Legislature(2021 - 2022)BARNES 124

04/26/2022 10:15 AM House ENERGY

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10:22:42 AM Start
10:23:16 AM HB301
11:01:30 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Location Change --
Heard & Held
-- Invited & Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                         April 26, 2022                                                                                         
                           10:22 a.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Calvin Schrage, Chair                                                                                            
Representative Matt Claman                                                                                                      
Representative Tiffany Zulkosky                                                                                                 
Representative George Rauscher                                                                                                  
Representative James Kaufman                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative Chris Tuck                                                                                                       
Representative Zack Fields                                                                                                      
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                                                                             
03/15/22       (H)       Heard & Held                                                                                           
03/15/22       (H)       MINUTE(ENE)                                                                                            
03/17/22       (H)       ENE AT 10:15 AM BARNES 124                                                                             
03/17/22       (H)       Heard & Held                                                                                           
03/17/22       (H)       MINUTE(ENE)                                                                                            
03/22/22       (H)       ENE AT 10:15 AM BARNES 124                                                                             
03/22/22       (H)       -- MEETING CANCELED --                                                                                 
03/24/22       (H)       ENE AT 10:15 AM BARNES 124                                                                             
03/24/22       (H)       -- MEETING CANCELED --                                                                                 
04/26/22       (H)       ENE AT 10:15 AM BARNES 124                                                                             
WITNESS REGISTER                                                                                                              
RYAN JOHNSTON, Staff                                                                                                            
Representative Calvin Schrage                                                                                                   
Juneau, Alaska State Legislature                                                                                                
POSITION STATEMENT: Answered questions on HB 301, sponsored by                                                              
House Rules at the request of the governor.                                                                                     
BRIAN HICKEY, Chief Operating Officer                                                                                           
Chugach Electric Association                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Gave a presentation on behalf of the                                                                      
Railbelt Utilities during the hearing on HB 301.                                                                                
CHRIS ROSE, Executive Director                                                                                                  
Renewable Energy Alaska Project (REAP)                                                                                          
Sutton, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 301.                                                                           
JENN MILLER, CEO,                                                                                                               
Renewable Independent Power Producers                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 301.                                                                           
ERIN MCKITTRICK, representing self                                                                                              
Seldovia, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of HB 301.                                                                           
MATTHEW PERKINS, Alaska Renewables                                                                                              
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 301.                                                                           
ACTION NARRATIVE                                                                                                              
10:22:42 AM                                                                                                                   
CHAIR  CALVIN  SCHRAGE  called the  House  Special  Committee  on                                                             
Energy meeting to  order at 10:22 a.m.   Representatives Schrage,                                                               
Rauscher,  Kaufman, and  Zulkosky  were present  at  the call  to                                                               
order.   Representative  Claman  arrived as  the  meeting was  in                                                               
         HB 301-UTILITIES: RENEWABLE PORTFOLIO STANDARD                                                                     
10:23:16 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."                                                                                         
10:23:35 AM                                                                                                                   
REPRESENTATIVE  ZULKOSKY   moved  to  adopt   proposed  committee                                                               
substitute  (CS),  Version  32-GH2546\G,  Klein,  4/22/22,  as  a                                                               
working document.                                                                                                               
CHAIR SCHRAGE objected for the purpose of discussion.                                                                           
10:24:00 AM                                                                                                                   
RYAN JOHNSTON, Staff, Representative  Calvin Schrage, offered the                                                               
summary  of changes  to  Version G,  [included  in the  committee                                                               
packet, and which read as follows]:                                                                                             
     Page 1,  Lines 1   3:  amends the title to  read "clean                                                                    
     energy  standard"  and  adds "relating  to  the  Alaska                                                                    
     Energy  Authority and  clean energy  projects;" to  the                                                                    
     title  of  the  bill.  The title  change  was  done  to                                                                    
     conform  with  the  twenty-seven  times  of  "renewable                                                                    
     portfolio  standard"  is  replaced with  "clean  energy                                                                    
     standard" throughout the bill.                                                                                             
     Page 1, Lines 9    11: after "energy resources" adds to                                                                    
     the purpose section of the  bill, "in order to minimize                                                                    
     costs  to consumers,  increase  stability for  economic                                                                    
     development,  maximize  grid resiliency,  and  minimize                                                                    
     the state's carbon emissions."                                                                                             
     Page  2,  Line 8:  amends  subsection  (B) to  be  more                                                                    
     aligned with utility industry language.                                                                                    
     Page 3,  Lines 20    22: amends the benchmarks  for the                                                                    
     clean  energy standard  from four  to three.  The first                                                                    
     being 25%  by December 31,  2030. The second  being 55%                                                                    
     by December 31, 2040. And  finally, the third being 80%                                                                    
     by December 31, 2050.                                                                                                      
     Page  4,  Lines 6     11:  adds  a  new section  to  AS                                                                    
     42.05.900 that  would allow  for construction  that has                                                                    
     begun prior  to the  end of a  compliance period  to be                                                                    
     counted  towards fulfilling  the clean  energy standard                                                                    
     if  the project  will begin  providing energy  no later                                                                    
     than two years  after the compliance period  or the end                                                                    
     of a period determined  by the Regulatory Commission of                                                                    
     Page 4,  Line 21:  adds a new  section to  AS 42.05.900                                                                    
     whereby  a load  serving entity  may satisfy  the clean                                                                    
     energy  standard   using  the  sale  of   clean  energy                                                                    
     Page 4,  Line 23:  adds a new  section to  AS 42.05.900                                                                    
     that a project located on  state lands is exempted from                                                                    
     state lease fees for a period of 10 years.                                                                                 
     Page  5,  Lines 9     21:  amends the  previous  energy                                                                    
     credit  system into  "clean  energy  credits". A  clean                                                                    
     energy credit  may only be  used once. A credit  may be                                                                    
     used to  comply with the clean  energy standard without                                                                    
     purchase  or  use  of the  electrical  generation  from                                                                    
     which the credit is derived.                                                                                               
     Page 6,  Line 24:  after "commission" changed  the word                                                                    
     "may" to "shall".                                                                                                          
     Page 7,  Lines 3    7:  amends the  previous exemptions                                                                    
     section  to  a  single  exemption.  The  new  exemption                                                                    
     states that  if the  as a  whole the  Railbelt achieves                                                                    
     the  clean energy  standard  then  the individual  load                                                                    
     serving entities are exempted.                                                                                             
     Page 7,  Lines 9    16: adds  a definition of  a "clean                                                                    
     energy credit".                                                                                                            
     Page 7, Lines  17   19: amends  the previous definition                                                                    
     of "renewable energy standard" and  reordered it in the                                                                    
     definitions section.                                                                                                       
     Page 7, Line 20: amends  the compliance period to a 10-                                                                    
     year period.                                                                                                               
     Page  8, Line  2: the  definition of  "renewable energy                                                                    
     resource"  was cleaned  up by  Legislative Legal  to be                                                                    
     more in line with their drafting standards.                                                                                
     Page  8,  Line   15:  adds  a  new   subsection  to  AS                                                                    
     44.83.940. The  new subsection  would require  that the                                                                    
     Alaska Energy  Authority shall provide a  report to the                                                                    
     legislature  every   two  years  on  the   progress  of                                                                    
     developing  renewable  and  clean energy  resources  in                                                                    
     rural parts of the state.                                                                                                  
     Page 8, Line 25    27: the regulations language for the                                                                    
     RCA of  Alaska was cleaned  up by Legislative  Legal to                                                                    
     be more in line with their drafting standards.                                                                             
10:30:11 AM                                                                                                                   
REPRESENTATIVE  KAUFMAN asked  if  the two-year  report on  rural                                                               
parts  of the  state would  provide a  general report  of overall                                                               
MR. JOHNSTON explained that the  Railbelt is extensively studied,                                                               
and the reports are supplemental to focus on rural areas.                                                                       
REPRESENTATIVE  KAUFMAN  asked  how  the  terms  "renewable"  and                                                               
"clean" energy are being used throughout the bill.                                                                              
MR. JOHNSTON explained that renewable  was not changed to "clean"                                                               
and addressed the change to the clean energy standard.                                                                          
REPRESENTATIVE   KAUFMAN  asked   what   would   happen  if   the                                                               
"grandfathered in"  construction permits  could not  close within                                                               
the stated window.                                                                                                              
MR. JOHNSTON  explained that  that event is  covered in  the bill                                                               
and went on to explained that  it is possible, for reason outside                                                               
of the  contractor's control,  that a  project would  be delayed,                                                               
and, in that case, it still would  be covered by the bill so long                                                               
as an earnest effort was made.                                                                                                  
10:34:22 AM                                                                                                                   
REPRESENTATIVE RAUSCHER  talked about the shift  from "renewable"                                                               
to  "clean" and  asked if  the  committee is  stepping away  from                                                               
national standards.                                                                                                             
MR.  JOHNSTON  explained that  the  clean  energy standard  is  a                                                               
standard used across the country, and both are used.                                                                            
10:35:44 AM                                                                                                                   
REPRESENTATIVE  KAUFMAN  asked  what  the  various  clean  energy                                                               
productions methods are.                                                                                                        
MR. JOHNSTON  said he did not  have it ready but  could provide a                                                               
list later.                                                                                                                     
10:36:36 AM                                                                                                                   
CHAIR SCHRAGE  removed his objection  to the motion to  adopt the                                                               
CS for HB 301, Version G, as  a working document.  There being no                                                               
further objections, Version G was before the committee.                                                                         
10:36:55 AM                                                                                                                   
CHAIR  SCHRAGE   announced  the  committee  would   hear  invited                                                               
testimony on HB 301, Version G.                                                                                                 
10:37:41 AM                                                                                                                   
BRIAN   HICKEY,  Chief   Operating   Officer,  Chugach   Electric                                                               
Association, began  his presentation on  behalf of the  Rail belt                                                               
Utilities.   He  started by  stating that  the utilities  believe                                                               
that "the  purpose section"  of Version  G is  well written.   He                                                               
reiterated  the  time  and effort  spent  creating  the  Electric                                                               
Reliability Organization (ERO).  He  went on to explain the ideal                                                               
implementation   of   renewable    portfolio   standards   (RPS),                                                               
reiterating  that the  Railbelt  Utilities believe  that it  must                                                               
include caps on user rates,  that it must include provisions that                                                               
allow the  RCA to modify or  extend or waive certain  portions of                                                               
the RPS if they find that the execution  of the RPS is not in the                                                               
public's interest.   He  stated second  priority of  the Railbelt                                                               
Utilities is that  fines that are incurred must  be includable in                                                               
rates  and stated  that membership  is  the only  income for  the                                                               
energy co-ops.   Mr.  Hickey stated  that the  Railbelt Utilities                                                               
believes those  fines should  go to  infrastructure improvements.                                                               
He  explained the  third priority  is aligning  the target  dates                                                               
with the  retirement dates of  their current plants.   Mr. Hickey                                                               
finished  by  stating that  a  periodic  review  of the  list  of                                                               
allowed "clean  energy sources" should  be reviewed  and analyzed                                                               
by third parties  and updated.  He  reemphasized that significant                                                               
transmission projects  will be needed  for a transition  to clean                                                               
energy  and explained  that currently  the Railbelt  Utilities is                                                               
only capable  of transmitting 10  percent of  its peak load.   He                                                               
also stated that there will be  a need for state funds to improve                                                               
transmission infrastructure.                                                                                                    
10:48:40 AM                                                                                                                   
CHAIR SCHRAGE opened public testimony on HB 301, Version G.                                                                     
10:49:03 AM                                                                                                                   
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP),  stated his  support  of HB  301  but expressed  concerns                                                               
about the timeline.   He said that 2050 is "too  far out" for any                                                               
immediate  movement  from  the  utilities.    He  stated  further                                                               
concern over the  title change, citing the lack  of definition of                                                               
"clean energy".   He opined that while the  exemption that allows                                                               
the utilities to comply as a unit  is a good thing, it does raise                                                               
questions about a  clean energy credit market.   He addressed Mr.                                                               
Hickey's comments,  saying that there  is no reason to  align the                                                               
dates  with retirement  of currently  running plants;  they would                                                               
support the extension of the  lease fee waiver but explained that                                                               
it raises the issue that not  all these projects have to be built                                                               
by the utilities citing non-utility energy producers.                                                                           
10:54:08 AM                                                                                                                   
JENN   MILLER,  CEO,   Renewable   Independent  Power   Producers                                                               
("Renewable IPP"),  testified in  support of HB  301.   She began                                                               
her testimony by describing the  Renewable IPP and stated the key                                                               
to  its  success was  transparent  cooperation  with the  utility                                                               
companies.  She  stated that the goal of 50  percent clean energy                                                               
by 2025 does  not have enough commitment and  is "quickly passing                                                               
us by"  and she opined  that the  state needs an  energy standard                                                               
and a  clear roadmap.   She also  asked the committee  to clarify                                                               
the definition  of clean energy  credit.  She explained  that the                                                               
current  definition is  problematic  because  the power  purchase                                                               
agreement sets  the ownership  rights, and  she advised  that the                                                               
definition should  include ownership  rights to the  load serving                                                               
10:56:49 AM                                                                                                                   
ERIN  MCKITTRICK,  representing  self,  began  her  testimony  by                                                               
urging the committee  to move back to "the older  timeline."  She                                                               
talked  about  the  necessity   of  cooperation  between  utility                                                               
companies    and   pointed    out   upgrades    to   transmission                                                               
infrastructure  recommended  in  the  National  Renewable  Energy                                                               
Laboratory  ("NREL") study  looking at  the feasibility  of clean                                                               
energy.   She concluded by talking  about the need for  a unified                                                               
transmission tariff on the Railbelt.                                                                                            
10:58:50 AM                                                                                                                   
MATTHEW PERKINS,  Alaska Renewables,  testified in support  of HB
301.   He talked about  his experience with General  Electric and                                                               
venture  capital   and  said  Alaska   Renewables  has   a  "keen                                                               
understanding  of  what's  real  and what's  experimental."    He                                                               
stated  that  he  believes  the  bill is  a  step  in  the  right                                                               
direction but  urged the committee to  move up the timeline.   He                                                               
emphasized  the need  for new  transmission  projects and  stated                                                               
that private capital should be available as well.                                                                               
11:01:27 AM                                                                                                                   
CHAIR SCHRAGE closed public testimony on HB 301.                                                                                
[HB 301 was held over.]                                                                                                         
11:01:30 AM                                                                                                                   
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 11:01 a.m.                                                                 

Document Name Date/Time Subjects
HB 301 ver G adpoted CS.pdf HENE 4/26/2022 10:15:00 AM
HENE 4/28/2022 10:15:00 AM
HB 301
HB 301 Ver G workdraft.pdf HENE 4/26/2022 10:15:00 AM
HB 301
HB301. Version A.PDF HENE 3/8/2022 10:15:00 AM
HENE 4/26/2022 10:15:00 AM
HB 301
HB 301 ver. G Summary of Changes 4.25.2022.pdf HENE 4/26/2022 10:15:00 AM
HB 301