Legislature(2019 - 2020)SENATE FINANCE 532
01/27/2020 03:30 PM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB151|| SB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 151 | TELECONFERENCED | |
HB 151-ELECTRIC RELIABILITY ORGANIZATIONS
SB 123-ELECTRIC RELIABILITY ORGANIZATIONS
3:31:54 PM
CHAIR COGHILL announced that the only order of business would be
SENATE BILL NO. 123, "An Act relating to the regulation of
electric utilities and electric reliability organizations; and
providing for an effective date." and HOUSE BILL NO. 151, "An
Act relating to the regulation of electric utilities and
electric reliability organizations; and providing for an
effective date." [Before the committees was the original
version of SB 123 and a proposed committee substitute (CS) for
HB 151, Version 31-LS0870\U, Klein/Fisher, 12/20/19 ("Version
U"), adopted by the House Special Committee on Energy as a
working document during its meeting on 1/23/20.]
CHAIR COGHILL explained that, prior to this meeting, the House
Special Committee on Energy and the Senate Special Committee on
Railbelt Electric System had been working to coordinate the two
proposed bills, HB 151 and SB 123. He acknowledged that the
hard work by both the utilities and other interest groups had
"found its place in these particular pieces of the legislation."
He declared that this hard work by everyone was "how to make
Alaska work better."
CHAIR COGHILL outlined that the committees would hear comments
from the utilities on the structure of the proposed bills,
processes aimed at improvement, and recommendations.
3:35:22 PM
JULIE ESTEY, Director External Affairs, Matanuska Electric
Association (MEA), acknowledged that, although there had been
work put into this for decades, this had to be a different
approach. She shared that they were all present to have
discussions between the utilities, the policy makers, and the
other stakeholders. She reported that, once the concerns had
been shared, solutions were made available and substantial
progress had been made "pretty quickly over the last few
months." She directed attention to the comments which had been
forwarded for consideration, noting that a response indicated
there had been "some overreach in our comments. We went really
down into the details." She asked that the provided comments be
taken as they were intended, and she offered her belief that the
proposed legislation was "very solid as presented. We think
that there are a few adjustments that we would put on the table
for your consideration to improve it and help with the
implementation." She offered a PowerPoint presentation and
brought attention to slide 2, "Presentation Outline," which
read:
? Progress to date
? The Railbelt Reliability Council (RRC)
? Next steps for the RRC
? How the legislature can help
? Thoughts on SB123 and HB151
3:39:02 PM
BRIAN HICKEY, Chief Operating Officer, Chugach Electric
Association, declared that the issue was important to the
Railbelt, and shared that he had "seen a lot of things over this
last 35 or 40 years and I do think that we are closer to doing
the things in a better way than we've ever been in my career."
He emphasized that it was important to understand that a grid
was a single machine operating in perfect synchronism; if not,
it would collapse and black out. He offered his belief that the
utilities had a done a great job of keeping reliability high and
costs low, adding that the electric industry was now changing.
He opined that the current organizational structure would be a
vehicle to move the grid into the future in a better way for all
the ratepayers.
CHAIR COGHILL interjected that all the members of the committee
had benefited from the hard work of the utilities. He pointed
out that all manners of getting power into the grid, including
wind and solar, were of interest to the committee. He expressed
appreciation for "the struggle of growing pains." He stated
that he would respect, as much as possible, the results of prior
meetings among the utilities while still asking what could be
done to move forward and allowing the latitude to make it work.
MR. HICKEY paraphrased slide 3 of the PowerPoint presentation,
"Progress - Consistent Railbelt Reliability Standards," which
read:
In 2014 the Intertie Management Committee (IMC)
adopted open access rules for the Alaska Intertie
In April 2018 the Railbelt electric utilities and
Alaska Energy Authority (AEA) filed consensus Railbelt
Reliability Standards with the Regulatory Commission
of Alaska (RCA)
Compliance with reliability standards is mandated no
later than one year after the Electric Reliability
Organization (ERO) is established, until then
compliance is voluntary
MR. HICKEY moved on to slide 4, "Progress - Coordinated Cyber
Security Rules," which read [original punctuation provided]:
All utilities engaged a nationally recognized
cybersecurity consultant and developed cyber security
standards that went into effect January 1, 2020,
starting a 3-year compliance clock.
Utilities are currently conducting internal cyber
security audits to identify gaps between the current
practices and the new standards.
The Railbelt Cyber Security Working Group (RCWG),
comprising IT subject matter experts from the six
Railbelt utilities and Doyon Utilities, meets monthly
to execute standards implementation.
MR. HICKEY, in response to Chair Coghill, expressed agreement
that there were national standards for reliability, although it
was necessary to consider the unique nature of the Railbelt as
it was a smaller scale, isolated grid not connected to any other
sources. It was this lack for economy of scale which brought a
focus on cost competitiveness. He explained that the utilities
would take the very best parts of these standards for adoption.
MR. HICKEY paraphrased from slide 5, "Progress - Power Pool
Development," which read [original punctuation provided]:
A tight power pool is a contractual structure that
pools generation resources and loads to facilitate
economic dispatch for efficiency and cost savings.
Chugach, ML&P and MEA drafted preliminary dispatch
protocols, financial settlement procedures, and other
processes. GVEA and HEA have been engaged in this
development.
Power pool development process was put on hold due to
the Chugach/ML&P acquisition, expected to achieve
approximately 75% of anticipated pool savings.
Utilities will return to power pool discussions after
the Chugach/ML&P acquisition docket has been
adjudicated.
3:49:02 PM
SENATOR GRAY-JACKSON asked how much longer until the sale
between Chugach Electric Association and Municipal Light & Power
was finalized.
MR. HICKEY offered his belief that, should the RCA issue an
order of approval for the acquisition on the intended date,
February 28, then Day One would be May 29. He reported that
there were 14 functional teams from both utilities meeting
weekly, and more often, to lay out all the necessary items to
bring the two companies together on Day One.
3:49:52 PM
JOHN BURNS, Vice President, Golden Valley Electric Association
(GVEA), reported that, even as the Railbelt utilities had worked
collaboratively on many issues over the years, this was now a
movement toward "an incredibly bright future." He pointed out
that, in December 2019, all six utilities had joined to sign the
Railbelt Reliability Council (RRC) memorandum of agreement. He
declared that the board would be balanced with utility and non-
utility members and focused on four tasks. He introduced slide
6 of the PowerPoint presentation, "Railbelt Reliability Council
- Signed MOU" and paraphrased the four tasks, which read:
The RRC will be an applicant for the role of ERO with
a balanced utility/non-utility board focused on
accomplishing the following tasks:
1. Establish, administer and enforce reliability
standards
2. Develop, adopt and administer open access
rules, system cost allocation procedures, and
interconnection protocols
3. Develop and adopt an Integrated Resource Plan
(IRP) for the entire Railbelt electric system
4. Perform a definitive cost-benefit analysis of
Railbelt-wide or regional security constrained
economic dispatch.
CHAIR COGHILL clarified that the RRC was envisioned in the
proposed bill as an Electric Reliability Organization (ERO).
MR. BURNS said that the RRC, once formed, would be the entity to
submit the application with the RCA to become the ERO. He
declared that the organization development team (ODT) recognized
that the possibilities for achievement by the RRC were endless.
He stated that the envisioned collaborative process would
facilitate conversations, shape relationships, and build trust.
CHAIR COGHILL asked that Mr. Burns remember to define the
acronyms.
MR. BURNS declared that many people played a significant role in
the development of the MOU. He stated that the legislature and
the RCA recognized the need for reform, adding that the
independent power producers, rate payers, and other non-utility
entities were demanding a voice in the decisions affecting the
Railbelt. He moved on to slide 7, "Railbelt Reliability Council
- ODT Process," which read:
An Organizational Development Team (ODT), comprised of
representatives from the six Railbelt utilities, was
established to begin building the RRC.
The ODT's focus was to develop consensus among
utilities and other stakeholders in forming an
Implementation Committee that would develop
foundational documents and stand up the RRC.
The ODT representatives met with utility and non-
utility stakeholders, including the RCA, AEA, REAP,
AkPIRG, IPPs, and others.
On December 18, 2019, six Railbelt utilities signed
the MOU for the creation of the RRC.
The signed MOU was filed with the RCA on December 20,
2019.
3:55:31 PM
MR. HICKEY, in response to Representative Spohnholz regarding
slide 6, said that economic dispatch was a term used for
dispatching the next, most efficient mega-watt to meet the load.
However, given the lengthy nature of the Railbelt with single
transmission lines, there were points of congestion, and enough
power could not be moved from one region to another. In a
security constrained economic dispatch, it was sometimes
necessary to start an uneconomic unit.
3:57:11 PM
MR. BURNS returned attention to slide 7, noting that the MOU had
been finalized on December 18, 2019 and filed with the RCA on
December 20, 2019. He declared that this was a significant
moment for the Railbelt utilities.
MR. BURNS, in response to Chair Coghill, explained that it had
been important for the Railbelt utilities to come together and
grapple with several difficult issues to reach consensus with
the MOU. Once there was consensus, the utilities had reached
out to other stakeholders for their insights and concerns, and
ultimately modified the MOU.
MR. BURNS directed attention to slide 8, "Railbelt Reliability
Council - Governance," which read:
Initially, the RRC will be governed by a twelve-member
Board with the CEO providing a tie-breaking vote.
? 6 Railbelt utilities
? Alaska Energy Authority
? 2 Independent Power Producers
? 1 organization advocating for consumer
interests
? 2 independent, non-affiliated members
? RCA and RAPA will hold non-voting, ex-officio
seats on the Board
? The RRC will hire a CEO and staff
MR. BURNS, in response to Chair Coghill, explained that RAPA
stood for Regulatory Affairs for Public Advocacy, which
represented public advocacy through the Office of the Attorney
General.
MR. BURNS returned to slide 8, adding:
the board composition may seem expansive and there has
been some criticism about the numbers on it, but the
reality is, it reflects the broad spectrum of
different interests that either impact or are impacted
by having a reliable, robust electric grid. So, it
was important to have an expansive and balanced board.
4:01:46 PM
REPRESENTATIVE SPOHNHOLZ asked about the two, independent, non-
affiliated members.
MR. BURNS reported that these members could be any entity or
individual, including engineers, with knowledge relative to
electric issues.
MR. HICKEY added that these members could also include "finance
folks, people with cyber security experience, it would depend on
what the board felt was required or necessary at that point in
time." He pointed to the list of requirements in the MOU, which
included preference for Alaska residents, as well as knowledge
of the Railbelt and the process that formed the RRC. He
declared that these members could not be working for, or part
of, any organization that was exchanging or delivering power in
the Railbelt, or one of the stakeholder groups. The idea was to
have two, independent, non-affiliated professionals on the
board.
MS. ESTEY added that those members would be initially chosen for
the implementation committee. She explained the process, as
written in the MOU, to include: receipt of applications by
February 17, with the decision made by a sub committee
consisting of one of the IPP representatives, the consumer
advocate position, and the Alaska Energy Authority (AEA).
4:03:18 PM
REPRESENTATIVE HOPKINS, referencing slide 7, asked what was to
be gained having the MOU filed with the RCA, as the RCA had no
statutory authority to regulate an ERO.
MR. BURNS explained that this provided notice to the RCA that
there had been success with the MOU.
MS. ESTEY added that this was an informational filing, noting
that the RCA had been engaged in the process since 2015,
although there was no adjudicatory request.
4:04:23 PM
CHAIR COGHILL clarified that the RRC had "put the meat and bones
onto a question that we put into statute," although it had not
been designated exactly in this manner. He added that this
action complimented the statute.
MS. ESTEY shared that the goal had been for a parallel path to a
cohesive solution with the legislation, while including the
desires from stakeholders and the RCA. She noted that the
utilities had been "trying to keep the lines of communication
open as we move forward so that the goals and the components
were aligned." She acknowledged that it was recognized that per
current legislation, all they could do was apply. She expressed
hope that once this was passed into law, the RCA would have the
authority to accept applications and choose them from the field
of applicants.
4:05:54 PM
MR. BURNS addressed slide 9, "Why is the Railbelt Reliability
Council Important?" and emphasized that the RRC was "not an
artifice, intended to deflect the legislature or the RCA's
attention away from necessary Railbelt reform." He added that
the RRC reflected a series of commitments being made by the
Railbelt utilities to propose and embrace meaningful,
deliberative changes on the Railbelt electric grid. He stated
that the RRC represented a regulatory compact, a contractual
commitment, with the State of Alaska and a commitment that the
utilities would be bound by the decisions of the RRC. He
declared that this represented a commitment to support statutory
language to provide the RCA authority to regulate the RRC as
described in the MOU. He pointed out that this was a commitment
of the utilities to be inclusive of a variety of perspectives in
decisions related to a Railbelt bulk electric system, with a
commitment by the utilities to participate with one another and
with non-utility stakeholders to achieve benefits for rate
payers throughout the state.
4:07:34 PM
MS. ESTEY shared that the utilities had evolved through this
process to readiness to work together, a big change from the
current control by each utility of its specific service
territory. She pointed out that the utilities were now being
inclusive in the decision making, as well as the operational
aspect. She moved on to slide 10, "Next Steps for the RRC -
Timeline," which read:
bracerighttp January 2-Feb 1 Thirty-day public notice for
applications to fill the non-utility seats
bracerighttp January 17 Utility, AEA, RCA and RAPA delegates
named ? February 17 All other non-utility
applications due
? March 20 IPP seats selected by Alaska Independent
Power Producer Association
? March 25 (est.) Firm retained to conduct review of
applications
? May 11 Consumer advocacy seat selected
? May 15 Independent, unaffiliated seats selected
? May 30 Implementation Committee Kick off
? December 2020 Complete foundational documents and
stand up the organization
4:10:00 PM
REPRESENTATIVE LINCOLN referenced the composition of the twelve-
member board, as listed on slide 8, and asked whether a change
would be in response to a definition from the legislation or the
RCA. He asked if there was anticipation for a change and under
what circumstances.
MS. ESTEY replied that through the definition in the MOU, there
was now establishment of the implementation committee. She
shared that it was imagined that the implementation committee
would become the first board as the organization was created.
She added that the implementation committee, both utility and
non-utility stakeholders, would define the by-laws and the
articles of incorporation within the context of the MOU. She
allowed that there was latitude for adjustment as new
information was presented. She pointed out that the balanced
board required negotiation from both sides.
MR. HICKEY shared that, with similar entities in the Lower 48,
as market segments coalesced and formed associations with a
function in the market, seats were applied for and the boards
were expanded. He stated that there was language in the MOU
that required a balancing of interests on the board but allowed
flexibility of the management for its composition.
CHAIR COGHILL explained that the proposed legislation requested
a balanced board whereas this discussion was for how the
balancing act would take shape. He allowed that Mr. Hickey was
proposing to organize an answer for the requirements in the
proposed statute.
4:13:45 PM
SENATOR GRAY-JACKSON asked how many IPPs (Independent Power
Producer) existed.
MR. HICKEY replied, "there are a handful that we know of, there
are some small ones, some are larger." He offered examples of
the wind farms on Fire Island and in Fairbanks, as well as the
solar project in Willow.
MS. ESTEY added that there were four IPPs currently operating on
the Matanuska Electric Association (MEA) system, with many more
applications. She referenced the consistent interconnection
standards, noting that more certainty would help new projects
and increase the number of requests.
4:15:10 PM
SENATOR MICCICHE pointed out that, although the proposed
legislation remained very general about the board, board make up
was often a key to success. He asked if the proposed
legislation should include board make up, noting that a CEO
would be a tie breaking vote.
MR. BURNS replied that there were certain decisions that may
likely require a super majority vote and as the process evolved
there would be these dialogues. He offered his belief that it
was important to achieve a balanced board, but that it was
important to move forward, and a tie breaking vote could be
necessary. He reminded that the CEO was chosen by consensus of
the entire board. He opined that it was often important to give
broad policy directives, and not minutiae, to the proposed RRC.
MS. ESTEY pointed out that during the implementation committee
phase there would not be a CEO, hence it would be more of a
balance. She added that there were provisions to ensure the
minority opinions in any decision had a voice in the process.
4:19:40 PM
MR. HICKEY added that the organization would be developing the
operating guidelines used to operate the system, and those types
of decisions had to be made with consensus. He noted that it
was important to express both minority and majority opinions.
CHAIR COGHILL pointed out that there were two new authorities
for both the planning and organizational structure through the
RCA and he emphasized that this would not be done in a vacuum.
4:21:20 PM
SENATOR MICCICHE stated: "nothing creates trust more than a
well-constructed contract." He expressed his desire to ensure
that everyone had an equal voice.
4:22:10 PM
MS. ESTEY returned to the timeline on slide 10, noting that the
goal was to have all the foundational documents completed by
December 2020. She declared support for SB 123 and HB 151 as
the "correct vehicles to move this forward. She moved on to
slide 11, "How the legislature can help," which read:
Establish a statutory framework for the RRC to operate
under the RCA's regulatory authority.
Provide a mechanism to enforce consistent reliability,
facility and cyber security standards developed by the
RRC.
Authorize the RRC to execute a robust, transparent
Integrated Resource Planning process and support
resulting outcomes.
Provide for RCA pre-approval of projects that are
consistent with the Integrated Resource Plan and/or
reliability standards.
Allow the RRC time to accomplish its goals but provide
discrete timelines.
MS. ESTEY relayed that the utilities worked well with deadlines,
as they were "rule followers by nature." She acknowledged that
the timelines ahead of the utilities was a very appropriate role
for the State of Alaska.
4:26:35 PM
MR. HICKEY offered an apology for any inappropriate presentation
of adjustments to SB 123, as that was not intended. He spoke
about the process for negotiating the RRC MOU, which involved
consensus drafting of the document, circulation among the
utilities, distribution to the stakeholders and then the RCA,
and finally back to the utilities. He explained that SB 123 had
gone through the same process. He emphasized that both the RRC
MOU and SB 123 had been presented to the stakeholders, with some
of the resulting comments being incorporated into those
documents. He acknowledged that, however, those documents had
not been endorsed by the stakeholders as their documents and
there could be some disagreements. He reported that there had
been a line by line review with the stakeholders and that the
utilities had adopted those suggestions which the utilities had
unanimously agreed to in a consensus fashion.
REPRESENTATIVE ZULKOSKY asked if all the suggested amendments
had been developed in consensus among all the utilities that
were part of the signed MOU.
MR. HICKEY explained that these were changes that the six
utilities agreed on, which were then distributed to the
stakeholders for input. The utilities then revised any changes
to the degree to which all the utilities could agree. These
changes were then presented to the RCA, and reviewed line by
line with each of the commissioners. These comments were
returned to the utilities and stakeholders for review, and the
comments that all could agree on were incorporated. He stated
that this was the best that the unanimous utilities could do in
order to come to agreement with the other stakeholders.
MR. BURNS shared that the red-line version had represented the
organizational development team's (the six utilities) consensus
document, which included many of the comments from other
stakeholders through the collaborative dialogue. He pointed out
that this was not a document that had been agreed to by all
stakeholders.
CHAIR COGHILL acknowledged that a great deal of time had gone
into the suggested adjustments to SB 123, and asked, as the time
remaining for this meeting was short, whether these could be
presented at another time.
4:31:07 PM
MR. HICKEY explained the pillars of the process to draft the
suggested adjustments to SB 123. He said that, first, they
reviewed SB 123 to conform with the MOU, which was quite
detailed, and looked for places where there was disagreement in
order to make changes to resolve these differences. He stated
that the committee had four pillars: (1) the outcome of
reliability standards or integrated resource plans should be
developed from the bottom up and not from the top down because
this was an operating entity that had to work on the ground; (2)
to use existing regulatory procedures with a focus on the tariff
process. He explained that the utilities would submit a tariff,
and the RCA had 45 days to open a docket of investigation or it
would become law. If there was a docket of investigation, the
tariff would not be modified but would be investigated and then
returned to the utilities with comments for necessary work. He
pointed out that the modifications were not being made in an
adjudicatory proceeding. The committee used this same viewpoint
to make modifications to SB 123. He added that (3) the
committee used short timelines to allow the organization to "be
nimble and can pivot and respond to things in the system that
need to be responded to in a very short time." The final pillar
(4) was for all the processes to be open, transparent and
inclusive. He noted that a definition for "pre-approval" had
been added, as there had been some confusion regarding "siting
authority" versus "pre-approval." He explained that, in many
states, "siting authority" included the ability to route
transmission lines through specific neighborhoods, to determine
the color of the poles, and to regulate framing construction.
He stated that this definition would narrowly define "project
pre-approval" as "the RCA providing a finding that the project
is necessary and that prudent costs incurred in developing that
project can be recovered in rates." He said it specifically
excluded the ability for the RCA to route transmission lines
through local areas as the committee wanted to preserve the
ability for local areas to have local criteria that met local
needs. He noted that they had tried to maintain this theme
throughout the MOU and with the revisions to SB 123.
CHAIR COGHILL expressed his agreement for this approach. He
shared that he recognized there were some process issues for
"how its done" whereas his preference was to keep the statute
based on "what we want you to do, not necessarily how you do
it." He noted that the committee revisions had started with the
MOU, whereas the statute started with "how do we direct this to
make sure that it happens well." He said he would suggest to
the Senate Special Committee on Railbelt Electric Systems (SRBE)
and the House Special Committee on Energy (HENE) to view this
"from what do we want you to do and stay out of how you do it."
He applauded the work on the MOU but clarified that the SRBE
would not start with the MOU. He declared that the SRBE was
probably working "off a different set of pillars but we want to
end up at the same place."
MR. HICKEY expressed his desire that the provided documents
would offer "a window into our thinking more than any
prescriptive way that we think you need to do anything."
MR. BURNS declared that all the utilities were "poised and
prepared to assist in any way to achieve this legislation and to
do it as quickly as possible."
4:39:07 PM
TONY IZZO, CEO, Matanuska Electric Association, Inc. (MEA), said
that MEA was probably the second largest electric utility in the
state, serving more than 66,000 meters in an area the size of
the State of West Virginia. He reported that his utility was
growing, adding between 1,000 and 1,200 services and meters
annually. He offered his belief that the proposed bills, HB 151
and SB 123, were the right vehicle to provide the enabling
legislation to make this a reality. He shared that he had been
in the utility business for 40 years, with 20 years in the
Railbelt. He reviewed the history for this legislation, noting
that in 2014 the Alaska State Legislature had asked the RCA to
do an analysis on the need for institutional reform in the
Railbelt electric grid. He acknowledged that there were "less
than good relationships leading to questionable decisions at
times" and offered his belief that the industry had earned that
reputation. However, he opined that the industry had moved
beyond that many years earlier. He shared that, after moving to
Alaska 20 years ago, Alaska had been about 20 to 30 years behind
the Lower 48. He opined that since then many lessons had been
learned from the Lower 48 and many pitfalls had been avoided.
MR. IZZO referenced a 2015 letter from the RCA to the leadership
of the Alaska State Legislature, which indicated the need for
institutional reform and included a lot of detail. He offered
his belief that this letter was "at a high level accurate" and
that currently this was a critical point for the growth of the
utilities. He opined that this was the time to codify the good
behavior recently exhibited by the utilities in order to build a
good foundation going forward. He added that, although there
was a great deal of trading among the utilities, it could better
include the other stakeholders. He reported that, as 40 percent
of the cost of a kilowatt hour in the Railbelt was for fuel, any
means to reduce that fuel was necessary.
4:44:57 PM
ANNA HENDERSON, General Manager, Municipal Light & Power, shared
her support for the positions advanced by the presenters, noting
that a lot of work had been put into this process. She
expressed her agreement with the comments from Mr. Izzo, adding
that institutional regulatory reform in the Railbelt was
necessary to address a lack of regulation, specifically for
reliability, interconnection, regional planning, and cyber
security. She stated her support for the committees telling "us
what to do versus telling us how to do it." She shared her
vision that this enabling legislation would lead to a "robust
regulatory process with the Regulatory Commission of Alaska that
will add further process and clarification to the regulations,"
and acknowledged it would be a multi-year process.
4:47:21 PM
MR. IZZO, in response to Representative Fields, offered his
belief that the construct of the proposed legislation would
create a "one stop shop across the grid through the planning
process with stakeholders." He offered an example for the need
of more megawatts for generation, noting that the request could
now be made to the entire broad stakeholder group. He pointed
out that this would provide reliable service at a lowest cost.
CHAIR COGHILL reiterated that both renewables and reliability
were high on the list.
4:50:02 PM
BRAD JANORSCHKE, General Manager, Homer Electric Association,
Inc., reported that Homer Electric had about 35,000 meters and
was 90 percent reliant on natural gas. He acknowledged that
this was the most alignment he had seen among the utilities, and
although there were still differences of opinion, these could be
worked through. He shared his desire to focus on renewables and
reduce dependence on natural gas. He reported that his utility
was moving forward with a very large battery energy storage
system that could provide benefits for the entire Railbelt. He
stated his support for the organizational development team and
the RRC MOU, noting that even as recently as five years prior,
the utilities would never have gotten together. He expressed
his hope that any legislation would align with the MOU and stay
focused on reliability standards. He asked what impact this
would have on the Bradley Lake energy program, noting that it
supplied almost 50 percent of the power in the western Kenai
Peninsula with no jurisdiction by the RCA per an exemption
created by the Alaska State Legislature in 1988. He referenced
the idea of the CEO position as a tiebreaker and opined that
"the last job I would ever want is to be a tie breaker for my
bosses." He stated that any changes to proposed SB 123 by the
ODT were valid and he asked that the legislature put thought
into these. He questioned, however, what could be missing and
what was not necessary.
4:56:14 PM
JOHN FOUTZ, Electric Utility Manager, City of Seward, pointed
out that this was a small utility, and the only utility on the
Railbelt which purchased power instead of generating. He
expressed his appreciation for the format of "what to do, not
how to do it." He stated support for a deadline on the
utilities to "help get us across the finish line." He declared
support for the proposed legislation and asked that the utility
perspective also be considered.
CHAIR COGHILL declared that a tremendous effort had been put
forward and this was a structure to work from. He stated that
it was important to recognize the perspective of other
stakeholders. He acknowledged the importance of energy
reliability.
REPRESENTATIVE HOPKINS expressed his appreciation for all the
work, noting that this impacted the economy of the state.
[HB 151 was held over.]
[SB 123 was held over.]
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