Legislature(2023 - 2024)BARNES 124
02/14/2023 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s) Regional Railbelt Coordination | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 14, 2023
10:16 a.m.
DRAFT
MEMBERS PRESENT
Representative George Rauscher, Chair
Representative Tom McKay
Representative Mike Prax
Representative Calvin Schrage
Representative Ashley Carrick
MEMBERS ABSENT
Representative Josiah Patkotak
Representative Stanley Wright
COMMITTEE CALENDAR
PRESENTATION(S) REGIONAL RAILBELT COORDINATION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CURTIS THAYER, Executive Director
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Co-presented a presentation titled Regional
Railbelt Coordination.
BRIAN HICKEY, Executive Director
Regional Railbelt Coordination
Juneau, Alaska
POSITION STATEMENT: Co-presented a presentation titled Regional
Railbelt Coordination.
ACTION NARRATIVE
10:16:46 AM
CHAIR GEORGE RAUSCHER called the House Special Committee on
Energy meeting to order at 10:16 a.m. Representatives Carrick,
Schrage, Prax, McKay, and Rauscher were present at the call to
order.
^PRESENTATION(S) REGIONAL RAILBELT COORDINATION
PRESENTATION(S) REGIONAL RAILBELT COORDINATION
10:17:48 AM
CHAIR RAUSCHER announced that the only order of business would
be a presentation, titled "Regional Railbelt Coordination."
10:18:58 AM
CURTIS THAYER, Executive Director, Alaska Energy Authority,
stated that there is currently "historic" alignment among the
Railbelt utilities and the Alaska Energy Authority (AEA). He
stated that upgrading the transmission lines on the Railbelt is
a necessary step in moving towards a higher usage of renewable
energy sources. He said that 166 million dollars have already
been contributed by the utilities towards upgrading
transmission. He said that a decrease in price per kilowatt
(kW) on the Railbelt would also benefit rural Alaska due to the
power cost equalization (PCE) program.
10:22:33 AM
BRIAN HICKEY, Executive Director, Regional Railbelt
Coordination, gave a brief overview of his PowerPoint, titled
"Modernizing the Railbelt Grid," [hardcopy included in the
committee packet], presentation as shown on slide 2.
MR. HICKEY continued to slide 3 and stated that as part of the
Grid Modernization and Resiliency Plan (GMRP), there would be
consideration of connecting the Copper Valley Electric
Association with the Railbelt. He stated that 75 percent of
Alaska's population lives on the Railbelt, and he said that 80
percent of Alaska's electricity is generated on the Railbelt.
He stated that the Railbelt only has 3 single transmission
lines, resulting in a single contingency line that allows for
the transfer of only 10 percent of the peak load. He said that
any time one of those transmission lines is out of service, it
results in that area being cut off from the rest of the
Railbelt.
10:26:19 AM
REPRESENTATIVE SCHRAGE asked about the relationship between
lowering energy costs on the Railbelt and energy funding for
communities in rural Alaska.
MR. HICKEY answered that he would provide more information on
the subject later on in the presentation.
10:28:35 AM
MR. HICKEY continued to slide 4 and stated that the Railbelt
utilities are aligned on the challenges facing the Railbelt. He
continued to slide 5 and stated that the utilities, the AEA, and
the Regulatory Commission of Alaska have created a vision that
seeks a "collaborative future."
MR. HICKEY continued to slide 6 and stated that the utilities
and regulators have created a 12-15 year plan that will upgrade
transmission along the Railbelt and cost approximately $2.9
billion. He said that all of the proposed transmission lines
would undergo the National Environmental Policy Act (NEPA)
process. He said that phase 1 of the plan would build
transmission from Bradley Lake to Lake Lorraine, including both
a rebuild of the current system and a second transmission line.
MR. HICKEY stated that the rebuilding of the current
transmission lines and building of an additional system of
transmission lines is a necessary step in utilizing new and
renewable sources of energy generation.
10:33:03 AM
MR. HICKEY added that he has spoken with the U.S. Department of
Energy (DoE) about his belief that Alaska's electrical grid
would be a good place to test decarbonization of a grid due to
the smaller size and subsequent cost.
MR. HICKEY continued to slides 7 and 8 and stated that the
reason the transmission project matters is that Alaska currently
lacks reliability in its transmission lines. He said that the
amount of natural gas available is decreasing and the Railbelt
needs to look at other sources of energy generation, which
requires improvements in transmission. He said that the
improvements in transmission and energy storage will increase
efficiency and lower energy costs. He said the PCE program is
tied to cost of energy on the Railbelt, and that lowering costs
on the Railbelt allows for more money to be contributed toward
the PCE.
10:34:54 AM
REPRESENTATIVE PRAX asked if the transmission project plan took
the possibility of a natural gas pipeline from the North Slope
into account.
MR. HICKEY answered that transmission upgrades are necessary
regardless of the source of energy. In response to a follow-up
question, he stated that the location and cost of the
transmission was being considered.
REPRESENTATIVE PRAX expressed his concern that decarbonization
is shifting dependance on hydrocarbons for dependence on the
minerals needed for renewable energy storage.
10:37:48 AM
CHAIR RAUSCHER asked about the possibility of buying 10 micro-
nuclear reactors as opposed to more transmission lines. He
wondered if this would have a greater impact on reducing rates.
He acknowledged that the plan was very unlikely to occur.
MR. HICKEY answered that for the economy of scale to support
such an action, it would require the participation of all
Railbelt utilities. He added that enacting such a plan would
still require the transmission lines to be upgraded, because the
utilities would need to be connected when the reactor located in
their respective areas were down for maintenance.
10:40:21 AM
MR. HICKEY continued with slide 8, noting that the Railbelt has
critical infrastructure, including: the Ted Stevens Anchorage
International Airport, which is the fourth busiest cargo airport
in the world; five military bases; mines for rare Earth
minerals; and a federally designated strategic seaport.
MR. HICKEY moved to slide 9 and gave the background for the
current transmission line proposals. He said that Governor Mike
Dunleavy "challenged" the Railbelt Utilities and AEA to create a
plan to serve the future of the Railbelt. With the passage of
the Bipartisan Infrastructure Law, there is increased
opportunity for federal funding to aid in building new
transmission. He said that the GMRP was developed to improve
the economy of scale and give the Railbelt opportunities for
energy source diversification, adding that an additional effect
would be reduction of electric rates.
10:42:52 AM
MR. HICKEY continued to slide 10, displaying a map showing
Railbelt transmission and battery energy storage systems along
the Railbelt. He showed the placement of the existing lines
compared to the new lines being proposed. New lines would
include a line going from Soldotna to Healy and another line
going along the "Roadbelt", tying the Copper Valley electric
system to the Railbelt. He mentioned the possibility of another
potential hydroelectric project roughly the size of Bradley Lake
called the Tiekel River Project.
10:44:45 AM
CHAIR RAUSCHER asked if any of the new transmission lines would
go through Anchorage, Alaska.
MR. HICKEY answered they would.
10:45:28 AM
MR. HICKEY continued that there is a new energy storage battery
in Soldotna and there are plans to add one in Anchorage and
Fairbanks, Alaska. On slide 11, he gave the three opportunities
for federal funding: grid resilience, smart grid, and grid
innovation. He noted that the application for third opportunity
was put in by the State of Alaska as the eligible entity, while
the first two applications were put in by Matanuska Electric
Association (MEA). He moved to slide 12 and stated that the
state of Alaska must be involved in the plan. The utilities
doing it without funding from the state would cause significant
rate increases, and receiving federal funding requires the same
amount of investment from the state.
10:48:25 AM
MR. HICKEY stated on slide 13 that the federal government has
decided to move forward with AEA's applications on grid
resiliency and smart grid. Out of 144 applications moving
forward on the first topic, 10 grants will be awarded, and out
of 157 applications on the second topic, 25 to 40 grants will be
awarded. He said that the state is still waiting to hear back
on the third topic, grid innovation. On slide 14, he said that
the applications for federal funding are part of the first
funding cycle in the Bipartisan Infrastructure Bill.
10:51:29 AM
REPRESENTATIVE PRAX asked if it was "worth the risk" to complete
parts of the project individually without knowing if the state
would receive federal grants for the other applications.
MR. HICKEY answered that if one were to accept the premise that
this has to be the state's plan, the answer would be yes. He
opined that the project needs to be completed "either way."
REPRESENTATIVE PRAX commented that the effects of not receiving
federal funding could be increased taxes and less state money to
fund other areas. He warned that there could be consequences
for completing only part of the project if this were to be the
case.
MR. HICKEY responded that each part of the project has its own
benefit. Upgrades to the Sterling to Quartz Creek line would
reduce losses of energy produced by Bradley Lake by 3 or 4
percent. In response to a follow up question, he said that the
math on the projects is part of the NEPA process.
10:54:38 AM
REPRESENTATIVE SCHRAGE asked how the planned funding of the
project would be affected by the proposed spending caps.
MR. HICKEY answered that he did not know.
10:56:19 AM
REPRESENTATIVE CARRICK asked if there was a priority list for
the project in the event that the legislature decided to fund
only part of it.
MR. HICKEY answered that part of the application process is
listing the priorities within the project, and that the work on
that is currently ongoing. In response to a follow up question,
he said that phase 1 of the project would require $1.26 billion
of state funding, which would fund the transmission line
upgrades up to the central region of the Railbelt.
10:59:38 AM
MR. HICKEY continued to slide 15 and said that the plan would
create benefits for rural communities, and those benefit plans
are part of the application process.
11:00:51 AM
CHAIR RAUSCHER asked where the data for rural communities
originates.
MR. HICKEY responded that the Regional Railbelt Coordination
group is currently collecting that data and has some available
from the previous census.
11:01:39 AM
MR. HICKEY skipped to slide 17 and reviewed the timeline for the
grant selection process and when the proposals were submitted.
He reiterated that the Regional Railbelt Coordination group has
been invited to apply for the first two proposals and is waiting
to hear back on the third. He stated that the amount of money
for the grants would be approximately $50-$70 million for the
first, $15 million for the second, and $300 million for the
third. There would not be any financial commitments
immediately, but the way that financial commitments would be
dealt with would be bound by what was said in the application.
11:04:43 AM
REPRESENTATIVE SCHRAGE asked if it would be possible to subject
the amount of money allocated during the reward negotiation
process to oil revenues.
MR. HICKEY answered that the primary focus is to secure the
funding if possible; he said that he believes the federal
government would want something more specific when it comes to
the numbers involved.
11:06:41 AM
REPRESENTATIVE CARRICK asked about the possibility of increased
energy storage needs if more renewable energy is used in the
future.
MR. HICKEY answered that there is more than one way to store
energy, including batteries and pond storage at hydroelectric
plants. He stated that grid stabilization is the current
priority, as energy used from storage is quickly used.
11:10:04 AM
REPRESENTATIVE SCHRAGE voiced his concern that the speed of the
process could make the Railbelt Reliability Council (RCC) less
effective, and he asked what impact it could have on public
input.
MR. HICKEY answered that the RRC should be placed in charge of
the plan when it is finished being set up, but it will take some
time to reach that point. He added that there will be much more
time for public input when the NEPA process begins.
11:15:23 AM
CHAIR RAUSCHER asked when Alaska would receive the funding if
the state's application were accepted.
MR. HICKEY stated that award negotiations would occur in the
fall and winter of 2023, and the following NEPA process would
take between three and five years.
11:17:47 AM
MR. THAYER reiterated that the Railbelt is in historic alignment
with the need to upgrade the transmission system.
11:18:57 AM
The committee took a brief at-ease. at 11:19 a.m.
11:19:54 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:20 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Modernizing the Railbelt Grid-House Energy Committee 2-14-23.pdf |
HENE 2/14/2023 10:15:00 AM |