Legislature(2009 - 2010)BARNES 124
03/25/2010 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Overview: Biomass Energy | |
| HB182 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 182 | TELECONFERENCED | |
HB 182-RAILBELT ENERGY & TRANSMISSION CORP.
CO-CHAIR MILLETT announced the next order of business would be
HOUSE BILL NO. 182, "An Act establishing the Greater Railbelt
Energy and Transmission Corporation and relating to the
corporation; relating to transition, financial plan, and
reporting requirements regarding planning for the initial
business operations of the Greater Railbelt Energy and
Transmission Corporation; relating to a report on legislation
regarding the Regulatory Commission of Alaska and the Greater
Railbelt Energy and Transmission Corporation; authorizing the
Alaska Energy Authority to convey the Bradley Lake Hydroelectric
Project and the Alaska Intertie to the Greater Railbelt Energy
and Transmission Corporation; and providing for an effective
date."
4:35:48 PM
REPRESENTATIVE RAMRAS withdrew his objection made at the hearing
of 3/18/10.
CO-CHAIR MILLETT withdrew her motion to adopt the committee
substitute (CS) for HB 182, 26-GH1041\E, Bailey, 3/18/10, made
at the hearing of 3/18/10. She then moved to adopt CSHB 182 26-
GH1041\S, Chenoweth/Bailey, 3/24/10, as the working document.
4:36:41 PM
CO-CHAIR EDGMON objected for discussion purposes.
CO-CHAIR MILLETT explained that the working document was drafted
for the Senate.
4:36:50 PM
JIM STRANDBERG, Project Manager, Alaska Energy Authority (AEA),
Department of Commerce, Community, & Economic Development
(DCCED), informed the committee he was speaking to the bill on
behalf of the administration. Referring to the meeting on
3/18/10, he said there were questions raised regarding the
financial status of the utility companies. He presented
documents from Seattle-Northwest Securities that looked at the
financial condition of the utilities.
4:39:46 PM
CO-CHAIR MILLETT advised there are attachments to the working
document.
4:40:29 PM
MR. STRANDBERG related that the administration was pleased with
the effort on the part of the Railbelt utilities to create a new
corporation to respond to the energy future. The Alaska Energy
Authority (AEA) and the governor's office were partners in the
effort, and assisted in the first step to get all six utilities
at their board, CEO, and technical levels to work together. He
said this was a positive action and he expressed his hope the
committee would consider the bill as such.
4:42:41 PM
CO-CHAIR EDGMON observed Homer Electric Association (HEA) had
backed away from the CS.
4:43:30 PM
MR. STRANDBERG said his understanding was the matter would be
addressed by testimony at the Senate Resources Standing
Committee meeting.
4:44:05 PM
CO-CHAIR EDGMON asked what would happen if all six utilities are
not in agreement.
MR. STRANDBERG acknowledged AEA was also concerned.
4:44:57 PM
CO-CHAIR MILLETT offered to provide copies of a letter from HEA
to the committee.
4:45:36 PM
BRIAN BJORQUIST, Senior Assistant Attorney General, Labor and
State Affairs Section, Department of Law (DOL), informed the
committee his primary clients are AEA and the Alaska Industrial
Development & Export Authority (AIDEA), Department of Commerce,
Community, & Economic Development (DCCED).
4:47:09 PM
CO-CHAIR MILLETT asked Mr. Bjorkquist to point out major items
that were not in the original bill.
4:47:12 PM
MR. BJORKQUIST agreed. He explained that this legislation
creates an energy and transmission corporation modeled after a
generation and transmission (G&T) cooperative. In this type of
entity, public utilities collectively plan for, develop, and
implement their G&T needs; however, the public utilities remain
distribution utilities providing electricity to their retail
customers. The original bill created one specific corporation,
but the CS creates a statutory scheme, an energy and
transmission corporation, and also provides authority for the
Greater Railbelt Energy and Transmission Corporation (GRETC) to
be formed. The [CS] provides that four or more municipal or
cooperative electric utilities form together to acquire or
operate a project from AEA, to plan for an interconnected
system, and to create an energy and transmission corporation, if
it is first approved by the legislature. Section 13 of the work
draft provides the legislature authority for this specific
corporation to be formed. Mr. Bjorkquist pointed out that this
change from the original bill was for two reasons: (1) to avoid
a constitutional issue regarding local and special legislation;
(2) to shift the model for the corporation from the Commercial
Fishing and Agriculture Bank (CFAB), which is a specific quasi-
public corporation established in statute, to a private style
with more freedom and flexibility as to how the utilities
operate within GRETC. The utilities desire the ability to
develop their own projects, rather than the expectation that the
new corporation will be the sole provider of G&T services. He
further explained that the process is starting "where there is
nothing, basically," and this will allow for more of an
evolution of the corporation instead of forcing the utilities
into an entity. The legislation gives more freedom to the
utilities, but with an expectation that the entity will evolve
into the provider of public services in the Railbelt. Mr.
Bjorkquist began a sectional analysis, and said Sections 1, 4,
and 5 deal with rate regulation by the Regulatory Commission of
Alaska (RCA), and municipalities. Sections 1 & 4 determine that
when GRETC is not regulated by the RCA, it is also not regulated
by municipalities. Section 5 provides for the exemption from
regulation by the RCA. These provisions would become effective
8/16/15, five years after the organization of GRETC, thus there
would be five years of full regulation by the RCA and five years
into the future the exemption from rate regulation would take
place. He cautioned that there is an inconsistency in the
language regarding regulation, but the amendment corrects that.
4:55:03 PM
CO-CHAIR MILLETT observed that GRETC would be a third party
storage facility without RCA regulation. This is contradictory
to proposed legislation, and she questioned the reasoning.
4:56:08 PM
MR. BJORKQUIST referred to language on page 2, line 15, which
deals with "related contracts for wheeling, storage,
regeneration." He expressed his belief that this does not
concern gas storage, but affects water storage related to
hydroelectric projects.
4:57:20 PM
CO-CHAIR MILLETT pointed out another reference to fuel storage
on page 4, line 5.
4:57:25 PM
MR. BJORKQUIST noted on page 14, lines 15-17, there was a
provision for fuel supplies. He said he was unfamiliar with
contradictory legislation; however, he suggested including the
exemption by language on page 18, line 8, which deals with
certain components that are related to regulation.
4:59:18 PM
CO-CHAIR MILLETT advised that there is also a contradiction in
whether the interconnection by an independent power producer
(IPP) has to conform to the corporation's interconnection
guidelines and standards. This sets up an adversarial role for
the IPP as it would need to appeal to the RCA to get
interconnection within GRETC.
5:00:24 PM
MR. BJORKQUIST stated the provisions regarding where GRETC takes
a role on interconnection are intended to replace a void in the
interconnection reliability standards throughout the Railbelt.
In fact, the Alaska Intertie Agreement is not signed by all of
the Railbelt utilities, and will terminate next October. These
provisions would have GRETC fill that void and become the entity
to deal with interconnection standards. Furthermore, there is
the provision that allows the RCA to compel interconnection.
The first step for interconnection is the obligation on the
utilities to negotiate terms and conditions with each other. If
unsuccessful, the RCA can open a docket and compel
interconnection with the terms and conditions established by the
RCA. This second step is less cumbersome than litigation
between parties, and he gave an example. Section 2 also deals
with the RCA and provides that power sales agreements between
GRETC and public utilities would not be subject to review or
approval by the RCA. The provision would apply as long as there
is long-term debt associated with the power project, as in the
Bradley Lake, Swan Lake, and Lake Tyee projects. The purpose of
Sec. 2 is to provide assurance and protection for financing.
For example, if power sales agreements were subject to
regulatory review, the review may affect the source of re-
payment. In addition, GRETC is forward-looking, and this
applies only to new projects. Section 3 deals with rate-
setting, and is identical to the provision in rate-setting that
would become effective in 2015. Further discussion on this
section is forthcoming later in the analysis. Section 6 begins
with general law on the energy and transmission corporation.
5:08:08 PM
CO-CHAIR MILLETT suggested the analysis stop at page 3, line 15,
Chapter 50, of the [CS].
5:08:24 PM
REPRESENTATIVE TUCK observed a title change was needed.
5:08:42 PM
CO-CHAIR MILLETT announced that HB 182 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Tok DOF Hazardous Forest Fuels & Wood Energy Chris Edit.pdf |
HENE 3/25/2010 3:00:00 PM |
|
| CS HB 182 3-24-10.PDF |
HENE 3/25/2010 3:00:00 PM HENE 3/30/2010 3:00:00 PM |
HB 182 |
| HB 182 Amendment 1.PDF |
HENE 3/25/2010 3:00:00 PM |
HB 182 |