Legislature(2021 - 2022)BELTZ 105 (TSBldg)

02/23/2022 01:30 PM Senate LABOR & COMMERCE

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**Streamed live on AKL.tv**
         SB 179-UTILITIES: RENEWABLE PORTFOLIO STANDARD                                                                     
1:31:11 PM                                                                                                                  
CHAIR  COSTELLO announced  the consideration  of SENATE  BILL NO.                                                               
179  "An  Act  relating  to  the  establishment  of  a  renewable                                                               
portfolio   standard  for   regulated  electric   utilities;  and                                                               
providing for an effective date."                                                                                               
She noted that  this was the first hearing and  the intention was                                                               
to hear the introduction from  Curtis Thayer, followed by invited                                                               
and public testimony.                                                                                                           
1:32:04 PM                                                                                                                    
CURTIS  THAYER,  Executive   Director,  Alaska  Energy  Authority                                                               
(AEA), Anchorage,  Alaska, introduced  himself and TW  Patch, the                                                               
director of planning for AEA.                                                                                                   
1:32:27 PM                                                                                                                    
MR. THAYER  began the presentation  with an explanation  of AEA's                                                               
programs and services. He summarized the following from slide 2:                                                                
[Original punctuation provided.]                                                                                                
     Railbelt   Energy      AEA   owns   the  Bradley   Lake                                                                  
     Hydroelectric  Project, the  Alaska  Intertie, and  the                                                                    
     Sterling  to Quartz  Creek Transmission  Line    all of                                                                    
     which benefit  Railbelt consumers by reducing  the cost                                                                    
     of power.                                                                                                                  
     Power Cost  Equalization (PCE)    PCE reduces  the cost                                                                  
     of   electricity  in   rural  Alaska   for  residential                                                                    
     customers and community  facilities, which helps ensure                                                                    
     the sustainability of centralized power.                                                                                   
     Rural  Energy    AEA constructs  bulk fuel  tank farms,                                                                  
     diesel powerhouses,  and electrical  distribution grids                                                                    
     in rural villages. AEA supports  the operation of these                                                                    
     facilities   through   circuit  rider   and   emergency                                                                    
     response programs.                                                                                                         
     Alternative   Energy  and   Energy  Efficiency      AEA                                                                  
     provides  funding, technical  assistance, and  analysis                                                                    
     on   alternative   energy   technologies   to   benefit                                                                    
     Alaskans.  These include  biomass, hydro,  solar, wind,                                                                    
     and others.                                                                                                                
     Grants  and  Loans     AEA   provides  loans  to  local                                                                  
     utilities,  local  governments, and  independent  power                                                                    
     producers  for the  construction  or  upgrade of  power                                                                    
     generation and other energy facilities.                                                                                    
     Energy  Planning     In collaboration  with  local  and                                                                  
     regional   partners,   AEA    provides   economic   and                                                                    
     engineering analysis  to plan the development  of cost-                                                                    
     effective energy infrastructure.                                                                                           
1:33:33 PM                                                                                                                    
MR.  THAYER turned  to slide  3,  What is  a Renewable  Portfolio                                                               
Standard?  He  explained  that   retail  electric  suppliers  are                                                               
required to  supply a  minimum amount of  their retail  load with                                                               
eligible  sources of  renewable energy.  Typically, it  is backed                                                               
with  a  financial  or  other  form of  incentive.  Often  it  is                                                               
accompanied by  a tradable renewable energy  certificate (REC) to                                                               
facilitate compliance.  Importantly, RPS standards are  unique to                                                               
each of  the 32 states  that have  them. They are  never designed                                                               
the same. He offered his expectation that Alaska's would be                                                                     
different going forward.                                                                                                        
MR. THAYER paraphrased slide 4 that read as follows:                                                                            
[Original punctuation provided.]                                                                                                
     Senate Bill 179                                                                                                          
     • Senate Bill (SB) 179 promotes  energy independence,                                                                      
        long-term cost reductions, and competitive markets                                                                      
        in Alaska's Railbelt.                                                                                                   
     • SB 179  aligns  Alaska  with  30   states  and  two                                                                      
        territories in creating a renewable portfolio                                                                           
        standard on the Railbelt.                                                                                               
     • A key element  of  the  Governor's  RPS is  a  firm                                                                      
        commitment to transition to 30% renewable power by                                                                      
        2030 and 80% by 2040.                                                                                                   
     • Expanding our renewable energy portfolio is the best                                                                     
        way to diversify our supply thus increasing Alaska's                                                                    
        energy security.                                                                                                        
1:35:00 PM                                                                                                                    
MR. THAYER stated that in 2010 the legislature passed An Act                                                                    
Declaring a State Energy Policy. He read the legislative intent                                                                 
in that bill:                                                                                                                   
     LEGISLATIVE   INTENT.  It   is   the   intent  of   the                                                                    
     legislature that                                                                                                           
     (1) the state  achieve a 15 percent  increase in energy                                                                    
          efficiency on a per capita basis between 2010 and                                                                     
     (2)  the  state  receive  50 percent  of  its  electric                                                                    
          generation from renewable and alternative energy                                                                      
          sources by 2025;                                                                                                      
     (3) the  state work to  ensure a reliable  in-state gas                                                                    
          supply for residents of the state;                                                                                    
     (4) the power project fund  (AS 42.45.010) serve as the                                                                    
          main source of state assistance for energy                                                                            
     (5) the state remain a leader in petroleum and natural                                                                     
          gas production and become a leader in renewable                                                                       
          and alternative energy development.                                                                                   
MR. THAYER displayed  slide 6 that illustrates  that from January                                                               
2012 to  September 2020,  the RPS  policies in  the participating                                                               
states have shifted more toward  standards and less toward goals.                                                               
He noted that Alaska  has been in the goal stage  and SB 179 will                                                               
take it more to standards.                                                                                                      
MR. THAYER reviewed  the energy production profile  by source for                                                               
the U.S., Alaska, and Alaska  if Susitna-Watana were to be built.                                                               
Today, 70  percent of the  energy produced  in the U.S.  is still                                                               
coming from oil  and gas; 9 percent comes  from renewable energy,                                                               
primarily  biomass,  solar,  and   wind;  2  percent  comes  from                                                               
hydroelectric; 11 percent  from coal; and 8  percent from nuclear                                                               
power.  In Alaska  today, 65  percent of  the energy  produced is                                                               
from oil and gas; 27  percent comes from hydroelectric; 2 percent                                                               
from  renewable energy;  and 6  percent  comes from  coal. At  29                                                               
percent,  Alaska's portfolio  of  renewables falls  short of  the                                                               
goal  to  have   50  percent  of  energy   production  come  from                                                               
renewables  including  hydro,  but  it is  moving  in  the  right                                                               
direction.  He  noted  that  if  Susitna-Watana,  or  some  other                                                               
renewable, were to be a  reality, hydroelectric would account for                                                               
58 percent of Alaska's energy production.                                                                                       
1:37:06 PM                                                                                                                    
SENATOR MICCICHE joined the committee.                                                                                          
1:38:17 PM                                                                                                                    
MR.  THAYER  continued to  slide  9  to discuss  the  30-year-old                                                               
Bradley  Lake  Hydroelectric Project  that  is  located about  25                                                               
miles from  Homer on  the Kenai  Peninsula. It  provides low-cost                                                               
energy  to the  Railbelt members  from Homer  Electric to  Golden                                                               
Valley in  Fairbanks. For example,  18 percent of the  power from                                                               
Bradley Lake  is sent  to Fairbanks consumers.  The cost  of this                                                               
power is  roughly 4 cents/kWh,  whereas natural gas is  7-8 cents                                                               
per kWh, and the wind farm  at Fire Island currently is 9.7 cents                                                               
per kWh. Bradley  Lake provides about 10 percent  of the Railbelt                                                               
energy  needs, which  is equivalent  to  54,400 homes/year.  Last                                                               
year the  $47 million  Battle Creek  diversion into  Bradley Lake                                                               
was completed and  it provides electricity for  the equivalent of                                                               
5,000 homes. That project was  done through a partnership between                                                               
the Railbelt utilities and AEA.  He highlighted that the bonds on                                                               
Bradley Lake were paid off this year.                                                                                           
MR. THAYER continued  to slide 10 to discuss  the Dixon Diversion                                                               
Project, which would  expand the capacity of Bradley  Lake. It is                                                               
located five miles from Bradley  Lake. Two alternatives are under                                                               
consideration;  Alternative 1  is a  tunnel to  Bradley Lake  and                                                               
Alternative 2  is a  tunnel to the  Martin River  Powerhouse. The                                                               
cost estimate ranges from $160  million to $500 million. It could                                                               
provide electric energy  for 17,000 to 40,000  homes, which would                                                               
nearly double the output of Bradley Lake.                                                                                       
1:40:39 PM                                                                                                                    
CHAIR COSTELLO noted that Senator Stevens had a question.                                                                       
SENATOR STEVENS  asked if  a lot  of power  is lost  from Bradley                                                               
Lake to Fairbanks  because the lines need to  be improved. Noting                                                               
that Susitna-Watana has  always run into problems,  he asked what                                                               
the last  illustration on slide  8 would  look like if  the Dixon                                                               
Diversion Project replaced Susitna-Watana.                                                                                      
MR. THAYER  replied it  would have  minimal effect.  Bradley Lake                                                               
currently  provides  10  percent   of  the  Railbelt  energy  and                                                               
maximizing  the Dixon  Diversion Project  would probably  add 6-7                                                               
percent.  He  noted that  subsequent  slides  address the  needed                                                               
upgrades  to the  transmission line,  but in  general, the  lines                                                               
leaving Bradley Lake are at  capacity. The Railbelt utilities are                                                               
working with AEA  to make those upgrades.  Subsequent slides talk                                                               
about how this will happen and how it will be financed.                                                                         
1:42:33 PM                                                                                                                    
MR. THAYER  displayed slide  11 that outlines  the steps  for the                                                               
Dixon Diversion  Project for  FY2022 through  FY2024. It  read as                                                               
     Fiscal Year 2022                                                                                                         
     •  Establish river gauge                                                                                                   
     •  Initiate Bradley Lake FERC License Amendment                                                                            
     •  Alternatives Analysis Report (Conceptual Design)                                                                        
     Fiscal Year 2023                                                                                                         
     •  Detailed mapping/topography                                                                                             
     •  License Amendment Consultations                                                                                         
     •  Environmental Studies                                                                                                   
     •  Hydrology Studies                                                                                                       
     •  Initial Geotechnical Investigations                                                                                     
     •  Preliminary Design                                                                                                      
     Fiscal Year 2024                                                                                                         
     •  Feasibility Design and Hydrology                                                                                        
     •  Environmental Studies                                                                                                   
     •  Draft License Amendment                                                                                                 
     •  Detailed Geotechnical Investigations                                                                                    
     •  Operations/Power Modeling                                                                                               
     •  Environmental Assessment                                                                                                
MR.  THAYER  said  the  next  two slides  were  lifted  from  the                                                               
National Energy Lab  report. The first shows where  power for the                                                               
Railbelt  would  come from  in  a  peak  demand scenario  on  the                                                               
coldest day of the year. Hydro  would be the largest piece. Slide                                                               
13 looks at the same  scenario without Susitna-Watana. A lot more                                                               
of the  power comes from wind  and solar. He noted  that the wind                                                               
component is untested in many places  in Alaska and both wind and                                                               
solar need batteries to store the  power and put it onto the grid                                                               
as  needed. These  batteries would  likely be  located in  Homer,                                                               
Anchorage, and Fairbanks.  He said AEA looks forward  to the ever                                                               
changing technologies for these resources.                                                                                      
1:44:56 PM                                                                                                                    
MR. THAYER  turned to slide 14,  Railbelt Infrastructure Upgrades                                                               
to  respond  further  to  Senator  Steven's  question  about  the                                                               
condition of  the power line  from Bradley Lake to  Fairbanks. He                                                               
listed  the  Railbelt  utilities,   which  are  Chugach  Electric                                                               
Association,  Matanuska  Electric  Association,  Seward  Electric                                                               
Association,  Homer  Electric   Association,  and  Golden  Valley                                                               
Electric  Association. Together,  they represent  550,000 Alaskan                                                               
consumers.  The  plans  to upgrade  the  infrastructure  involves                                                               
projects  to   remove  transmission  constraints,   improve  grid                                                               
resiliency, and  allow for  better use  of the  Bradley Project's                                                               
potential  by increasing  its ability  to deliver  more low-cost,                                                               
renewable energy  throughout the Railbelt grid.  The lines, which                                                               
are more than 30 years old and  pre Bradley Lake, do not have the                                                               
capacity to move additional renewables.                                                                                         
1:46:16 PM                                                                                                                    
MR.  THAYER  directed  attention  to the  Required  Project  Work                                                               
Summary  on  slide  15.  The utilities  are  looking  at  working                                                               
together on the following projects:                                                                                             
Upgrade Transmission Line from Bradley  Junction to Soldotna. The                                                             
transmission line would be upgraded to  230 kV or a second 115 kV                                                               
line would be constructed.                                                                                                      
Upgrade Transmission Line from Sterling to Quartz Creek.                                                                      
Upgrade  Transmission Line  from  Sterling to  Quartz Creek.  AEA                                                             
purchased this  transmission line  from Homer  Electric following                                                               
the Swanson  Lake fire  to extinguish a  number of  lawsuits. The                                                               
goal was to  upgrade the transmission line from 115  kV to 230 kV                                                               
and remove the 69 kV line.                                                                                                      
Battery  Energy Storage  Systems (BESS)  for Grid  Stabilization.                                                             
This project will  upgrade the existing BESS  system in Fairbanks                                                               
and add systems in the Kenai and Southcentral regions.                                                                        
Study of Alternative  Path to Export Energy  off Kenai Peninsula.                                                             
This might be an undersea cable.                                                                                                
MR THAYER stated that the total  cost for these projects is about                                                               
$261  million. Because  the Bradley  Lake  power sales  agreement                                                               
from 30  years ago allows  for required project work,  the excess                                                               
from the  12.5 percent  that the utilities  are obligated  to pay                                                               
for the next 20 years can  go toward these projects. He estimated                                                               
that  this  bonding  could  pay from  $225-$250  million  of  the                                                               
upgrades. AEA is working with  the utilities on this bonding. The                                                               
ratepayers will pay  no more than they do now.  He noted that the                                                               
line  loss to  Fairbanks is  estimated to  cost ratepayers  up to                                                               
$0.5 million  per month, so this  will make a huge  difference in                                                               
that  community.  The  upgraded   transmission  lines  will  also                                                               
provide  opportunities for  wind and  solar to  serve the  entire                                                               
1:49:46 PM                                                                                                                    
MR. THAYER  briefly reviewed the  Alaska Intertie. Slide  16 read                                                               
as follows:                                                                                                                     
     • Constructed in the mid -1980s, the Alaska Intertie                                                                       
        is a 170 mile -long, 345 kilovolt (kV) transmission                                                                     
        line from Willow to Healy                                                                                               
He highlighted  that this  line was designed  to be  upgraded and                                                               
that work  would need to be  done for any renewable  work that is                                                               
done from Anchorage to Fairbanks.                                                                                               
        • Operated by AEA and Railbelt utilities, the                                                                           
        transmission line improves reliability within                                                                           
        Railbelt system                                                                                                         
    • Allows Golden Valley Electric Association (GVEA) to                                                                       
        connect to and benefit from lower cost power                                                                            
      • Between 2008 and 2018, the Intertie provided an                                                                         
        average annual cost savings of $30 million to GVEA                                                                      
MR. THAYER emphasized that even  after 30 years, Bradley Lake and                                                               
the  Alaska  Intertie  continues   to  save  money.  He  directed                                                               
attention  to the  bulleted  points on  slide  17 that  highlight                                                               
clean  energy  savings  for  the  Railbelt.  The  slide  read  as                                                               
        • Bradley Lake Expansion (Spillway Raise)      $4                                                                     
        • Bradley-Soldotna 115kV Line  $66 million                                                                            
        • Soldotna-Quartz Creek (and Substation)      $70                                                                     
        • Bernice Lake-Beluga HVDC  $185 million                                                                              
He noted  that this is an  undersea cable to take  a line to                                                                    
Beluga and  provide a second  line into Fairbanks,  which is                                                                    
similar to what Enstar Natural  Gas does with two lines. AEA                                                                    
has just  one line  into Southcentral and  is looking  for a                                                                    
      • Dave's Creek-University 230kV Line  $58 million                                                                       
        •  Grid Stabilization  $115 million                                                                                   
1:52:02 PM                                                                                                                    
MR.  THAYER  displayed  slide  18,  Susitna-Watana  Hydroelectric                                                               
Project History. He  recapped that the project  was first studied                                                               
as  a source  of  power in  the  1950s. In  the  1980s the  state                                                               
supported the project  and by 2010 the 50  percent renewable goal                                                               
was established. In 2011,  the legislature unanimously authorized                                                               
the Alaska  Energy Authority to  pursue Susitna-Watana  Hydro and                                                               
studies began in 2012. He reported  that the state has spent $193                                                               
million  on  FERC   licenses  and  estimated  it   will  take  an                                                               
additional  $100 million  to  get a  FERC  license. The  previous                                                               
administration put licensing  of the project in  abeyance and the                                                               
current administration rescinded the abeyance in 2019.                                                                          
MR.  THAYER highlighted  that the  utilities  along the  Railbelt                                                               
have  expressed interest  in purchasing  450  megawatts from  the                                                               
project and  that there was  interest from the private  sector to                                                               
build  Susitna-Watana. He  acknowledged that  a new  cost-benefit                                                               
analysis was needed before any more work is done.                                                                               
MR. THAYER  paraphrased slide  19, Cook  Inlet Natural  Gas Value                                                               
into the Future. It read as follows:                                                                                            
[Original punctuation provided.]                                                                                                
     • Home heating on the Railbelt (including potential                                                                        
        future expansion)                                                                                                       
    • Power generation fuel on an as-needed basis and gas                                                                       
        storage (CINGSA)                                                                                                        
     • Industrial customers in the Cook Inlet                                                                                   
          - Combined heat and power applications standalone                                                                     
          - Possibility for green hydrogen production                                                                           
          - In-state industrial use                                                                                             
          - Potential pipeline transport for minerals                                                                           
MR. THAYER  described SB 179 as  a work in progress  as the state                                                               
moves toward  clean energy.  He said this  is something  that the                                                               
utilities, AEA, and  the state have said they want  to do and now                                                               
is the  time to work  together to figure  out a path  forward. He                                                               
added that  the RPS is  with the Regulatory Commission  of Alaska                                                               
(RCA) and that  agency will be responsible for  both the statutes                                                               
and regulations.                                                                                                                
1:56:02 PM                                                                                                                    
CHAIR  COSTELLO mentioned  that  while the  bill  would create  a                                                               
portfolio standard  for electric  providers to  include renewable                                                               
energy,  it  does  not  consider  other  innovative  carbon  free                                                               
options  such  as microreactors.  For  that  reason, the  invited                                                               
testimony  will  illuminate  new   opportunities  for  Alaska  to                                                               
incorporate  clean, reliable  energy  sources  into the  electric                                                               
1:57:19 PM                                                                                                                    
JESS GEHIN, Ph.D. Associate  Laboratory Director, Nuclear Science                                                               
and  Technology  (NS&T)  Directorate, Idaho  National  Laboratory                                                               
(INL),  Idaho  Falls,  Idaho, stated  that  his  testimony  would                                                               
provide  information on  nuclear energy  as a  primary source  of                                                               
clean,  low   carbon  energy.  It  provides   an  opportunity  to                                                               
complement  renewables, so  it  could be  considered  part of  an                                                               
energy  portfolio. He  explained that  INL is  the Department  of                                                               
Energy's  nuclear laboratory  that performs  research on  nuclear                                                               
energy  technologies, deployment,  and  demonstrations. He  noted                                                               
that INL  also works  closely with  other laboratories  on energy                                                               
system integration.                                                                                                             
1:59:36 PM                                                                                                                    
DR. GEHIN  explained that  nuclear energy is  based on  a process                                                               
called  fission. A  nuclear reactor  system  harnesses the  power                                                               
from nuclear fission,  controls it, and converts  it primarily to                                                               
heat that  can be converted  to electricity. Fuel is  not burned,                                                               
so carbon emissions are comparable  to other renewable sources of                                                               
energy.  Nuclear plants  provide firm  power  24/7 or  it can  be                                                               
adjusted to meet  demand; operate in any  weather conditions; and                                                               
run  for long  periods between  refueling. These  plants are  not                                                               
subject to  fuel supply disruptions.  Nuclear plants in  the U.S.                                                               
generate  about  100  gigawatts  (GWh)   or  20  percent  of  the                                                               
electricity  produced in  the nation.  It accounts  for about  55                                                               
percent of the low carbon electricity generation.                                                                               
2:02:15 PM                                                                                                                    
DR. GEHIN  recounted the significant  development in  new reactor                                                               
types  in  the  last  several  years.  Termed  advanced  reactors                                                               
because of the technologies used,  they are under development and                                                               
will be demonstrated in the  next decade and deployed after that.                                                               
The  advanced  reactors  use  fuels  and  coolants  that  can  be                                                               
operated at higher temperatures  and lower pressures, which leads                                                               
to  simpler designs,  higher efficiency  and a  broader range  of                                                               
application. One size is typically  less than 50 megawatts. Small                                                               
modular  reactors typically  range  from 500  [kilowatts] to  300                                                               
megawatts, and  modules can be  added to meet the  required power                                                               
demand. Smaller  sized reactors can  be fabricated in  a factory,                                                               
which reduces  the cost  and allows  a more  streamlined schedule                                                               
for development.                                                                                                                
DR.  GEHIN described  three microreactor  concepts  that will  be                                                               
demonstrated in the next five years.                                                                                            
   1)  The Department of Energy (DOE) is funding the microreactor                                                               
      development called  Marvel. The  plan  is for  it to  start                                                               
      operations  in 2023.  It  will  demonstrate  the  processes                                                               
      required  to  get  a   microreactor  designed,  authorized,                                                               
      fabricated, and started.                                                                                                  
   2)  In the 2024 timeframe, the Department of Energy Capability                                                               
      Office will demonstrate at INL its mobile microreactor for                                                                
      remote uses.                                                                                                              
   3)  The company Oklo is developing the microreactor called                                                                   
      Aurora. It will be demonstrated at INL in the middle of                                                                   
      this decade.                                                                                                              
2:05:07 PM                                                                                                                    
DR.  GEHIN  related  that DOE's  Advanced  Reactor  Demonstration                                                               
Program  is  supporting  public/private  partnerships  for  other                                                               
advanced reactor systems. These include:                                                                                        
   1)  TerraPower's Natrium Reactor, which is sodium cooled, will                                                               
      be deployed at a retired coal plant in Kemmerer, Wyoming.                                                                 
   2)  X-energy is developing the Xe-100 gas  cooled reactor that                                                               
      will be sited in Washington state and start up in 2027.                                                                   
   3)  Kairos salt-cooled high temperature test reactor that will                                                               
      start up in 2026.                                                                                                         
   4)  Southern Company and TerraPower are partnering on a Molten                                                               
      Chloride Reactor Experiment that will start in 2025.                                                                      
DR. GEHIN  also mentioned  the small  modular reactor  (SMR) that                                                               
Utah  Associated  Municipal Power  System  is  moving forward  on                                                               
deploying on  the INL site in  2029. It consists of  six modules,                                                               
each of which is 77 megawatts.                                                                                                  
He said  the point is  that there  will be demonstrations  in the                                                               
next  decade  that will  prove  the  ability and  feasibility  of                                                               
microreactors  and small  modular reactors  to meet  clean energy                                                               
2:06:50 PM                                                                                                                    
DR. GEHIN  stated that there  is increased interest in  states to                                                               
consider nuclear energy as an  option. In addition to projects in                                                               
Idaho,  Wyoming, and  Washington  state,  West Virginia  recently                                                               
removed its ban on nuclear  power plants; Indiana has legislation                                                               
to consider  small modular reactors; Nebraska  passed legislation                                                               
to  allow   nuclear  energy  to  qualify   for  renewable  energy                                                               
incentives;  and  SB  177  seeks   to  streamline  deployment  of                                                               
microreactors in Alaska.                                                                                                        
DR. GEHIN described  other things happening in  Alaska related to                                                               
nuclear power.                                                                                                                  
   1)  Copper Valley Electric Association  is working  with Ultra                                                               
      Safe Nuclear Corporation (USNC) on a feasibility study of                                                                 
   2)  The U.S. Air  Force  has expressed  its  intention to  use                                                               
      nuclear energy at Eielson Air Force Base.                                                                                 
   3)  INL has supported and collaborated to look at  the role of                                                               
      nuclear energy in  Alaska. This  includes the study  by MIT                                                               
      and supported by the INL Market  Initiative, which included                                                               
      participation  from  the  University  of  Alaska  Anchorage                                                               
      faculty and  staff. A  finding was  that microreactors  are                                                               
      cost effective because they provide both heat and                                                                         
   4)  The University of Alaska, Anchorage supported studies that                                                               
      looked at use cases for nuclear energy in Alaska.                                                                         
DR. GEHIN  stated that the  foregoing are concrete  projects that                                                               
will  demonstrate the  feasibility  of a  wide  range of  nuclear                                                               
energy concepts.  Microreactors that provide heat  and power look                                                               
particularly attractive  for remote communities and  rural areas.                                                               
In the next ten years  these demonstration projects will show how                                                               
these reactors perform. Nuclear energy  is clean and it meets all                                                               
the  objectives of  a renewable  energy  portfolio standard,  and                                                               
because of the emerging efforts,  it warrants consideration for a                                                               
future energy source.                                                                                                           
2:09:55 PM                                                                                                                    
CHAIR COSTELLO asked him to  talk about the safety considerations                                                               
and the small physical footprint of a microreactor.                                                                             
DR GEHIN stated that the physical  footprint for a micro might be                                                               
the size of  a shipping container while others may  have a garage                                                               
size building.  There may  also be  support buildings  around the                                                               
facility itself. Safety  considerations include exclusionary area                                                               
emergency  planning  zones,  which   are  unoccupied  spaces.  He                                                               
relayed that  the Nuclear Regulatory Commission  (NRC) is working                                                               
to  update the  requirements for  emergency planning  zones given                                                               
the small size  and enhanced safety of these  small reactors. The                                                               
expectation is that the emergency  planning zones will be limited                                                               
to  the  physical  area  of the  reactor.  By  comparison,  large                                                               
gigawatt class reactors may occupy 50 acres.                                                                                    
With regard  to safety, he  said a lot of  work has been  done on                                                               
light water reactors since Fukushima  to maintain cooling after a                                                               
reactor shuts down, because the  heat produced during the fission                                                               
process does not  immediately go to zero.  Existing reactors need                                                               
power  to cool  the reactor  within 72  hours if  power is  lost.                                                               
Without  power,  a  disaster  like  what  happened  at  Fukushima                                                               
occurs. New safety  measures for those reactors have  been to put                                                               
systems  in  place  to  ensure   that  power  is  maintained.  By                                                               
comparison,  decay heat  for advanced  reactors does  not require                                                               
any  operator action  to  maintain  cooling, which  significantly                                                               
enhances safety if there is an incident at a reactor.                                                                           
2:13:28 PM                                                                                                                    
SENATOR  MICCICHE  asked  if  there  had  been  a  delay  in  the                                                               
development of  microreactors because  its  been discussed  for a                                                               
long  time and  he would  have expected  something to  be on  the                                                               
market by now.                                                                                                                  
DR.  GEHIN  said   no  and  offered  his   perspective  that  the                                                               
development and  deployment timeline for this  nuclear technology                                                               
has been quite fast.                                                                                                            
SENATOR MICCICHE  observed that in certain  applications in rural                                                               
Alaska, 300 megawatts was a  significant amount of generation. He                                                               
asked  what portion  could go  toward  heating structures  versus                                                               
providing electrical power.                                                                                                     
DR. GEHIN  clarified that reactors  currently under  design range                                                               
from   less  than   a  megawatt   to  300   megawatts  or   more.                                                               
Microreactors  currently  are  being developed  in  the  megawatt                                                               
range. The  reactor that will  be demonstrated  at INL is  in the                                                               
100 kilowatt range.                                                                                                             
He explained that  the 300 megawatt reactor  mentioned earlier is                                                               
the upper limit  for a small modular reactor and  it will produce                                                               
700-800  megawatts of  heat.  It  depends on  the  design of  the                                                               
reactor  and the  power  conversion system,  but  one can  decide                                                               
whether some  or all will go  directly to heat and  how much will                                                               
go to  electricity. The waste or  rejected heat can also  be used                                                               
for different processes.                                                                                                        
SENATOR  MICCICHE asked  what  it would  take  for the  renewable                                                               
community to accept micro nuclear  reactors as a renewable source                                                               
of energy.                                                                                                                      
DR. GEHIN offered his view  that the nuclear community is working                                                               
closely with  the renewable community. Combining  firm power from                                                               
nuclear with renewables makes it  easier to manage variabilities.                                                               
He described  it as  infinite batteries.  He added  that reactors                                                               
can also be  designed to work with renewables  for thermal energy                                                               
storage. The reactor in Wyoming,  for example, has the ability to                                                               
maneuver  power  through  thermal  energy storage  to  adjust  to                                                               
variable renewables.                                                                                                            
2:18:23 PM                                                                                                                    
SENATOR STEVENS noted that hydropower  in his community of Kodiak                                                               
costs about  6 cents/kWh. He  asked what it  would cost to  run a                                                               
small nuclear plant.                                                                                                            
DR.  GEHIN said  that  it  would be  hard  to  compete with  that                                                               
because established  hydro is very cost  effective. Analyses have                                                               
been done  that show the  cost would be  from 10 cents/kWh  to as                                                               
much as  50 cents/kWh for  the very small nuclear  systems. These                                                               
systems would only  be competitive in small  rural locations that                                                               
rely on diesel that  is shipped in. He said the  goal is to match                                                               
with the appropriate market.                                                                                                    
CHAIR COSTELLO invited  Gwen Holdmann to comment on  the bill and                                                               
the approach it takes.                                                                                                          
2:19:59 PM                                                                                                                    
GWEN  HOLDMANN,  Director, Alaska  Center  for  Energy and  Power                                                               
(ACEP), UAF, Fairbanks,  Alaska, stated that it  is fairly common                                                               
for nuclear to  be excluded from an RPS. No  other state includes                                                               
nuclear as  eligible under a  RPS, although a bill  introduced in                                                               
California in  2020 would have  made nuclear eligible  under that                                                               
RPS  standard. The  European Union  (EU)  also recently  declared                                                               
nuclear  a  green  technology.  She said  Alaska  does  not  have                                                               
nuclear as part of its renewable  energy mix, but she believes it                                                               
has potential as part of a future mix.                                                                                          
MS.  HOLDMANN agreed  with an  earlier  comment that  the use  of                                                               
nuclear has been discussed for a  long time. She noted that there                                                               
were no venders  looking at microreactors when  the Alaska Center                                                               
for  Energy  and  Power  first reported  to  the  legislature  on                                                               
modular nuclear  reactors in  2011, but that  has changed.  Now a                                                               
number  of  venders  are  actively  looking  at  smaller  reactor                                                               
designs. She highlighted that there is  a plan to install up to a                                                               
5 megawatt reactor at Eielson Air Force Base by 2027.                                                                           
MS. HOLDMANN  stated that  ACEP has been  working with  the Idaho                                                               
National Lab to analyze opportunities  for microreactors under 50                                                               
megawatts of  electric power  output for  the Alaska  market. She                                                               
highlighted  that  including  microreactors  in  this  RPS  would                                                               
provide additional  grid resilience for  critical infrastructure.                                                               
This would be similar to the  Eielson project where both heat and                                                               
power could be  provided to critical nodes on  the Railbelt grid.                                                               
She  agreed  with  Dr.  Gehin  that there  is  the  potential  to                                                               
regulate variable  renewables. Mr.  Thayer talked about  the need                                                               
for  additional   energy  storage  on  the   Railbelt  grid,  but                                                               
microreactors could potentially be  an alternative solution since                                                               
they  have the  ability  to firm  up  renewable energy  resources                                                               
while  providing other  energy  sources like  electric power  and                                                               
heat.  This is  different  than a  battery.  There are  potential                                                               
industrial applications  as well  as for  rural hubs.  She opined                                                               
that nuclear could support other  opportunities in Alaska related                                                               
to hydrogen or synthetic fuel production.                                                                                       
MS. HOLDMANN related that ACEP  has been working on the economics                                                               
and possible  use cases for  microreactors and hopes  to continue                                                               
to do so  as part of a statewide roadmap  for nuclear energy. She                                                               
mentioned that  many states  have a  clean energy  standard (CES)                                                               
instead  of   a  renewable  portfolio   standard  RPS.   The  key                                                               
differences  include  energy   efficiency,  carbon  capture,  and                                                               
nuclear.  She noted  that this  might exclude  biomass, which  is                                                               
considered renewable  but it does  have emissions.  She concluded                                                               
her  comments saying  that  she did  not see  that  an RPS  would                                                               
necessarily exclude nuclear.                                                                                                    
2:25:27 PM                                                                                                                    
SENATOR  REVAK noted  that the  committee heard  about hydropower                                                               
that costs about 6 cents/kWh. He asked  if she had an idea of the                                                               
cost for nuclear.                                                                                                               
MS.  HOLDMANN  said   it  will  not  compete   with  6  cents/kWh                                                               
hydropower.  ACEP is  working with  INL to  understand the  value                                                               
streams that come  from a microreactor and she  believes that the                                                               
economics are  such that, there will  be a place for  these types                                                               
of systems  as part of the  state and national energy  mix in the                                                               
SENATOR REVAK  asked how many  states have RPS policies  or clean                                                               
energy standards, and how that has affected the rates for users.                                                                
MS.  HOLDMANN said  she did  not  have the  answer, although  she                                                               
recalled that  Mr. Thayer  said about half  the states  have some                                                               
type of RPS or clean energy standard.                                                                                           
SENATOR  MICCICHE  asked  if  the   NRC  was  looking  at  tiered                                                               
permitting  such  that  the evaluation  was  different  than  for                                                               
typical nuclear construction.                                                                                                   
MS. HOLDMANN  answered that the idea  over the long term  was for                                                               
the National Regulatory Commission  to license the technology and                                                               
then a separate  licensing process would be specific  to the site                                                               
to ensure  that the technology  is appropriate for the  site. The                                                               
expectation  is that  the reactor  design  would not  need to  go                                                               
through  multiple  levels  of relicensing  for  every  individual                                                               
project because they will be developed  and built in a factory to                                                               
exacting specifications.                                                                                                        
2:30:34 PM                                                                                                                    
SENATOR MICCICHE  asked if  anyone had modeled  a community  on a                                                               
megawatt Btu  balance for generation  versus heat and  waste heat                                                               
and looked for applications for  a district heating system versus                                                               
outlying electrification using waste heat heating.                                                                              
MS. HOLDMANN  offered to meet  separately or  set up a  Lunch and                                                               
Learn  on  such details.  She  relayed  that ACEP  currently  was                                                               
looking at  potential use cases  to better understand  the energy                                                               
streams. These  are: Fort Wainwright and  downtown Fairbanks; the                                                               
university; a remote  community; and a remote mine  site She said                                                               
ACEP  has very  good electric  power  data but  heating data  was                                                               
lacking for  many users in the  state. She noted that  sites that                                                               
have an existing steam heat  district heating system such as Fort                                                               
Wainwright  and downtown  Fairbanks are  potentially examples  of                                                               
where one could replace a coal plant  at the end of its life with                                                               
a microreactor.  She opined that  such use cases might  have more                                                               
economic value  than just  the power  generation itself.  ACEP is                                                               
working with the  developers and manufacturers on  this model and                                                               
there is  a supplemental  request in  the university's  budget to                                                               
fund that effort.                                                                                                               
CHAIR COSTELLO said she believes that  a Lunch and Learn would be                                                               
helpful to  give people an  idea of the  work that ACEP  is doing                                                               
with this  technology and  the potential  for application  in the                                                               
2:33:02 PM                                                                                                                    
CHAIR COSTELLO opened public testimony on SB 179.                                                                               
2:33:15 PM                                                                                                                    
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP),  Sutton,   Alaska,  stated  support  for   the  Renewable                                                               
Portfolio  Standard (RPS),  as written.  He agreed  with previous                                                               
comments that  RPSs typically do  not include nuclear  and opined                                                               
that there  were practical reasons  for maintaining  the existing                                                               
standard. Some  of the nuclear  technology under  discussion will                                                               
not  be  available  for  5-10 years.  Furthermore,  the  cost  of                                                               
nuclear  energy  from  microreactors  will  not  be  close  to  6                                                               
cents/kWh.  Solar  and wind  currently  are  the least  expensive                                                               
power options  available in the  country. He opined  that nuclear                                                               
will  not be  competitive  with wind  and solar  in  the next  19                                                               
years, which is  the range of the  RPS put forward in  SB 179. He                                                               
urged the  committee to keep  the RPS to those  technologies that                                                               
were currently available.                                                                                                       
CHAIR  COSTELLO asked  if  he knew  why the  80  percent by  2040                                                               
requirement was set and if that was achievable.                                                                                 
MR. ROSE explained that the  National Renewable Energy Laboratory                                                               
(NREL) looked  at whether an  80 percent standard  was achievable                                                               
and  determined  that in  the  Railbelt  that standard  could  be                                                               
achieved  without   impacting  reliability.  All   the  scenarios                                                               
included the  updated transmission and batteries  that Mr. Thayer                                                               
discussed  and continued  natural  gas generation  to supply  the                                                               
remaining 20 percent of the power.                                                                                              
2:37:52 PM                                                                                                                    
CHAIR COSTELLO discerned  that nobody else wished  to comment and                                                               
closed public testimony on SB 179.                                                                                              
CHAIR COSTELLO held SB 179 for further consideration.                                                                           

Document Name Date/Time Subjects
SB 179 Transmittal Letter.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 Sectional Analysis version A.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 Fiscal Note 2417 - DCCED.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 AEA Presentation to SLAC - 2.22.22.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 Supporting Document - NREL Feasibility Study (2022).pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 179 Written Testimony received as of 2.22.22.pdf SL&C 2/23/2022 1:30:00 PM
SB 179
SB 132 Presentation to SLAC 2.23.22.pdf SL&C 2/23/2022 1:30:00 PM
SB 132