Legislature(2023 - 2024)BELTZ 105 (TSBldg)
04/29/2024 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s): Alaska Labor Relations Agency | |
| SB211 | |
| SB257 | |
| SB153 | |
| HB17 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 211 | TELECONFERENCED | |
| += | SB 257 | TELECONFERENCED | |
| += | SB 153 | TELECONFERENCED | |
| + | HB 17 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 257-ELECTRIC UTILITY REGULATION
[Includes discussion of SB 217.]
2:11:44 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."
CHAIR BJORKMAN noted that Senate Labor and Commerce Standing
Committee had held several meetings on SB 257 and taken invited
and public testimony on the bill. He said during the last
meeting there was a motion to adopt a CS to SB 257 and there is
an objection still in place.
2:12:29 PM
KONRAD JACKSON presented the summary of changes in the committee
substitute for SB 257 from Version D to Version H:
[Original punctuation provided.]
Summary of Changes Ver D to Ver H
Senate Bill 257
Sections 1 and 2: No changes.
Section 3: Amends AS 42.05.762 by removing the
requirement that the Electric Reliability Organization
(ERO) participate in integrated grid planning by the
Railbelt Transmission Organization (RTO) and returning
to the current language found in statute.
Amends AS 42.05.762 by inserting new subsection 4
adding the duty that the ERO shall consider the cost
to the consumer when prioritizing reliability and
stability of the interconnected bulk-electric system.
Amends AS 42.05.762 Deletes the description of the
governing board. (Inserted in new section 4)
Section 4: AS 42.05.763 Governance of an Electric
Reliability Organization.
Inserts new section which includes the language
deleted above and further expands the qualifications
which must be met to serve on the ERO board of
directors.
2:14:22 PM
MR. JACKSON continued reading the summary of changes in the
committee substitute from Version D to Version H for SB 257:
[Original punctuation provided.]
Renumber the following sections accordingly.
Section 5: (renumbered former section 4) No Change.
Section 6: (renumbered former section 5) Amends AS
42.05.770 Regulations. To require nondiscriminatory
standards for interconnection and caps the cost
recovery of the ERO to $1.2 million.
Section 7: (former section 6) No Change.
Old Section 7 is deleted.
Section 8: (former section 8) No Change.
Section 9: No Change.
Section 10: Amends AS 44.83 Railbelt Transmission
Organization
AS 44.83.700 is amended by replacing paragraph (c)
with language expressly stating that provisions of AS
44.83.700-44.83.750 do not alter the rights and
obligations of a utility regulated by the RCA.
And, renumbers the following paragraph.
AS 44.83.710(a)(6) is amended by deleting "grid" and
replacing with "transmission".
(a)(8) is deleted (moved below), the following
paragraph is renumbered.
Renumbered (a)(9) is amended by adding reference to AS
44.83.72
2:16:11 PM
MR. JACKSON corrected a discrepancy, noting that "44.83.72"
should read "44.83.720." He continued reading the summary of
changes in the committee substitute from Version D to Version H
for SB 257.
[Original punctuation provided.]
Deletes and replaced former (b) granting optional
authorities to the organization:
Old paragraph 8 is moved to new subparagraph (b)(1)
Renumbers old 44.83.710 (b) to subparagraph (b)(2)
2:16:47 PM
MR. JACKSON continued reading the summary of changes in the
committee substitute from Version D to Version H for SB 257.
[Original punctuation provided.]
Inserts new paragraph (c) prohibiting the conveyance
by the RTO of any backbone transmission asset, without
legislative approval, prior the effective date of the
conveyance.
Inserts new paragraph (d) requiring the RTO ensure
that work performed on new construction and
maintenance of backbone assets is prioritized to give
first preference to the Railbelt utility in the area
where the work is performed. Further, the RTO must
compensate the utility for reasonable and necessary
expenses incurred and that work shall be subject to
existing collective bargaining agreements.
Former paragraph (c) is renumbered to subparagraph (e)
with a change to reference regulations necessary to
implement AS 44.83.700-44.83.750.
Sec. 44.83.720 Revenue Mechanism:
Old paragraph (a) is deleted and replaced with
language combining old (a) & (a)(1).
Renumbers the following paragraphs.
Old paragraph (a)(2) is renumbered to subparagraph (b)
and is amended to more clearly define the RTO cost
recovery methodology and be approved by the
commission.
Old paragraph (b) is renumbered (c) and amended to
more fully describe the cost recovery methodology to
be used by the RTO, to define recoverable backbone
transmission system costs and how these costs will be
shared among member utilities. These include
accounting for ancillary backbone services, backbone
system congestion and disruption of backbone
connectivity for more than 24 hours.
Inserts new paragraph (d) requiring a Railbelt utility
pass the commission approved transmission costs
directly and transparently to the utility's customers.
2:19:16 PM
MR. JACKSON continued reading the summary of changes in the
committee substitute (CS) from Version D to Version H for SB
257:
[Original punctuation provided.]
Sec. 44.83.730 Integrated transmission planning:
Old paragraph (a) is amended by deleting the term
"integrated grid plan" and replacing it with "the
Railbelt to integrated transmission plan for the
backbone transmission system."
2:19:41 PM
MR. JACKSON corrected a discrepancy, noting that "Railbelt to
integrated" should read "Railbelt integrated." He continued
reading the summary of changes in the CS from Version D to
Version H for SB 257.
[Original punctuation provided.]
Paragraph (b) is amended to require the integrated
transmission plan to fully articulate the details of
the plan.
Paragraph (c) is amended by replacing the term "grid
plan" with "integrated transmission plan"
Sec. 44.83.740 Transfer management of assets: Is
unchanged. Sec. 44.83.750 Definitions: Old paragraph
(1) "backbone transmission system" is revised to more
clearly define the system and adds a reference to
assets that are considered distribution or radial
facilities under the standards of the Federal Energy
Regulatory Commission which shall not be considered
part of the backbone system.
No further changes are made to this section.
Former Section 11: Is deleted.
The following sections of the act are renumbered.
Section 11: Applicability and Transition: EROs Adds
new section to the uncodified laws of the State
regarding (a) board member terms and qualification
language allowing current board members who do not
meet the qualifications, to retain their seat until a
successor is appointed, referenced in Section 4 of the
Act.
And, (b), AS 44.05.770(3) apply to costs incurred by
an ERO on or after the effective date of section 6 of
the Act.
2:21:45 PM
MR. JACKSON continued reading the summary of changes in the CS
from Version D to Version H for SB 257:
[Original punctuation provided.]
Former section 12 is deleted and replaced with:
Section 12: Transition Language: Agreements between
AEA and Railbelt Utilities
Adds a new section to the uncodified laws of the State
defining the agreement which will be established
between the Alaska Energy Authority (AEA) and the
Railbelt utilities referenced in Section 10 of the
Act. The contents of this agreement are further
described in this section.
Section 13: Transition Language: Integrated
Transmission Plan and Capital Improvement Program
Amends old section 13 which adds a new section to the
uncodified laws of the State which instructs the AEA
to immediately assume the integrated transmission
planning duties under AS 44.83.700 in Section 10 of
the Act following establishment of the governance
structure under sect. 12 of the Act. Amends the
section by replacing the term "integrated grid
planning" with "integrated transmission" and adding
the term "transmission" where appropriate.
Section 14: Transition language: Regulatory Commission
of Alaska Members
Adds a new section to the uncodified laws of the State
regarding the terms and qualifications of members of
the Regulatory Commission of Alaska as detailed in
Section 1 of the Act.
Section 15: Immediate Effective date clause for
sections 12 and 13 of the Act.
Section 16: Effective date clause providing that
except for sec. 15, this act takes effect July 1,
2024.
2:23:28 PM
CHAIR BJORKMAN shared with the committee the background behind
the CS and some of the rationale and methodology used to draft
the CS. He said portions of the current CS for SB 217 that were
similar or having to do with portions of SB 257 were
incorporated into SB 257 to:
• add qualifications to membership on the ERO board.
• cap cost recovery to the ERO board.
• make sure there was language to protect any utility from
islanding events or constraints within the system.
2:24:20 PM
CHAIR BJORKMAN thanked Senator Giessel for incorporating pieces
of SB 217 into SB 257 and for her willingness to consider
language to prevent any utility from having to pay for costs
incurred by the Railbelt Transmission Organization (RTO) for
which they experience no benefit. He mentioned a letter of
concern by the Homer Electric Association that provided more
detail and which was available on BASIS.
2:25:59 PM
At ease
2:26:18 PM
CHAIR BJORKMAN reconvened the meeting and removed his objection.
2:26:26 PM
CHAIR BJORKMAN [finding no further objection,] CSSB 257, version
H, was adopted as the working document.
2:26:39 PM
CHAIR BJORKMAN solicited a motion.
2:26:42 PM
SENATOR DUNBAR moved to adopt Amendment 1, workorder 33-
LS1047\H.1, for CSSB 257.
33-LS1047\H.1
Walsh
4/26/24
AMENDMENT 1
OFFERED IN THE SENATE BY SENATOR DUNBAR
TO: CSSB 257(L&C), Draft Version "H"
Page 7, line 31, through page 8, line 3:
Delete all material and insert:
"(1) provide for oversight of the transmission
organization by a management committee that is made up of
(A) representatives from each of the Railbelt
utilities;
(B) the executive director of the authority;
(C) the chief executive officer of the
applicable electric reliability organization, or the chief
executive officer's designee;
(D) an individual who represents a person, other
than a public utility, that owns or operates a facility for
the generation of electricity; and
(E) an individual who represents a labor
organization engaged in collective bargaining with a
Railbelt utility;"
2:26:50 PM
CHAIR BJORKMAN objected for purposes of discussion.
2:26:52 PM
SENATOR DUNBAR referred to SB 257, pages 7 and 8. He noted the
Railbelt Transmission Organization (RTO) board consisted of the
six railbelt utility heads, the Alaska Electrical Association
(AEA) head and the Chief Executive Officer (CEO) of the Electric
Reliability organization (ERO). He said his [amendment] would
add two additional seats to the board. One seat would be filled
by an operator or owner of a facility for the generation of
electricity, otherwise known as an Independent Power Producer
(IPP). He noted that IPPS are very involved in this process and
are represented at the ERO. The second seat proposed by his
amendment would be filled by "an individual who represents a
labor organization engaged in collective bargaining with a rail
belt utility". He said there were a number of labor
organizations that fit that description, the largest and the one
that works most with the stakeholder utilities, was the
International Brotherhood of Electrical Workers (IBEW). He
advocated for a representative on the transmission planning
board that would actually do the work on the lines and do the
work of maintaining the facilities. He noted concerns expressed
regarding the relatively small size of the RTO board and that it
didn't have the kind of public representation that existed at
the ERO. He pointed out that the ERO was relatively large with
13 members, and a variety of public seats. He said he didn't
feel those numbers were appropriate for the RTO, but that the
two suggested additions would be valuable.
2:29:28 PM
CHAIR BJORKMAN removed his objection, found no further objection
and Amendment 1 (H.1) was adopted.
2:29:38 PM
CHAIR BJORKMAN solicited a motion.
2:29:41 PM
SENATOR GRAY-JACKSON moved to adopt Amendment 2, work order 33-
LS1047\H.2 for CSSB 257.
33-LS1047\H.2
Walsh
4/27/24
AMENDMENT 2
OFFERED IN THE SENATE
TO: CSSB 257(L&C), Draft Version "H"
Page 10, following line 4:
Insert a new subsection to read:
"(e) A Railbelt utility that provides service
exclusively on the Kenai Peninsula is not subject to the
cost recovery methodology for the transmission organization
until
(1) the transmission line between the Kenai
Peninsula and Anchorage is upgraded to a capacity of 230
kilovolts; or
(2) a high-voltage submarine cable between the
Kenai Peninsula and the area near Beluga is operational."
Page 11, line 30:
Delete "(1)"
Page 12, line 5:
Delete "; and"
Insert "."
Page 12, lines 6 - 9:
Delete all material.
2:29:44 PM
CHAIR BJORKMAN objected for purposes of explanation.
2:29:52 PM
CHAIR BJORKMAN explained that Amendment 2 (H.2) is from him and
states that the Homer Electric Association (HEA) would be
excluded from the RTO cost recovery methodology until the
railbelt system is fully deconstrained. He specified that
deconstraint would be accomplished when there is a line that can
move power on and off the peninsula at 230 kilovolts, and said,
hopefully that could be done within five years.
2:30:44 PM
SENATOR DUNBAR countered that the RTO would do the integrated
[railbelt system] planning that would benefit the HEA going
forward. He acknowledged it would take a number of years to
develop those plans and asked if there was consideration for
retroactive [payment from HEA to the RTO] in which the cost
wouldn't apply [to HEA] for the time it takes to build the
cables. He noted HEA will benefit [from the new railbelt system]
just as other stakeholders will; from the work that will happen
during those five years. He asked whether HEA would be delaying
those charges for five years or fully exempting them. He
reiterated that the RTO would take a number of years to develop
the plans, and none of the rail belt utilities would benefit
from those plans until they're completed.
2:32:11 PM
CHAIR BJORKMAN said HEA's proposal was that they not pay
administrative costs and other things that are incurred due to
the RTO because HEA would not experience benefits from the RTO.
He acknowledged more work was needed on SB 257 as it moves
through the process with the utilities. He maintained that other
areas of the state get significant benefit from their utilities
being unconstrained, while Homer continues to be at a
disadvantage because the bandwidth going on and off the
peninsula is lower and constrained. He said members on the Kenai
Peninsula should not be required to pay for increasing costs and
benefits that they have no ability to experience a benefit from
until they're fully integrated. He suggested members of HEA
would and should pay for planning and scheduling and other
administrative functions when they are benefiting from those
things. He reiterated that, until HEA is deconstrained, they
should not have to pay for services they're not going to benefit
from.
2:33:57 PM
SENATOR DUNBAR explained that there would not be any immediate
financial benefit to anyone until the results of the RTOs
planning work went into effect. He said the issues of islanding
or deconstraining the transmission of power was unrelated to the
RTO and to the cost recovery for the RTO, which would be doing
the planning and integration work that goes hand in glove with
the construction of [the upgraded railbelt system]. He said no
one would benefit until it was fully built. He suggested the
finance committee could look into whether any stakeholders would
be benefiting from this cost recovery methodology in the short
term and everyone [in the railbelt system] was in the same boat.
2:35:26 PM
CHAIR BJORKMAN asked if there was any further committee
discussion on Amendment 2 (H.2).
2:35:28 PM
SENATOR GRAY-JACKSON maintained objection.
2:35:35 PM
CHAIR BJORKMAN asked for a roll call vote.
2:35:50 PM
A roll call vote was taken. Senators Dunbar, Merrick, Bjorkman
voted in favor of Amendment 2 (H.2) and Senator Gray-Jackson
voted against it. Therefore, SB 257 passed by a 3:1 vote.
2:36:13 PM
CHAIR BJORKMAN announced that Amendment 2 (H.2) to CSSB 257,
work order 33-LS1047\H, was adopted.
2:36:32 PM
CHAIR BJORKMAN solicited the will of the committee.
2:36:33 PM
SENATOR GRAY-JACKSON moved to report committee substitute (CS)
for SB 257, work order 33-LS1047\H, from committee with
individual recommendations and attached fiscal note(s).
2:36:53 PM
CHAIR BJORKMAN found no objection and CSSB 257(L&C) was reported
from the Senate Labor and Commerce Standing Committee.