Legislature(2009 - 2010)BUTROVICH 205
02/25/2010 04:00 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB203 | |
| SB277 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 220 | TELECONFERENCED | |
| += | SB 203 | TELECONFERENCED | |
| = | SB 277 | ||
SB 277-PUB. UTILITY EXEMPTION: RENEWABLE ENERGY
4:16:54 PM
CO-CHAIR WIELECHOWSKI announced the next order of business to
come before the committee was SB 277.
SENATOR FRENCH moved to adopt the proposed committee substitute
(CS) for SB 277, labeled 26-LS1353\P, as the working document of
the committee.
SENATOR WIELECHOWSKI objected for discussion purposes.
MICHAEL PAWLOWSKI, Staff to Senator McGuire, said changes in
Section 3 [on page 2, version P] respond to concerns about the
size of the projects that could be exempted from regulation
under SB 277. On page 2, lines 9-10 specify that SB 277 applies
to facilities placed into service before January 1, 2016. On
page 2, line 11 limits the size of the facilities to those
generating less than 65 megawatts of electricity. He said
Senator Stedman had been concerned about large hydro-projects
being built, particularly with state money, without regulation.
Mr. Pawlowski explained that on page 2, Section 3, paragraph
(3), lines 14-19 state that the exemption from regulation is
appropriate if the facility is not receiving tax credits or
state grants.
He said the fundamental point of SB 277 is maintained on page 2,
lines 12-13 of Version P. The power sales agreement between the
power producer and the consumers is regulated at the utility
level. The power producer will sell power to a utility and that
power sales agreement must go up for approval by the commission.
4:20:18 PM
He explained that Section 3 [page 2, version P] was also
redrafted to apply to the plant or facility rather than the
person.
SENATOR STEVENS asked for a point of reference to help
understand the magnitude of 65 megawatt plant.
MR. PAWLOWSKI said much of the larger generation in the Rail
Belt is about 60 megawatts, such as the North Pole Extension. He
said under a provision in the Federal Energy Regulatory
Commission (FERC), an 80 megawatt plant generated from renewable
energy can apply for exemptions to regulations.
4:22:48 PM
SENATOR STEVENS asked how many megawatts Bradley Lake is.
CO-CHAIR WIELECHOWSKI said he believes Bradley Lake is over 100
megawatts. Chakachumna is proposed to be 360 megawatts, Susitna
is proposed to be from 400 to 1600 megawatts and Mt. Spur is
proposed to be 100 or 150 megawatts. He said SB 277 is contained
to the smaller renewable plants.
SENATOR MCGUIRE said 65 megawatts would be around 5,000 to 6,000
households. She said the massive projects are not covered in SB
277, which should ease concerns about large hydro-electric
facilities. She said she worries that the renewable energy
companies attracted to Alaska may be discouraged by the RCA
process.
4:25:14 PM
SENATOR MCGUIRE reiterated that the philosophy behind SB 277 is
to get as much power produced in Alaska as possible, coming into
the utilities, with RCA overseeing the ultimate contract with
consumers. An extra layer of government could end up killing a
project. She encouraged committee members to consider the
broader question of renewable energy.
SENATOR FRENCH asked what the difference is between having the
RCA regulate a facility and having the RCA regulate a contract
between a facility that produces electricity and the utility
that buys the electricity.
STUART GOERING, Assistant Attorney General, representing RCA,
Department of Law, Anchorage, replied that AS 42.05, the Public
Utility Regulatory Act, generally speaks in terms of activities,
such as furnishing electricity, not in terms of facilities. The
process begins with a Certificate of Public Convenience and
Necessity (CPCN) which requires a showing that a utility
operator is fit, willing and able to provide the service and the
service is in the public's convenience and necessity. Once
certificated, the utility files a tariff for approval by the
commission that specifies the terms, rules and regulations under
which service is provided to the public.
4:30:02 PM
CO-CHAIR WIELECHOWSKI called a short at ease at 4:30 p.m. due to
static over the sound system.
SENATOR FRENCH asked if the issuance of a CPCN is more
comprehensive than passing on a wholesale power agreement.
4:32:02 PM
CO-CHAIR WIELECHOWSKI called another at ease from 4:32 to 4:33
due to static over the sound system.
4:33:35 PM
MR. GOERING said that a contract for the supply of wholesale
power between a utility and non-regulated vendor is covered by 3
AAC 52.470(e) which requires that the utility file the contract
with the commission. Prior approval is not required.
SENATOR FRENCH asked how many vendors in Alaska sell electricity
without having themselves applied for and gotten a CPCN.
MR. GOERING replied that he does not have a firm answer but they
are typically small projects. He said wholesale power sales
agreements are usually between regulated utilities. The
assumption is that the vendor is unregulated because these are
smaller projects. Under existing law, anybody who provides power
to a public utility for compensation becomes a public utility
themselves and the only way to not be a public utility is if
they are a Public Utility Regulatory Policies Act Qualifying
Facility (PURPA QF). That regulation would have to be revisited
if SB 277 is enacted into law.
4:36:31 PM
CO-CHAIR WIELECHOWSKI closed public testimony.
4:36:45 PM
CO-CHAIR WIELECHOWSKI called an at ease from 4:36 p.m. to 4:39
p.m.
4:39:30 PM
CO-CHAIR WIELECHOWSKI said the committee had a comprehensive
list of questions that had been raised by Mr. Goering, many of
which are legal in nature and better addressed by the judiciary
committee.
CO-CHAIR WIELECHOWSKI removed his objection and version P was
before the committee.
4:40:11 PM
SENATOR MCGUIRE moved to report CS for SB 277, 26-LS1353\P, from
committee with individual recommendations and accompanying
fiscal notes. There being no objection CSSB 277(RES) moved from
the Senate Resources Standing Committee.
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