ERO or
the RTO and because that step is related to energy generation,
there would only be one project approval required. She clarified
that it would not be an additional step, but would remain a
single step.
2:49:38 PM
CHAIR BJORKMAN asked whether Ms. Miller had a preference for
where that planning step would be [with the ERO or the RTO].
2:49:47 PM
MS. MILLER said the ERO has had a slow start. She said there is
a diverse stakeholder set and that diversity sometimes requires
more time to iron out processes. She said the ERO is hiring a
CEO to facilitate efficiency. She opined the integrated resource
planning process should remain with the ERO and transmission
planning should be with the RTO. She said her organization does
both planning and execution [of projects] which allows
efficiency; so, if the RTO is constructing transmission
upgrades, she advocated for keeping the planning work with the
RTO as well, because planning is tightly tied to financing. She
said, especially when pursuing federal grants, it makes sense
for the transmission planning to stay with the RTO. She proposed
that, because the ERO has already done so much legwork, allow
them to continue with the generation planning and keep the
integrated resource planning with the ERO.
2:51:08 PM
CHAIR BJORKMAN asked what the expected timeline is for the ERO
to create an integrated resource plan. He noted that it had been
four years since the group was created and opined that was a
long time.
2:51:31 PM
MS. MILLER said she was not part of the ERO group and is only
familiar with it on the periphery. She deferred the question to
the ERO and observed that there was a lesson to be learned from
SB 123 and timelines. She advocated for firm timelines and
accountability. She suggested adding a timeline to SB 257,
specifying a date for forming the RTO and eliminating
transmission wheeling charges. She offered to follow up with a
firm date for the integrated resource plan.
2:52:46 PM
TONY M. IZZO, CEO, Matanuska Electric Association, Palmer,
Alaska said he brings 40 years of experience in the energy
industry with the last eight years as the CEO of the Matanuska
Electric Association. He said he strongly supports SB 257. He
said he co-chaired the rail belt subcommittee of the Governor's
Energy Security Task Force with Ms. Miller. The Task Force was
formed to develop a statewide comprehensive energy plan that
would evaluate energy generation, distribution and transmission
for the many communities of the State of Alaska. He said the
duty and responsibility of the task force was to identify
solutions for meeting Alaska's energy needs now and for the
future with a focus on affordability, reliability and energy
security. He said at the very first meeting of the task force,
the governor described a goal of achieving $.10 per kilowatt
hour by the year 2030, a moonshot goal the task force took
seriously. He said after dozens of meetings, including public
meetings, presentations and considerable discussion by the task
force, they concluded lower rates were not achievable in the
near term, especially not with the Cook Inlet natural gas
situation. They chose to focus on building a foundation for the
future of Alaska to achieve lower energy costs and facilitate
economic development. He said the task force unanimously came
together around three goals. He said the third goal was to "grow
the load" and he explained growing the load spreads the cost
across more consumers. The second goal was to diversify fuel
supply, specifically for energy security purposes, especially
away from natural gas in Southcentral Alaska. He said the task
force was charged with review and recommendation of a Renewable
Portfolio Standard (RPS) versus a Clean Energy Standard (CES).
He said the task force learned that cooperatives are not subject
to penalties because they are passed directly to consumers, but
investor-owned utilities pass penalties to shareholders rather
than raising rates.
2:56:14 PM
MR. IZZO said the number one goal of the task force was [energy]
transmission unification. He said the task force determined
that, as a foundation for the future, Alaska needs a single
backbone for the transmission of energy. He suggested a single
road from the Kenai Peninsula to Fairbanks as a metaphor to
describe the Railbelt Transmission Organization (RTO). He said
[currently] there are parts of the road that are dirt, parts are
gravel, parts are two-lane highway and it's owned by four
different parties with four different boards and four
communities. He opined the single most important step to take
today, for our future, no matter what kind of [energy source],
whether it is renewable, wind, solar, nuclear, sequestered
carbon from coal, etc., is the formation of the RTO.
2:57:26 PM
MR. IZZO expressed appreciation to the governor and the Senate
Resources Committee for crafting SB 257 and SB 217. He said they
eliminate the wheeling charges or the "toll" to get energy
through the four different service areas, removing an
obstruction for bringing on alternate sources of power,
especially at the economy of scale that makes it affordable for
75-80 percent of the population across the rail belt. He said SB
217 brings parity to IPPs and their private sector investors. He
said it reduces risk to ratepayers and he said that is good. He
said the downside in SB 217 is the need for clarity in its
language regarding the wheeling charges and the "transmission
association" that was identified.
MR. IZZO said SB 257 clarifies a path forward and fills in
important gaps. He said SB 257 is aligned with the governor's
task force recommendation and with the governor's press release
on SB 217. He expressed support for merging SB 217 and SB 257.
He said SB 257 focuses the scope on a larger public interest,
with the focus on the backbone of energy transmission that is
beneficial to the entire system, not just localized needs. He
said Alaska has grown beyond the current system which is
localized. He compared the energy system to a highway and said
the state's role is to develop infrastructure for the common
good as well as to open up opportunities for economic
development. He said the transmission system and the RTO as
described in SB 257 will accomplish that. He said SB 257 will
eliminate wheeling tariffs, which will work in Alaska and has
been proven to work in other places. He said SB 257 creates a
transmission organization that can own part and operate the
system for the common good and not just localized interests. He
said people have asked whether [forming the RTO] is necessary
and proposed that it be included in the Railroad Reliability
Council (RRC). He pointed out that having the RRC manage
transmission assets would be a direct conflict of interest and
as a CEO that has worked for investor-owned utilities in and
outside Alaska, he said he is keenly aware of the view of
lenders when turning over control of assets that are mortgaged.
He said he would have great difficulty approaching a lender to
say the transmission assets that are managed by fiduciaries and
a board of directors, and a CEO will now be managed by someone
else. He said the qualifications of fiduciaries are very
specific and that specific core competence is not present
throughout the RRC.
3:01:42 PM
MR. IZZO said SB 257, with the RTO, creates a place to put the
new grid assets; it consolidates about one third of the
transmission the state owns along the rail belt and that will
grow to over 50 percent, along with utility transmission assets
that are specific to the backbone. He said SB 257 creates a
structure for decisions to resolve conflicts without legal
action. He noted discussion about using a BP or Bradley Project
management committee-like structure. He said the Bradley Lake
Project Management Committee (BPMC), with 24 years in the rail
belt, is the highest functioning organization that he has seen
with operating costs around $1 million or less per year. He
opined that was because it was managed by the asset owners,
essentially with in-kind labor. He said he was a member of the
BPMC and they do not charge their time to the state. He said
BPMC believes that the project brings benefit to the members, so
he considers his time to be "in-kind." He said there are long-
standing agreement in place to avoid conflicts and pointed out
that over the past 27 years, tens of millions of dollars of
disputes in the past have been over transmission. He said SB 257
would eliminate the possibility of those expensive disputes in
the future. He said SB 257 increases the accountability to
ratepayers versus being an Alaska Energy Authority (AEA)-only,
by creating a management committee like the Bradley Project. He
said regulation is necessary, as identified in SB 257, which was
a task force recommendation. He said SB 257 also allows for
governance of the transmission system which has been proven to
work, ensures accountability and the public is open to
management-committee type meetings and can provide comment
online or in person in that type of structure.
3:04:06 PM
MR. IZZO recommended improvements to SB 257, such as leaving the
integration resource or generation planning process with the
RRC. He acknowledged the frustration with the four years it has
taken to get started but said he would like to give it more
time. He said he would remove from the ERO the transmission,
planning and tariff function. He said that was critical for the
RTO to succeed. He said clarity, intent and rate-recovery
language would be helpful; uploading the backbone, only costs
through the utilities to the end-user is critical. He again
compared the transmission system to a highway and said, if you
drive from point A to point B, that's all you pay for, but with
the transmission system, if you drive any part of the "road,"
you will pay for the whole system. He said the task force
suggests distinguishing the backbone to set up infrastructure
for future development that provides a foundation for a much
better and lower cost energy future; and we have outgrown the
current structure. He said SB 257 would eliminate inequities
between IPPS and utility-based projects and by being regulated
ensures the RCA has a lead role.
3:06:31 PM
MR. IZZO concluded by saying now is clearly a time to send a
signal to investors, developers and federal funders like the
U.S. Department of Energy that Alaska is ready to put skin in
the game and create a transmission system for the future that
will bring in industry and lower rates for all. He said the
current situation is the result of our existing system and
structures and he did not believe anything will improve without
legislative intervention.
3:07:11 PM
MR. IZZO said there is a lot of talk about collaboration in the
rail belt and he commended the true collaboration of the people
who keep the lights on and repair outages, however he thinks
there is more attention focused on insuring a perception of
collaboration. He suggested that if the utilities were investor-
owned there would be a strategic alliance. He said, though the
individual distribution utility would still exist, there would
be a unified message about goals, keeping rates low, providing
infrastructure for new consumers and reliability. He suggested
if there are inconsistent messages coming from utilities that
supported SB 257 and now don't support it, that should be more
of a reason for the legislature to take action.
MR. IZZO said this moment requires bold visionary action,
visionary leadership from elected officials. He said Alaskans
have entrusted the leadership with these decisions. He said this
is a moment in history when [leaders] will be judged, not so
much on what is done as on what is not done.
3:09:02 PM
CHAIR BJORKMAN noted the mention that the scope of knowledge
needed for the ERO board to be effective and their ability to
produce a work product in a timely manner may be lacking. He
also noted the desire to maintain the generation planning with
the ERO and asked whether there should be "side boards" or
guidelines for members of that board or timelines for work
products or limits to the amount of cost-recovery that the ERO
is able to undertake as they hire their own consultants and
duplicate efforts that utilities have already done.
3:09:56 PM
MR. IZZO said it was important to clearly state expectations and
consequences are important when it comes to work performance. He
said the RRC has had an unintentional slow start. He expressed
concern over what could be a $10 million per year organization
to adopt and enforce reliability standards and conduct
integrated resource plans every few years. He said, if costs
reached that level, it would exceed Regulatory Commission of
Alaska (RCA) costs for the entire state. He said he is concerned
about costs and, as a business leader is more focused on value
propositions. He said it was very frustrating to Matanuska
Electric Association (MEA) to experience hard push-back when
they asked the Railroad Reliability Council (RRC) to provide a
report on some relative frequency around their results, because
one of the intents of SB 123, 2020 was high functioning of the
rail belt utilities. He described the RRC as a one-stop shop
with independent voices conducting integrated resource plans as
the right thing for consumers. He explained that it is important
for the RRC to be able and willing to demonstrate and
communicate its results and fulfilling its purpose.
3:12:56 PM
CHAIR BJORKMAN said as the RRC goes forward, issuing reports,
etc., he said it would be important to gauge the cost to
individual ratepayers. He noted there are many line items on a
utility bill and he wondered if MEA includes a line item that
explains the cost of the RRC over the past four years to
ratepayers, for a report that has yet to be produced.
3:13:30 PM
MR. IZZO said the line item has been added as recently as 2023.
He said MEA provided communication to members of the RRC cost
and intent. He urged setting expectations and consequences, but
also advocated allowing RRC adequate time to produce a work
product and he opined that four years is getting pretty close.
He proposed asking the RRC to tell when they could be expected
to adopt reliability standards, explain how the standards will
be enforced, a timeline for enforcement and what the associated
costs are, in other words when there would be an integrated
resource plan. He said the RRC may have determined and
communicated some of those things, but not yet the most
important aspects. He said that, in business, if a product isn't
meeting expectations, the business must determine what revisions
are necessary to deliver the expected product.
3:15:06 PM
CHAIR BJORKMAN referred to the Bradley Project Management Group
(BPMG) and asked what elements of the RTO as described by SB 257
and SB 217 differ from the BPMG
3:15:37 PM
MR. IZZO said the development of the RTO in SB 217 is very
unclear. He said it was not aligned with the recommendations of
the task force, and he did not think it was aligned with the
governor's press release. He said there was a lot yet to flesh
out and regulations would have to follow approved legislation.
He said the intent of the task force was that the RTO would be
similar to the Bradley Project Management Group in structure. He
described that structure, explaining that the co-ops which take
power from Bradley are the governance body along with the Alaska
Energy Authority, which is the owner of the generation asset. He
compared that with the RTO and said the intent was that the AEA
would be the owner of much of the transmission infrastructure.
He described parts of the transmission system and how they
currently connect to one another. He said the state owns parts
of the system now and will own any assets built by the Grid
Resilience and Innovation Partnerships Program (GRIP) funding,
which are anticipated at first to be the High Voltage Direct
Current (HVDC) line from somewhere on the Kenai Peninsula and
the Homer system over to Southcentral Alaska. He said the
application had also been made to extend the line to Healy which
is needed to double-circuit. He said the RTO would be made up of
the state and the asset owners and would have very structured
voting rights, public meetings and public input and the state
would have final veto rights.
3:19:10 PM
CHAIR BJORKMAN asked whether Mr. Izzo would support language in
SB 257 to protect utilities if they become disconnected from the
rest of the grid or "islanded". He further asked what could be
done to protect utilities from costs associated with the RTO if
the utilities will be islanded as scheduled by another utility.
3:19:38 PM
MR. IZZO compared the current system with the ideal system,
which he described as a first-world system because it would have
two transmission lines. He pointed out line losses occur with
the current system, such as the Swan Lake fire and shutdowns for
other emergencies or regular scheduled maintenance. The line
losses cause higher costs for the utilities than would be the
case if a second line were available to carry power from other
sources. He said when the two-line system is built there will be
benefits and savings for costs that will no longer be
experienced. He also said the new system will set Alaska up for
economic opportunity of larger scale, lower cost power from
renewable sources, nuclear, etc. than is now available.
3:21:00 PM
MR. IZZO acknowledged a significant step between the current
system and the ideal. He noted that wheeling charges could be
eliminated now and said there was an appropriate way to do that
so no one utility or its members are harmed. He proposed an
immediate rate structure that would provide for building the
second line from the Kenai Peninsula to Healey. Until that
second line was built, some utility members would be subsidizing
other utility members because those utilities would be islanded,
or without access because of constraints on the system to the
lowest cost power necessary. He opined that the change could be
done in a stepped fashion, beginning with eliminating wheeling
charges now, getting rid of those constraints for the
Independent Power Producers (IPPs). As the system is de-
constrained a shift would be made to a standard rate.
MR. IZZO said, if a utility becomes islanded, once the new
system is built out, that utility should be exempt from paying
the costs of the overall system since their members would not be
able to take advantage of the overall system. He opined that
there was a way to do that where no one is harmed.
3:23:00 PM
CHAIR BJORKMAN referred to the scheduling of power movement up
and down the rail belt and asked whether utilities are able to
schedule power in such a way that it would disadvantage other
utilities in their ability to move power.
3:23:53 PM
MR. IZZO said there are ways that can happen and he has seen it
happen. He said the BPMC is effective in addressing that kind of
action immediately. He urged that creating an RTO structure
takes out the parochial politics, because with the GRIP funding
the state will own 50 percent or more of the rail belt
transmission. The state is not in any way involved in
transmission assets and he said that "an adult" is needed on the
rail belt. He said once the state has that much ownership and
having an RTO with bylaws and a formal structure versus
individual regulated utilities, will eliminate a lot of the
problems experience in the past. He mentioned that the state
does oversee transmission wheeling revenues now, but it is done
on through the RCA on an individual utility basis, not on a
macro level with a "backbone" perspective. He reiterated that
moving to that structure will eliminate a lot of the drama and
problems experienced in the past.
3:25:49 PM
CHAIR BJORKMAN asked whether the open access language of SB 257
would allow one utility or one IPP to sell power directly to a
large consumer (such as a mine or a refinery) in another
utility's area.
3:26:32 PM
MR. IZZO suggested that there may be a need for clarifying
language. He said this does happen through economy energy sales
and without specifics due to non-disclosure agreements he said
there are currently two utilities meeting with another regarding
a renewable project that is of a scale that is more than any
utility could take. He said there would be no obstruction to
doing that and when there are two lines and there are no
constraints on transmission and there is good reliability, it
would be possible for an entity to access competitively priced
power. He said that would be a positive situation because of job
creation, increased residential meters, and emerging service
industries that a utility would benefit from. He said he could
not think of a situation where a utility would disagree and try
to intervene, but he said he did not know.
3:28:37 PM
CHAIR BJORKMAN appreciated Mr. Izzo's testimony and sought to
determine whether there was a need for clarifying language
regarding open access that would prevent cannibalization of
customers from one utility service area to another.
3:28:59 PM
MR. IZZO said language to obstruct [one utility selling power
outside its region] could be needed and he would look into it.
He said his vision and the task force's vision for the rail belt
was that, unifying transmission and building out the grids from
the Kenai Peninsula to Healy using the GRIP [federal] funding
would level the playing field. He said the state would
automatically go to an economic dispatch in which the lowest
cost energy generation would benefit every entity in the system.
He said, with that as the ultimate goal, he did not see where
there is a problem. He said there might be a utility that might
have a concern and it would be prudent to see that there isn't
something in a regulation or a statute or a tariff that would
interfere with doing what would be best for the state's economy.
3:30:32 PM
JOHN ESPINDOLA, Commissioner, Regulatory Commission of Alaska
(RCA), Anchorage, Alaska, read the following statement:
[Original punctuation provided.]
Good afternoon and thank you for allowing me this
opportunity to provide public testimony.
For the record, my name is John Espindola,
Commissioner with the Regulatory Commission of Alaska.
This afternoon I am here to testify on behalf of the
RCA regarding some of the general powers of the
Commission, set forth in statutes and regulations, as
it relates to regulating utilities while protecting
the public interest.
• Statute AS 42.05.141 speaks specifically to the
"general powers and duties of the commission". Two
subsections I will be highlighting today are
subsections (a) and (d).
• Subsection (a) reads, The Regulatory Commission of
Alaska may do all things necessary or proper to
carry out the purposes and exercise the powers
expressly granted or reasonably implied in this
chapter including:
1. regulate every public utility engaged or
proposing to engage in a utility business inside
the state, except to the extent exempted in AS
42.05.711
2. investigate, upon complaint or upon its own
motion, the rates, classifications, rules,
regulations, practices, services, and facilities
of a public utility and hold hearings on them;
and
3. make or require just, fair, and reasonable rates,
classifications, regulations, practices,
services, and facilities for a public utility
3:32:07 PM
MR. ESPINDOLA continued:
Now, I will speak to the Commission's methodology in
determining just and reasonable rates and how the
Commission regulates the cost of energy for consumers.
The overall cost of energy for consumers is comprised
of non-fuel costs which are established through a
revenue requirement including fuel and purchased power
costs which are recovered through the Cost of Power
Adjustment also known as the COPA.
• Statute AS 42.05.381 states: Rates to be just and
reasonable, subsection (a) reads, all rates demanded
or received by a public utility, or by any two or
more public utilities jointly, for a service
furnished or to be furnished shall be just and
reasonable.
• We are charged by this statute to ensure that rates
are just and reasonable. To determine just and
reasonable rates the Commission reviews a utility's
proposed total annual required earnings, known as
the revenue requirement. At a high level, the
revenue requirement is the sum of the utility's
prudently incurred allowable expenses such as taxes,
interest on debt incurred by the utility, operating
expenses, annual depreciation, and a fair return on
investment.
3:33:23 PM
MR. ESPINDOLA continued:
• To determine the revenue requirement, we utilize a
"normalized test year" which is defined in
regulation 3 AAC 48.820 (42)
• In addition, regulation 3 AAC 48.540 requires an
electric utility to file a cost of service study
with a revenue requirement if their annual kWh sales
exceed 100,000,000; for an electric utility that has
less than 100,000,000 kWh in annual sales, a cost of
service study is required if the utility proposes a
new rate design. In this instance when a utility
proposes a new rate design, once the revenue
requirement has been determined, we review the "cost
of service study" defined in regulation 3 AAC 48.820
(40)
• This component of the ratemaking process allocates
the revenue requirement among customer classes.
Also, when verifying pricing objectives, the
Commission refers to 3 AAC 48.510 which reads, "the
cost causer should be the cost payer". The results
of the cost of service study are used as the basis
to develop rates for specific customer classes.
3:34:43 PM
MR. ESPINDOLA continued:
• Regulation 3 AAC 52.502(a) establishes the criteria
for adjustment clauses (i.e the COPA), where a
utility recovers fuel and purchased power costs
outside of the revenue requirement. In order to be
allowed to recover the costs through the adjustment
clause, cost elements must be approved by the
Commission. These cost elements must meet the
following criteria:
1. Subject to change at a rate that would cause
financial harm to the utility if the costs were
recovered through base rates; I note this is the
rate established in the revenue requirement
2. Beyond the control of the utility; and
3. Easily verifiable.
• Lastly, regulation 3 AAC 52.503 establishes the
formula and entries for the COPA, and 3 AAC 52.504
establishes the filing requirements for COPAs.
These filing requirements include invoices to verify
the costs as well as reports on generation and
sales.
Next, I will speak to a recent example of the
Commission approving a filing using factors other
than cost. In March, the Commission approved a gas
contract between a gas supplier and an electric
Railbelt utility. Although the cost of gas in this
filing was higher than what other Railbelt utilities
are currently paying, the commission approved the
contract to ensure the electric utility was able to
continue to provide reliable service to its
customers.
• Statute AS 42.05.141 subsection (d) states, when
considering whether the approval of a rate or a gas
supply contract proposed by a utility to provide a
reliable supply of gas for a reasonable price is in
the public interest, the commission shall:
1. recognize the public benefits of allowing a
utility to negotiate different pricing mechanisms
with different gas suppliers and to maintain a
diversified portfolio of gas supply contracts to
protect customers from the risks of inadequate
supply or excessive cost that may arise from a
single pricing mechanism; and
2. consider whether a utility could meet its
responsibility to the public in a timely manner
and without undue risk to the public if the
commission fails to approve a rate or a gas
supply contract proposed by the utility.
3:37:05 PM
MR. ESPINDOLA concluded his statement:
In closing, it is important to note that as the
Commission fulfills its statutory mandates while
protecting the public interest, ensuring public
utilities are solvent, that they provide safe and
adequate services with just and reasonable rates, and
terms & conditions, are all factors we use in our
decision making process. This afternoon I will not be
taking questions. However, the Commission is willing
to come back at a later date to allow this committee
an opportunity for questions. Thank you and this
concludes my testimony.
3:38:10 PM
MR. ESPINDOLA confirmed he was unable to answer questions at
this time.
3:38:33 PM
CHAIR BJORKMAN postponed public testimony, summarized heard
testimony and made closing remarks.
3:42:05 PM
CHAIR BJORKMAN held SB 257 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB115 Public Testimony-Combined 02.28-03.12.24.pdf |
SL&C 4/5/2024 1:30:00 PM |
SB 115 |
| SB115 Sectional Analysis -corrected- ver U 03.05.24.pdf |
SL&C 4/5/2024 1:30:00 PM |
SB 115 |
| SB135 Public Testimony-ACLI Letter Opposing 02.14.24.pdf |
SL&C 4/5/2024 1:30:00 PM |
SB 135 |
| SB135 Public Testimony-Letters of Support 04.05.24.pdf |
SFIN 5/10/2024 9:00:00 AM SL&C 4/5/2024 1:30:00 PM |
SB 135 |
| SB135 Blank Draft Proposed CS ver U.pdf |
SL&C 4/5/2024 1:30:00 PM |
SB 135 |
| SB135 Public Testimony-Letter_NFIB opposition 04.03.24.pdf |
SL&C 4/5/2024 1:30:00 PM |
SB 135 |
| SB115 Public Testimony-Letter_ACEP_Opposition 04.02.24.pdf |
SL&C 4/5/2024 1:30:00 PM |
SB 115 |
| SB115 Public Testimony-AMA Issue Brief_Summary of Studies.pdf |
SL&C 4/5/2024 1:30:00 PM |
SB 115 |