Legislature(2023 - 2024)BARNES 124
01/26/2023 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.
| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Curtis Thayer, Executive Director, Alaska Energy Authority | |
| Presentation(s): Pacific Northwest Economic Region | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
January 26, 2023
10:16 a.m.
DRAFT
MEMBERS PRESENT
Representative George Rauscher, Chair
Representative Tom McKay
Representative Josiah Patkotak
Representative Calvin Schrage
MEMBERS ABSENT
All members present
[As of 1/26/23 there was a vacant seat on a committee of five.]
OTHER LEGISLATORS PRESENT
Representative David Eastman
COMMITTEE CALENDAR
PRESENTATION: CURTIS THAYER~ EXECUTIVE DIRECTOR~ ALASKA ENERGY
AUTHORITY
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CURTIS THAYER
Executive Director of Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Provided a presentation about the status of
the Susitna-Watana Hydroelectric Project for the Alaska Energy
Authority.
BYRAN CAREY, Director of Owned Assets
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Answered questions in the capacity of
Director of Owned Assets for the Alaska Energy Authority about
the Susitna-Watana Hydroelectric Project.
ACTION NARRATIVE
10:16:22 AM
CHAIR GEORGE RAUSCHER called the House Special Committee on
Energy meeting to order at 10:16 a.m. Representatives McKay,
Patkotak, and Rauscher were present at the call to order.
Representative Schrage arrived as the meeting was in progress.
^Presentation(s): Curtis Thayer, Executive Director, Alaska
Energy Authority
PRESENTATION(S): CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA
ENERGY AUTHORITY
10:17:28 AM
CHAIR RAUSCHER announced that the first order of business would
be the Alaska Energy Authority presentation. Later, we will
hear from Matt Morrison the leader of the Pacific Northwest
Economic Region.
10:18:35 AM
}CURTIS THAYER, Executive Director* Alaska Energy Authority*
Anchorage, Alaska* Gave a presentation on the Alaska Energy
Authority.{ He described the background of AEA to the members.
Established in 1976 by the legislature with the mission to
reduce the cost of energy to all Alaskans, AEA is also the lead
state office for energy policy and statewide program
development. One area in which AEA is involved is in Alaska's
Railbelt. Mr. Thayer said, AEA owns the largest hydroelectric
project in the state, Bradley Lake, outside of Homer; it's a
120-megawatt plant that also brings power to Fairbanks. The
authority also has the Alaska Intertie which is the "SS" fuel
line from the Kenai Peninsula to Willow and Healy. The state's
ownership of the intertie saves the city of Fairbanks
approximately $37 million in energy costs from ownership of the
intertie.
MR. THAYER stated that AEA also runs the power cost equalization
(PCE) program for rural Alaska, which provides approximately $40
million a year, and operates the rural energy program. The
authority also has power houses, bulk fuel, and upgrades and
deferred maintenance costs. It continues to work with federal
partners for funding, and it does energy ratings and
"renewables". He reminded committee members that the state also
has biomass, windfarms, and hydro projects. AEA also does
grants, loans, and energy planning as well as being currently
involved in the electric vehicle (EV) planning for the state.
The authority expects it will have $200 million with the help of
the legislature.
10:21:14 AM
MR. THAYER stated that these projects are all still on-going,
active projects. He then gave a PowerPoint presentation, titled
"Susitna-Watana Hydroelectric Project", [hard copy included in
the committee packet]. He began on Slide 1, which read as
follows [original punctuation provided]:
Created in 1976 by the Alaska Legislature, the Alaska
Energy Authority (AEA) is a public corporation of the
State of Alaska governed by a board of directors with
the mission to "reduce the cost of energy in Alaska."
AEA is the state's energy office and lead agency for
statewide energy policy and program development.
MR. THAYER stated that the majority of the work was conducted
under the Governor Parnell Administration and the Governor
Walker Administration for the Susitna-Watana Hydro Project. The
project was put on the shelf until 2019 until Governor Mike
Dunleavy rescinded Administrative Order 271, which effectively
halted the project. As of 2022, no state funds have been spent
on the project. The updates of the project have been provided
each year to the legislature and to federal authorities but
since then, no new work has taken place on the project. In
order for the project to advance, more updating would need to be
done.
MR. THAYER moved on to Slide 7, which illustrated the project
history and the decline of funding available to the AEA. He
noted that Slide 9 serves to answer the question, "Why Susitna-
Watana?" Mr. Thayer narrated the benefits of renewable energy
and the savings over the first 50 years of operation to the
State of Alaska. He stated that the project is a 100-plus year
project. Projected estimates made in 2014 showed the savings
would be in the billions for the Railbelt communities as a
result of not using non-renewable natural gas, and carbon
emissions could be reduced.
MR. THAYER noted that this is a Federal Energy Regulatory
Commission (FERC) regulated project. He further noted that FERC
licensing is still in the process of permitting. The project
still has investors and interest from the public. The FERC
license removes a lot of the risk factors. Mr. Thayer shared
that there are 58 FERC approved studies: 19 were advanced by
FERC and 39 remain to require further investigations.
10:25:46 AM
MR. THAYER, referring to Slide 11, stated that there weren't any
problems with the FERC filing, but it is still on hold during
the time of the update to the committee. All proposed study
modifications were rejected by FERC. The data was deemed to be
only useful for baseline information. The earliest studies were
conducted in the 1950s, 1980s, and 2011. The legislature
unanimously granted AEA the authority to move forward with the
project once again. In 2012, the AEA studies began until 2017;
no further funding is available at present, and the project is
in abeyance, [as shown on Slide 12].
10:26:36 AM
MR. THAYER turned to Slide 13, to the map showing the project
area and nearby communities. The project area is shown in red
near Talkeetna. The project would create a 42-mile-long lake or
reservoir to the east of the dam location. He continued that
there was some concern about the effects of a dam on salmon. He
stated that only a dozen Chinook salmon were observed above the
proposed dam site; fisheries would not be an issue despite the
FERC rejection.
MR. THAYER turned to Slide 14, "Project At-A-Glance," and
discussed the bulleted items, which read as follows [original
punctuation provided]:
.notdefDam Height 705 feet
.notdefDam Elevation 2,065 Feet
.notdefReservoir Length ~42 miles
.notdefReservoir Width~1.25 miles
.notdefInstalled Capacity 618 MW
.notdefAnnual Energy 2,800,000 MWh
.notdefCost~$5.6 billion (2014$)
MR. THAYER added that the price tag has increased over eight
years, and technology improvements will affect cost in the
future.
MR. THAYER moved to Slide 15, "Engineering," and covered the
information, which read as follows [original punctuation
provided]:
.notdefSize and generation optimized
.notdefDesign reviewed by International Board of Consultants
.notdefDesigned to withstand:
-10,000-year flood
-Maximum credible earthquake of a magnitude 8.0
.notdef2014 Engineering Feasibility Report
MR. THAYER then highlighted Slide 16, "Economics," which read as
follows [original punctuation provided, with some formatting
changes]:
.notdefBenefit-Cost and Economic Impact Analyses completed in 2015
-Based on 2014 projection of natural gas prices:
.notdefBenefit-cost ratio of 2.39 from energy savings alone
.notdef$11.2 billion (2014$) in energy savings over first 50 years
.notdefEnergy savings and retirement of older generation facilities
MR. THAYER shared the information on Slide 17, "Employment
Opportunities," regarding pre-construction, construction, and
operations employment, all of which would provide benefits to
the state. He concluded his presentation on Slide 18, "Project
Timeline," which illustrated the entirety of the project from
planning to power generation. He noted that the initial phase
involves preparation, planning, collaboration, and environmental
studies. He said FERC will review and make a determination on
the feasibility of the project, which usually takes two years.
The project execution phase - the actual construction - will
last 9-11 years.
10:32:17 AM
MR THAYER said that the dam won't be operational for about 15-20
years. He noted that it is very important that the legislature
act to green light the project into the future and take the next
steps to advance the project. He described the PCE process.
The Railbelt energy cost is tied to the cost equalization
program, which would benefit rural Alaska.
CHAIR RAUSCHER asked for the total aggregate cost for the
proposed updates on page [Slide] 19 of the presentation.
MR. THAYER replied that the cost will be $5 million. He
provided estimates of the costs associated with green lighting
the project. Studies and licensing are separate costs, he
noted.
10:35:41 AM
CHAIR RAUSCHER asked if there was any cooperation from other
state departments on the project.
MR. THAYER answered that under Alaska statute the purview of the
project falls under AEA.
10:36:27 AM
REPRESENTATIVE MCKAY informed the committee he has worked for
four years in Norway on oil and gas energy projects that
developed hydroelectric projects concurrently. He asked if the
department had looked at Norway specifically as a model as to
how to proceed with the state's project.
10:37:21 AM
}BYRAN CAREY, Director of Owned Assets* Alaska Energy
Authority*, Anchorage, Alaska* Answered questions during the
Alaska Energy Authority presentation. He stated no formal
research has been undertaken with respect to Norway.
10:37:46 AM
REPRESENTATIVE MCKAY pointed out that in Norway, a company
called Norsk Hydro has similar projects that have combined oil
development with hydroelectric projects.
MR. BRIAN CAREY answered that no formal research has been
undertaken with respect to Norway and was not familiar with the
company Norsk Hydro. He said the authority did look at Iceland
because, at the time of the Susitna-Watana project development,
that country was building a 600-700 foot dam for power
generation and possibly internet cloud servicing.
10:38:49 AM
REPRESENTATIVE MCKAY asked about what the obstacles, challenges
and oppositions are to getting the project done.
MR. CAREY answered, "About $100 million." He said the 2014
costs need to be updated for inflation and other factors. He
advised that the legislature and the Office of the Governor need
to assess whether this project should move forward.
10:40:30 AM
REPRESENTATIVE PATKOTAK asked what communities would benefit
from the project.
MR. CAREY answered the communities connected to the Railbelt
would benefit directly.
10:41:56 AM
REPRESENTATIVE PATKOTAK asked, about when the project obtains a
FERC license, whether there would be outside funding for the
project or the $5.6 billion to complete the project would be
needed from the legislature.
10:42:57 AM
MR. THAYER answered that there are a number of countries that
are interested in renewable projects. Furthermore, he said that
there are companies that know how to contract dams, operate dams
and would work with AEA in the regulatory process during the
life of the project. He informed the committee that he is aware
of a company that budgets $5.6 billion a year for renewable
[energy] projects and may be willing to invest in the [Susitna-
Watana] project.
MR. THAYER told the committee that establishing renewable energy
is the purpose of the project. The cost per kilowatt has
increased since the initial studies were conducted. He pointed
out that the cost currently is 6 cents/kilowatt and is locked in
for the long term. He summarized his presentation, and he
reiterated that there are companies interested in seeing the
project move forward.
10:44:59 AM
REPRESENTATIVE PATKOTAK asked what the role of the state is
after providing $100 million in funding by the legislature to
AEA.
10:45:36 AM
MR. THAYER replied that AEA would see a reduced role in the
operation of the dam after construction. He said that there is
the issue of the $300 million already invested in the project by
the State of Alaska and possible outcomes for recouping those
cost. Once the state has the FERC license, the options for
recovering the costs of the initial $200 million spent on the
initial studies could be reassessed.
10:46:39 AM
MR. THAYER responded to a further question from Representative
Patkotak. He said that once the state obtains the license,
there will be a value of potentially $300 million for Alaska.
He said AEA could provide the funding history from 2009 to
present, but the data from the 80s or earlier came from
different sources. He reviewed that the current sources of
power to the Railbelt are natural gas, wind power, and the
Bradley Lake hydroelectric dam. Mr. Thayer estimated that the
Susitna-Watana dam could provide 50 percent of the necessary
power needed for Railbelt communities, but further studies are
needed to quantify the actual savings.
10:50:37 AM
REPRESENTATIVE MCKAY inquired about cold temperatures and how
that effects the reservoir. He said he wondered if the project
could create ice dams downstream in the spring. He expressed
interest in knowing how the project dealt with salmon, as well
as the potential effects to the salmon, and he asked, if salmon
could make it upstream after the dam is constructed.
10:52:02 AM
MR. CAREY responded that salmon would not be affected; He said
salmon are not affected; currently 99.9 percent of Susitna
salmon divert to other streams and do not go up to the proposed
dam site. He said in one summer there was sonar equipment
monitoring streams above the proposed dam location. Only 25
Chinook salmon were counted by sonar above Devil's Canyon near
the proposed dam site. He informed the committee that very few
salmon make it past Devil's Canyon.
MR. CAREY stated fish passages are an option. There would be a
cost issue to create fish passages, consideration of them would
require feasibility studies. He said fish would need to make it
up the dam and down safely.
MR. CAREY addressing previous issues brought up by
Representative McKay regarding winter operations, said that the
dam would be operational year-round. He explained that winter
is the most expensive time of year for Railbelt communities, so
it would be essential to harvest power year-round. Water-flows
during the winter would be higher than they currently are. Ice-
flows already exist downriver on the Susitna River, and ice-
flows would continue to occur after construction of the dam. He
said there was modeling conducted to predict water flows. He
confirmed that at least part of the reservoir would freeze up
with thick ice in the winter.
10:55:01 AM
CHAIR RAUSCHER announced the final only order of business would
be the Pacific Northwest Economic Region presentation. CHAIR
RAUSCHER thanked the previous presenters and moved onto the next
presentation for the day.
^PRESENTATION(S): Pacific Northwest Economic Region
10:55:26 AM
}MATT MORRISON, CEO* of the Pacific NW Economic Region* Seattle,
Washington*{introduced the Pacific NorthWest Economic Region
(PNWER) organization. He stated that PNWER is statutory, and
that Alaska is a founding member, along with the states of
Washington, Oregon, Idaho, and Montana, and the Canadian
provinces and territories of Alberta, British Columbia,
Saskatchewan, the Yukon, and Northwest Territories. He stated
that the leadership of PNWER is made up of legislators from the
different states, provinces, and territories. The mission of
PNWER is to develop a framework for energy security and
sustainability in the United States and Canada.
11:00:04 AM
MR. MORRISON reiterated the state of Alaska is an energy
"superpower" in the world, and the resources in the region are
astounding. He urged the committee to take stock of the
infrastructure and how to utilize funding available from the
federal government. He emphasized the need to attract, train
and sustain talent to the workforce of Alaska. He related an
example from a year ago where parents couldn't find baby formula
in the grocery stores. He said the pandemic illuminated how
supply was affected. For example, [microchips] weren't
available in order to purchase an automobile.
MR. MORRISON stated the need to transition from fossil fuels to
electric power, and he question supply and infrastructure
preparedness. He pointed out the need for electric charging
stations.
MR. MORRISON began a PowerPoint presentation, entitled "Global
Challenges | Regional Solutions", [hard copy included in the
committee packet]. He mentioned the success stories of Alaska.
He said the states within the group know how to produce and
transport energy. He pointed to Slide 7, "Outcomes," which
lists four issues that the group faces [original punctuation
provided]:
1. Develop a repository of information to share best
practices between the states, provinces, and
territories to achieve success in energy
sustainability and security while increasing food
production and developing critical mineral production.
We need Alaska's success stories for this.
2. Work with the PNWER States Provinces and
Territories to provide specific data and best
practices on how our jurisdiction are planning for a
transition toward a secure, sustainable clean energy
future. What data can we bring from Alaska?
3. Work with the PNWER States, Provinces, and
Territories, First Nations and Tribes to identify
priority opportunities for environmentally sound,
critical mineral development and related permit
reform. What are Alaska's issues and challenges here?
4. Develop clear recommendations to both Washington,DC
and Ottawa to develop a transition plan working with
states provinces, and territories on how best to move
toward the goal of a secure and sustainable energy and
food security future for our two great nations.
He emphasized the need to work with Ottawa and Washington D.C.
toward mutual goals. He noted what Alaska can offer with
respect to energy development. He emphasized the need to work
with First Nations Tribes on what the challenges are for
critical mineral development. He warned that rare-earth
minerals will be depleted in roughly 10 years unless the country
does something drastically different from what the country is
doing now. He spoke about a work group that will be pulling
together for the annual summit in Boise, Idaho for future
recommendations.
11:03:52 AM
}STEVE MYERS, Operations Manager* Pacific NorthWest Economic
Region * Seattle, Washington* { Offered information during the
Pacific NorthWest Economic Region presentation. He gave the
second part of the PNWER presentation. He told the committee
that PNWER had the chance to visit the U.S. Department of
Defense (DoD) in Washington D.C. in 2022 to discuss the program.
The origin of the program is from the Defense Protection Act
enacted by the federal government. He informed the committee
that the Defense Production Act provided a fund of $750 million
to a private company sector that can apply for funding. These
monies can be used to complete various impact studies,
essentially to allow projects to move forward that might
otherwise be stalled because of funding shortfalls. He told the
committee he could provide more details on how the application
process works if they would like or answer any questions they
might have.
11:05:08 AM
}MATT MORRISON* CEO of Pacific NW Economic Region City & State
took the opportunity to describe the Defense Protection Act to
the committee members.
11:05:59 AM
MR. MORRISON moved ahead to Slide 10, Legislative Energy Horizon
Institute (LEHI). MR. MORRISON said the group is actively
recruiting legislators to attend next year's working group. MR.
MORRISON then listed the statistical break down of active
graduates still seated in the respective legislatures. MR.
MORRISON expressed his gratitude to be able to offer the LEHI
program. MR. MORRISON said the governor's office will be sending
several staff members to the meeting in Richmond, Washington.
11:07:18 AM
MR. MORRISON told the committee about the annual graduation
ceremony at the Canadian embassy. MR. MORRISON presented a
slide that showed this year's graduating class.
MR. MORRISON discussed an activity that LEHI does with
legislators where the draft a 10-year utility plan. At the end
of the exercise all of the legislators compared their plans with
the other legislators. The activity provided a real example of
utility costs at a hypothetical rate.
11:08:41 AM
MR. MORRISON concluded by describing his experiences in Alaska
from the early 70s. MR. MORRISON stated the Alaska is the new
frontier. MR. MORRISON said the world is watching Alaska. MR.
MORRISON stated the pioneering innovation begins here [Alaska].
Federal assistance is a vailable for communities. MR. MORRISON
said that what has made America great has come from pioneering
states. MR. MORRISON told the committee that Alaska has the
opportunity to be a pioneer in innovation from the village up to
community stability. MR. MORRISON said there is a once-in-a-
generation chance to gain federal funding to spark Alaska's
energy independence.
MR. MORRISON highlighted a "Riv-Gen" project that could work in
Alaska. The project is the longest marine project in North
America; it has survived two winters...
11:10:41 AM
MR. MORRISON said the project was made possible by SENATOR
MURKOWSKI and will benefit so many villages that are still
dependent on diesel fuel. MR. MORRISON finished his presentation
and asked if there were any questions and thanked the committee.
11:11:26 AM
MR. MORRISON played a 3-minute video [undiscernible]. MR.
MORRISON said the Riv-Gen project is a great example of
sustainable energy and innovation.
11:12:49 AM
MR. MORRISON said with the coming funding for infrastructure is
available. MR. MORRISON continued by saying that there is $90
billion in funding from the United States Department of Energy.
MR. MORRISON described how the generator is fully submerged
underwater and has provided consistent power to the community it
serves. [Undiscernible music.] MR. MORRISON told the committee
the project is a public-private partnership. MR. MORRISON said
this [the project] is a good opportunity.
11:13:50 AM
CHAIR RAUSCHER asked if there were any questions.
11:14:03 AM
REPRESENTATIVE SCHRAGE offered to thank the presenters for being
there and the work that LEHI does.
11:14:26 AM
REPRESENTATIVE MCKAY also thanked the presenters.
11:15:12 AM
CHAIR RAUSCHER though it was a great program and that he learned
a lot and described his experience to the rest of the committee.
MR. MORRISON invited all of the members of the committee to the
next meeting in Idaho next October.
11:15:27 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:15 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Energy Committee Schedule 23-27 Jan 2023.pdf |
HENE 1/26/2023 10:15:00 AM |
PNWR Presentation |
| 2023.01.25 AEA Susitna-Watana Presentation to House Energy Committee.pdf |
HENE 1/26/2023 10:15:00 AM |
AKEA Presentation |