Legislature(2021 - 2022)ADAMS 519

04/06/2021 10:15 AM House ENERGY

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Audio Topic
10:17:48 AM Start
10:18:25 AM SB69
10:46:44 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Invited & Public Testimony --
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                         April 6, 2021                                                                                          
                           10:17 a.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Calvin Schrage, Chair                                                                                            
Representative Chris Tuck                                                                                                       
Representative Matt Claman                                                                                                      
Representative Zack Fields                                                                                                      
Representative George Rauscher                                                                                                  
Representative James Kaufman                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative Tiffany Zulkosky                                                                                                 
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 69 AM                                                                                                           
"An  Act  extending an  exemption  from  regulation as  a  public                                                               
utility   for  plants   and  facilities   generating  electricity                                                               
entirely from  renewable energy resources;  and providing  for an                                                               
effective date."                                                                                                                
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB  69                                                                                                                  
SHORT TITLE: EXEMPT RENEWABLE ENERGY ELECTRIC PLANTS                                                                            
SPONSOR(s): SENATOR(s) REVAK                                                                                                    
02/03/21       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/03/21       (S)       L&C                                                                                                    
02/10/21       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/10/21       (S)       <Bill Hearing Canceled>                                                                                
02/15/21       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/15/21       (S)       Heard & Held                                                                                           
02/15/21       (S)       MINUTE(L&C)                                                                                            
03/03/21       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/03/21       (S)       Moved SB 69 Out of Committee                                                                           
03/03/21       (S)       MINUTE(L&C)                                                                                            
03/05/21       (S)       L&C RPT 1DP 3AM                                                                                        
03/05/21       (S)       DP: COSTELLO                                                                                           
03/05/21       (S)       AM: GRAY-JACKSON, STEVENS, HOLLAND                                                                     
03/31/21       (S)       TRANSMITTED TO (H)                                                                                     
03/31/21       (S)       VERSION: SB 69 AM                                                                                      
04/05/21       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/05/21       (H)       ENE, L&C                                                                                               
04/06/21       (H)       ENE AT 10:15 AM ADAMS 519                                                                              
WITNESS REGISTER                                                                                                              
DIRK CRAFT, Staff                                                                                                               
Senator Josh Revak                                                                                                              
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Presented SB  69 am  on behalf  of Senator                                                             
Revak, prime sponsor.                                                                                                           
JENN MILLER, CEO                                                                                                                
Renewable Independent Power Producers                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided  information and answered questions                                                             
during the hearing on SB 69 am.                                                                                                 
SUZANNE SETTLE, Vice President                                                                                                  
Energy, Land and Resources                                                                                                      
Cook Inlet Region, Inc.                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 69 am.                                                                        
ACTION NARRATIVE                                                                                                              
10:17:48 AM                                                                                                                   
CHAIR  CALVIN  SCHRAGE  called the  House  Special  Committee  on                                                             
Energy  meeting to  order at  10:17 a.m.   Representatives  Tuck,                                                               
Claman,   Schrage   were   present   at  the   call   to   order.                                                               
Representatives  Fields, Rauscher,  and  Kaufman  arrived as  the                                                               
meeting was in progress.                                                                                                        
         SB 69-EXEMPT RENEWABLE ENERGY ELECTRIC PLANTS                                                                      
10:18:25 AM                                                                                                                   
CHAIR SCHRAGE announced that the  only order of business would be                                                               
SENATE  BILL NO.  69  am,  "An Act  extending  an exemption  from                                                               
regulation  as  a  public  utility   for  plants  and  facilities                                                               
generating electricity entirely  from renewable energy resources;                                                               
and providing for an effective date."                                                                                           
10:19:00 AM                                                                                                                   
DIRK CRAFT, Staff, Senator Josh  Revak, Alaska State Legislature,                                                               
presented SB  69 am  on behalf of  Senator Revak,  prime sponsor.                                                               
He said SB  69 am would extend a narrow  regulatory exemption for                                                               
power plants utilizing renewable  resources of under 65 megawatts                                                               
from  July  1,   2021,  to  July  1,  2028.     He  reviewed  the                                                               
responsibilities  of the  Regulatory Commission  of Alaska  (RCA)                                                               
and  noted  that  Alaska  has   seen  increasing  private  sector                                                               
investment in the development of  renewable energy systems across                                                               
the  state.   He related  that  since 2010,  Alaska has  exempted                                                               
small power  producers from  regulation under the  RCA if:   they                                                               
generate  electricity  entirely   from  renewable  energy;  their                                                               
facility  is  under 65  megawatts;  they  sell  power only  to  a                                                               
regulated public utility; and the  project receives neither state                                                               
tax credits nor state grants.  He continued:                                                                                    
     This  extra layer  of regulation  can not  only prevent                                                                    
     power producers from  providing private risk investment                                                                    
     in  the state,  but  it can  also add  to  the cost  of                                                                    
     government  through  the additional  regulatory  layer.                                                                    
     Exempting  independent  power   producers  under  these                                                                    
     narrow  conditions  essentially   ensures  there  isn't                                                                    
     duplicative  regulation,  which   adds  costs  and  can                                                                    
     create  delays for  investment, as  well as  discourage                                                                    
     potential investors.                                                                                                       
     Consumers  are  protected  because the  power  purchase                                                                    
     agreement    and   other    agreements   between    the                                                                    
     [independent power  producer] (IPP) and  public utility                                                                    
     are  considered by  the RCA.   Therefore,  an exemption                                                                    
     made  through SB  69 [am]  continues to  maintain state                                                                    
     oversight  on   the  power  purchase   agreements,  and                                                                    
     thereby continues to protect the rate payers.                                                                              
MR. CRAFT  noted that an amendment  on the Senate floor  made two                                                               
small  changes.     One  was   a  reference  to   the  Electrical                                                               
Reliability  Organization  (ERO)  statute,   which  was  made  to                                                               
clarify that the regulatory exemption  under AS 42.05.711(r) does                                                               
not  apply   to  applicable  ERO-related  regulations   under  AS                                                               
42.05.760-790,  which were  authorized  under SB  123 last  year.                                                               
The other  change was the  reduction of  the sunset date  from 10                                                               
years  to 7  years.   He  offered to  answer  questions from  the                                                               
10:21:36 AM                                                                                                                   
REPRESENTATIVE  TUCK  asked  what  the RCA  was  doing  that  was                                                               
"making it difficult" for the IPPs.                                                                                             
MR.  CRAFT,  in  response  to   a  question  from  Representative                                                               
Rauscher,  said  the difficulty  for  IPPs  has been  related  to                                                               
filing and application for certificate  of public convenience and                                                               
10:23:57 AM                                                                                                                   
CHAIR  SCHRAGE   announced  the  committee  would   hear  invited                                                               
10:24:07 AM                                                                                                                   
JENN  MILLER, CEO,  Renewable Independent  Power Producers,  said                                                               
Renewable  IPP  develops, builds,  and  operates  solar farms  in                                                               
Alaska,  the  largest  one  in   Willow,  Alaska.    She  offered                                                               
background  regarding IPPs,  stating  that they  can operate  any                                                               
energy  generating  source, and  they  sell  energy at  wholesale                                                               
prices.  She discussed how  Renewable IPP works through technical                                                               
studies and power  purchase agreements.  She noted  that IPPs are                                                               
responsible for  the cost of  upgrading the grid  to interconnect                                                               
its facilities.   Once a  price is  agreed upon, the  contract is                                                               
sent to the  RCA for review and approval.   She explained that if                                                               
the  existing regulatory  environment were  to sunset,  Renewable                                                               
IPP  would  be required  to  do  quarterly tariff  filing,  which                                                               
requires  additional  staff.   She  further  explained  that  the                                                               
filing is repetitious  because four times per year  the IPP would                                                               
be  filing on  something  that was  already  approved before  the                                                               
project was built.   She said SB  69 am would require  the IPP to                                                               
sell 100  percent of its power  to a regulated utility,  and that                                                               
utility  must  also  submit quarterly  filings,  which  increases                                                               
costs.  The additional filing requirement  also puts the IPP at a                                                               
disadvantage  because Alaska  is  the only  state  where this  is                                                               
required,  and  investors  are  considering  that  when  deciding                                                               
whether to invest.  She talked  about renewable energy being at a                                                               
tipping point.                                                                                                                  
10:32:46 AM                                                                                                                   
MS.  MILLER,  in  response  to  a  question  from  Representative                                                               
Rauscher, mentioned  100 percent private investments  and federal                                                               
solar investment tax  credit, and she said although  there may be                                                               
COVID  relief  dollars  in  the  future,  Renewable  IPP  is  not                                                               
receiving any at this time.                                                                                                     
REPRESENTATIVE  RAUSCHER  asked Ms.  Miller  to  look into  COVID                                                               
[relief funds] that may be going toward the grid itself.                                                                        
10:34:37 AM                                                                                                                   
MS.  MILLER,  in  response  to  a  question  from  Representative                                                               
Kaufman, explained  that the  65 megawatt  size limit  is aligned                                                               
with  standards in  the Lower  48.   She said  she thinks  the 65                                                               
megawatt is a  great size; it's good to have  a high ceiling, and                                                               
then leave  it to the  technical group  to work with  the utility                                                               
collaboratively to determine the size.                                                                                          
REPRESENTATIVE KAUFMAN concurred.                                                                                               
10:36:47 AM                                                                                                                   
REPRESENTATIVE  TUCK asked  about communities  that don't  have a                                                               
purchase agreement.   He  mentioned an  IPP in  Coldfoot, Alaska,                                                               
and asked  if it falls  into "this category,"  as it is  the only                                                               
producer in the area.                                                                                                           
MR. CRAFT responded  that to fall under the  category [covered by                                                               
the bill  provisions] an IPP  would have to sell  power wholesale                                                               
to  one or  more public  utilities;  it could  not have  separate                                                               
agreements with any private entities.                                                                                           
10:37:55 AM                                                                                                                   
CHAIR SCHRAGE opened public testimony on SB 69 am.                                                                              
10:38:06 AM                                                                                                                   
SUZANNE SETTLE, Vice President,  Energy, Land and Resources, Cook                                                               
Inlet Region,  Inc., stated that  Cook Inlet Region,  Inc. (CIRI)                                                               
is an  IPP in the railbelt,  an investor of wind  and gas powered                                                               
generation and multiple  projects across the U.S., as  well as an                                                               
active  participant  in   establishing  Alaska's  first  Electric                                                               
Reliability Council pursuant  to last year's SB 123.   She stated                                                               
support of SB  69 am.  She said CIRI  used the exemption embedded                                                               
in statute  as part of  its development process for  a successful                                                               
Fire  Island   wind  project.     She  said  the   agreement  and                                                               
development has  provided long-term, flat-priced,  renewable wind                                                               
power  to Chugach  Electric Association  for more  than 8  years,                                                               
with 16 to go.   She said CIRI believes this is  a good model for                                                               
private  investment  in  a  sector and  can  benefit  the  public                                                               
without burdening state  government.  She noted  the great points                                                               
already  made  by Ms.  Miller.    She  warned that  allowing  the                                                               
statute to expire would kill  future investment.  She stated that                                                               
CIRI believes it is important to  extend the sunset so that other                                                               
IPPs  can  have  "regulatory  certainty   in  their  own  project                                                               
development activities."   She extolled  the benefits of  IPPs to                                                               
the state, underlining  that they put their own  dollars at risk;                                                               
since the  price is  decided in  the agreement,  any rise  in the                                                               
cost of building or operating is covered by the IPPs.                                                                           
10:42:16 AM                                                                                                                   
MR. CRAFT responded to questions  from Representative Claman.  He                                                               
explained that the amendment by the  Senate to make the sunset of                                                               
seven years was a compromise.   He confirmed that the list in the                                                               
committee packet  naming the companies  that would  qualify under                                                               
the  exemption   is  an   exhaustive  list.     He   offered  his                                                               
understanding that there was no formal audit done on this issue.                                                                
10:45:02 AM                                                                                                                   
MR. CRAFT,  in response to Representative  Rauscher, restated the                                                               
information about the  compromise made as to the  number of years                                                               
for  the sunset.    He pointed  out that  part  of the  reasoning                                                               
behind  the number  has to  do  with the  private financing  that                                                               
comes in  during the  construction phase;  it can  take a  lot of                                                               
time  to recoup  the costs.    He explained  that it  is hard  to                                                               
secure private financing "when you  have a sunset looming over on                                                               
this type of regulatory exemption."                                                                                             
10:45:57 AM                                                                                                                   
MR. CRAFT,  in response to  Representative Fields, said  the bill                                                               
sponsor had originally  supported a lengthier sunset  period.  He                                                               
reiterated  that a  compromise had  been made,  and he  suggested                                                               
this would be an issue for the committee to discuss.                                                                            
10:46:28 AM                                                                                                                   
CHAIR SCHRAGE closed public testimony on SB 69 am.                                                                              
[SB 69 am was held over.]                                                                                                       
10:46:44 AM                                                                                                                   
There being no further business before the committee, the House                                                                 
Special Committee on Energy meeting was adjourned at [10:47]                                                                    

Document Name Date/Time Subjects
SB 69 am Sponsor Statement.pdf HENE 4/6/2021 10:15:00 AM
HENE 4/13/2021 10:15:00 AM
HL&C 4/26/2021 3:15:00 PM
SB 69
SB 69 version A.pdf HENE 4/6/2021 10:15:00 AM
HENE 4/13/2021 10:15:00 AM
HL&C 4/26/2021 3:15:00 PM
SB 69
SB 69 am Version A.A.PDF HENE 4/6/2021 10:15:00 AM
HENE 4/13/2021 10:15:00 AM
HL&C 4/26/2021 3:15:00 PM
SB 69
SB 69 am Summary of Changes.pdf HENE 4/6/2021 10:15:00 AM
HENE 4/13/2021 10:15:00 AM
HL&C 4/26/2021 3:15:00 PM
SB 69
SB 69 Legal Opinion 3.4.21.pdf HENE 4/6/2021 10:15:00 AM
HENE 4/13/2021 10:15:00 AM
SB 69
SB 69 DCCED RCA Fiscal Note.pdf HENE 4/6/2021 10:15:00 AM
SB 69
SB 69 Legislative Research IPP's 2.4.2021.pdf HENE 4/6/2021 10:15:00 AM
SB 69
SB 69 Research - RCA List of renewable facilities from 2010 to 2021.pdf HENE 4/6/2021 10:15:00 AM
SB 69