Legislature(2023 - 2024)BARNES 124

03/26/2024 10:15 AM House ENERGY

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Audio Topic
10:18:21 AM Start
10:19:28 AM Presentation: the Railbelt Transmission Grid: Now and Future
11:30:58 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: The Railbelt Transmission Grid (Now TELECONFERENCED
and Future) by Gwen Holdmann, Senior Researcher,
Associate Vice Chancellor for Research,
Innovation and Industry Partnerships,
University of Alaska Fairbanks
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                         March 26, 2024                                                                                         
                           10:18 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative George Rauscher, Chair                                                                                           
Representative Tom McKay                                                                                                        
Representative Thomas Baker                                                                                                     
Representative Stanley Wright                                                                                                   
Representative Mike Prax                                                                                                        
Representative Calvin Schrage                                                                                                   
Representative Jennie Armstrong                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION(S): THE RAILBELT TRANSMISSION GRID: NOW AND FUTURE                                                                 
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
GWEN HOLDMANNN, Senior Researcher                                                                                               
Associate Vice Chancellor for Research, Innovation, and Industry                                                                
Partnerships                                                                                                                    
University of Alaska Fairbanks                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Gave the Railbelt Transmission Grid: Now                                                                 
and Future presentation.                                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:18:21 AM                                                                                                                   
                                                                                                                                
CHAIR  RAUSCHER  called the  House  Special  Committee on  Energy                                                               
meeting to order at 10:18  a.m.  Representatives Rauscher, McKay,                                                               
Baker, Wright, Prax,  Schrage, and Armstrong were  present at the                                                               
call to order.                                                                                                                  
                                                                                                                                
^PRESENTATION:  THE RAILBELT TRANSMISSION GRID: NOW AND FUTURE                                                                  
 PRESENTATION:  THE RAILBELT TRANSMISSION GRID: NOW AND FUTURE                                                              
                                                                                                                                
10:19:28 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER  announced that the  only order of  business would                                                               
be the Railbelt Transmission Grid: Now and Future presentation.                                                                 
                                                                                                                                
10:21:01 AM                                                                                                                   
                                                                                                                                
GWEN HOLDMANNN, Senior Researcher,  Associate Vice Chancellor for                                                               
Research,  Innovation and  Industry  Partnerships, University  of                                                               
Alaska  Fairbanks, gave  the presentation,  titled "The  Railbelt                                                               
Transmission  Grid: Now  and Future,"  [hardcopy included  in the                                                               
committee  packet].   She began  on  slide 2,  which described  a                                                               
future  vision  for  the Railbelt's  transmission  grid  and  its                                                               
ability to  deliver power to customers  on it.  She  continued to                                                               
slide 3, which displayed a  historical map of the Railbelt region                                                               
of  Alaska  and gave  a  brief  history  of the  Railbelt's  past                                                               
infrastructure projects and  plans.  She moved to  slide 4, which                                                               
explained  both the  political history  of the  Railbelt and  how                                                               
problems with the Railbelt have been historically addressed.                                                                    
                                                                                                                                
10:30:26 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN, in  response  to a  question  from Chair  Rauscher                                                               
about  why Alaska  is not  using its  power optimally,  explained                                                               
that  the utilities  have been  working to  optimize the  current                                                               
transmission  system, and  she used  the  Golden Valley  Electric                                                               
Association (GVEA)  and the Bradley Lake  Hydroelectric System as                                                               
examples  of utilities  companies  that are  succeeding with  the                                                               
current system.   In  response to  Representative Prax,  she said                                                               
that  privatization of  the  Railbelt is  a  direction that  many                                                               
people  along the  Railbelt would  like to  see happen,  and that                                                               
would be  dependent on the  cost-competitive nature  of differing                                                               
energy projects  and generation methods.   She noted  that future                                                               
projects  along   the  Railbelt's  transmission  line   would  be                                                               
completed  by  private  sector   enterprises.    To  a  follow-up                                                               
question  regarding clean  energy  tax subsidies,  she said  that                                                               
pertains  to  planning systems  used  to  construct new  projects                                                               
along the Railbelt grid.                                                                                                        
                                                                                                                                
10:38:28 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN   resumed  the  presentation  on   slide  5,  which                                                               
explained federal funding opportunities  being utilized along the                                                               
Railbelt  grid.   She  moved  to  slide  6, which  described  the                                                               
current series  of constraints on  development and  progress that                                                               
the Railbelt  grid is  experiencing.  In  response to  a question                                                               
from  Chair Rauscher,  she  explained that  there  is a  Railbelt                                                               
Reliability   Council  that   sets   the  reliability   standard,                                                               
coordinates   joint   planning,   and   ensures   interconnection                                                               
protocols for  independent utilities that  want to use  the grid,                                                               
and  that organization  would  need more  time  to determine  the                                                               
downstream effects of Senate Bill  123, passed during the Thirty-                                                               
First Alaska State  Legislature.  To a second  question, she said                                                               
that  there  are  limited  opportunities  for  economic  dispatch                                                               
currently.  She  described the specific roles  each utility along                                                               
the Railbelt grid plays in maintaining operations.                                                                              
                                                                                                                                
10:47:50 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN,  in  response  to  questions  from  Representative                                                               
McKay,  relayed that  currently the  Railbelt grid  serves a  bit                                                               
over 500,000  people.   She said Alaska  is different  from other                                                               
states because of the geographic  challenges it faces.  She cited                                                               
Hawai'i and  Iceland as  better examples  to compare  to Alaska's                                                               
power grid.                                                                                                                     
                                                                                                                                
10:50:12 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN   resumed  the  presentation  on   Slide  7,  which                                                               
described the  practical realities  that the railbelt  grid faces                                                               
in  its  current  operation.     She  moved  to  slide  8,  which                                                               
emphasized that the location of  a generation source could change                                                               
in the  future. She  continued to slide  9, which  outlined three                                                               
goals for  the railbelt grid  to achieve  as a whole,  as follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     1. Eliminate pancaking wheeling rates and establish a                                                                      
     framework for how transmission costs will be recovered                                                                     
     and allocated                                                                                                              
     2. Create an organization that can oversee, manage and                                                                     
        develop backbone transmission assets and that is                                                                        
     subject to appropriate regulation                                                                                          
      3. Re-imagining a planning process that uses a whole-                                                                     
    system   approach    (transmission,   generation,   and                                                                     
     distribution)                                                                                                              
                                                                                                                                
MS. HOLDMANN, in  response to Chair Rauscher,  she explained that                                                               
the  term "pancaking"  is  used to  describe  the stacking  costs                                                               
across  different parts  of the  system together  with the  fixed                                                               
costs of  the system.  To  a second question, she  confirmed that                                                               
the number figures  used in the presentation  were current rather                                                               
than historic.                                                                                                                  
                                                                                                                                
10:58:16 AM                                                                                                                   
                                                                                                                                
MS. HOLDMANN  resumed the  presentation on  slide 10,  which gave                                                               
ideas as  to how the  legislature could establish a  framework to                                                               
recover and  allocate the costs  of the  Railbelt.  She  moved to                                                               
slide 11, which  elaborated on the first of  the three previously                                                               
mentioned goals and  continued to slide 12,  which explained cost                                                               
recovery efforts  being made under  the Railbelt's  current model                                                               
of funding and allocation.                                                                                                      
                                                                                                                                
11:02:10 AM                                                                                                                   
                                                                                                                                
MS. HOLDMANN, in response to  questions from Representative Prax,                                                               
said costs to the ratepayer  are about power versus energy value;                                                               
energy is the legal metric being  used to determine the value and                                                               
cost  to a  ratepayer  on  the Railbelt.    Different users  have                                                               
different criteria for how they  use the grid, she explained, and                                                               
emergency calculations  would depend on  the type of user  on the                                                               
grid.                                                                                                                           
                                                                                                                                
11:08:46 AM                                                                                                                   
                                                                                                                                
MS. HOLDMANN resumed  the presentation on slides 13  and 14, both                                                               
of which described  the second of the  three previously mentioned                                                               
goals by explaining  and giving examples of  their application in                                                               
other  countries.   She moved  to slide  15, which  described the                                                               
final of  the three previously  mentioned goals by  outlining the                                                               
development of  a plan  for the entire  Railbelt.   She concluded                                                               
the presentation on slide 16, which  gave a final overview of the                                                               
three previously mentioned goals for the Railbelt grid.                                                                         
                                                                                                                                
11:14:45 AM                                                                                                                   
                                                                                                                                
MS. HOLDMANN,  in response to Representative  McKay, advised that                                                               
power cost equalization (PCE) has  been directly tied to the cost                                                               
of Cook Inlet  Gas and explained how that would  correlate with a                                                               
higher cost of energy along the Railbelt.                                                                                       
                                                                                                                                
REPRESENTATIVE  MCKAY commented  that  there is  a  need for  the                                                               
State to address the military's need for reliable power.                                                                        
                                                                                                                                
11:20:34 AM                                                                                                                   
                                                                                                                                
MS. HOLDMANN,  in response to  a question from Chair  Rauscher as                                                               
to  how  a  transmission  line upgrade  would  help  balance  the                                                               
initial costs  of infrastructure  upgrades to the  Railbelt grid,                                                               
explained that there would be  a higher value associated with the                                                               
construction  of  Railbelt  assets   because  of  their  expected                                                               
longevity.   She said that there  is still a significant  need to                                                               
de-constrain the  current generation points on  the Railbelt, and                                                               
she shared  her belief  that the  lack of gas  in the  Cook Inlet                                                               
Region  is more  concerning  for home  heat  generation than  for                                                               
power generation along the Railbelt grid.                                                                                       
                                                                                                                                
11:24:45 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN responded  to questions  from Representative  Prax.                                                               
She  said  that  the  proposed  upgrade  wouldn't  apply  to  the                                                               
northern part of  the system and explained how  the upgrade would                                                               
affect the  south part  of the  system.   She explained  that the                                                               
current  intertie  is  the  limit  of the  power  that  GVEA  can                                                               
purchase, and she  shared her hope that upgrades  to the northern                                                               
part of the system would come along sooner rather than later.                                                                   
                                                                                                                                
CHAIR RAUSCHER commented that Curtis  Thayer of the Alaska Energy                                                               
Authority had said that the  upgrades are proposed to be complete                                                               
between 2030 and 2032.                                                                                                          
                                                                                                                                
MS. HOLDMANN  responded that the current  funding secured through                                                               
the grid  resilience innovation  partnerships (GRIP)  program are                                                               
more related  to the existing  projects that need  more cashflow.                                                               
In  response to  a  question from  Representative Prax  regarding                                                               
phase  2 and  3 of  the Railbelt  grid's upgrades,  she said  the                                                               
project  would move  forward whether  or not  there were  federal                                                               
funding.   She emphasized  that it is  important for  the federal                                                               
government to know that the  utilities and local governments have                                                               
a  plan in  place to  construct and  use energy  produced by  any                                                               
given grant.                                                                                                                    
                                                                                                                                
11:30:58 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 11:31.                                                                     

Document Name Date/Time Subjects
Transmission Overview - House Energy 3-26-24.pdf HENE 3/26/2024 10:15:00 AM
Transmission