Legislature(2023 - 2024)BARNES 124
03/21/2023 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Alaska Energy Authority | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
March 21, 2023
10:16 a.m.
DRAFT
MEMBERS PRESENT
Representative George Rauscher, Chair
Representative Tom McKay
Representative Stanley Wright
Representative Mike Prax
Representative Calvin Schrage
Representative Ashley Carrick
MEMBERS ABSENT
Representative Josiah Patkotak
COMMITTEE CALENDAR
PRESENTATION(S): ALASKA ENERGY AUTHORITY
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CURTIS THAYER, Executive Director
Alaska Energy Authority
Juneau, Alaska
POSITION STATEMENT: Gave a PowerPoint presentation titled: "AEA
Overview Presentation" [hard copy included in committee packet].
ACTION NARRATIVE
10:16:52 AM
CHAIR GEORGE RAUSCHER called the House Special Committee on
Energy meeting to order at [10:16 a.m.] Representatives
Carrick, Wright, Prax, McKay, and Rauscher were present at the
call to order. Representative Schrage arrived as the meeting
was in progress.
^PRESENTATION(S): ALASKA ENERGY AUTHORITY
PRESENTATION(S): ALASKA ENERGY AUTHORITY
10:18:25 AM
CHAIR RAUSCHER announced that the only order of business would
be the ALASKA ENERGY AUHTORITY presentation.
10:18:44 AM
CURTIS THAYER, Executive Director, Alaska Energy Authority,
offered a PowerPoint presentation [hard copy included in the
committee packet]. He began on slides 2 and 3 and stated that
the Alaska Energy Authority (AEA) was created in 1976 by the
Alaska State Legislature with the mission of reducing energy
costs in Alaska. He said AEA administers power cost
equalization (PCE), provides grants and loans, works on energy
planning, and works with the Railbelt and rural utilities on
their energy generation facilities.
MR. THAYER moved to slide 4 and showed a map of active projects
overseen by AEA, spanning across all different forms of energy
generation.
10:20:41 AM
The committee took an at-ease from 10:20 a.m. to 10:22 a.m.
10:22:42 AM
REPRESENTATIVE PRAX asked how many projects the map covers.
MR. THAYER answered that it covers over 500 projects, including
renewable energy generation and PCE communities.
10:24:01 AM
MR. THAYER moved to slides 5 through 7 and gave an overview of
the Bradley Lake hydroelectric project. He stated that Bradley
Lake provides approximately 10 percent of the energy used by the
Railbelt utilities and is the largest source of renewable energy
in the state. Energy generated by Bradley Lake costs 4 cents
per kilowatt-hour (kWh). He showed a chart with the percentage
of power received by each of the Railbelt utilities from Bradley
Lake.
10:25:41 AM
REPRESENTATIVE PRAX asked how the percentages are determined.
MR. THAYER answered that they were determined during the
original discussion of the project and reflect the percentages
of the bonds paid by each utility. In response to a follow-up
question, he agreed that it was fair to characterize the
percentages of power received as a purchase.
10:26:54 AM
MR. THAYER continued to slides 8 through 10 and gave an overview
of transmission line upgrades. He said that AEA and the
Railbelt utilities have raised $166 million in financing to
build transmission lines from Bradley Lake to improve its
efficiency and the amount of power it can deliver. There will
be no additional costs to ratepayers or the State of Alaska. He
showed a map displaying transmission lines and coverage areas of
the Railbelt utilities. He said that the Alaska intertie is
owned by AEA from Willow to Healy, and it allows Golden Valley
Electric Association to benefit from lower cost power, saving
its ratepayers an average of $37 million annually.
10:30:07 AM
REPRESENTATIVE SCHRAGE asked how it is possible to upgrade
transmission lines without additional costs to the state or
ratepayers.
MR. THAYER answered that additional payments made for the bonds
were eligible to go towards the Bradley Lake project. In
response to a follow-up question, he said that the excess bond
funds were redirected to the Bradley Lake project.
10:34:44 AM
CHAIR RAUSCHER asked why additional payments were necessary when
the bonds had already been paid.
MR. THAYER answered that it was a provision in the original
conception of the project.
10:35:44 AM
MR. THAYER continued to slides 11 and 12 and reiterated that AEA
administers the PCE program. He said 193 communities, 91
utilities, and 82,000 Alaskans are covered by the program. He
said that residential users are eligible to receive PCE credits
up to 750 kWh per month. Public facilities can receive PCE
credit up to 70 kWh per month multiplied by the number of
residents in the community.
10:37:33 AM
REPRESENTATIVE WRIGHT asked how much money is in the PCE
endowment fund.
MR. THAYER answered approximately $1 billion. He added that the
fund is overseen by the Department of Revenue.
10:37:56 AM
REPRESENTATIVE SCHRAGE asked how the fund is structured.
MR. THAYER answered that a court case the previous year resulted
in a ruling stating that the fund is not sweepable. He added
that it was mostly an accounting issue. In response to a
follow-up question, he said that depending on the amount of
funds generated by investment, a certain amount of those funds
can be allocated to certain other appropriations. He added that
such a scenario is uncommon.
10:40:54 AM
CHAIR RAUSCHER commented that a full presentation on the PCE
would be held in the future to give a more in-depth overview of
the fund.
10:42:02 AM
MR. THAYER continued with slide 13 and gave an overview of PCE
eligibility. He stated that residential and community customers
are eligible, and state and federal facilities are not eligible
for PCE funds. Additionally, communities with rates lower than
the urban average are not eligible.
10:42:36 AM
REPRESENTATIVE CARRICK asked whether state or federal facilities
in rural communities benefitted from PCE in any capacity.
MR. THAYER answered that they do not benefit directly.
10:45:35 AM
The committee took an at-ease from 10:45 a.m. to 10:46 a.m.
10:46:31 AM
REPRESENTATIVE CARRICK asked whether the rural utilities
benefitted from PCE regardless of whether an individual is a
direct customer.
MR. THAYER answered that Representative Carricks statement is
correct.
10:46:56 AM
MR. THAYER continued to slide 14 and stated that AEA has been
involved in system upgrades for rural communities. He said that
197 communities are eligible for the program, and its goal is to
improve safety, efficiency, and reliability of energy systems in
rural communities.
10:48:25 AM
REPRESENTATIVE PRAX asked whether it is correct to say that AEA
is 10 years behind on deferred maintenance.
MR. THAYER answered that it is. In response to a follow-up
question, he said that AEA tries to prevent replacement from
becoming necessary.
10:49:53 AM
REPRESENTATIVE WRIGHT asked what AEA does in order to extend the
lifespan of those systems.
MR. THAYER answered that AEA sends out technicians to do as much
maintenance as possible. He added that a recent survey was done
for all equipment maintained by AEA.
10:51:18 AM
REPRESENTATIVE PRAX asked whether the state capital match is
separate from the PCE fund.
MR. THAYER answered that the PCE fund has only been used twice
for systems upgrades, due to an excess of funds generated.
10:53:19 AM
MR. THAYER moved to slides 15 through 19 and gave a brief
overview of bulk fuel upgrades and the power project fund (PFF)
loan program, which provides loans to build renewable energy
projects. He said that AEA has done work on 400 bulk fuel
upgrades in rural areas of Alaska. The deferred maintenance of
those facilities is $800 million. He said that AEA has $27.2
million in outstanding loans and $6.7 million available for new
loans. The current interest rate is 4.86 percent. He mentioned
the Hiilangaay and South Fork hydroelectric projects as examples
of successful projects brought about because of the availability
of those loans.
10:56:28 AM
CHAIR RAUSCHER asked how the South Fork hydroelectric project
provides power to other homes.
MR. THAYER answered that the owners sell the power generated to
Matanuska Electric Association (MEA).
10:56:59 AM
REPRESENTATIVE SCHRAGE asked whether Hydaburg, Alaska, is a PCE
eligible community.
MR. THAYER answered that it is. In response to a follow-up
question, he said that King Cove, Alaska, has not applied for
PCE. He added that the state invested money into the
community's hydroelectric project to help it become energy self-
sufficient, which makes up for the PCE funds that the community
is not receiving.
11:00:20 AM
MR. THAYER continued to slides 20 through 24 and presented more
examples of projects that had benefited from the loan program
and the renewable energy fund (REF) grant program. He said that
the Willow Solar Farm expansion project provides 1.2 MWh of
energy and offsets 2 million pounds of carbon dioxide annually.
He said AEA has awarded 271 grants totaling $300 million for
building renewable energy projects and has 31 new applicants
requesting a total of $33 million. He mentioned the Banner Peak
Wind Farm expansion, Whitman Lake hydroelectric project, and
Terror Lake hydroelectric expansion project as examples of
projects receiving those grants.
11:03:57 AM
MR. THAYER continued to slides 25 through 28 and gave an
overview of some federal funding made available by the
Infrastructure Investment and Jobs Act. He said that $60
million would be made available to Alaska over five years to
increase grid resiliency. The grants from the federal
government would require a 15 percent match from the state and a
33 percent small utility match. He stated that a plan to
increase electric vehicle infrastructure was approved, which
will unlock $19 million for electric vehicle charging
infrastructure; AEA expects that Alaska may receive $52 million
over the course of the next five years. The charging stations
will be required to be built no more than 50 miles apart, with
an exception in Glitter Gulch.
11:06:05 AM
CHAIR RAUSCHER asked what the requirement for an alternative
fuel corridor (AFC) is.
MR. THAYER answered that it is a term referring to the
possibility of building charging stations in those corridors.
In response to a follow-up question, he stated that AEA has not
received any requests other than Anchorage, Alaska to Fairbanks,
Alaska.
11:07:20 AM
REPRESENTATIVE SCHRAGE asked whether more federal funding could
be received after building charging stations on the AFCs.
MR. THAYER answered that more could be built after work along
the AFCs was completed. In response to a follow-up question, he
said that Glitter Gulch is not operational during the winter,
and the rest of the plan including the exception was approved.
REPRESENTATIVE SCHRAGE asked whether an estimated time of
completion is available.
MR. THAYER answered that it is a long process to work out
logistics, and that AEA is still waiting in some respects on the
federal government.
11:10:06 AM
MR. THAYER continued to slides 29 and 30 and gave an overview of
opportunities offered by the Infrastructure, Investment, and
Jobs Act. He stated that there is a total of $145 million that
will come into the state for energy infrastructure projects. He
showed a chart breaking down the amount of money and what it
would be for and added that the only state match required is
$1.8 million for grid resiliency.
11:13:49 AM
MR. THAYER moved to slide 31 and gave an overview of staffing
needs for AEA. He said that two project managers, a contracting
officer, a senior accountant, and a grant coordinator are needed
for administration of the projects being built with federal
dollars. An additional PCE technician is also needed, along
with some PCE salary adjustments.
11:15:59 AM
REPRESENTATIVE SCHRAGE asked how AEA is faring with staffing
challenges.
MR. THAYER answered that AEA has only three vacancies, not
including the new positions that will be added. He added that
there are times when AEA is unable to compete with much higher
salaries from the private sector. In response to a follow-up
question, he said that AEA does have more ability than most
state agencies to increase salaries.
11:21:31 AM
REPRESENTATIVE PRAX asked if there is a better way to keep track
of the different divisions within AEA.
MR. THAYER answered that AEA is focused on resilience,
redundancy, and reliability. He said that there is not
redundancy on the Railbelt, which will potentially cause price
issues in the future.
REPRESENTATIVE PRAX asked if there is a way to figure out how
the benefits of investing in energy compare to state investment
in other areas.
MR. THAYER answered that he is unsure. He added that energy is
a statewide issue that needs investment and work.
11:26:55 AM
REPRESENTATIVE SCHRAGE asked what the circuit rider program is.
MR. THAYER answered that it is a group of technicians that
travel around rural Alaska to provide training and assistance.
In response to a follow-up question, he stated that the circuit
rider program mostly relies on federal funding.
REPRESENTATIVE SCHRAGE asked if there is a need for more circuit
riders.
MR. THAYER answered that there is still a backlog from the
COVID-19 pandemic, and further discussion with his team would
provide a better answer.
11:33:30 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:33 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AEA Overview Presentation to House Energy Committee.pdf |
HENE 3/21/2023 10:15:00 AM |
AEA |