04/17/2024 01:30 PM Senate LABOR & COMMERCE

               SB 152-COMMUNITY ENERGY FACILITIES                                                                           
                                                                                                                                
        [Before the committee is CSSB 152 (33-LS0607\U)]                                                                        
                                                                                                                                
2:38:13 PM                                                                                                                    
CHAIR  BJORKMAN announced  the consideration  of SENATE  BILL NO.                                                               
152 "An Act relating to community energy facilities."                                                                           
                                                                                                                                
2:38:47 PM                                                                                                                    
CHAIR  BJORKMAN   noted  Robert   Doyle,  the  chairman   of  the                                                               
Regulatory  Commission of  Alaska (RCA)  was available  online to                                                               
answer questions.                                                                                                               
                                                                                                                                
2:39:09 PM                                                                                                                    
CHAIR BJORKMAN asked  how SB 152 would work  from the perspective                                                               
of the RCA.                                                                                                                     
                                                                                                                                
2:39:46 PM                                                                                                                    
ROBERT  DOYLE,  Chair,  Regulatory Commission  of  Alaska  (RCA),                                                               
Anchorage, Alaska, said  the role of the RCA as  envisioned by SB
  is  that the  RCA  would  establish protocol  to  facilitate                                                               
communication   between   the   utilities  and   the   subscriber                                                               
organizations  as outlined  by the  statute. He  said the  RCA is                                                               
supportive  of  net metering  and  community  solar farms,  etc.,                                                               
acknowledging  the growing  interest  of  Alaskans [in  renewable                                                               
energy opportunities] and  that they can save money.  He said, if                                                               
SB  152 does  not  move  forward, RCA  is  considering opening  a                                                               
regulatory [approach] to see if  it would be possible to increase                                                               
net metering. He  said the highest percentage of  net metering in                                                               
the railbelt currently is about  seven percent in ATA, about five                                                               
percent in  Chugach and JVA, and  he said MEA is  probably around                                                               
three percent. He  said RCA was looking at getting  to 20 percent                                                               
[net metering].  He said getting  to 20 percent would  remove any                                                               
caps and  allow utilities to  make sure  that if there  are costs                                                               
associated  with [net  metering]  that are  having  to be  cross-                                                               
subsidized, that would be addressed in  SB 153. He said RCA would                                                               
develop  regulations to  carry out  SB 152.  He said  he did  not                                                               
expect any problematic surprises to emerge.                                                                                     
                                                                                                                                
2:41:30 PM                                                                                                                    
CHAIR  BJORKMAN  noted  the mention  of  cross-subsidization  and                                                               
language  in  SB  152 that  mentions  utilities  modifying  their                                                               
interconnection  standards,  fees  and  processes  to  facilitate                                                               
cost-effective  interconnection. He  asked  how  SB 152  protects                                                               
other  consumers  from  having  to  pay  for  the  connection  of                                                               
renewable projects to their utility system.                                                                                     
                                                                                                                                
2:42:04 PM                                                                                                                    
MR. DOYLE said the process  would be developed by having hearings                                                               
and getting facts from the  various utilities. [The process] will                                                               
be based  upon the  facts that  are presented  on the  record. He                                                               
said there is  a point of regulating the  electrons and, because,                                                               
in net  metering, it's different  than just receiving  the power.                                                               
He  explained  [a ratepayer]  could  actually  be generating  the                                                               
power and  the power would  go back to  the utility and  [the net                                                               
metering  ratepayers]  would pay  either  an  avoided cost  or  a                                                               
negotiated cost.  He said at  some point, the  normal transformer                                                               
systems, the  normal systems to  regulate that power may  have to                                                               
be upgraded because  there would have to be a  mechanism by which                                                               
the  utilities would  quantify [the  electron exchange]  and show                                                               
the  RCA  exactly what  it  is  so the  people  who  are not  net                                                               
metering will not  have to pay for something they  do not benefit                                                               
from. He said  the RCA would analyze that  through regulation and                                                               
through the  hearing process.  He asked  whether he  had answered                                                               
the question.                                                                                                                   
                                                                                                                                
2:43:12 PM                                                                                                                    
CHAIR BJORKMAN said yes.                                                                                                        
                                                                                                                                
2:43:14 PM                                                                                                                    
CHAIR BJORKMAN  referred to SB 152,  page 3, line 11  which calls                                                               
for the  RCA to  facilitate financing of  projects and  asked how                                                               
that would work.                                                                                                                
                                                                                                                                
2:43:24 PM                                                                                                                    
MR. DOYLE  said that  would be  an interesting  conversation that                                                               
will  occur  in  the  hearing  process.  He  said  RCA  does  not                                                               
currently  facilitate   the  creation  and  financing   of  those                                                               
projects   but  would   be  able   to  examine   regulations  and                                                               
established processes and consider  proposed energy projects such                                                               
as  the recently  approved Chugach  project and  monitor them  as                                                               
pilot  projects.  That  would  allow them  to  work  with  actual                                                               
numbers to have a rate chase  in the future based on real numbers                                                               
and real  cost. He said  RCA could  facilitate that and  would be                                                               
able to  work with Independent  Power Producers (IPPs)  and other                                                               
groups   developing  community   [renewable  energy   generation]                                                               
projects who  would want to  be confident  that RCA would  not be                                                               
exerting unwarranted  status in the middle  of financing efforts.                                                               
[IPPs  and other  entities]  want to  have  [processes] that  are                                                               
known, prudent  and [consider] the  interests of all  the members                                                               
of  the co-op  and  the utility  and not  just  the members  that                                                               
directly benefit from net metering.                                                                                             
                                                                                                                                
2:44:47 PM                                                                                                                    
CHAIR BJORKMAN  noted SB  152, page  2, lines 17  - 18  and read,                                                               
"The  commission shall  ensure  that a  community energy  program                                                               
does  not have  an  adverse  effect on  the  retail  rates of  an                                                               
electric  utility...". He  expressed  his  appreciation for  this                                                               
provision in the bill.                                                                                                          
                                                                                                                                
CHAIR BJORKMAN  noted the  mention of  the Chugach  pilot project                                                               
and  asked whether  RCA had  originally denied  that project  and                                                               
subsequently reversed the denial.                                                                                               
                                                                                                                                
2:45:20 PM                                                                                                                    
MR. DOYLE said  the first project was  envisioned differently and                                                               
ended up going through a full  hearing. Based on that hearing, it                                                               
was  determined  that  cross-subsidization  had  not  been  well-                                                               
addressed, and the  project was denied. When the  project was re-                                                               
introduced  as  a smaller  pilot  project,  [the developers]  had                                                               
addressed  many of  those  [cross-subsidization]  concerns and  a                                                               
hearing  was not  required.  The project  was  approved after  an                                                               
adjudication. He  described it  as a  small project  with minimal                                                               
impact,  for which  the  developers worked  out  the details  and                                                               
communicated more  information to  the consumers  and the  RCA as                                                               
[the project]  was envisioned and  grew. So,  he said it  was two                                                               
different  processes   and  two  different  programs   [that  RCA                                                               
evaluated].                                                                                                                     
                                                                                                                                
2:46:18 PM                                                                                                                    
CHAIR  BJORKMAN  restated that  the  RCA  is confident  that  the                                                               
cross-subsidization issues were dealt with  and the pilot project                                                               
moving forward is fair to all ratepayers.                                                                                       
                                                                                                                                
2:46:27 PM                                                                                                                    
MR. DOYLE affirmed his summary and  said that is why RCA approved                                                               
[the Chugach project].                                                                                                          
                                                                                                                                
2:46:48 PM                                                                                                                    
SENATOR BILL WIELECHOWSKI, District  K, Alaska State Legislature,                                                               
Juneau, Alaska, sponsor of SB 152  said the bill was filed over a                                                               
year  ago and  that it  had been  through an  exhaustive process,                                                               
meeting  with stakeholders  and  talking with  utilities, and  he                                                               
said the  bill had gone  through many  changes and had  reached a                                                               
state of  consensus. He appreciated the  committee's patience and                                                               
cooperation  and said  he thought  the bill  was one  that people                                                               
across Alaska will  appreciate. He said it would be  good for the                                                               
electrical grid, it  will help save natural gas and  it will help                                                               
consumers save money.                                                                                                           
                                                                                                                                
2:47:47 PM                                                                                                                    
CHAIR BJORKMAN solicited the will of the committee.                                                                             
                                                                                                                                
2:47:48 PM                                                                                                                    
SENATOR GRAY-JACKSON  moved to  report CSSB  152, work  order 33-                                                               
LS0607\U,  from  committee  with individual  recommendations  and                                                               
attached fiscal note(s).                                                                                                        
                                                                                                                                
2:48:11 PM                                                                                                                    
CHAIR  BJORKMAN  found  no  objection  and  CSSB  152  (L&C)  was                                                               
reported from the Senate Labor and Commerce Standing Committee.                                                                 
#                                                                                                                             
                                                                                                                                
2:48:50 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Bjorkman  adjourned the Senate Labor  and Commerce Standing                                                               
Committee meeting at 2:48 p.m.