Legislature(2021 - 2022)BARNES 124
04/08/2021 10:00 AM House ENERGY
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| Presentation: Alaska Energy Authority | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
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ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
April 8, 2021
10:00 a.m.
MEMBERS PRESENT
Representative Calvin Schrage, Chair
Representative Chris Tuck
Representative Matt Claman
Representative Tiffany Zulkosky
Representative Zack Fields
Representative George Rauscher
Representative James Kaufman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: ALASKA ENERGY AUTHORITY
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CURTIS THAYER, Executive Director
Alaska Energy Authority
Department of Commerce, Community & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Gave a presentation on the Alaska Energy
Authority.
KIRK WARREN, Director
Engineering and Energy Development
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the presentation
on the Alaska Energy Authority.
ACTION NARRATIVE
10:00:55 AM
CHAIR CALVIN SCHRAGE called the House Special Committee on
Energy meeting to order at 10:00 a.m. Representatives Claman
and Schrage were present at the call to order. Representatives
Rauscher, Fields, Zulkosky, Tuck, and Kaufman arrived as the
meeting was in progress.
^PRESENTATION: Alaska Energy Authority
PRESENTATION: Alaska Energy Authority
10:01:45 AM
CHAIR SCHRAGE announced that the only order of business would be
a presentation on the Alaska Energy Authority.
10:01:48 AM
CURTIS THAYER, Executive Director, Alaska Energy Authority,
Department of Commerce, Community & Economic Development, began
his presentation by explaining that the Alaska Energy Authority
(AEA) was started by the Alaska State Legislature in 1976. He
explained that the mission of AEA is to "reduce the cost of
energy in Alaska." He explained the programs AEA oversees,
including the Alaska Intertie, the Bradley Lake hydro project,
power-cost equalization (PCE), and multiple projects in rural
Alaska.
10:04:06 AM
MR. THAYER continued with slide 3 explaining the energy planning
AEA does with local and regional partners across the state for
economic and energy analysis. He moved to slide 4, outlining
the current projects. He explained basic energy units and gave
examples of how many homes can be powered by each unit. He
compared the rates of renewable energy in Alaska and the Lower
48, stating that Alaska was "ahead of the game." He said that
Alaska uses half the coal that the Lower 48 does and 5 percent
less gas and oil. He noted that the Lower 48 has nuclear
energy, and Alaska does not.
10:07:22 AM
REPRESENTATIVE SCHRAGE asked about the energy breakdown on slide
8. He then mentioned the map of Alaska on slide 4 and asked Mr.
Thayer to speak about the differences in energy dependance of
the regions.
MR. THAYER responded that most of the hydropower comes from
Southeast Alaska; Kodiak has wind and hydro; Anchorage receives
approximately 10 percent. He spoke to the challenges of wind
power in rural Alaska and the use of biomass in the Interior.
He explained that AEA has funded the largest wind farm and solar
panel farm in Alaska. Mr. Thayer noted that if the Susitna-
Wattana project was built, it would take Alaska from 49 percent
renewable energy to over 60 percent.
10:10:31 AM
REPRESENTATIVE FIELDS asked about the modeling of costs for the
Susitna-Wattana project versus other projects in the Railbelt to
expand pump storage options for hydropower.
10:11:19 AM
MR. THAYER explained that AEA is looking at all projects, with
consideration of the potential to expand the Bradley Lake
project. He explained that AEA has done a cursory look at
Eklutna, but the multiple ownership poses additional challenges.
He further explained that the Susitna-Wattana would be six to
ten times the size of any current project but would come at a
high cost.
10:14:05 AM
MR. THAYER proceeded with slide 9, "Urban Energy." He explained
that the slide addresses Homer to Fairbanks. He noted that
Bradley Lake is the largest hydro project in Alaska and is owned
by AEA. He moved to slide 11 showing the Bradley Lake project
at capacity. He noted that Bradley Lake provides 10 percent of
the Railbelt's power. He pointed out that 500 thousand people
depend on the power from Bradley Lake. He compared the price of
natural gas to hydro and explained that hydro tends to be
cheaper. He moved to slide 13 showing a recent purchase made by
AEA, and he explained that the line was destroyed by a fire and
has been the subject of numerous lawsuits. He said AEA
negotiated for almost a year over the upgrade. He explained
that Bradley Lake is a one-hundred-megawatt plant; the lines
that support it are 75 megawatt and predate Bradley Lake. He
explained that the most recent purchase is a necessary step
towards upgrading the plant. He moved to slide 14 showing the
length of the new line. He noted that past state investments
into infrastructure on the Railbelt were through an endowment to
PCE.
10:21:15 AM
REPRESENTATIVE ZULKOSKY asked Mr. Thayer to expound on PCE.
MR. THAYER responded that the State investment in the intertie
saves the people of Fairbanks around $40 million in cost savings
compared to power generation in Fairbanks. He compared this to
the endowment fund that the state uses in rural Alaska, which is
a nearly $30 million subsidy for around 82 thousand people.
REPRESENTATIVE ZULKOSKY said she thinks that underscores the
importance of the PCE.
10:22:58 AM
REPRESENTATIVE TUCK asked what the purchase price of the
intertie was and who sold it to the state.
MR. THAYER explained that the intertie was built by AEA, and he
did not have the cost at hand.
10:23:20 AM
KIRK WARREN, Director, Engineering and Energy Development,
Alaska Energy Authority, explained to Representative Tuck that
the intertie cost $125 million.
10:23:47 AM
MR. THAYER proceeded to slide 17 looking at maximizing clean
energy for the Railbelt. He gave a breakdown of upgrade
projects that the state is working on.
10:25:17 AM
REPRESENTATIVE FIELDS asked whether AEA has analyzed the new
infrastructure package introduced by the Biden Administration.
MR. THAYER explained that AEA just finished its analysis of the
COVID-19 relief from December, and he said there are
opportunities, but it is too early to define them.
10:26:50 AM
MR. THAYER proceeded to slide 18 that illustrates a possible use
of the funding from "the Volkswagen settlement." He explained
that AEA is looking at creating an Electric Vehicle charging
corridor, the first phase of which will run from the Kenai
Peninsula to Fairbanks. He explained the second phase would
expand into Glenallen, along the Parks Highway, and Southeast
Alaska. He emphasized that it is federally funded.
10:27:59 AM
REPRESENTATIVE TUCK asked how much the State of Alaska received
from the Volkswagen settlement, and how much is left for the
electric vehicle (EV) fast-charging corridor.
MR. THAYER explained that the money was primarily used to pay
for new school busses to reduce emissions. He relayed that AEA
also provided funding for an electric bus in Juneau, an electric
truck in Anchorage, and the rest to the fast-charging corridor.
10:29:51 AM
REPRESENTATIVE KAUFMAN asked what the state-of-the-art fast-
charging time is.
MR. THAYER answered about a half hour to fully charged.
10:30:30 AM
MR. WARREN responded to Representative Kaufmans question and
mentioned "ultra-fast charging stations" that are being
developed in the Lower 48 that require power flow larger than
anything currently available on the Railbelt.
REPRESENTATIVE KAUFMAN asked about the backwards compatibility
of charging stations.
MR. THAYER explained that what AEA has laid out is the most
popular configuration currently, but that charging technology is
likely to change in the future. He explained that an additional
challenge is that only two companies make chargers that work at
40 below.
10:32:16 AM
REPRESENTATIVE TUCK asked about the payment for the charging
stations.
MR. THAYER explained that the charging stations will be card
operated by private businesses. He stated that the cost of a
charge will be less than a tank of gas.
10:34:43 AM
MR. THAYER proceeded with his presentation on slide 20, "Power
Cost Equalization." He explained that PCEs help provide power
to rural Alaskans by paying the difference between rural and
urban power cost. He noted that PCE does not cover government
buildings. He explained that in the Fiscal Year 2020 (FY 20),
the program disbursed close to $30 million. He said AEA
anticipates a similar amount in FY 21. Mr. Thayer explained
that the PCE endowment is capitalized at $1.1 billion. He
explained that the earnings of the endowment go into paying for
the program. If there are up to $30 million in additional
earnings, then that money is used for community assistance; if
the earnings will support it, $30 million go into the renewable
energy fund.
10:36:46 AM
REPRESENTATIVE ZULKOSKY asked if renewable energy funds are
spent on projects statewide.
MR. THAYER responded yes, but primarily in rural Alaska.
10:37:37 AM
MR. THAYER moved to slide 21, "Digital Twin (3D Model with
Information)," and explained the purpose of the model, which he
displayed for the committee. He stated that AEA had taken 3D
imaging in the rural powerhouses to understand how the
powerhouses are operating. The model shows what operators in
both Anchorage and rural Alaska can see. He reported that AEA
has completely modeled two-thirdsof the powerhouses in rural
Alaska.
10:39:25 AM
REPRESENTATIVE FIELDS asked if remote assistance is going to be
used instead of a standard in-person check, or will it be used
for more urgent problems.
MR. THAYER answered that remote modeling will probably be used
for a little bit of both.
10:40:34 AM
MR. THAYER proceeded to slide 22, "Rural Power System Upgrades,"
which shows there are 197 communities that receive the upgrades
with the goal of improving the efficiency of the power system.
He pointed to a picture in the slide of a new powerhouse. He
pointed to another picture of a powerhouse within a community
with missing and broken generators and noted that since the
picture was taken, AEA has replaced the generators. He advised
that AEA is currently working on seven projects, and the
deferred maintenance of rural Alaska powerhouses is around $300
million.
10:41:45 AM
REPRESENTATIVE FIELDS asked if the governor's proposed capital
budget addresses any of the deferred maintenance needs; he
requested a list breaking down the maintenance projects.
MR. THAYER responded that slide 23 provides a list of the
projects. He explained that the governor is requesting $5
million in 2022 and that the federal government is expected to
provide a $4.5 million match. He explained the list is in order
of a capital request and that the priorities are based on need.
REPRESENTATIVE FIELDS asked whether there would be additional
federal dollars available if the legislature added money to the
budget.
MR. THAYER replied that those are conversations AEA would have
to have with the federal partners. He pointed out that the
state has lost $47 million in federal match monies over the last
five years, and he stated his belief that the federal match
could be increased.
10:44:48 AM
REPRESENTATIVE KAUFMAN asked what caused the maintenance to be
deferred.
MR. THAYER answered that it was a combination of a lack of
funds, project management, and the life span of powerhouses. He
spoke about the challenges of maintaining powerhouses in small
rural communities.
10:47:07 AM
REPRESENTATIVE ZULKOSKY asked Mr. Thayer about the technical
assistance resources currently available for communities,
tribes, and nonprofits through AEA and how that has changed in
the last decade.
MR. THAYER replied that AEA has spent a "great deal of time"
increasing the robustness of its training projects. He said
this has greatly increased online training and the
implementation of 3D modeling.
10:49:05 AM
MR. THAYER moved to slide 24 illustrating rural fuel storage
facilities. He explained that AEA has 8 replacement projects
and 18 maintenance projects. He said AEA is working with the
U.S. Coast Guard on the projects. He moved to slide 25, showing
a request for $5.5 million in the governor's budget. He noted
that the state has not funded the program for five years. Mr.
Thayer outlined the grants and loans in the renewable energy
fund and the projects funded through it. He explained that AEA
is asking the legislature for a reappropriation of $4.7 million
to fund 11 projects. He talked about the "power project fund
(PPF), on slide 28, that has $31 million in outstanding loans.
He explained that the PPF has funded the largest solar and wind
projects in the state and currently has $8.7 million available
for lending. He said the current interest rate, set by statute,
is 2.83 percent.
10:53:47 AM
MR. THAYER moved to slide 31, "Susitna-Wattana Hydroelectric
Project, with an overview of the proposed project.
10:55:34 AM
REPRESENTATIVE ZULKOSKY asked if AEA has looked at developing
funding models for funding infrastructure projects throughout
Alaska.
MR. THAYER responded that that is the purpose behind the PPF.
He said he did not have the names of the three pending
applications but said he believes AEA provides a lot of capital
through the PPF
REPRESENTATIVE ZULKOSKY said she would follow up with Mr. Thayer
outside of the meeting to ensure that the PPF is as flexible as
it can be.
MR. THAYER pointed out that AEA has a request to the legislature
for $21 million for federal seed authority.
10:58:40 AM
REPRESENTATIVE KAUFMAN said he will be looking forward to
learning more about AEA.
MR. THAYER invited anyone from the committee to make an
appointment to come speak to AEA in the Office of Management &
Budget.
10:59:57 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:00 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2021.04.02 AEA Overview Presentation for House Energy Committee (Final).pdf |
HENE 4/8/2021 10:00:00 AM |