Legislature(2023 - 2024)BARNES 124
01/26/2023 10:15 AM House ENERGY
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| 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.
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
PRESENTATION: Pacific Northwest Economic Region
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CURTIS THAYER, Executive Director
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation on the
status of the Susitna-Watana Hydroelectric Project.
BYRAN CAREY, Director
Owned Assets
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the PowerPoint
presentation on the status of the Susitna-Watana Hydroelectric
Project
MATT MORRISON, CEO
Pacific NorthWest Economic Region
Seattle, Washington
POSITION STATEMENT: Co-presented a PowerPoint, entitled "Global
Challenges | Regional Solutions."
STEVE MYERS, Operations Manager
Pacific NorthWest Economic Region
Seattle, Washington
POSITION STATEMENT: Co-presented a PowerPoint, entitled "Global
Challenges | Regional Solutions."
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.
10:18:35 AM
CURTIS THAYER, Executive Director, Alaska Energy Authority
(AEA), provided a PowerPoint presentation, titled "Susitna-
Watana Hydroelectric Project" [hard copy included in the
committee packet]. He stated that AEA was established in 1976
by the legislature with the mission to reduce the cost of energy
to all Alaskans. He added that AEA is also the lead state
office for energy policy and statewide program development. He
pointed out its involvement with the Railbelt. He stated that
AEA owns the largest hydroelectric project in the state, Bradley
Lake. He stated that AEA also owns the Alaska Intertie, which
is the fuel line from the Kenai Peninsula to Willow and Healy.
He acknowledged that the state's ownership of the intertie saves
the city of Fairbanks approximately $37 million in energy costs.
MR. THAYER stated that AEA also runs the power cost equalization
(PCE) program for rural Alaska, which provides approximately $40
million a year. He added that AEA also is the authority over
power houses, bulk fuel, upgrades, and deferred maintenance. He
stated that it continues to work with federal partners for
funding, and it performs energy ratings. He continued that AEA
is involved with renewable energy, as the state also has
biomass, windfarms, and hydro projects. He described AEA's
involvement with grants, loans, and energy planning, as well as
the electric vehicle (EV) planning for the state. He expressed
the expectation that, with the help of the legislature, AEA will
receive around $200 million by the end of the year in federal
funding.
10:21:14 AM
MR. THAYER stated that the majority of the work for the Susitna-
Watana Hydro Project was conducted under the past two
administrations. He stated that Administrative Order 271 had
effectively halted the project in 2019, and as of 2022 no state
funds have been spent on the project. He added that project
updates have been provided each year to the legislature and to
federal authorities, but no new work has taken place. He
advised that for the project to advance, more updating would be
needed.
MR. THAYER moved to slide 7, which illustrated the project
history and the decline of funding available to AEA. He noted
that slide 9 serves to answer the question, "Why Susitna-
Watana?" He narrated the benefits of renewable energy and the
potential savings to the state over the first 50 years of
operation. He said that the project is a 100-plus year project.
He pointed out that the projected estimates made in 2014 showed
that the savings would be in the billions for the Railbelt
communities. These savings would come from not using
nonrenewable natural gas. He added that carbon emissions would
also be reduced.
MR. THAYER noted that the project would be under the Federal
Energy Regulatory Commission (FERC). He further noted that FERC
licensing is still in the process of permitting for the project.
He noted that the project still has investors and interest from
the public. He advised that having a FERC license would remove
many of the risk factors. He shared that there are 58 FERC
approved studies: 19 were advanced by FERC and 39 remain to
require further investigations.
MR. THAYER, referring to slide 11, expressed the understanding
that there are no current problems with the FERC filing, but it
is still on hold. He pointed out that all proposed study
modifications had been rejected by FERC; therefore, the data was
deemed to be only useful for baseline information. The earliest
studies were conducted in the 1950s, 1980s, and 2011, when the
legislature unanimously granted AEA the authority to move
forward with the project once again. In 2012, the AEA studies
began until 2017; therefore, no further funding is available at
present, and the project is in abeyance, [as shown on slide 12].
10:26:36 AM
MR. THAYER moved to slide 13 and showed the map of the project
area and nearby communities. 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, and he concluded that the
fisheries would not be an issue despite the FERC rejection. He
turned to slide 14, subtitled "Project At-A-Glance," and
discussed the bulleted items, which read as follows [original
punctuation provided]:
Dam Height 705 feet
Dam Elevation 2,065 Feet
Reservoir Length ~42 miles
Reservoir Width~1.25 miles
Installed Capacity 618 MW
Annual Energy 2,800,000 MWh
Cost~$5.6 billion (2014$)
MR. THAYER pointed out that the price tag has increased over
eight years, adding that technological improvements will affect
costs in the future. He moved to slide 15, subtitled
"Engineering," and covered the information, which read as
follows [original punctuation provided]:
Size and generation optimized
Design reviewed by International Board of Consultants
Designed to withstand:
-10,000-year flood
-Maximum credible earthquake of a magnitude 8.0
2014 Engineering Feasibility Report
MR. THAYER moved to slide 16 and discussed the benefit-cost and
economic impact analyses completed in 2015, estimating that
there would be $11.2 billion in energy savings over the first 50
years. He shared the employment opportunities as listed on
slide 17. These opportunities include preconstruction,
construction, and operations employment, all of which would
provide benefits to the state. He concluded his presentation on
slide 18, subtitled "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. He pointed out that the
actual construction would last 9 to 11 years.
10:32:17 AM
MR THAYER advised that the dam would not be operational for
about 15 to 20 years. He expressed the importance of the
legislature taking the next steps to advance the project. He
described the PCE process, stating that Railbelt energy cost is
tied to PCE, and this benefits rural Alaska. In response to a
committee question, he stated that the total aggregate cost for
the proposed updates on slide 19 is $5 million. He provided
estimates of the costs associated with greenlighting the
project. Studies and licensing are separate costs, he noted.
In response to a follow-up question concerning any cooperation
from other state departments on the project, he answered that
under statute the purview of the project falls under AEA.
10:36:27 AM
BYRAN CAREY, Director, Owned Assets, Alaska Energy Authority, in
response to a committee question concerning weather Norway had
been used as a model for the state's project, stated that no
formal research has been undertaken with respect to Norway. He
reiterated this point, adding he was not familiar with the
company Norsk Hydro. He stated that AEA had looked at Iceland
because at the time of the Susitna-Watana project development,
it was building a 700-foot dam for power generation and possibly
internet cloud servicing. In response to a follow-up question,
he stated that the obstacles and challenges to getting the
project done is "about $100 million." He said that the 2014
costs need to be updated for inflation and other factors. He
advised that the legislature and the governor need to assess
whether this project should move forward.
10:40:30 AM
MR. CAREY, in response to a committee question, answered that
the communities connected to the Railbelt would benefit directly
from the project.
10:41:56 AM
MR. THAYER in response to a committee question about outside
funding for the project and whether the $5.6 billion would be
needed from the legislature, answered that there are a number of
countries who are interested in renewable projects.
Furthermore, he said that there are companies that know how to
contract and operate dams, and these companies would work with
AEA in the regulatory process. He informed the committee that
he is aware of a company that budgets $5.6 billion a year for
renewable [energy] projects, and it may be willing to invest in
the [Susitna-Watana] project. He continued that establishing
renewable energy is the purpose of the project; however, the
cost per kilowatt has increased since the initial studies were
conducted. He pointed out that the cost currently is 6 cents
per kilowatt, and this is locked in for the long term. He
summarized the presentation, and he reiterated that there are
companies interested in seeing the project move forward.
10:44:59 AM
MR. THAYER, in response to a committee question, stated that
after the $100 million in funding is provided by the
legislature, AEA would see a reduced role in the operation of
the dam after construction. He said that the $300 million
already invested by the state in the project could possibly be
recouped, as 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. Responding to a
further question, he said that once the state obtains the
license, there will be a value of potentially $300 million for
Alaska. He said that AEA could provide the funding history from
2009 to present, but the data from earlier than the 1980s 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 questioned whether the project would create
ice dams downstream and whether salmon would be able to make it
upstream after the dam is constructed.
MR. CAREY expressed the opinion that salmon would not be
affected. He explained that currently 99.9 percent of Susitna
salmon divert to other streams and are not going to the proposed
dam site. He said that sonar equipment monitoring streams above
the proposed dam location had been used for one summer, with
only 25 Chinook salmon counted above Devil's Canyon near the
proposed dam site. He informed the committee that very few
salmon make it past Devil's Canyon. He continued that fish
passages are an option; however, there would be a cost, and this
would require a feasibility study. He suggested that fish would
need to make it up the dam and down safely.
MR. CAREY, addressing issues concerning winter operations, said
that the dam would be operational all year. He explained that
winter is the most expensive time of the year for Railbelt
communities, so it would be essential to harvest power all year.
He suggested that water flow during the winter would be high.
He explained that ice flows already exist 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
^PRESENTATION(S): Pacific Northwest Economic Region
PRESENTATION(S): Pacific Northwest Economic Region
CHAIR RAUSCHER announced the final order of business would be
the Pacific NorthWest Economic Region presentation.
10:55:26 AM
MATT MORRISON, CEO, Pacific NorthWest Economic Region (PNWER),
co-presented a PowerPoint, entitled "Global Challenges |
Regional Solutions", [hard copy included in the committee
packet]. He stated that PNWER is statutory, and Alaska is a
founding member along with Washington, Oregon, Idaho, Montana,
and the Canadian provinces and territories of Alberta, British
Columbia, Saskatchewan, the Yukon, and the Northwest
Territories. He stated that the leadership of PNWER is made up
of legislators from these areas. The mission of PNWER is to
develop a framework for energy security and sustainability in
the United States and Canada.
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 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 the pandemic when parents could not find baby
formula in the grocery stores, as this had illuminated how
supply could be affected. He expressed the opinion that a
transition from fossil fuels to electric power needs to be made,
and he questioned supply and infrastructure preparedness. He
pointed out the need for electric charging stations.
MR. MORRISON outlined success stories in Alaska and suggested
that states within PNWER know how to produce and transport
energy. He pointed to slide 7, subtitled "Outcomes," which
lists four issues that PNWER 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. 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, co-presented the PowerPoint. He stated that in 2022
PNWER had visited the U.S. Department of Defense (DoD) in
Washington D.C. to discuss the program. He explained that the
program originated from the federal Defense Protection Act,
providing $750 million in funding to private companies. He
stated that this funding can be used to complete various impact
studies, allowing projects to move forward. He offered to
provide the committee with more details on how the application
process works and answer any questions.
11:05:08 AM
MR. MORRISON described the Defense Protection Act to the
committee. He moved to slide 10 and discussed the Legislative
Energy Horizon Institute (LEHI). He said that LEHI is actively
recruiting legislators to attend next year's working group. He
then listed the statistical break down of active graduates still
seated in the respective legislatures. He expressed his
gratitude to be able to offer the LEHI program and informed the
committee about the annual graduation ceremony. He pointed out
that LEHI had an exercise for legislators to draft a 10-year
utility plan. At the end of the exercise legislators compared
their plans with the other legislators. He stated that the
activity had provided a real example of utility costs at a
hypothetical rate.
MR. MORRISON described his experiences in Alaska from the early
1970s. He expressed the opinion that Alaska is the new frontier
and said the "world is watching," as this is where pioneering
innovation begins. He advised that federal assistance is
available for communities. He suggested that Alaska has the
opportunity to be a pioneer in innovation for community
stability in villages, as this is a once-in-a-generation chance
to gain federal funding to give Alaska energy independence.
MR. MORRISON highlighted the "Riv-Gen" project made possible by
Senator Lisa Murkowski. He explained that the project is the
longest marine project in North America, and it has survived two
winters. He suggested that the project would benefit many of
the villages that are still dependent on diesel fuel. He
concluded the presentation by presenting a video on the Riv-Gen
project. He expressed the opinion that the project is a great
example of sustainable energy and innovation. He stated that
upcoming funding for infrastructure is available, with $90
billion from the U.S. Department of Energy. During the video he
described how a generator would be fully submerged underwater,
providing consistent power to communities, and he stated that
the project is a public-private partnership.
11:13:50 AM
CHAIR RAUSCHER provided closing comments along with other
committee members.
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 |