Legislature(2019 - 2020)FAHRENKAMP 203
02/12/2020 09:00 AM Senate RAILBELT ELECTRIC SYSTEM
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| Audio | Topic |
|---|---|
| Start | |
| SB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 123 | TELECONFERENCED | |
SB 123-ELECTRIC RELIABILITY ORGANIZATIONS
9:05:31 AM
CHAIR COGHILL announced the consideration of SENATE BILL NO.
123, "An Act relating to the regulation of electric utilities
and electric reliability organizations; and providing for an
effective date."
He solicited a motion to adopt the work draft committee
substitute and noted that it generated a new title.
9:06:07 AM
SENATOR MICCICHE moved to adopt the work draft committee
substitute (CS) for SB 123, work order 31-LS0959\K, as the
working document.
9:06:30 AM
CHAIR COGHILL objected for an explanation of the changes.
9:06:57 AM
RENA MILLER, Staff, Senator Cathy Giessel, Alaska State
Legislature, Juneau, Alaska, and on loan to the committee for
the purposes of SB 123, reviewed the following changes between
Version M and Version K:
Throughout: Changed references to 'bulk power system'
and 'interconnected bulk power system' to
'interconnected bulk electric system'
CHAIR COGHILL asked if this comports with RCA terminology.
MS. MILLER answered yes. She continued:
Page 1, lines 1-5: [At the Chair's request} redrafted
a more descriptive title. Page 1, line 11: Changed
'certified' to 'certificated' [to conform with other
RCA statutes].
Page 1, line11, to page 2, line 1:
Added provision specifying that a group of utilities
all of which are exempt as municipal entities or
political subdivisions of the state are exempt from
the requirement to participate in an ERO.
She explained the drafters will relocate this provision to a
more appropriate section of the bill. Instead of addressing the
requirement of utilities to participate, it addresses the
requirement to actually have an ERO.
Page 2, line 4: Changed 'certify' to 'certificate'.
Page 2, line 5: Changed 'certify' to 'certificate'.
Page 2, lines 7-8: Restructured to separate the
provisions for applications and approval from the
requirements an ERO must demonstrate in order to be
approved. [A new subsection (c) is created.]
Page 2, line 24: Changed [] to [].
Page 3, lines 2-4: Added requirement for the RCA to,
once regulations are written and bill is in effect,
notify the [interconnected] load-serving entities in a
system that an ERO is required.
Page 3, line 5: Added 'and certificate' after 'form'
to clarify an ERO formed by the RCA also must be
certificated.
Page 3, lines 7-12: Restructured provisions directing
the RCA to form an ERO. The previous bill required the
RCA to form an ERO if no one had applied to be an ERO
within three months. The CS applies the notice
requirement in (d) on page 2; once notice has been
given, the RCA will form an ERO [if] no one has
applied to be an ERO after 90 days. If someone has
applied but the RCA has not certified an ERO within
270 days, the RCA shall form an ERO.
9:11:09 AM
SENATOR MICCICHE asked if the effective date of the bill starts
the countdown for the required notification by the commission.
MS. MILLER answered yes. She continued.
Page 3, lines 13-17: Provides a process for the RCA to
waive the requirement for a given network to have an
ERO.
She explained that all the load-serving entities within the
system would have to petition the RCA and explain why
establishing an ERO for the network isn't necessary. This looks
to the future and provides an opportunity for the RCA to not
require an ERO if the circumstances of a particular network do
not warrant it. She continued.
Page 3, lines 21-22: Emphasizes that all users, owners
and operators of an interconnected system must comply
with [reliability] standards; this includes entities
that are otherwise exempt from RCA regulation.
Page 3, line 24: Changes 'adopted' to 'approved' to
conform.
Page 3, line 27: Technical change to the structure of
(g).
Page 4, lines 2-3: Prohibits standards from being
designed with the intent to require enlarging
facilities or new construction.
9:13:23 AM
Page 4, line 5: Clarifies that the commission must
give public notice and hold a hearing before acting on
a reliability standard filed by the ERO. Adds 'or
reject' after 'approve'.
Page 4, lines 9-16: Lays out the new process the RCA
must undertake to modify a standard. The RCA must give
the ERO an opportunity to modify the standard.
CHAIR COGHILL said this gives the ERO authority to oppose a
proposed modification, but the RCA retains the ultimate
authority.
MS. MILLER agreed; the utilities felt it was important to have
the opportunity for a back and forth process for modifying a
standard. She continued.
9:14:44 AM
Page 4, lines 9-16: Lays out the new process the RCA
must undertake to modify a standard. The RCA must give
the ERO an opportunity to modify the standard.
Page 5, lines 4-5: Clarifies that penalties imposed by
the ERO can be appealed to and reviewed by the
commission. [But penalties imposed by the commission
do not get reviewed by the commission.]
Page 5, line 11: Conforms to new lettering of
subsections enabling penalties.
Page 6, line 1: Removed a provision that the RCA may
require an ERO to obtain a certificate of public
convenience and necessity (CPCN). An ERO is already
required to have a CPCN under Sec. 42.05.292 (b) on
page 2.
Page 6, line 7: Changes 'electric utility' to 'load-
serving entity' to conform with defined terms.
Page 6, line 9: Deletes requirement to 'prepare'
before 'file'. Specifies that an integrated resource
plan must be filed with the RCA as a petition for
approval.
Page 6, line 11: Changes 'most cost-effective manner'
to 'in a manner that provides the greatest value.'
Page 6, line 15: Adds battery storage to the options
an integrated resource plan should consider.
9:17:14 AM
SENATOR MICCICHE noted that this does not affect projects in
process, just future projects.
MS. MILLER clarified that this section addresses integrated
resource planning and what it would include. The ERO would not
get started on the IRP until it has been certified by the RCA.
She suggested he may be thinking about the project pre-approval
requirement that goes into effect on the effective date of the
bill, July 1, 2021. The RCA must write regulations addressing
how to handle projects undertaken between the effective date and
the time an IRP is accepted by the commission.
9:18:22 AM
MS. MILLER continued.
Page 6, line 17: Changes 'at the lowest cost' to 'in a
manner that provides the greatest value'.
Page 6, line 18: Adds conservation activities to
conform with the options an integrated resource plan
should consider.
Page 6, line 19: Adds 'public' before 'notice'.
Page 6, line 20: Changes 'submitted' to 'filed'.
Page 6, lines 21-31: Incorporates a new process for
the RCA's handling of a petition to approve an
integrated resource plan. Within 45 days of receipt,
the RCA must approve the plan or open a docket for
investigation. If the RCA decides the plan should be
modified, it must return the plan to the ERO for
changes. The RCA retains the backstop ability to
modify a plan.
Page 7, line 10: Adds 'and greatest value' to the
terms the RCA will define in regulation.
Page 7, line 24: Changes 'the most cost-effective
manner' to 'a cost-effective manner'.
Page 7, lines 29-30: Clarifies that refurbishments and
capitalized maintenance do not require preapproval by
the RCA.
Page 7, line 31, to Page 8, line 6: Requires the RCA
to adopt regulations related to project pre-approval,
including defining refurbishments and capitalized
maintenance; giving local governments jurisdiction
over local planning decisions; and how the RCA will
address projects that are started before an integrated
resource plan is approved.
Page 8, line 11: Adds 'above-ground' to the
transmission line description.
Page 8, line 13: Increases the length of a high-
voltage, above-ground transmission line requiring
project pre-approval from 5 to 10 miles.
Page 8, lines 14-16: Separates high-voltage submarine
or underground cables from above-ground lines and
requires pre-approval if longer than 3 miles.
Page 8, lines 17-22: Adds, to projects requiring pre-
approval, energy storage devices and reactive
compensation devices. Definitions are renumbered.
Page 8, line 30: Changes 'certified' to
'certificated'.
Page 9, line 2: Renames 'bulk-power system' to
'interconnected bulk-electric system' and re-
alphabetizes the list of defined terms.
Page 9, line 4: In definition for interconnected bulk-
electric system, clarifies the interconnected entities
must be load-serving entities.
Page 9, line 20: Updates the date by the which the RCA
must adopt regulations to July 1, 2021.
Page 9, line 25: Updates the effective date of the
bill to July 1, 2021.
MS. MILLER said that concludes the summary of changes.
CHAIR COGHILL said he was unable to withdraw his objection at
this time because he didn't have a quorum. He relayed that there
would be public comment on Friday and he would entertain
amendments at that time. He advised that he and Ms. Miller have
talked with all parties to ensure that the changes in Version K
conform to what has been discussed and answer the questions that
have been brought forward.
9:24:35 AM
SENATOR MICCICHE commented that subsection (f) on page 3, lines
13-17, was an interesting addition. It says that if the
utilities as a group unanimously agree to go in a different
direction, they have the right to petition the commission for an
exemption from the bill.
MS. MILLER agreed that with unanimous agreement [the load-
serving entities within an interconnected bulk-electric system]
would have the ability to petition to waive the need for an ERO,
but project pre-approval would still apply. She explained that
the provision is trying to account for circumstances that may
exist in the future where the responsibilities within the
network are well understood so there is not the clear benefit of
requiring formation of an ERO.
CHAIR COGHILL added that it is trying to allow for new
production and laying out the rules.
9:26:53 AM
CHAIR COGHILL reiterated that public testimony would be heard
during the next hearing and he would entertain amendments,
including the one previously described to relocate the provision
on page 1.
MS. MILLER agreed that there would be several fine-tuning
amendments and that testimony would be taken from stakeholders
who would be directly impacted by the legislation.
CHAIR COGHILL held SB 123 in committee.
SENATOR MICCICHE expressed the desire to hear from the utilities
and encouraged robust participation. He stated support for many
of the improvements.
CHAIR COGHILL advised that the CS was posted to BASIS and had
been distributed to stakeholders.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 123 - Version K Workdraft.pdf |
SRBE 2/12/2020 9:00:00 AM |
SB 123 |
| SB 123 - Version K CS Summary of Changes M to K.pdf |
SRBE 2/12/2020 9:00:00 AM |
SB 123 |