Legislature(2023 - 2024)BELTZ 105 (TSBldg)

03/27/2024 01:30 PM Senate LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 239 AIDEA WORKFORCE HOUSING DEVELOPMENT TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= SB 257 ELECTRIC UTILITY REGULATION TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 154 BIDDER PREF MILITARY CAREER SKILLS PROG TELECONFERENCED
Moved SB 154 Out of Committee
-- Invited & Public Testimony --
-- Testimony <Time Limit May Be Set> --
**Streamed live on AKL.tv**
               SB 257-ELECTRIC UTILITY REGULATION                                                                           
                                                                                                                                
1:49:11 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  Railbelt Transmission                                                               
Organization; and providing for an effective date."                                                                             
                                                                                                                                
1:49:33 PM                                                                                                                    
SENATOR  CATHY GIESSEL,  District  E,  Alaska State  Legislature,                                                               
Juneau,  Alaska,   sponsor  of   SB  257,  explained   that  this                                                               
legislation would establish  a railbelt transmission organization                                                               
that would oversee  the function and dispatch  of the lowest-cost                                                               
electrons across  a grid, thereby  lowering consumers'  cost. She                                                               
emphasized  the  importance and  need  for  this organization  as                                                               
Alaska  moves  toward lower  cost  electrons.  In addition,  this                                                               
would make it possible for  independent power producers - who are                                                               
expanding the  state's renewable energy  access - to  utilize the                                                               
backbone transmission  system. She expressed hope  that reviewing                                                               
the sectional  analysis would clear  up confusion around  what SB
257 does.                                                                                                                       
                                                                                                                                
1:50:51 PM                                                                                                                    
ANGELA  RODELL,  Staff,  Senator   Cathy  Giessel,  Alaska  State                                                               
Legislature,  Juneau, Alaska,  presented  a  presentation on  the                                                               
sectional analysis for SB 257. She advanced to slide 2:                                                                         
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Improvements  to the  Regulatory  Commission of  Alaska                                                                  
     (RCA)                                                                                                                    
                                                                                                                                
     Section 1:                                                                                                               
     Amends  AS  42.04.020 (a)  to  clarify  and update  the                                                                    
     qualifications of  individuals nominated to serve  as a                                                                    
     commissioner  for the  Regulatory Commission  of Alaska                                                                    
     (RCA) by  requiring at least  5 years of  experience in                                                                    
     the field associated with the degrees.                                                                                     
                                                                                                                                
     Section 2:                                                                                                               
     Amends  AS 42.05.381  by clarifying  that  the RCA  may                                                                    
     consider diversity of energy  supply, promotion of load                                                                    
     growth or  enhanced energy  reliability or  security in                                                                    
     determining if  an electric utility's rate  is just and                                                                    
     reasonable.                                                                                                                
                                                                                                                                
MS. RODELL  explained that current  law requires RCA  to consider                                                               
cost  and  this  would  give  RCA  the  option  of  adding  these                                                               
additional factors for consideration.                                                                                           
                                                                                                                                
1:52:54 PM                                                                                                                    
CHAIR  BJORKMAN  asked  if  RCA  has  a  hierarchy  of  needs  or                                                               
preference when  deciding on a project  - or rate in  this case -                                                               
that helps to  determine whether the power is "good  power" for a                                                               
project or when creating a rate.                                                                                                
                                                                                                                                
1:53:20 PM                                                                                                                    
MS. RODELL deferred to the RCA  and said she would follow up with                                                               
RCA's response.                                                                                                                 
                                                                                                                                
1:53:31 PM                                                                                                                    
CHAIR  BJORKMAN shared  his understanding  that reliability  is a                                                               
priority, along with markets (cost  to produce power), quality of                                                               
power, and  other factors.  He asked  how SB  257 would  help RCA                                                               
make good decisions  about permitting projects and  rates - while                                                               
still   prioritizing   low   costs   for   homeowners,   members,                                                               
businesses.                                                                                                                     
                                                                                                                                
1:54:19 PM                                                                                                                    
MS. RODELL deferred to Gwen Holdmann.                                                                                           
                                                                                                                                
1:54:36 PM                                                                                                                    
GWEN HOLDMANN,  Senior Researcher, Associate Vice  Chancellor for                                                               
Research, Innovation & Industry  Partnerships, UAF, Alaska Center                                                               
for Energy  and Power (ACEP),  Fairbanks, Alaska, said  that many                                                               
projects developed  at a given  time may  not be the  lowest cost                                                               
project. She  offered the Bradley Lake  Hydroelectric Project and                                                               
explained  that at  the time  of its  construction, this  was the                                                               
most  expensive project  for the  railbelt grid.  She noted  that                                                               
this project was left out of  regulation due to concerns that, if                                                               
subject to  regulation, it  would not have  been approved  by the                                                               
RCA,  due  to  the  cost  of delivering  power  at  the  time  of                                                               
construction.  However, this  project currently  provides one  of                                                               
the lowest  forms of  electric power on  the grid.  She suggested                                                               
that  there is  a  benefit  to considering  the  future of  these                                                               
electric systems  in order to  create systems that best  meet the                                                               
needs of  consumers both  now and future  - rather  than focusing                                                               
solely on present-day costs.                                                                                                    
                                                                                                                                
1:55:52 PM                                                                                                                    
CHAIR BJORKMAN  asked if there  were currently any  projects that                                                               
would benefit from the changes in Section 2.                                                                                    
                                                                                                                                
1:56:11 PM                                                                                                                    
MS.  HOLDMANN  shared  her  understanding that  SB  257  was  not                                                               
drafted with the intention of  benefitting a particular project -                                                               
and  is not  related specifically  to renewable  or non-renewable                                                               
energy sources.  She stated that  "diversity of supply"  could be                                                               
interpreted  as  seeking more  local  energy  sources that  could                                                               
displace declining  Cook Inlet gas  supplies. This  could include                                                               
increasing the amount of coal, etc.                                                                                             
                                                                                                                                
1:56:56 PM                                                                                                                    
CHAIR   BJORKMAN  commented   that  this   could  include   coal,                                                               
hydroelectric sources, etc.                                                                                                     
                                                                                                                                
1:57:02 PM                                                                                                                    
MS. HOLDMANN said that this is correct.                                                                                         
                                                                                                                                
1:57:09 PM                                                                                                                    
MS.  RODELL  advanced to  slide  3  and continued  the  sectional                                                               
analysis for SB 257:                                                                                                            
                                                                                                                                
[Original punctuation provided.}                                                                                                
                                                                                                                                
     Improvements to  the Electric  Reliability Organization                                                                  
     (ERO)                                                                                                                    
                                                                                                                                
     Section 3:                                                                                                               
     Amends AS  42.05.762 by repealing the  requirement that                                                                    
     an   electric  reliability   organization  (ERO)   must                                                                    
     develop  integrated  resource   plans  and  adding  the                                                                    
     requirement  that  the  ERO   must  participate  in  an                                                                    
     integrated   grid  plan   conducted  by   the  Railbelt                                                                    
     Transmission   Organization.    It   also    adds   the                                                                    
     requirement  that the  ERO  prioritize reliability  and                                                                    
     stability of  the system served  by the ERO  while also                                                                    
     taking into account cost to the consumer.                                                                                  
                                                                                                                                
1:57:51 PM                                                                                                                    
CHAIR BJORKMAN  asked about the difference  between participating                                                               
in an integrated grid plan and developing a resource plan.                                                                      
                                                                                                                                
1:58:05 PM                                                                                                                    
MS.  RODELL offered  her understanding  that the  integrated grid                                                               
plan takes all sections (including  operations and management) of                                                               
the  transmission/grid  system  into account.  In  contrast,  the                                                               
integrated resource  plan includes reliability standards  as well                                                               
as  transmission,  generation,  and distribution.  She  explained                                                               
that  SB  257  bifurcates  this  requirement  and  instructs  the                                                               
electricity  reliability  organization  (ERO)  to  focus  on  the                                                               
reliability standards to ensure  that the incoming electricity is                                                               
reliable.                                                                                                                       
                                                                                                                                
1:59:21 PM                                                                                                                    
MS. HOLDMAN clarified that an  integrated resource plan typically                                                               
focuses  more on  the  generation assets  of  the system.  Citing                                                               
Hawaii as an example, she explained  that as the grid evolves and                                                               
power use changes, taking a  wholistic approach across the entire                                                               
system  allows for  continued  system  development and  upgrades.                                                               
This  helps to  ensure that  consumer  needs are  met and  prices                                                               
contained. She agreed that this  function is bifurcated away from                                                               
EROs   and  places   this   responsibility   with  the   Railbelt                                                               
Transmission  Organization  (RTO).  She explained  that  the  ERO                                                               
would remain responsible for  setting (and enforcing) reliability                                                               
standards and interconnection standards for utilities and                                                                       
independent power producers. She reiterated that "planning" is                                                                  
moved to RTO and is redefined as a more wholistic effort.                                                                       
                                                                                                                                
2:00:57 PM                                                                                                                    
MS. RODELL advanced to slide 4 and continued the sectional                                                                      
analysis for SB 257:                                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Clarifying the Responsibilities of an ERO                                                                                
                                                                                                                                
     Section 4:                                                                                                               
     Amends AS  42.05.765(a) by clarifying that  an ERO must                                                                    
     develop,  monitor,  and enforce  reliability  standards                                                                    
     and it  is the  responsibility of an  ERO is  to ensure                                                                    
     the stable operation  of the interconnect bulk-electric                                                                    
     system  served  by  an  ERO  and  specifically  require                                                                    
     coordination    with    the    Railbelt    Transmission                                                                    
     Organization   (RTO)    when   developing   reliability                                                                    
     standards that impact the RTO.                                                                                             
                                                                                                                                
2:01:38 PM                                                                                                                    
MS. RODELL advanced to slide 5:                                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Conforming the ERO Tariff to Streamlined ERO Duties                                                                      
                                                                                                                                
     Section 5:                                                                                                               
     Repeals AS 42.05.770 (1) which  is the requirement that                                                                    
     an ERO  tariff include standards  for nondiscriminatory                                                                    
     open  access   transmission  and   interconnection  and                                                                    
     standards for transmission system cost recovery.                                                                           
                                                                                                                                
     Sec.  42.05.770.  Regulations.   The  commission  shall                                                                    
     adopt   regulations   governing  electric   reliability                                                                    
     organizations,      reliability     standards,      and                                                                    
     modifications to reliability  standards consistent with                                                                    
     this   section.  Regulations   under  AS   42.05.760                                                                       
     42.05.790 must                                                                                                             
     (1)    require    that    an    electric    reliability                                                                    
     organization's tariff include                                                                                              
     (A)   standards  for   nondiscriminatory  open   access                                                                    
     transmission and interconnection;                                                                                          
     (B) standards for transmission system cost recovery;                                                                       
                                                                                                                                
MS. RODELL explained  that this section ensures  that the changes                                                               
made by SB 257 do not conflict with existing statute.                                                                           
                                                                                                                                
2:02:21 PM                                                                                                                    
MS.  RODELL  advanced to  slide  6  and continued  the  sectional                                                               
analysis for SB 257:                                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Streamlining the ERO's Responsibilities                                                                                  
                                                                                                                                
     Section 6:                                                                                                               
     Amends  AS  42.05.772  by adding  that  a  load-serving                                                                    
     entity that  would otherwise be exempt  from regulation                                                                    
     under  this   chapter,  shall   adhere  to   the  ERO's                                                                    
     reliability standards, coordinate with  the ERO, and if                                                                    
     applicable, coordinate  with the  Railbelt Transmission                                                                    
     Organization  to integrate  reliability standards  into                                                                    
     the load-serving entity's operational procedures.                                                                          
                                                                                                                                
     Section 7:                                                                                                               
     Amends AS 42.05.785 to repeal  (d) requiring the RCA to                                                                    
     adopt   regulations   addressing  projects   undertaken                                                                    
     before  integrated   resource  plan  approval   for  an                                                                    
     interconnected electric energy transmission network.                                                                       
                                                                                                                                
2:03:00 PM                                                                                                                    
CHAIR BJORKMAN asked who would be considered "otherwise exempt".                                                                
                                                                                                                                
2:03:24 PM                                                                                                                    
MS. RODELL  deferred the question  and offered  her understanding                                                               
of what is meant by "load-serving entity."                                                                                      
                                                                                                                                
2:03:38 PM                                                                                                                    
MS. HOLDMANN  explained that a  "load-serving entity"  is defined                                                               
as  a  distribution  utility  with   customers.  She  shared  her                                                               
understanding that  the current  section relates  to the  ERO and                                                               
falls under RCA regulations.                                                                                                    
                                                                                                                                
2:04:09 PM                                                                                                                    
MS. RODELL  agreed that this  is correct. She then  continued her                                                               
discussion  of section  7 on  slide  6. She  explained that  this                                                               
section brings  RCA requirements in  line with the  new statutory                                                               
language.                                                                                                                       
                                                                                                                                
2:04:57 PM                                                                                                                    
MS. RODELL advanced to slide 7 and continued the sectional                                                                      
analysis for SB 257:                                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Administrative Needs - Conformity                                                                                        
                                                                                                                                
     Section 8:                                                                                                               
     Amends AS  42.05.790 by adding  that the  definition of                                                                    
     "Railbelt" has  the same meaning given  in AS 44.83.750                                                                    
     and  "Railbelt  Transmission  Organization"  means  the                                                                    
     transmission organization established by AS 44.83.700.                                                                     
                                                                                                                                
     Section 9:                                                                                                               
     Amends  AS 44.83.080  by adding  to the  powers of  the                                                                    
     Alaska Energy  Authority the ability  to carry  out the                                                                    
     duties   and  powers   assigned  under   AS  44.83.700-                                                                    
     44.83.750 (Section  10 creating  the RTO) and  adds the                                                                    
     ability to  acquire battery  energy storage  systems by                                                                    
     construction, purchase, gift or lease.                                                                                     
                                                                                                                                
2:06:15 PM                                                                                                                    
CHAIR BJORKMAN asked what is changing besides section 9,                                                                        
subsection 20.                                                                                                                  
                                                                                                                                
2:06:25 PM                                                                                                                    
MS. RODELL answered  that the RTO would be required  to carry out                                                               
the duties and powers assigned  under AS 44.83.700-44.83.750. She                                                               
explained that Section 10 creates  these areas of statute - which                                                               
create the  RTO. She noted that  this tells the ERO  that the RTO                                                               
would take on these responsibilities.                                                                                           
                                                                                                                                
2:07:10 PM                                                                                                                    
MS. RODELL advanced to slide 8:                                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Creation of the Railbelt Transmission Organization                                                                       
                                                                                                                                
     Section 10                                                                                                               
     Amends  AS 44.83  by adding  a new  subsection creating                                                                    
     the Railbelt Transmission Organization (RTO).                                                                              
                                                                                                                                
     44.83.700                                                                                                                  
     (a)  establishes  the  RTO   under  the  Alaska  Energy                                                                    
     Authority  for the  purpose  of  developing a  backbone                                                                    
     transmission system for the Railbelt.                                                                                      
                                                                                                                                
     (b) establishes the  governance structure that provides                                                                    
     for  oversight  of  the   RTO,  creating  a  management                                                                    
     committee  that  is  composed of  members  representing                                                                    
     each of  the utilities,  the executive director  of the                                                                    
     Alaska  Energy  Authority and  the  chair  of the  ERO;                                                                    
     requires  the RTO  to establish  a conflict  resolution                                                                    
     process,  and facilitates  public participation  in the                                                                    
     operations of the RTO.                                                                                                     
                                                                                                                                
     (c) clarifies  the RTO is  subject to  the jurisdiction                                                                    
     of  the Regulatory  Commission of  Alaska  and the  RCA                                                                    
     will adopt regulations  as necessary including defining                                                                    
     by regulation the term "backbone transmission asset."                                                                      
                                                                                                                                
     44.83.710 sets  out the  powers and  duties of  the RTO                                                                    
     including   managing  Railbelt   backbone  transmission                                                                    
     assets,  follow  reliability standards  established  by                                                                    
     the ERO,  ensure safe, resilient,  reliable, efficient,                                                                    
     and  economical   operation  and  development   of  the                                                                    
     integrated    transmission    system,   preserve    non                                                                    
     discriminatory  open access,  maintain capacity  rights                                                                    
     of  legacy transmission  owners and  perform integrated                                                                    
     transmission  planning.  The  RTO  is  also  given  the                                                                    
     authority  to  purchase,   lease  or  acquire  backbone                                                                    
     transmission  assets; construct,  own, and  operate new                                                                    
     transmission assets;  establish tariffs subject  to the                                                                    
     approval  of   the  RCA   and  enter   into  contracts,                                                                    
     agreements,  and  partnerships   that  enhance  safety,                                                                    
     reliability, and efficiency  of the Railbelt integrated                                                                    
     transmission system.                                                                                                       
                                                                                                                                
2:08:29 PM                                                                                                                    
SENATOR   DUNBAR   referred  to   Section   b   and  shared   his                                                               
understanding  that  there  are  4  railbelt  utilities:  Chugach                                                               
Electric  Association,  Homer   Electric  Association,  Matanuska                                                               
Electric Association (MEA), and  Golden Valley Electric. He asked                                                               
if  this  is  correct  -  or  if  other  organizations  would  be                                                               
considered "railbelt utilities."                                                                                                
                                                                                                                                
2:08:53 PM                                                                                                                    
MS.  RODELL said  that Seward  Electric Association  may also  be                                                               
included.  She  added  that  "railbelt"  is  already  defined  in                                                               
statute and this would help the RCA move forward.                                                                               
                                                                                                                                
2:09:21 PM                                                                                                                    
SENATOR DUNBAR commented that "railbelt"  is defined and asked if                                                               
there are any small utilities along the railbelt.                                                                               
                                                                                                                                
2:09:52 PM                                                                                                                    
MS. HOLDMANN  replied that the  five utilities mentioned  are the                                                               
only independent  utilities with a load-servicing  area along the                                                               
railbelt. She  added that  there is  no reason  to believe  a new                                                               
utility would be  created in the future but  acknowledged that it                                                               
is a possibility.                                                                                                               
                                                                                                                                
2:10:16 PM                                                                                                                    
SENATOR  DUNBAR pointed  out that,  as currently  written, Seward                                                               
Electric would  have as  much weight  on the  board as  Chugach -                                                               
despite  the large  difference  in the  size  of the  populations                                                               
served. He asked if this would be an issue.                                                                                     
                                                                                                                                
2:10:47 PM                                                                                                                    
MS. RODELL  answered that they  do not  believe this would  be an                                                               
issue. She added  that this management committee  was inspired by                                                               
the   Bradley   Lake   management  committee   and   shared   her                                                               
understanding that no  issues have arisen for  that committee due                                                               
to the size of the customer base since 1987.                                                                                    
                                                                                                                                
2:11:17 PM                                                                                                                    
SENATOR  DUNBAR  stated that  he  is  not casting  aspersions  on                                                               
Seward Electric and commented that  it is interesting that Seward                                                               
Electric  would have  the  same voting  authority  as much,  much                                                               
larger utilities.                                                                                                               
                                                                                                                                
2:11:37 PM                                                                                                                    
CHAIR   BJORKMAN   directed   attention   to   Section   10,   AS                                                               
44.83.700(b)(3),  and commented  that there  is discussion  about                                                               
separating governance and operations  in many areas of government                                                               
(e.g. education and  fire service). He said that  the sentence in                                                               
this   section  appears   to  blur   the  lines   between  public                                                               
participation  and  operations.  He   asked  if  there  has  been                                                               
feedback  from  the utilities  on  this  issue  and if  there  is                                                               
currently  any  public  participation  in the  operation  of  the                                                               
Bradley Lake Project.                                                                                                           
                                                                                                                                
2:12:41 PM                                                                                                                    
MS.  RODELL  shared  her  understanding  that  the  Bradley  Lake                                                               
Project does  not have  an avenue  for public  participation. She                                                               
added that she has not received  comments from the utilities - or                                                               
requests for the removal of this  section. She stated that she is                                                               
not aware of  any concerns regarding this  language and explained                                                               
that  the intent  is to  create a  mechanism for  public comment,                                                               
given the  number of people  impacted by a  railbelt transmission                                                               
organization.                                                                                                                   
                                                                                                                                
2:13:26 PM                                                                                                                    
CHAIR BJORKMAN  asked Ms. Holdmann  how public  participation and                                                               
operations for a transmission organization  would work - and what                                                               
the effect of public participation may be.                                                                                      
                                                                                                                                
2:13:43 PM                                                                                                                    
MS.  HOLDMANN offered  her understanding  that the  desire is  to                                                               
have as much  transparency as possible (e.g. one  way of creating                                                               
this transparency is  to have RTO fall under  RCA regulation) and                                                               
to  have   robust  public  participation  in   the  process.  She                                                               
suggested that the language of  this subsection could be improved                                                               
for clarity.                                                                                                                    
                                                                                                                                
2:14:19 PM                                                                                                                    
CHAIR  BJORKMAN said  that constituents  have expressed  concerns                                                               
about  this   line  and  indicated   that  it   warrants  further                                                               
discussion. He  said that  if RTO  is a  management tool  used to                                                               
deliver massive amounts  of electrons from Homer to  Healy, it is                                                               
important to  separate the creation  of the  governance structure                                                               
and standards from what it means  to have an organization that is                                                               
responsible for operating the backbone transmission.                                                                            
                                                                                                                                
2:15:07 PM                                                                                                                    
MS. RODELL continued her discussion of the slide 8:                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Creation of the Railbelt Transmission Organization                                                                       
                                                                                                                                
     Section 10                                                                                                               
     Amends  AS 44.83  by adding  a new  subsection creating                                                                    
     the Railbelt Transmission Organization (RTO).                                                                              
                                                                                                                                
     44.83.700                                                                                                                  
     (a)  establishes  the  RTO   under  the  Alaska  Energy                                                                    
     Authority  for the  purpose  of  developing a  backbone                                                                    
     transmission system for the Railbelt.                                                                                      
                                                                                                                                
     (b) establishes the  governance structure that provides                                                                    
     for  oversight  of  the   RTO,  creating  a  management                                                                    
     committee  that  is  composed of  members  representing                                                                    
     each of  the utilities,  the executive director  of the                                                                    
     Alaska  Energy  Authority and  the  chair  of the  ERO;                                                                    
     requires  the RTO  to establish  a conflict  resolution                                                                    
     process,  and facilitates  public participation  in the                                                                    
     operations of the RTO.                                                                                                     
                                                                                                                                
     (c) clarifies  the RTO is  subject to  the jurisdiction                                                                    
     of  the Regulatory  Commission of  Alaska  and the  RCA                                                                    
     will adopt regulations  as necessary including defining                                                                    
     by regulation the term "backbone transmission asset."                                                                      
                                                                                                                                
     44.83.710 sets  out the  powers and  duties of  the RTO                                                                    
     including   managing  Railbelt   backbone  transmission                                                                    
     assets,  follow  reliability standards  established  by                                                                    
     the ERO,  ensure safe, resilient,  reliable, efficient,                                                                    
     and  economical   operation  and  development   of  the                                                                    
     integrated    transmission    system,   preserve    non                                                                    
     discriminatory  open access,  maintain capacity  rights                                                                    
     of  legacy transmission  owners and  perform integrated                                                                    
     transmission  planning.  The  RTO  is  also  given  the                                                                    
     authority  to  purchase,   lease  or  acquire  backbone                                                                    
     transmission  assets; construct,  own, and  operate new                                                                    
     transmission assets;  establish tariffs subject  to the                                                                    
     approval  of   the  RCA   and  enter   into  contracts,                                                                    
     agreements,  and  partnerships   that  enhance  safety,                                                                    
     reliability, and efficiency  of the Railbelt integrated                                                                    
     transmission system.                                                                                                       
                                                                                                                                
2:16:16 PM                                                                                                                    
MS. RODELL advanced to slide 9 and continued the sectional                                                                      
analysis for SB 257:                                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Duties of the New RTO                                                                                                    
                                                                                                                              
     Section 10, continued                                                                                                    
                                                                                                                                
     44.83.720 creates  a revenue mechanism, subject  to the                                                                    
     approval of  the RCA,  whereby the  RTO shall  hold and                                                                    
     administer  an open  access transmission  tariff; shall                                                                    
     adopt  a transmission  cost  recovery methodology  that                                                                    
     ensures the reliability and  sufficient capacity of the                                                                    
     integrated  transmission  to  support and  promote  the                                                                    
     economy.  In addition,  the  cost recovery  methodology                                                                    
     must eliminate per-unit  wholesale transmission charges                                                                    
     and  pool  backbone  transmission  costs  and  allocate                                                                    
     those costs to end users.                                                                                                  
                                                                                                                                
     44.83.730  requires the  RTO  to  engage in  integrated                                                                    
     grid planning  at least every  10 years. The  plan must                                                                    
     use  a  whole  system approach  which  articulates  the                                                                    
     strategic trajectory, capital  funding requirements and                                                                    
     outlook for the Railbelt  transmission system and shall                                                                    
     take  into  consideration  technological  advancements,                                                                    
     load growth, fuel supply among others.                                                                                     
                                                                                                                                
     44.83.740  requires   the  RTO  to   identify  existing                                                                    
     backbone  transmission  assets  and that  the  Railbelt                                                                    
     utilities will  transfer management of those  assets to                                                                    
     the RTO by July 1, 2026.                                                                                                   
                                                                                                                                
     44.83.750  defines  "backbone transmission  system"  as                                                                    
     the   assets  of   the  interconnect   electric  energy                                                                    
     transmission network that  serves the Railbelt; defines                                                                    
     "commission"  as   the  RCA;   defines  "interconnected                                                                    
     electric  energy  transmission  network"  as  the  same                                                                    
     definition  as  that used  for  the  ERO in  42.05.790;                                                                    
     defines "Railbelt"  as the area  of Alaska  that ranges                                                                    
     from the Kenai Peninsula  to Interior Alaska, connected                                                                    
     by  a common  electric  transmission backbone;  defines                                                                    
     "railbelt   utility"   to   mean   a   public   utility                                                                    
     certificated to  operate in  the Railbelt;  and defines                                                                    
     transmission  organization to  the  RTO established  in                                                                    
     this bill.                                                                                                                 
                                                                                                                                
MS.  RODELL said  that this  section eliminations  "wheeling" and                                                               
"pancaking"   -  which   have  been   referred  to   in  previous                                                               
presentations.                                                                                                                  
                                                                                                                                
2:17:02 PM                                                                                                                    
CHAIR BJORKMAN said that, on  the Kenai peninsula, Homer Electric                                                               
Association (HEA)  is planned to  be islanded for 4-5  months out                                                               
of the year, for many years  - which limits their ability to sell                                                               
power  off the  peninsula (if  independent power  producers (IPP)                                                               
were to be cited there or  if they were to have excess generation                                                               
during  those months).  He asked  if  there is  a mechanism  that                                                               
would reduce tariffs and cost  recovery from the ERO or otherwise                                                               
compensate HEA members during this time.                                                                                        
                                                                                                                                
2:18:07 PM                                                                                                                    
MS. RODELL  shared her belief that  this is one reason  SB 257 is                                                               
important - it  creates an organization that requires  all of the                                                               
utilities to come together to find  a solution and put together a                                                               
tariff  request for  the RCA.  She  added that,  without SB  257,                                                               
there  is no  requirement for  the utilities  to coordinate  with                                                               
HEA.                                                                                                                            
                                                                                                                                
2:18:43 PM                                                                                                                    
MS. HOLDMANN  expressed confusion about  the idea that  HEA would                                                               
be "islanded"  because the Bradley  Lake Hydroelectric  Project -                                                               
the state's  most important  asset - is  on the  Kenai Peninsula.                                                               
She  said  that  the  idea  of disconnecting  the  asset  -  thus                                                               
removing access to  this power source - does not  make sense. She                                                               
surmised that there is a bottleneck  in the system - meaning that                                                               
it  is fully  committed  to moving  the power  off  of the  Kenai                                                               
Peninsula - which prevents the use  of the same asset to move the                                                               
power in  the other direction.  She emphasized the  importance of                                                               
building out new assets to free  up bottlenecks in the system and                                                               
creating  secondary sources  power flowing  both on  and off  the                                                               
Kenai  Peninsula.  She  referred  to  a  recently  approved  Grid                                                               
Resilience  and  Innovation   Partnerships  (GRIP)  proposal  and                                                               
stated  that  this  is  one component  of  this  proposal  (which                                                               
requires a 50 percent non-federal funding match).                                                                               
                                                                                                                                
2:20:14 PM                                                                                                                    
CHAIR  BJORKMAN   shared  his  knowledge  of   HEA's  history  of                                                               
islanding. He  shared his understanding  that Bradley  Lake power                                                               
is used on the Kenai Peninsula  and gave a brief overview of this                                                               
process.  He noted  that HEA  does not  financially benefit  from                                                               
being islanded  - the  savings received must  be shared  with the                                                               
other  utilities based  on the  Bradley management  agreement. He                                                               
suggested that Curtis Thayer or  Brian Hickey could speak to this                                                               
at a future hearing.                                                                                                            
                                                                                                                                
2:21:19 PM                                                                                                                    
SENATOR DUNBAR said he has  heard conflicting descriptions of RTO                                                               
and what it does. He asked if RTO would be a systems operator.                                                                  
                                                                                                                                
2:22:24 PM                                                                                                                    
MS. RODELL answered no.                                                                                                         
                                                                                                                                
2:22:31 PM                                                                                                                    
SENATOR  DUNBAR  noted  that  some advocates  have  said  that  a                                                               
systems  operator  is needed.  He  questioned  if this  would  be                                                               
considered at a later stage -  or whether utilities would be able                                                               
to  do this  independently,  without the  centralization that  is                                                               
seen in Iceland.                                                                                                                
                                                                                                                                
2:23:10 PM                                                                                                                    
MS.  HOLDMANN  agreed  that  this  does  not  include  a  systems                                                               
operator element.  She explained that  SB 257 includes  a portion                                                               
of what is done in Iceland -  it does not include the dispatch of                                                               
power (which will still be  done by the utilities). She explained                                                               
that  the main  advantage  of  a systems  operator  is to  ensure                                                               
economic dispatch - i.e. that the  lowest cost source of power is                                                               
turned  on first  and that  this energy  is flowing  to consumers                                                               
across the  system. She expressed  her hope that by  setting this                                                               
structure in place - and eliminating  wheeling - there would be a                                                               
natural movement by  the utilities toward a  natural structure of                                                               
economic  dispatch  across the  grid.  She  noted that,  to  some                                                               
extent,  this has  been mandated  by  the RCA  and proposed  that                                                               
natural market  forces would do  the rest. However, if  that does                                                               
not happen, the  legislature could choose to mandate  this in the                                                               
future.                                                                                                                         
                                                                                                                                
2:25:16 PM                                                                                                                    
SENATOR DUNBAR  said he  has heard two  conflicting views  of the                                                               
management   of  assets.   He  shared   his  understanding   that                                                               
management does  not mean ownership  - therefore,  the facilities                                                               
would still  be owned  by the  utilities but  managed by  RTO. He                                                               
questioned  what  this would  look  like  when put  into  action.                                                               
Specifically, whether AEA  (on RTO's behalf) would  build its own                                                               
workforce or manage without taking the work from the utilities.                                                                 
                                                                                                                                
2:26:23 PM                                                                                                                    
MS. RODELL answered  that it is not the intent  to have RTO build                                                               
up  its own  workforce.  She noted  that this  was  based on  the                                                               
Bradley  Lake  management  model,   where  the  utilities  remain                                                               
responsible for  agreements to manage  the assets. She  said that                                                               
the backbone  transmission assets would be  managed collectively.                                                               
She explained that one utility would  not decide on its own about                                                               
backbone transmission assets; instead,  this would be discussed -                                                               
and  decisions  - made  collectively  within  the RTO  management                                                               
framework.                                                                                                                      
                                                                                                                                
2:27:15 PM                                                                                                                    
SENATOR DUNBAR offered  examples and asked how  outages along the                                                               
railbelt would be dealt with.                                                                                                   
                                                                                                                                
2:27:44 PM                                                                                                                    
MS. RODELL said  that these details would be worked  out when RTO                                                               
is formed. However,  she suggested that MEA would  likely fix the                                                               
assets and pass along the costs to the RTO.                                                                                     
                                                                                                                                
2:28:13 PM                                                                                                                    
MS.  HOLDMANN explained  that the  Alaska Energy  Authority (AEA)                                                               
currently owns  about one  third of  the transmission  assets and                                                               
does not have a  labor force to work on those  assets. AEA has an                                                               
agreement  with   local  utilities   to  conduct   any  necessary                                                               
maintenance or  repairs on the  Alaska Intertie and  the Sterling                                                               
to  Quartz Creek  (SSQ) Line.  She said  that, while  significant                                                               
unexpected issues  can arise, the  costs are well  understood and                                                               
thus possible to predict and plan for.                                                                                          
                                                                                                                                
2:29:06 PM                                                                                                                    
MS. RODELL continued her discussion of slide 9:                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Duties of the New RTO                                                                                                    
                                                                                                                              
     Section 10, continued                                                                                                    
                                                                                                                                
     44.83.720 creates  a revenue mechanism, subject  to the                                                                    
     approval of  the RCA,  whereby the  RTO shall  hold and                                                                    
     administer  an open  access transmission  tariff; shall                                                                    
     adopt  a transmission  cost  recovery methodology  that                                                                    
     ensures the reliability and  sufficient capacity of the                                                                    
     integrated  transmission  to  support and  promote  the                                                                    
     economy.  In addition,  the  cost recovery  methodology                                                                    
     must eliminate per-unit  wholesale transmission charges                                                                    
     and  pool  backbone  transmission  costs  and  allocate                                                                    
     those costs to end users.                                                                                                  
                                                                                                                                
     44.83.730  requires the  RTO  to  engage in  integrated                                                                    
     grid planning  at least every  10 years. The  plan must                                                                    
     use  a  whole  system approach  which  articulates  the                                                                    
     strategic trajectory, capital  funding requirements and                                                                    
     outlook for the Railbelt  transmission system and shall                                                                    
     take  into  consideration  technological  advancements,                                                                    
     load growth, fuel supply among others.                                                                                     
                                                                                                                                
     44.83.740  requires   the  RTO  to   identify  existing                                                                    
     backbone  transmission  assets  and that  the  Railbelt                                                                    
     utilities will  transfer management of those  assets to                                                                    
     the RTO by July 1, 2026.                                                                                                   
                                                                                                                                
     44.83.750  defines  "backbone transmission  system"  as                                                                    
     the   assets  of   the  interconnect   electric  energy                                                                    
     transmission network that  serves the Railbelt; defines                                                                    
     "commission"  as   the  RCA;   defines  "interconnected                                                                    
     electric  energy  transmission  network"  as  the  same                                                                    
     definition  as  that used  for  the  ERO in  42.05.790;                                                                    
     defines "Railbelt"  as the area  of Alaska  that ranges                                                                    
     from the Kenai Peninsula  to Interior Alaska, connected                                                                    
     by  a common  electric  transmission backbone;  defines                                                                    
     "railbelt   utility"   to   mean   a   public   utility                                                                    
     certificated to  operate in  the Railbelt;  and defines                                                                    
     transmission  organization to  the  RTO established  in                                                                    
     this bill.                                                                                                                 
                                                                                                                                
2:30:39 PM                                                                                                                    
MS. RODELL advanced to slide 10 and continued the sectional                                                                     
analysis for SB 257:                                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Final Implementation                                                                                                     
                                                                                                                                
     Section 11                                                                                                               
     Repeals AS 42.05.780 and  42.05.785(b) which sets forth                                                                    
     integrated  resource planning  and integrated  resource                                                                    
     planning tariffs for the ERO.                                                                                              
                                                                                                                                
     Section 12                                                                                                               
     Sets the directive for Alaska  Energy Authority and the                                                                    
     Regulatory Commission of Alaska  to adopt the necessary                                                                    
     regulations  to implement  the changes  made by  Senate                                                                    
     Bill 257.                                                                                                                  
                                                                                                                                
     Section 13                                                                                                               
     Requires Alaska  Energy Authority to  immediately begin                                                                    
     an initial grid plan and capital improvement program.                                                                      
                                                                                                                                
     Section 14                                                                                                               
     Sections 12 and 13 take effect immediately.                                                                                
                                                                                                                                
     Section 15                                                                                                               
     All other sections take effect July 1, 2024.                                                                               
                                                                                                                                
2:32:04 PM                                                                                                                    
CHAIR BJORKMAN asked if changes to ERO board membership                                                                         
qualifications (e.g. requiring expertise in the generation of                                                                   
electrons) have been considered.                                                                                                
                                                                                                                                
2:32:57 PM                                                                                                                    
MS. RODELL answered that no one has requested this change and                                                                   
added that this could be discussed further.                                                                                     
                                                                                                                                
2:33:24 PM                                                                                                                    
SENATOR GIESSEL expressed gratitude for the hearing and                                                                         
discussion of SB 257 that provided an opportunity to clarify                                                                    
misunderstandings. With respect to changing the ERO board                                                                       
qualification requirements, she said this is an interesting idea                                                                
to consider.                                                                                                                    

Document Name Date/Time Subjects
SB257 Sectional Analysis Presentation to SLAC 03.27.24.pdf SL&C 3/27/2024 1:30:00 PM
SB 257
SB257 Support Document-Letter-RIPP 03.24.24.pdf SL&C 3/27/2024 1:30:00 PM
SB 257
SB257 Fiscal Note-DCCED-AEA-03.03.24.pdf SL&C 3/27/2024 1:30:00 PM
SB 257
SB257 Fiscal Note-DCCED-RCA-03.04.24.pdf SL&C 3/27/2024 1:30:00 PM
SB 257
SB257 Fiscal Note-DCCED-AIDEA-03.04.24.pdf SL&C 3/27/2024 1:30:00 PM
SB 257
SB257 ver D.pdf SL&C 3/4/2024 1:30:00 PM
SL&C 3/27/2024 1:30:00 PM
SB 257
SB257 Sectional Analysis ver D.pdf SL&C 3/4/2024 1:30:00 PM
SL&C 3/27/2024 1:30:00 PM
SB 257
SB257 Sponsor Statement ver D.pdf SL&C 3/4/2024 1:30:00 PM
SL&C 3/27/2024 1:30:00 PM
SB 257
SB239 ver B.pdf SL&C 3/27/2024 1:30:00 PM
SL&C 4/12/2024 1:30:00 PM
SB 239
SB239 Sponsor Statement.pdf SL&C 3/27/2024 1:30:00 PM
SL&C 4/12/2024 1:30:00 PM
SB 239
SB239 Sectional Analysis.pdf SL&C 3/27/2024 1:30:00 PM
SL&C 4/12/2024 1:30:00 PM
SB 239
SB239 Fiscal Note-DCCED-AIDEA 03.22.24.pdf SL&C 3/27/2024 1:30:00 PM
SL&C 4/12/2024 1:30:00 PM
SB 239