Legislature(2021 - 2022)BARNES 124

03/15/2022 10:15 AM House ENERGY

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
10:20:30 AM Start
10:21:07 AM HB301
11:16:45 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Location Change --
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                         March 15, 2022                                                                                         
                           10:20 a.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Calvin Schrage, Chair                                                                                            
Representative Chris Tuck                                                                                                       
Representative Matt Claman                                                                                                      
Representative Tiffany Zulkosky                                                                                                 
Representative Zack Fields                                                                                                      
Representative George Rauscher                                                                                                  
Representative James Kaufman                                                                                                    
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 301                                                                                                              
"An Act relating to the establishment of a renewable portfolio                                                                  
standard for regulated electric utilities; and providing for an                                                                 
effective date."                                                                                                                
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 301                                                                                                                  
SHORT TITLE: UTILITIES: RENEWABLE PORTFOLIO STANDARD                                                                            
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
02/04/22       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/22       (H)       ENE, L&C, FIN                                                                                          
03/08/22       (H)       ENE AT 10:15 AM BARNES 124                                                                             
03/08/22       (H)       Heard & Held                                                                                           
03/08/22       (H)       MINUTE(ENE)                                                                                            
03/10/22       (H)       ENE AT 10:15 AM BARNES 124                                                                             
03/10/22       (H)       Heard & Held                                                                                           
03/10/22       (H)       MINUTE(ENE)                                                                                            
03/15/22       (H)       ENE AT 10:15 AM BARNES 124                                                                             
WITNESS REGISTER                                                                                                              
SHERRY STOUT, Arctic Strategic Program Manager                                                                                  
Cold Climate Housing Research Center                                                                                            
National Renewable Energy Laboratory                                                                                            
U.S. Department of Energy                                                                                                       
Denver, Colorado                                                                                                                
POSITION STATEMENT:   Co-provided  a PowerPoint  presentation and                                                             
testified in support of HB 301.                                                                                                 
PAUL DENHOLME, Principal Energy Analyst                                                                                         
Grid Planning and Analysis Center                                                                                               
National Renewable Energy Laboratory                                                                                            
U.S. Department of Energy                                                                                                       
Golden, Colorado                                                                                                                
POSITION STATEMENT:   Co-provided  a PowerPoint  presentation and                                                             
testified in support of HB 301.                                                                                                 
ACTION NARRATIVE                                                                                                              
10:20:30 AM                                                                                                                 
CHAIR  CALVIN  SCHRAGE  called the  House  Special  Committee  on                                                             
Energy  meeting to  order at  10:20 a.m.   Representatives  Tuck,                                                               
Rauscher,  Kaufman,  and Schrage  were  present  at the  call  to                                                               
order.   Representatives Fields, Zulkosky, and  Claman arrived as                                                               
the meeting was in progress.                                                                                                    
         HB 301-UTILITIES: RENEWABLE PORTFOLIO STANDARD                                                                     
10:21:07 AM                                                                                                                   
CHAIR SCHRAGE announced that the  only order of business would be                                                               
HOUSE BILL  NO. 301, "An Act  relating to the establishment  of a                                                               
renewable  portfolio standard  for regulated  electric utilities;                                                               
and providing for an effective date."                                                                                           
10:23:00 AM                                                                                                                   
SHERRY  STOUT, Arctic  Strategic  Program  Manager, Cold  Climate                                                               
Housing  Research Center,  National  Renewable Energy  Laboratory                                                               
(NREL),  U.S.  Department  of  Energy  (DoE),  introduced  NREL's                                                               
PowerPoint  presentation on  Renewable Portfolio  Standards (RPS)                                                               
[hard copy  included in  the committee  packet].   She introduced                                                               
herself, her  colleague, and the core  team, as seen on  slide 2.                                                               
She gave  an overview of  NREL, as seen on  slide 3 and  slide 4.                                                               
She  stated that  NREL is  the only  laboratory in  DoE with  the                                                               
single mission  of energy efficiency  and renewable energy.   She                                                               
noted  that  NREL also  has  the  Cold Climate  Housing  Research                                                               
Center (CCHRC)  in Fairbanks.   She stated  that NREL  focuses on                                                               
the  following   renewable  technologies:  solar,   wind,  water,                                                               
geothermal,  sustainable transportation,  and energy  efficiency.                                                               
She informed  the committee that  the presentation will  focus on                                                               
energy  systems   integration.     She  defined   energy  systems                                                               
integration as how renewable energy  systems are brought into the                                                               
U.S. electric grid.   The process uses complex  hybrid systems to                                                               
ensure  energy  resilience  and   security.    The  process  also                                                               
involves   economic  planning,   economic   policy,  and   market                                                               
maturity.  She  reiterated that this is all  under energy systems                                                               
MS. STOUT, moving to slide 5,  stated that NREL has been involved                                                               
with  RPS design  and development  since well  before 1999.   She                                                               
stated the  Renewable Electricity Futures  Study is now  10 years                                                               
old.   The  study reviews  the  process of  obtaining 80  percent                                                               
renewable  energy  for  the  entire  U.S. grid.    She  said  the                                                               
laboratory has been  working in this field for a  very long time,                                                               
and  current  studies  are  looking  at  bringing  grids  to  100                                                               
10:26:57 AM                                                                                                                   
REPRESENTATIVE  RAUSCHER questioned  the amount  of time  and the                                                               
timeframe NREL has been doing research in Alaska.                                                                               
MS.  STOUT  responded  that  her  knowledge  depends  on  digital                                                               
records,  not  paper files.    She  stated that  digital  records                                                               
indicate research goes back as early  as 1995, but there had been                                                               
research before this  point.  She mentioned  a wind-diesel hybrid                                                               
microgrid project  in Wales,  Alaska.  She  stated that  NREL has                                                               
worked across the state for over  20 years but very little in the                                                               
Railbelt.  She indicated that  the research has been concentrated                                                               
on  energy planning,  energy resilience,  and cost  reductions in                                                               
microgrids.    She   added  that  CCHRC  has   worked  on  energy                                                               
efficiency  in Alaska  since 1999,  before  it became  a part  of                                                               
NREL.  She  stated that NREL has  a history of work  in the state                                                               
and is very familiar with the Alaska markets.                                                                                   
10:29:31 AM                                                                                                                   
MS. STOUT, in response to  Representative Kaufman, explained that                                                               
NREL's  funding  primarily   comes  from  DoE  in   the  form  of                                                               
congressional earmarks  and competitive funding  within different                                                               
offices in  DoE.  She  added that  NREL does not  receive nuclear                                                               
funds,  but  rather  it  is  funded from  the  Office  of  Energy                                                               
Efficiency and Renewable  Energy.  She said that  NREL also works                                                               
with the  Office of Electricity  and the  Office of Science.   In                                                               
terms of Alaska,  she mentioned the Arctic Energy  Office and the                                                               
Office of Indian  Energy, which are both part of  DoE.  She added                                                               
that funding  also comes  from agencies  not connected  with DoE,                                                               
such as military bases in  Alaska and the Department of Interior.                                                               
She  stated that  the funding  is mostly  from a  mix of  federal                                                               
offices,  but it  is  not exclusively  federal.   Private  sector                                                               
funding includes large partnerships with Exxon Mobile and Shell.                                                                
10:31:31 AM                                                                                                                   
MS. STOUT,  turning to  slide 6, addressed  the study's  goals of                                                               
providing  insight into  the economic  feasibility of  80 percent                                                               
RPS and identifying  likely elements of the portfolio.   She said                                                               
that giving every  utility "a voice" was really  important in the                                                               
study.   The utilities and  energy developers were  involved with                                                               
the  data clarification  and information  gathering.   She stated                                                               
that the  Alaska Energy Authority  (AEA) provided a  large amount                                                               
of data,  along with other  sources in Alaska, and  this resulted                                                               
in a collaborative process.  She  indicated that the data used in                                                               
the analysis came mostly from Alaska.                                                                                           
10:33:13 AM                                                                                                                   
PAUL  DENHOLME,  Principal  Energy  Analyst,  Grid  Planning  and                                                               
Analysis  Center,  National  Renewable  Energy  Laboratory,  U.S.                                                               
Department of Energy,  reviewed NREL's analysis.   He provided an                                                               
overview of the integrated resource  planning process, as seen on                                                               
slide  7.   To achieve  desired costs  and reliability,  he said,                                                               
utilities would  go through this  process to develop  their power                                                               
systems.  He indicated that  the proceeding slides go into detail                                                               
about this process.   Given the short timeframe of  the study, he                                                               
related that  [the scope of  the study  is limited].   He pointed                                                               
out that  the following [two]  slides provide an overview  of the                                                               
planning process [to  achieve 80 percent RPS].   Slide 8 outlines                                                               
an approach which  concentrates on costs and  reliability.  Slide                                                               
9 outlines the 4 steps of the process.                                                                                          
10:34:50 AM                                                                                                                   
MR. DENHOLME,  referencing the 4  steps in developing  the system                                                               
model,  stated that  during step  1  an electrical  model of  the                                                               
Railbelt system had been designed.   To achieve 80 percent RPS by                                                               
2040,  step 2  had  used various  combinations  of renewables  to                                                               
develop  5 scenarios.   He  continued that  [during step  3] each                                                               
scenario   had  been   modeled,  addressing   issues  until   the                                                               
reliability  standard was  met.   The final  step confirmed  that                                                               
fuel savings  were evaluated  [in each  scenario] and  80 percent                                                               
RPS was achieved.                                                                                                               
MR. DENHOLME,  [in providing  more detail  on step  1], explained                                                               
that to  create the electrical  model, each of the  five Railbelt                                                               
utilities were  divided into three  electrical zones,  [as listed                                                               
on  slide 10],  and  connected by  two  transmission systems,  or                                                               
interties.  He stated that the  three zones were considered to be                                                               
a   single  balancing   area,  but   each   could  also   operate                                                               
independently.  A  critical element of this was  testing each for                                                               
independent robustness  and reliability if disconnected  from the                                                               
10:37:27 AM                                                                                                                   
REPRESENTATIVE RAUSCHER,  in reference to the  evaluation of fuel                                                               
savings, questioned  whether the study took  into consideration a                                                               
capital-cost evaluation.                                                                                                        
MR. DENHOLME  responded that there  had not been  sufficient time                                                               
to evaluate the  capital-cost savings.  The primary  focus of the                                                               
study  was the  savings  from  the avoided  [use  of]  fuel.   He                                                               
continued that a  more comprehensive study could  be performed at                                                               
a  later  time  to  compare the  avoided-fuel  savings  with  the                                                               
increase   of  capital   costs   associated  with   [implementing                                                               
MR. DENHOLME,  in response to  a follow-up question,  stated that                                                               
the  timeframe for  a  future  study of  capital  costs would  be                                                               
relevant  to the  study's details,  and he  would follow  up once                                                               
this is determined.                                                                                                             
10:38:29 AM                                                                                                                   
REPRESENTATIVE   FIELDS,   for   clarification,   expressed   his                                                               
understanding that  capital costs of generation  and transmission                                                               
were not quantified [in the study].                                                                                             
MR. DENHOLME  responded in  the affirmative.   He moved  to slide                                                               
11,  [which   details  the   base  conditions   considered  while                                                               
developing  the  system model  in  step  2].   He  addressed  the                                                               
differences between  [2020] and  2040.  Based  on data  from AEA,                                                               
and other sources, he pointed  out that an anticipated 12 percent                                                               
load growth  had been used  to increase  the peak demand  for the                                                               
system.  He said the 2040  system had been modeled on the current                                                               
way electricity is used, but  with an increased usage of electric                                                               
vehicles.   Other adaptations in  the model had been  upgrades to                                                               
existing  systems  and   age-related  retirement  of  fossil-fire                                                               
energy,  adding  the  replacement   of  new  types  of  gas-fired                                                               
MR.  DENHOLME,  moving  to slide  12,  [addressed  the  scenarios                                                               
created  in step  2 of  the modeling  process].   He stated  that                                                               
scenario 1 was  created using no new added  renewables, while the                                                               
other   scenarios  were   created   using   different  mixes   of                                                               
renewables.   He stated that  these scenarios are  not considered                                                               
optimum, as  the optimum would be  determined in the future.   In                                                               
developing the  scenarios, he noted  that an 80  percent standard                                                               
was  applied to  the entire  Railbelt, not  individual utilities.                                                               
The eligible renewables used are  listed in the slide, with wind,                                                               
solar,  and hydro  being the  primary sources.   In  slide 13  he                                                               
pointed out the 2020 base case  depicting the existing mix of the                                                               
Railbelt's energy, and its growth to  2040 using fuel, but no new                                                               
10:42:31 AM                                                                                                                   
MR. DENHOLME  directed attention to scenario  1 on slide 14.   He                                                               
stated that this  scenario uses the largest  amount of hydropower                                                               
and is based  on the capacity of the  Susitna-Watana project, but                                                               
any hydropower resource  could have been used.   The remainder of                                                               
the  energy contribution  in this  scenario is  mostly wind.   On                                                               
slide  15, he  pointed  out scenario  3 with  60  percent of  the                                                               
Railbelt electricity  mostly coming from  wind and solar.   Slide                                                               
16  depicts the  technologies  that have  not been  significantly                                                               
deployed in Alaska.   He pointed out that in  this slide wind and                                                               
solar  were replaced  with tidal  power and  new geothermal.   He                                                               
moved to  slide 17  which shows  the range  of the  scenarios and                                                               
their energy mixes.  He stated  this helps to understand the full                                                               
range of the evaluation.                                                                                                        
MR. DENHOLME  moved to  slide 18,  which displays  step 3  in the                                                               
modeling process.  He said that  this is the most important step,                                                               
as  the primary  objective is  to test  systems for  reliability,                                                               
"making sure we  can keep the lights on."   He explained that the                                                               
systems not  meeting the reliability criteria  were not reported.                                                               
When a  system is not  reliable, problems would be  identified in                                                               
an interim  step and  fixes are attempted  by adjusting  mixes of                                                               
capacity.   He  pointed out  the three  tests for  reliability on                                                               
slide  19, as  listed:  have sufficient  generation resources  to                                                               
meet  the demand  for electricity,  have operating  reserves, and                                                               
have sufficient generation for quick  outage response.  He stated                                                               
that  power plants  can  rapidly  fail and  be  out for  extended                                                               
periods  of time,  either from  unforeseen events  or for  needed                                                               
maintenance.   He  stated that  these outages  were simulated  to                                                               
check the  largest generator in  each region  for interconnection                                                               
and  regional robustness.   He  pointed  out slide  20 shows  the                                                               
locations considered  in the analysis  for extended outages.   He                                                               
added  that while  these interties  reduce  costs to  ratepayers,                                                               
they  would be  vulnerable to  outages like  all elements  in the                                                               
power  grid.   In  these  cases, he  said,  no  two single  large                                                               
elements  were allowed  to cause  power outages.   He  added that                                                               
this is  an example  of things  "we basically  broke to  test the                                                               
system."  He said,  "A big part of my job is  to break things and                                                               
see if the lights stay on."                                                                                                     
10:47:28 AM                                                                                                                   
MR.  DENHOLME  stated  that  slide 21  provides  an  overview  of                                                               
electrical  reliability with  80  percent depending  on wind  and                                                               
solar for  energy.  He stated  that the system depicted  does not                                                               
rely on  wind and solar  for capacity, as Alaska's  energy demand                                                               
would  peak in  the winter  when  there is  insufficient sun  and                                                               
wind.   He pointed out that  the slide identifies the  periods in                                                               
each of the scenarios when the  grid would need to rely on fossil                                                               
fuel generators  to meet the demand.   He said that  during these                                                               
periods hydropower and energy storage would also be used.                                                                       
10:49:57 AM                                                                                                                   
REPRESENTATIVE FIELDS  clarified his understanding that  with the                                                               
use  of  gas  resources,  80 percent  renewables  [could  achieve                                                               
reliability]  during  the  winter  months.    He  questioned  the                                                               
economics  concerning the  use of  large amounts  of natural  gas                                                               
during  the  winter  months while  adding  renewable  generation,                                                               
which would have to be built.                                                                                                   
MR. DENHOLME  responded, "So that is  a huge part of  what I want                                                               
to talk about."   He relayed that he would  address this question                                                               
after the  discussion of the  current slide, [as this  would help                                                               
detail  the answer].   He  stated  that variability  needs to  be                                                               
addressed to  confirm 80 percent  renewable energy  was obtained.                                                               
He indicated variability  relates to any time "you  are getting a                                                               
lot more than  80 percent or, in  many cases, a lot  less than 80                                                               
percent."   He pointed  to the  line on the  graph [on  slide 21]                                                               
which  depicts  this  and  confirms  80  percent  renewables  was                                                               
achieved.   He explained that  once 80 percent is  obtained, fuel                                                               
savings can  be evaluated.   He expressed  the importance  of the                                                               
role of  an upgraded  intertie, as  seen on slide  23.   He noted                                                               
that he passed over slide 22.                                                                                                   
10:52:56 AM                                                                                                                   
REPRESENTATIVE KAUFMAN  questioned whether Mr. Denholme  has ever                                                               
provided  an analysis  of the  most  cost-effective and  reliable                                                               
energy mix, as  opposed to the analyses for  a certain percentage                                                               
of renewables.   He questioned whether  a study of this  has been                                                               
conducted in Alaska.                                                                                                            
MR.  DENHOLME responded  that NREL  has not  done this  study for                                                               
Alaska.   He explained  that NREL  has done  many studies  on the                                                               
cost-optimization mix of resources, either  under RPS or in cases                                                               
with no policy  constraints.  Directing attention  [to slide 23],                                                               
he emphasized  the role of the  Alaska intertie and its  use.  He                                                               
commented that  he has never  seen a study when  transmission did                                                               
not pay  for itself, regardless  of renewable energy.   He stated                                                               
that  not  only  would  transmission   reduce  overall  cost  and                                                               
increase reliability, but it would  also increase the integration                                                               
of  renewable energy.   He  explained the  details on  the graph,                                                               
which depicts the Alaska Intertie ability to share resources.                                                                   
10:56:30 AM                                                                                                                   
MR.   DENHOLME,  [addressing   Representative  Fields'   previous                                                               
question on  fuel savings], moved  to slide  24.  He  stated that                                                               
[deploying renewables] would  save the cost of  fuel but increase                                                               
capital costs of renewable energy.   Describing whether [building                                                               
renewable energy]  would make economic  sense, he  cautioned that                                                               
the  full analysis  is  not  available, but  some  of the  pieces                                                               
available  will  help  to   understand  the  potential  fuel-cost                                                               
savings  along  with  some  insights  into  capital  costs.    In                                                               
example,  he pointed  out the  avoided-cost  calculation for  the                                                               
Eklutna Power  Plant on  the chart.   He  stated this  example is                                                               
used because  of its flexibility  and efficiency as a  key source                                                               
of reliable energy  for the Railbelt.  He  detailed the estimated                                                               
fuel-cost usage at 7 cents per  kilowatt hour.  He stated that if                                                               
a  power purchase  agreement  (PPA) could  be  signed below  this                                                               
price, the  avoided-fuel cost alone  would pay for  the renewable                                                               
energy investments.   Because of  the variability of  fuel costs,                                                               
he explained that  any PPA at or below the  estimated value would                                                               
produce net savings.   He speculated that if fuel  costs go down,                                                               
this should  still be  considered in the  future.   He reiterated                                                               
that any  PPA for any renewable  resource at or below  this value                                                               
would produce  net savings in  cost, regardless of  ongoing costs                                                               
associated with maintaining this resource for reliability.                                                                      
10:59:39 AM                                                                                                                   
REPRESENTATIVE  RAUSCHER expressed  his understanding  concerning                                                               
the  fuel  cost and  ratepayers,  but  he  pointed out  that  the                                                               
capital and  maintenance costs  would need to  be paid.   Because                                                               
ratepayers  would  be paying  capital  costs,  he questioned  the                                                               
benefit compared to what the ratepayers are paying today.                                                                       
MR.  DENHOLME responded  that  if  a power  plant  is built,  the                                                               
capital and fixed maintenance costs  would be incurred regardless                                                               
of  whether renewables  were  built.   If  the  cost of  building                                                               
renewables is less  than the variable fuel cost, this  would be a                                                               
fuel-cost  savings.   He pointed  out  that there  would be  some                                                               
bonuses.   If renewables were  built, power plants would  be used                                                               
less;  thus, the  life of  these plants  would be  extended.   He                                                               
reasoned that the savings would not  be much, but it would add to                                                               
the  plus side  of the  balance sheet,  with the  primary benefit                                                               
being  avoided-fuel   cost.    He  added   that  maintenance  and                                                               
investment in resources could also be deferred.                                                                                 
REPRESENTATIVE RAUSCHER  stated that  his question  had concerned                                                               
"if the ratepayers win or lose."                                                                                                
CHAIR  SCHRAGE  suggested  that Representative  Fields'  upcoming                                                               
question may provide an answer.                                                                                                 
11:01:37 AM                                                                                                                   
REPRESENTATIVE FIELDS  asked how long an  optimized-cost analysis                                                               
would  take, and  if  the necessary  information  to conduct  the                                                               
analysis is available to NREL.                                                                                                  
MR. DENHOLME  responded that NREL is  "really good at this."   He                                                               
said  that NREL  has most  of the  information, but  some of  the                                                               
Alaska specific  information has not  been obtained.   He offered                                                               
to follow up after the meeting with a timeline.                                                                                 
REPRESENTATIVE FIELDS  said, "I think  we are only looking  at 25                                                               
percent of the picture."   He expressed certainty that renewables                                                               
would save  money, but he argued  the right mix has  not yet been                                                               
determined, and  this cannot  be understood  until the  costs are                                                               
known.   He said,  "It makes  very little  sense to  advance this                                                               
when we don't have most of the information we need."                                                                            
11:03:00 AM                                                                                                                   
MR.  DENHOLME continued  with the  presentation, noting  that the                                                               
effect  [of deploying  renewables]  would  be accumulative,  with                                                               
benefits  from  multidecade investments  taking  a  long time  to                                                               
accrue.  He pointed out the  graph on slide 25, which depicts the                                                               
accumulation of  fuel savings as  renewables move to  80 percent.                                                               
He said  that fuel savings  would begin when renewable  energy is                                                               
deployed, but savings in the beginning  would be very little.  In                                                               
conjunction  with  the slide,  he  provided  the details  of  the                                                               
projected  fuel savings.   Speaking  about avoided-fuel  cost, he                                                               
said that  every time a  wind and  solar plant is  built, savings                                                               
would  be locked  in, and  the electricity  prices of  ratepayers                                                               
would be fixed for 20-plus years.   He explained that the portion                                                               
of  [electricity] being  served by  wind and  solar would  not be                                                               
exposed to  price volatility.   He remarked that  volatility goes                                                               
both  ways, and  if the  price of  fossil fuel  decreases in  the                                                               
coming  decades,  the  negative-price   rate  would  need  to  be                                                               
studied.    To  insulate  against  short-term  price  shocks,  he                                                               
suggested  deploying renewables  would decrease  the impact.   He                                                               
said, "That  is just  math, and  I'm not  really trying  to sound                                                               
like an advocate  here."  He added that [renewables]  would be in                                                               
long-term contracts  with a guaranteed  price.  He said,  per the                                                               
committee's  requested   fuel-cost  analysis,  a  study   on  the                                                               
accumulative fuel  savings compared  to capital costs  would need                                                               
to be done, and then decisions would  need to be made in terms of                                                               
benefits associated with avoided costs  and the value of avoided-                                                               
price volatility.                                                                                                               
11:05:46 AM                                                                                                                   
MR. DENHOLME  explained that slide  26 summarizes the  results of                                                               
the implementation  of an 80  percent renewable standard.   There                                                               
would  be an  increase  in  the capital  costs  of the  renewable                                                               
infrastructure  and  a  decrease  in  the  costs  of  the  fossil                                                               
infrastructure.    Less fossil  capacity  would  be built,  which                                                               
would offset  some of the  renewable capital costs;  however, the                                                               
capital costs  would still increase.   He explained that  this is                                                               
really a  comparison between  the net  increase of  capital costs                                                               
and  the  net decrease  in  variable  costs associated  with  the                                                               
fossil infrastructure.   He  advised that  some of  the questions                                                               
can be  answered now, but  because only variable costs  are known                                                               
and capital costs  are unknown, there is not  a complete picture.                                                               
He pointed to the conclusion  on slide 27, which conveys multiple                                                               
pathways  for reliable  electricity.   He  said further  analysis                                                               
would  be needed  to determine  an  optimum portfolio  minimizing                                                               
overall costs while maintaining reliability standards.                                                                          
11:07:17 AM                                                                                                                   
REPRESENTATIVE  FIELDS  expressed  the  opinion  that  the  state                                                               
should be  aggressively deploying renewable energy;  however, the                                                               
best way  to do this needs  to be understood.   He continued that                                                               
the  Railbelt  would  need  to maintain  gas  capacity  and  more                                                               
storage  for periods  of low  wind and  sun.   He questioned  the                                                               
optimum mix  for those low  renewable periods,  referencing using                                                               
fuel  or building  a large  amount of  pumped-hydro storage.   He                                                               
suggested  that this  analysis should  be done.   He  stated that                                                               
AEA's  shovel-ready  costs  for  capital  projects  represent  $7                                                               
billion, or $1000  per person.  He stated that  he pays over $200                                                               
for gas to heat  his home.  In conclusion, he  said, the math may                                                               
work out, but still, he would like to see the analysis.                                                                         
11:08:47 AM                                                                                                                   
REPRESENTATIVE  KAUFMAN referenced  a prior  presentation to  the                                                               
committee  that discussed  other states'  implementation of  RPS.                                                               
He remarked that some states  have "lofty" goals and commented on                                                               
the differences  in Alaska's  opportunities.   He said,  "We have                                                               
tremendous hydrocarbon  reserves, and ...  we don't want  to walk                                                               
away from them too  soon, or at all, if that is  the best mix for                                                               
us."  He said the state can be  very dark and cold, and fuel is a                                                               
solid  energy  source.    He  expressed  the  opinion  that  this                                                               
resource  is dependable  and  produces  jobs in  the  state.   He                                                               
referenced  that  deploying  renewables would  require  equipment                                                               
imports for infrastructure.  He  questioned whether a "prosperity                                                               
factor"  concerning  job  creation  and  productivity  in  Alaska                                                               
should be considered in the mix.                                                                                                
MS. STOUT responded that Alaska  has some of the best hydrocarbon                                                               
resources in  the country  but exports  most of  it.   She stated                                                               
that the refined product primarily  comes from Washington, versus                                                               
Alaska, so  there is a reliance  on a supply chain.   She pointed                                                               
out the weaknesses in the supply  chain should be considered.  In                                                               
response  to  the  jobs  question,  she  referenced  NREL's  Jobs                                                               
Economic Development Impact  Index.  She said this  tool looks at                                                               
jobs  created   in  the  various   stages  of   renewable  energy                                                               
deployment.     She   stated  that   initially  there   would  be                                                               
construction  jobs, and  then operations  jobs would  be created.                                                               
She  added that  the  index also  considers  ancillary jobs  like                                                               
hotels, restaurants,  and gas stations,  which would  support the                                                               
labor force.   She stated that the short answer  is the impact on                                                               
jobs would not be  known until an analysis is done.   She said if                                                               
Alaska pursues  renewables, this  could be  a decision  point for                                                               
job optimization and building a job market.                                                                                     
11:13:10 AM                                                                                                                   
REPRESENTATIVE KAUFMAN,  with a follow-up comment,  expressed the                                                               
belief  that every  state is  endowed with  a resource  mix.   He                                                               
reiterated the  hope that Alaska  would not ignore  its resources                                                               
to pursue a  "lofty" goal that may fit better  elsewhere, or at a                                                               
different point  in time.   He said,  "The adoption curve  can be                                                               
the bleeding edge  as opposed to the leading edge,  if you deploy                                                               
technology that may be soon  displaced by something even better."                                                               
He explained that the state  should not lock into something which                                                               
would not be the optimal  solution over the long term, especially                                                               
with resources in the state that could be developed.                                                                            
11:14:22 AM                                                                                                                   
REPRESENTATIVE FIELDS questioned the process  for NREL to be able                                                               
to start on the optimized-cost analysis as soon as possible.                                                                    
MS. STOUT responded that, like  state government, this would take                                                               
funding.   All the funding  streams are directly tied  to certain                                                               
outcomes, research projects, and analyses.   She said the expense                                                               
in  these  studies  would  be  in  the  use  of  high-performance                                                               
computers, which take time.  She  stated that staff would need to                                                               
be reserved, and it would also  take additional time to work with                                                               
entities within Alaska to obtain  the needed data.  She concluded                                                               
that, in terms of the  request, NREL works with state governments                                                               
at any level.                                                                                                                   
[HB 301 was held over.]                                                                                                         
11:16:45 AM                                                                                                                   
There being no  further business before the  committee, the House                                                               
Special  Committee on  Energy meeting  was  adjourned at  [11:17]                                                               

Document Name Date/Time Subjects
HB 301 NREL Presentation 3.15.2022.pdf HENE 3/15/2022 10:15:00 AM
HB 301
HB301. Supporting Document. NREL Feasability Study (2022).pdf HENE 3/8/2022 10:15:00 AM
HENE 3/15/2022 10:15:00 AM
HB 301
HB 301 Testimony received as of 3.14.2022.pdf HENE 3/15/2022 10:15:00 AM
HB 301