Legislature(2021 - 2022)ADAMS 519
04/06/2021 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| SB69 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 69 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
April 6, 2021
10:17 a.m.
MEMBERS PRESENT
Representative Calvin Schrage, Chair
Representative Chris Tuck
Representative Matt Claman
Representative Zack Fields
Representative George Rauscher
Representative James Kaufman
MEMBERS ABSENT
Representative Tiffany Zulkosky
COMMITTEE CALENDAR
SENATE BILL NO. 69 AM
"An Act extending an exemption from regulation as a public
utility for plants and facilities generating electricity
entirely from renewable energy resources; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 69
SHORT TITLE: EXEMPT RENEWABLE ENERGY ELECTRIC PLANTS
SPONSOR(s): SENATOR(s) REVAK
02/03/21 (S) READ THE FIRST TIME - REFERRALS
02/03/21 (S) L&C
02/10/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/10/21 (S) <Bill Hearing Canceled>
02/15/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/15/21 (S) Heard & Held
02/15/21 (S) MINUTE(L&C)
03/03/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/03/21 (S) Moved SB 69 Out of Committee
03/03/21 (S) MINUTE(L&C)
03/05/21 (S) L&C RPT 1DP 3AM
03/05/21 (S) DP: COSTELLO
03/05/21 (S) AM: GRAY-JACKSON, STEVENS, HOLLAND
03/31/21 (S) TRANSMITTED TO (H)
03/31/21 (S) VERSION: SB 69 AM
04/05/21 (H) READ THE FIRST TIME - REFERRALS
04/05/21 (H) ENE, L&C
04/06/21 (H) ENE AT 10:15 AM ADAMS 519
WITNESS REGISTER
DIRK CRAFT, Staff
Senator Josh Revak
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 69 am on behalf of Senator
Revak, prime sponsor.
JENN MILLER, CEO
Renewable Independent Power Producers
Anchorage, Alaska
POSITION STATEMENT: Provided information and answered questions
during the hearing on SB 69 am.
SUZANNE SETTLE, Vice President
Energy, Land and Resources
Cook Inlet Region, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 69 am.
ACTION NARRATIVE
10:17:48 AM
CHAIR CALVIN SCHRAGE called the House Special Committee on
Energy meeting to order at 10:17 a.m. Representatives Tuck,
Claman, Schrage were present at the call to order.
Representatives Fields, Rauscher, and Kaufman arrived as the
meeting was in progress.
SB 69-EXEMPT RENEWABLE ENERGY ELECTRIC PLANTS
10:18:25 AM
CHAIR SCHRAGE announced that the only order of business would be
SENATE BILL NO. 69 am, "An Act extending an exemption from
regulation as a public utility for plants and facilities
generating electricity entirely from renewable energy resources;
and providing for an effective date."
10:19:00 AM
DIRK CRAFT, Staff, Senator Josh Revak, Alaska State Legislature,
presented SB 69 am on behalf of Senator Revak, prime sponsor.
He said SB 69 am would extend a narrow regulatory exemption for
power plants utilizing renewable resources of under 65 megawatts
from July 1, 2021, to July 1, 2028. He reviewed the
responsibilities of the Regulatory Commission of Alaska (RCA)
and noted that Alaska has seen increasing private sector
investment in the development of renewable energy systems across
the state. He related that since 2010, Alaska has exempted
small power producers from regulation under the RCA if: they
generate electricity entirely from renewable energy; their
facility is under 65 megawatts; they sell power only to a
regulated public utility; and the project receives neither state
tax credits nor state grants. He continued:
This extra layer of regulation can not only prevent
power producers from providing private risk investment
in the state, but it can also add to the cost of
government through the additional regulatory layer.
Exempting independent power producers under these
narrow conditions essentially ensures there isn't
duplicative regulation, which adds costs and can
create delays for investment, as well as discourage
potential investors.
Consumers are protected because the power purchase
agreement and other agreements between the
[independent power producer] (IPP) and public utility
are considered by the RCA. Therefore, an exemption
made through SB 69 [am] continues to maintain state
oversight on the power purchase agreements, and
thereby continues to protect the rate payers.
MR. CRAFT noted that an amendment on the Senate floor made two
small changes. One was a reference to the Electrical
Reliability Organization (ERO) statute, which was made to
clarify that the regulatory exemption under AS 42.05.711(r) does
not apply to applicable ERO-related regulations under AS
42.05.760-790, which were authorized under SB 123 last year.
The other change was the reduction of the sunset date from 10
years to 7 years. He offered to answer questions from the
committee.
10:21:36 AM
REPRESENTATIVE TUCK asked what the RCA was doing that was
"making it difficult" for the IPPs.
MR. CRAFT, in response to a question from Representative
Rauscher, said the difficulty for IPPs has been related to
filing and application for certificate of public convenience and
necessity.
10:23:57 AM
CHAIR SCHRAGE announced the committee would hear invited
testimony.
10:24:07 AM
JENN MILLER, CEO, Renewable Independent Power Producers, said
Renewable IPP develops, builds, and operates solar farms in
Alaska, the largest one in Willow, Alaska. She offered
background regarding IPPs, stating that they can operate any
energy generating source, and they sell energy at wholesale
prices. She discussed how Renewable IPP works through technical
studies and power purchase agreements. She noted that IPPs are
responsible for the cost of upgrading the grid to interconnect
its facilities. Once a price is agreed upon, the contract is
sent to the RCA for review and approval. She explained that if
the existing regulatory environment were to sunset, Renewable
IPP would be required to do quarterly tariff filing, which
requires additional staff. She further explained that the
filing is repetitious because four times per year the IPP would
be filing on something that was already approved before the
project was built. She said SB 69 am would require the IPP to
sell 100 percent of its power to a regulated utility, and that
utility must also submit quarterly filings, which increases
costs. The additional filing requirement also puts the IPP at a
disadvantage because Alaska is the only state where this is
required, and investors are considering that when deciding
whether to invest. She talked about renewable energy being at a
tipping point.
10:32:46 AM
MS. MILLER, in response to a question from Representative
Rauscher, mentioned 100 percent private investments and federal
solar investment tax credit, and she said although there may be
COVID relief dollars in the future, Renewable IPP is not
receiving any at this time.
REPRESENTATIVE RAUSCHER asked Ms. Miller to look into COVID
[relief funds] that may be going toward the grid itself.
10:34:37 AM
MS. MILLER, in response to a question from Representative
Kaufman, explained that the 65 megawatt size limit is aligned
with standards in the Lower 48. She said she thinks the 65
megawatt is a great size; it's good to have a high ceiling, and
then leave it to the technical group to work with the utility
collaboratively to determine the size.
REPRESENTATIVE KAUFMAN concurred.
10:36:47 AM
REPRESENTATIVE TUCK asked about communities that don't have a
purchase agreement. He mentioned an IPP in Coldfoot, Alaska,
and asked if it falls into "this category," as it is the only
producer in the area.
MR. CRAFT responded that to fall under the category [covered by
the bill provisions] an IPP would have to sell power wholesale
to one or more public utilities; it could not have separate
agreements with any private entities.
10:37:55 AM
CHAIR SCHRAGE opened public testimony on SB 69 am.
10:38:06 AM
SUZANNE SETTLE, Vice President, Energy, Land and Resources, Cook
Inlet Region, Inc., stated that Cook Inlet Region, Inc. (CIRI)
is an IPP in the railbelt, an investor of wind and gas powered
generation and multiple projects across the U.S., as well as an
active participant in establishing Alaska's first Electric
Reliability Council pursuant to last year's SB 123. She stated
support of SB 69 am. She said CIRI used the exemption embedded
in statute as part of its development process for a successful
Fire Island wind project. She said the agreement and
development has provided long-term, flat-priced, renewable wind
power to Chugach Electric Association for more than 8 years,
with 16 to go. She said CIRI believes this is a good model for
private investment in a sector and can benefit the public
without burdening state government. She noted the great points
already made by Ms. Miller. She warned that allowing the
statute to expire would kill future investment. She stated that
CIRI believes it is important to extend the sunset so that other
IPPs can have "regulatory certainty in their own project
development activities." She extolled the benefits of IPPs to
the state, underlining that they put their own dollars at risk;
since the price is decided in the agreement, any rise in the
cost of building or operating is covered by the IPPs.
10:42:16 AM
MR. CRAFT responded to questions from Representative Claman. He
explained that the amendment by the Senate to make the sunset of
seven years was a compromise. He confirmed that the list in the
committee packet naming the companies that would qualify under
the exemption is an exhaustive list. He offered his
understanding that there was no formal audit done on this issue.
10:45:02 AM
MR. CRAFT, in response to Representative Rauscher, restated the
information about the compromise made as to the number of years
for the sunset. He pointed out that part of the reasoning
behind the number has to do with the private financing that
comes in during the construction phase; it can take a lot of
time to recoup the costs. He explained that it is hard to
secure private financing "when you have a sunset looming over on
this type of regulatory exemption."
10:45:57 AM
MR. CRAFT, in response to Representative Fields, said the bill
sponsor had originally supported a lengthier sunset period. He
reiterated that a compromise had been made, and he suggested
this would be an issue for the committee to discuss.
10:46:28 AM
CHAIR SCHRAGE closed public testimony on SB 69 am.
[SB 69 am was held over.]
10:46:44 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at [10:47]
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 69 am Sponsor Statement.pdf |
HENE 4/6/2021 10:15:00 AM HENE 4/13/2021 10:15:00 AM HL&C 4/26/2021 3:15:00 PM |
SB 69 |
| SB 69 version A.pdf |
HENE 4/6/2021 10:15:00 AM HENE 4/13/2021 10:15:00 AM HL&C 4/26/2021 3:15:00 PM |
SB 69 |
| SB 69 am Version A.A.PDF |
HENE 4/6/2021 10:15:00 AM HENE 4/13/2021 10:15:00 AM HL&C 4/26/2021 3:15:00 PM |
SB 69 |
| SB 69 am Summary of Changes.pdf |
HENE 4/6/2021 10:15:00 AM HENE 4/13/2021 10:15:00 AM HL&C 4/26/2021 3:15:00 PM |
SB 69 |
| SB 69 Legal Opinion 3.4.21.pdf |
HENE 4/6/2021 10:15:00 AM HENE 4/13/2021 10:15:00 AM |
SB 69 |
| SB 69 DCCED RCA Fiscal Note.pdf |
HENE 4/6/2021 10:15:00 AM |
SB 69 |
| SB 69 Legislative Research IPP's 2.4.2021.pdf |
HENE 4/6/2021 10:15:00 AM |
SB 69 |
| SB 69 Research - RCA List of renewable facilities from 2010 to 2021.pdf |
HENE 4/6/2021 10:15:00 AM |
SB 69 |