Legislature(2025 - 2026)BUTROVICH 205
05/05/2025 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB32 | |
| SB180 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 32 | TELECONFERENCED | |
| += | SB 180 | TELECONFERENCED | |
SB 180-LNG IMPORT FACILITIES
4:18:00 PM
CHAIR GIESSEL announced the consideration of SENATE BILL NO. 180
"An Act relating to the regulation of liquefied natural gas
import facilities by the Regulatory Commission of Alaska."
4:18:29 PM
INTIMAYO HARBISON, Staff, Senator Cathy Giessel, Alaska State
Legislature, Juneau, Alaska, said SB 180 would repeal AS
42.05.711(v). This would return the authority to regulate the
import of liquified natural gas to the Regulatory Commission of
Alaska (RCA). He explained that the RCA previously had this
authority; however, this was removed during the previous
legislature. SB 180 repeals that change.
4:19:11 PM
SENATOR HUGHES shared her understanding that the previous
legislature deliberated at length before changing the policy in
question. She noted that the policy has been in effect a short
time. She pointed out that the Federal Energy Regulatory
Commission (FERC) has jurisdiction over liquified natural gas
(LNG) import facilities. She said SB 180 would add an additional
layer of oversight. She shared her understanding that the chair
of the RCA supported the exemption. She wondered why a repeal is
needed. She opined that it makes sense for FERC to have
jurisdiction.
4:19:59 PM
CHAIR GIESSEL explained that this change was in House Bill 50,
Section 49 and was not extensively deliberated. She recalled a
meeting in January of 2025, during which the RCA commissioner
expressed concern about the wording of that section. She
recalled a meeting of the RCA on or around April 20, 2025,
during which Enstar requested permission to recover $4.6 million
in costs associated with its LNG import development. She briefly
explained this request, which RCA rejected. She recalled that,
at that time, there was confusion related to the authority of
FERC.
CHAIR GIESSEL referred to 15 CFR 717b, which states FERC has
authority over siting, construction, expansion, or operation of
an LNG terminal. She clarified that FERC does not have control
over rate-setting and the cost of the gas produced. She
reiterated that there is confusion over the authority of FERC.
She reiterated and emphasized that FERC does not have authority
over the price regulation of imported LNG. She added that,
similarly, FERC does not have authority over the gas purchased
from a platform in Cook Inlet. She reiterated that AS
42.05.711(v) has created this confusion; therefore, SB 120 would
repeal that language and return to oversight of LNG rates and
price regulation to RCA. FERC would continue to regulate its
listed functions.
4:23:32 PM
SENATOR HUGHES recalled that the change was added to House Bill
50 late in the legislative session. She stated that House Bill
394 also contained the change and was deliberated. She recalled
that the industry supported the change at that time. She shared
her understanding that the Resource Development Council has
concerns. She shared her understanding that the language in
House Bill 394 - language that was later added to House Bill 50
- did not remove RCA authority over LNG rates and price
regulation. She reiterated her concern that SB 120 would add an
additional layer that could result in legal action. She stated
that industry testimony is necessary. She recalled that RCA
previously testified that the language in House Bill 394 was not
problematic. She expressed confusion and stated that, if RCA has
changed its position, she would like to know why.
4:24:50 PM
CHAIR GIESSEL clarified that SB 120 repeals language that caused
confusion; it does not add more layers.
4:25:09 PM
CHAIR GIESSEL announced invited testimony on SB 120.
4:25:13 PM
JOHN ESPINDOLA, Commissioner and Chair, Regulatory Commission of
Alaska (RCA), Anchorage, Alaska, said that he is unable to speak
to the Enstar filing referenced by Chair Giessel. He stated that
RCA issued an order on April 22, 2025. He explained that 3 AAC
48.105 allows a party 15 days from that date to file a petition
for reconsideration. RCA is still within the reconsideration
period for that order. He stated that the order cites the
regulatory jurisdictional authority of the commission as it
relates to rates. He confirmed that RCA does have jurisdiction
over rates; however, RCA believes that the repeal of AS
42.05.711(v) would eliminate any uncertainty regarding its
jurisdiction over the review of gas supply agreements or
terminal use agreements for public utilities using the services
of an LNG import facility.
4:26:31 PM
SENATOR MYERS noted that under current statute, RCA cannot
regulate an LNG facility. He asked whether RCA is currently able
to regulate a contract between the facility and the utility.
4:26:52 PM
MR. ESPINDOLA replied yes. He clarified that RCA believes it
maintains the authority to regulate those contracts.
4:27:01 PM
SENATOR MYERS asked what authority RCA would gain from repealing
AS 42.05.711(v). He pointed out that RCA can still regulate the
rate charged to the consumer via the contract.
4:27:36 PM
MR. ESPINDOLA replied that RCA would not gain any authority by
repealing AS 42.05.711(v). He clarified that the repeal would
eliminate the uncertainty of the jurisdictional boundaries of
RCA.
4:28:05 PM
SENATOR MYERS asked for a detailed explanation of how the
process would change if the RCA was able to regulate the LNG
import facility.
4:28:28 PM
MR. ESPINDOLA replied that the import facility would not be
subject to RCA regulation. This is the case regardless of
whether the statute in question is repealed. He clarified that
the rates passed on to ratepayers would fall within RCA
jurisdiction. He reiterated that the facility would not fall
under RCA jurisdiction. He stated that he was not chair of RCA
when RCA testified regarding House Bill 394 and House Bill 50
and is not able to speak to that testimony.
4:29:12 PM
SENATOR MYERS shared his understanding that SB 120 would give
RCA control over rates; however, RCA already has that control
because RCA is able to regulate the contract. He asked for
further clarification as to why the repeal is necessary.
4:29:38 PM
MR. ESPINDOLA clarified that RCA does not believe it is
necessary to repeal the language.
4:29:50 PM
SENATOR CLAMAN asked for confirmation of his understanding that
RCA can already do what SB 120 would allow RCA to do.
4:30:19 PM
MR. ESPINDOLA asked Senator Claman to repeat the question.
4:30:26 PM
SENATOR CLAMAN repeated his question. He asked for confirmation
of his understanding that, from the perspective of RCA, SB 120
is unnecessary in terms of the power of RCA to regulate the
price consumers are paying for potentially imported LNG.
4:30:45 PM
MR. ESPINDOLA confirmed this understanding.
4:30:51 PM
SENATOR CLAMAN asked whether RCA holds the position that,
despite already having that authority, it would nevertheless be
advantageous to clarify the authority of RCA by removing AS
42.05.711(v).
4:31:07 PM
MR. ESPINDOLA replied yes. He clarified that repealing AS
42.05.711(v) would eliminate the uncertainty related to the
jurisdiction of RCA.
4:31:19 PM
CHAIR GIESSEL recalled that during the most recent Enstar case,
the two property entities argued the legislature had an intent
to restrict the jurisdiction of RCA by adopting AS 42.05.711(v).
She stated that the following language was removed:
For ratemaking purposes, the commission shall consider
the investment of a public utility in an LNG import of
export facility.
CHAIR GIESSEL explained that removing this language created
confusion. Some argued that RCA does not have jurisdiction over
ratemaking. She stated that, at that meeting, RCA disagreed and
argued that it maintains jurisdiction to consider gas supply and
terminal use agreements and is not barred by statute from doing
so.
4:32:58 PM
CHAIR GIESSEL pointed out the confusion that arose during that
meeting and briefly discussed the statute responsible for that
confusion. She acknowledged that RCA believes it maintains
jurisdiction over the rate setting. However, because some have
argued that RCA does not have jurisdiction over ratemaking, the
issue of whether the jurisdiction falls to FERC or RCA may come
up each time RCA attempts to exercise its authority over rate
setting.
4:34:43 PM
SENATOR CLAMAN asked whether the RCA would be subject to
significant risk if it was determined that RCA did not have
proper statutory authority. He asked for confirmation that SB
120 would simply remove any doubt related to the jurisdiction of
RCA.
4:35:36 PM
RICHARD GAZAWAY, Administrative Law Judge, Regulatory Commission
of Alaska, Anchorage, Alaska, stated that he was not involved in
the docket in question. However, he recalled concerns regarding
ambiguous language related to the jurisdiction of RCA over rates
for purchases from a liquified natural gas (LNG) facility. He
indicated that RCA disagreed with the determination. He stated
that clarification would eliminate any ambiguity.
4:36:55 PM
CHAIR GIESSEL opened public testimony on SB 180; finding none,
she closed public testimony.
4:37:11 PM
CHAIR GIESSEL held SB 180 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 180 Sponsor Statement.pdf |
SRES 5/5/2025 3:30:00 PM |
SB 180 |
| SB 180 Fiscal Note DCCED.pdf |
SRES 5/5/2025 3:30:00 PM |
SB 180 |
| SB 180 Sectional Analysis .pdf |
SRES 5/5/2025 3:30:00 PM |
SB 180 |
| SB 180 - RCA Notice if Utility Tariff Filing.pdf |
SRES 5/5/2025 3:30:00 PM |
SB 180 |
| CS v.I.pdf |
SRES 5/5/2025 3:30:00 PM |
SB 32 |
| SB 32 Sponsor Statement.pdf |
SRES 5/5/2025 3:30:00 PM |
SB 32 |
| SB 32 Sectional Analysis .pdf |
SRES 5/5/2025 3:30:00 PM |
SB 32 |
| SB 32 Holdmann Testimony.pdf |
SRES 5/5/2025 3:30:00 PM |
SB 32 |
| SB 32 Fiscal Note RCA.pdf |
SRES 5/5/2025 3:30:00 PM |
SB 32 |