Legislature(2023 - 2024)SENATE FINANCE 532
05/02/2024 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB217 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | SB 217 |
SENATE BILL NO. 217
"An Act relating to the taxation of independent power
producers; and increasing the efficiency of integrated
transmission system charges and use for the benefit of
ratepayers."
1:40:38 PM
SENATOR CATHY GIESSEL, SPONSOR, introduced herself.
1:40:49 PM
ANGELA RODELL, STAFF, SENATOR CATHY GIESSEL, continued
discussing the presentation, "CS for Senate Bill 217
(RES)Integrated Transmission Systems Sectional Analysis"
(copy on file). She spoke to Section 18 of the bill and
clarified that the governance structure was amended in the
Senate Resources Committee. She said that the original
structure had been designed to mirror the Bradley Lake
Management Committee model; a consortium of asset owners
collectively manages the assets and have different voting
rules based on the fiduciary level of the action needed to
be taken. She noted that the amended version created three
voters that do not have the same fiduciary responsibility
and do not have the same asset owner responsibility.
1:43:09 PM
Senator Wilson wondered whether the members under (C) and
(D)could still maintain a voice on the committee but
without the voting requirements.
1:43:45 PM
Ms. Rodell responded that if they were not voting members,
they could continue to retain seats on the committee.
1:43:55 PM
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY,
ANCHORAGE (via teleconference), replied that Ms. Rodell was
correct.
1:44:40 PM
Ms. Rodell addressed slide 15, "Duties of the New RTO":
Section 18, continued
44.83.720
•creates a revenue mechanism, subject to the
approval of the RCA
•shall adopt a transmission cost recovery
methodology that ensures the reliability and
sufficient capacity
•the cost recovery methodology must:
•pool and allocate transmission system costs
•account for backbone ancillary services,
congestion and disruptions resulting from
the isolation of one geographical area
44.83.730
•requires the RTO to engage in integrated
transmission planning at least every 10 years
•the plan must set clear goals and use a whole-
system approach
•shall take into consideration technological
advancements, load growth, fuel supply among
others
•The plan shall be published on the AEA website
44.83.740 requires the RTO to identify existing
backbone transmission assets by July 1, 2025, and
that the Railbelt utilities will transfer
management of those assets to the RTO by July 1,
2026.
44.83.750 Definitions
"backbone transmission system": assets of the
interconnect electric energy transmission network
that serves the Railbelt; it does not include
assets that would be considered distribution or
radial facilities as defined by FERC
ommission" as the RCA
"Railbelt" as the area of Alaska that ranges from
the Kenai Peninsula to Interior Alaska, connected
by a common electric transmission backbone
"Railbelt utility" to mean a public utility
certificated to operate in the Railbelt
"transmission organization" to the RTO
established in this bill
1:47:46 PM
Senator Wilson recalled slide 14 and noted that a question
had been asked earlier about the bargaining agreement would
work.
1:48:31 PM
Senator Giessel replied that the utilities would have
existing contracts and that the specificity of the language
had been requested as a belt and suspenders measure.
1:48:59 PM
Senator Wilson expressed confusion about different existing
bargaining agreement across different lines.
1:49:45 PM
Senator Giessel deferred to Mr. Thayer.
1:49:56 PM
Mr. Thayer replied that dual agreements existed for other
projects and work would be done with both bargaining units.
1:50:41 PM
Senator Wilson wondered whether the language was necessary.
1:50:44 PM
Mr. Thayer responded that the language for to reiterate
that the practices would be the same under the RTO.
1:51:06 PM
Senator Bishop interjected many utilities shared crews up
and down the line for maintenance and emergencies.
1:51:39 PM
Senator Wilson asked how the cost recovery methodology
would be conducted.
1:52:23 PM
Ms. Rodell agreed to get back to the committee on current
practices. Under the bill, all the fixed costs would be
spread across the utilities without regard to load. She
said that if there were significant outages the costs
associated would be incorporated into the tariff request
before the Regulatory Commission of Alaska.
1:53:12 PM
Senator Giessel offered the Swan Lake fire as an example of
a break in the transmission line.
1:53:28 PM
Mr. Thayer explained the fire was on the SQ line, which was
owned by Homer Electric and served the northern utilities,
but not Homer. The line was out for 4 months, and the
northern utilities were able to get the water they were
owed after several months.
1:55:04 PM
Senator Wilson wondered who paid the cost for the loss of
utility.
1:55:29 PM
Mr. Thayer said that the rate payer paid initially for the
natural gas during that time, but as more power became
available not as much natural gas was used. He believed
that there had been a leveling of costs eventually.
Senator Wilson asked if power could only go one-way on a
powerline due to being islanded how would the utility
make up the cost.
1:56:45 PM
Mr. Thayer said he would need to ask each utility
individually. He noted that several arrangements could be
at play.
1:57:58 PM
Senator Wilson cited Page 12 of the bill. He wondered about
the projected costs to rate payers under the bill.
1:59:01 PM
Senator Giessel replied that some estimates had been made
and were under refinement. She stressed that without an
upgrade to the transmission line there would certainly be
increased costs due to limited access and the lack of
renewables into the system. She guessed that things could
continue under the status quo, but that costs would rise.
She asserted that the bill was a step into a future of less
cost and more efficiency.
2:00:01 PM
Co-Chair Olson asked about net metering.
2:00:07 PM
Senator Giessel replied that the matter was a side issue.
She said that it was not part of the backbone directly.
2:00:33 PM
Senator Wilson understood that under the legislation, for a
time there would be an increase but that it would plateau
overtime.
2:01:03 PM
Ms. Rodell referenced slide 16, "Final Implementation":
Section 19
Sets the directive for Alaska Energy Authority and the
Regulatory Commission of Alaska to adopt the necessary
regulations to implement the changes made by CS for
Senate Bill 217.
Section 20
Requires Alaska Energy Authority to immediately begin
an initial transmission plan and capital improvement
program.
Section 21
Allows any current member of the RCA to continue to
serve until their term expires and a replacement has
been nominated and qualified.
Section 22
Provides for the transition of the new AEA board
members to allow for staggered terms for the public
members with 2 members serving 1 year, 2 members
serving 2 years and 2 members serving 3 years.
Section 23
Sections 19 and 20 take effect immediately.
Section 24
All other sections take effect July 1, 2024
2:02:39 PM
Senator Giessel thanked the committee for their time.
2:02:51 PM
Mr. Thayer added that the legislation was comprehensive and
incorporated many of the administration's goals.
Senator Olson asked whether the governor supported the RTO.
Mr. Thayer replied that the RTO was a concept that had been
discussed and supported by the administration in the past.
SB 217 was HEARD and HELD in committee for further
consideration.
Senator Olson discussed housekeeping.
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