Legislature(2025 - 2026)BELTZ 105 (TSBldg)
05/07/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB170 | |
| SB158 | |
| SB149 | |
| SB35 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 170 | TELECONFERENCED | |
| *+ | SB 158 | TELECONFERENCED | |
| *+ | SB 149 | TELECONFERENCED | |
| += | SB 35 | TELECONFERENCED | |
SB 149-UTILITIES: RENEWABLE PORTFOLIO STANDARD
3:20:03 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 149 "An Act relating to
generation of electricity from renewable energy resources;
relating to a renewable portfolio standard; relating to power
cost equalization; and providing for an effective date."
3:20:28 PM
SENATOR BILL WIELECHOWSKI, District K, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 149 he said the bill establishes a
renewable portfolio standard to address the ongoing energy
challenges in Cook Inlet. Despite significant incentives over
the past 15 yearsincluding royalty relief and other measures
aimed at developing local gas resourcesthe state has only
achieved 1215 percent of energy from renewable sources, far
below the nonbinding 50 percent goal set in 2010 under House
Bill 306. SB 149 seeks to diversify Alaska's energy portfolio,
promote affordable and reliable power, and provide incentives
for independent power producers and utilities to invest in
renewable energy. He said by doing so, it aims to reduce
dependence on gas, ensure stable energy supplies for residents
and businesses, and strengthen the overall resilience and
sustainability of the state's energy system, particularly in the
Railbelt region.
3:24:09 PM
HUNTER LOTTSFELDT, Staff, Senator Bill Wielechowski, Alaska
State Legislature, Juneau, Alaska, provided the sectional
analysis for SB 149:
[Original punctuation provided.]
Sectional Analysis Version N
Section 1 - Amends Section 42.05.780:
Requires integrated resource plans to include options
by which each load-serving entity may satisfy the
renewable portfolio standard.
Section 2 - Amends Section 42.05.785(a):
Adds a new subsection (4) clarifying the regulatory
commissions pre-approval process for large energy
facilities and that project approval must not be
detrimental to a load-serving entities ability to
comply with a renewable portfolio standard.
3:25:14 PM
MR. LOTTSFELDT continued with the sectional analysis for SB 149:
Section 3 Amends Section 42.05.785(c):
Exempts pre-approval for renewable energy projects
that help a load-serving entity meet the renewable
portfolio standard.
Note that section 7 repeals this exception on December
31, 2030.
Section 4 Adjusts the numbering of section
42.05.785(e) and adds the definition for "renewable
energy resource" within the pre-approval for large
energy facilities section.
Section 5 - Creates new article under Sec. 42.05
entitled Article 11A. Renewable Portfolio Standard
(RPS).
AS 42.05.900 requires load-serving entities subject to
the standards of an electric reliability organization
(ERO) to comply with the renewable portfolio standard;
diversifying their current generation portfolio by
increasing the proportion of megawatt hours (MWh) of
renewable electricity generated.
AS 42.05.905 incentivizes the development of projects
to meet the goals of a renewable portfolio standard.
AS 42.05.910 - Governs the use of renewable energy
credits and qualifies which uses may count towards
meeting the target goals.
Sec. 42.05.915 Establishes a noncompliance fine for
a load-serving entity that fails to meet the RPS.
Qualifies what conditions merit a waiver for The
Regulatory Commission of Alaska (RCA) for failure to
meet the target goals.
Sec. 42.05.920 - Establishes an exemption for
individual load serving entities if the aggregate
generation of renewable electricity of all load-
serving entities in an interconnected electric
transmission network meets the goal required by the
standard.
Sec. 42.05.925 - Provides for definitions.
3:28:01 PM
MR. LOTTSFELDT continued with the sectional analysis for SB 149:
Section 6 Amends AS 42.45.110(a) excluding revenue
from the sale of recovered heat, or revenue from the
sale of renewable energy credits, for Power Cost
Equalization.
Section 7 Establishes a sunset for AS
42.05.785(c)(3)
Section 8 Establishes an effective date of July 1,
2025.
MR. LOTTSFELDT stated that the new committee substitute (CS)
change would change in AS 42.05.910 [Renewable electricity
credits]
3:28:38 PM
CHAIR BJORKMAN announced invited testimony on SB 149.
3:29:00 PM
ERIN MCKITTRICK, representing self, Seldovia, Alaska, testified
by invitation on SB 149 and moved to slide 2:
[Original punctuation provided.]
Primary questions
• Are the goals in SB 149 achievable?
• What are the potential savings or costs to
customers?
3:30:03 PM
MS. MCKITTRICK moved to slide 3 and explained that the graph
shows past and present Railbelt energy sources, with current
renewables, mainly hydro and some wind and solar making up a
small portion compared to fossil fuels like gas, coal, and oil.
The dashed lines indicate the renewable energy targets proposed
in SB 149.
3:30:40 PM
MS. MCKITTRICK moved to slide 4 and explained the graph. She
stated that the Railbelt could meet the first renewable energy
target in SB 149 through several planned projects, including the
Little Mount Susitna and Chugach Creek wind farms, the Puppy Dog
Lake solar project, and the Dixon Diversion hydro expansion at
Bradley Lake. Together, these projects would exceed the first
target and come close to meeting the second, with multipliers in
SB 149 boosting their credited renewable contribution.
3:32:42 PM
MS. MCKITTRICK moved to slide 5 and spoke about the details of
the projects found on slide 4. She explained that the chart
details several renewable projectschosen because they've been
thoroughly studied, can be completed by 2038, and integrate
smoothly with the existing grid without major new transmission
infrastructure. The modeled wind projects alone would meet the
2030 target, while combining all projects would nearly reach the
2035 goal.
3:34:47 PM
MS. MCKITTRICK moved to slide 6 and explained that if no new
renewable projects are developed and the state remains at 15
percent renewable energy, utilities would need to pay about $30
million in compliance fees each year. She said this could
increase rates by roughly 5.5 percent during the first target
period and 8.5 percent in the second.
3:35:51 PM
MS. MCKITTRICK moved to slide 7 and explained that the $45 per
megawatt-hour fees function as a cost cap, essentially setting
the upper limit on what utilities could be required to pay under
the legislation. However, this scenario represents a theoretical
worst caseassuming no renewable projects are developed, no new
contracts are signed, and no waivers are granted, which is
highly unlikely. She said SB 149 includes multiple provisions
allowing waivers for good-faith compliance efforts and
permitting fees to be reinvested in renewable energy projects,
customer efficiency programs, or distributed generation. Even in
that extreme "straw man" situation, the cost impact would be
modestabout a 1.2-cent increase per kilowatt-hour, or roughly
$6 per month for an average residential customer, similar to the
base rate increases seen over the past year.
3:38:23 PM
MS. MCKITTRICK moved to slide 8 and explained the bar graph. She
compared the potential costs of different energy sources and
emphasized that the real issue is not failing to comply, but
what happens if renewable targets are met. Current power from
natural gas plants costs under eight cents per kilowatt-hour,
but future gas prices are expected to rise sharply due to the
Cook Inlet supply crisis, potentially reaching $12$16 per unit
for imported LNGmaking it more expensive than most renewables.
She said existing renewable projects like Bradley Lake hydro,
Houston Solar, and Fire Island wind already produce cheaper
power, and future wind and solar developments, even without
federal tax credits, are projected to remain competitive or
lower in cost than imported gas. Overall, transitioning to
renewables would likely cost consumers far less than continuing
to rely on increasingly expensive fossil fuels.
3:42:24 PM
MS. MCKITTRICK moved to slide 9 and spoke about the following:
[Original punctuation provided.]
Costs may range from similar to significantly cheaper
• Future gas generation costs are expected to be
substantially higher than
current costs.
-New Cook Inlet gas contracts start at $12.30/Mcf
-Imported gas cost projections range from $12-
16/Mcf
• Other fossil generation costs are already quite
high
• All current renewable energy is cheaper than
future gas energy projections
• Future renewable energy projects with tax credits
are probably substantially
cheaper than imported gas energy.
• If tax credits end, the costs are more similar.
There are likely small savings
available, depending on project details and exact
fuel prices.
3:43:09 PM
MS. MCKITTRICK moved to slide 10, and spoke about the following:
[Original punctuation provided.]
• Current plans will mostly satisfy the standard.
• Diversification may save money, and any potential
fees would be modest.
3:44:00 PM
MATTHEW PERKINS, CEO, Alaska Renewables, Fairbanks, Alaska,
testified by invitation on SB 149. He stated that Alaska
Renewables is a development firm building several power plants
across the Railbelt, with extensive experience in technologies
ranging from gas pipelines and coal mines to gas turbines, wind,
and solar. The company focuses on delivering fast, cost-
effective solutions to Alaska's energy security challenges and
recently partnered with a major multi-billion-dollar power
operator to fund its first wind projects, leveraging nationwide
experience in managing power plants under harsh environmental
and grid conditions similar to those in Alaska. He emphasized
Alaska Renewables is not advocating for mandates or promoting
their projects but are instead providing information to clarify
market realities and how a well-crafted Renewable Portfolio
Standard (RPS) could influence them. He noted that such a policy
could attract investment capital to Alaska and highlighted the
stark difference between Alaska and the rest of the U.S. in the
presence of independent power producers (IPPs).
3:47:03 PM
MR. PERKINS explained that, unlike the Lower 48 where about half
of power generation comes from independent power producers
(IPPs), Alaska's Railbelt relies on utilities for roughly 99
percent of its energy. He argued that increasing competition
through more IPPs would strengthen the market, promote
innovation, and benefit utilities and consumers alike. He also
stressed the need for long-term regulatory stability to attract
investors and support planning for infrastructure projects.
Finally, he emphasized that diversifying Alaska's energy sources
beyond natural gas would enhance reliability, energy security,
and resilience for both communities and military bases.
3:50:14 PM
SENATOR YUNDT expressed strong support for renewable energy. He
asked for an explanation of how increased wind or solar
generation affects the power grid, how energy storage technology
is developing, and what renewable solutions work best during
Alaska's winter.
3:51:03 PM
MR. PERKINS replied that intermittent renewables once caused
grid issues like voltage flickers and blackouts, but decades of
engineering advances have largely solved those problems. He
explained that proper programming and configuration ensure
stable performance, while storage solutionssuch as gas, heat,
and batteriescomplement renewables. Wind power, particularly in
Alaska, is most productive in winter when energy demand peaks,
making it a strong seasonal match for the grid's needs.
3:54:42 PM
CHAIR BJORKMAN asked whether the group had evaluated the
potential for renewable power and specifically inquired about
Ms. McKettrick's graph and how the Susitna-Watana Dam would
appear in showing progress toward renewable energy goals.
3:55:07 PM
MS. MCKITTRICK replied that the Susitna-Watana Dam qualifies as
a renewable project and could supply about 59 percent of the
Railbelt's total power, meeting both targets. However, it was
excluded from the analysis because it could not be completed
before the first target date and would require roughly $1
billion in transmission upgrades.
3:56:24 PM
SENATOR WIELECHOWSKI stated that he looks forward to working
with committee members, utilities, and IPPs to determine whether
this proposal can work for Alaska and how to ensure it provides
affordable, diversified energy.
3:57:04 PM
CHAIR BJORKMAN stated that he does not want to impose fines on
utilities, noting that ratepayers ultimately bear those costs.
He emphasized the potential of the Susitna-Watana Dam, urging
Alaska to invest in its own reliable, long-term energy projects
such as large hydrorather than relying on outside entities, as
part of a broader vision for the state's energy future.
3:58:54 PM
CHAIR BJORKMAN held SB 149 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB158 Supporting Documents-Upper Cook Inlet Management Area Statistical Areas.pdf |
SL&C 5/7/2025 1:30:00 PM |
SB 158 |
| SB35 Instacart-Responses to Committee Questions 05.05.25.pdf |
SL&C 5/7/2025 1:30:00 PM |
SB 35 |
| SB35 Uber-Responses to Committee Questions 05.07.25.pdf |
SL&C 5/7/2025 1:30:00 PM |
SB 35 |