Legislature(2023 - 2024)BARNES 124
02/14/2023 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s) Regional Railbelt Coordination | |
| 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
February 14, 2023
10:16 a.m.
MEMBERS PRESENT
Representative George Rauscher, Chair
Representative Tom McKay
Representative Mike Prax
Representative Calvin Schrage
Representative Ashley Carrick
MEMBERS ABSENT
Representative Josiah Patkotak
Representative Stanley Wright
COMMITTEE CALENDAR
PRESENTATION(S) REGIONAL RAILBELT COORDINATION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CURTIS THAYER, Executive Director
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Made opening comments on the PowerPoint
presentation, titled "Modernizing the Railbelt Grid."
BRIAN HICKEY, Executive Director
Regional Railbelt Coordination
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint presentation, titled
"Modernizing the Railbelt Grid."
ACTION NARRATIVE
10:16:46 AM
CHAIR GEORGE RAUSCHER called the House Special Committee on
Energy meeting to order at 10:16 a.m. Representatives Carrick,
Schrage, Prax, McKay, and Rauscher were present at the call to
order.
^PRESENTATION(S) REGIONAL RAILBELT COORDINATION
PRESENTATION(S) REGIONAL RAILBELT COORDINATION
10:17:48 AM
CHAIR RAUSCHER announced that the only order of business would
be a presentation on regional Railbelt coordination.
10:18:58 AM
CURTIS THAYER, Executive Director, Alaska Energy Authority
(AEA), stated that there is currently "historic" alignment
between the Railbelt utilities and AEA. He stated that
upgrading the transmission lines on the Railbelt is a necessary
step in moving towards a higher usage of renewable energy
sources. He said that $166 million has already been contributed
by the utilities towards upgrading transmission. He said that a
decrease in price per kilowatt (kW) on the Railbelt would also
benefit rural Alaska due to the power cost equalization (PCE)
program.
10:22:33 AM
BRIAN HICKEY, Executive Director, Regional Railbelt
Coordination, Alaska Energy Authority, gave a PowerPoint
presentation, titled "Modernizing the Railbelt Grid" [hardcopy
included in the committee packet]. On slide 3, he pointed out
that as part of the Grid Modernization and Resiliency Plan
(GMRP), there is the consideration of connecting the Copper
Valley Electric Association with the Railbelt. He stated that
75 percent of Alaska's population lives on the Railbelt, which
generates 80 percent of Alaska's electricity. He stated that
the Railbelt only has three single transmission lines, which
results in the transfer of just 10 percent of the peak load. He
said that any time one of these transmission lines is out of
service, the area served is cut off from the rest of the
Railbelt. In response to a committee question concerning
lowering energy costs on the Railbelt in relation to energy
funding for communities in rural Alaska, he stated that this
would be addressed later in the presentation.
10:28:35 AM
MR. HICKEY continued to slide 4 and stated that Railbelt
utilities are aligned on the challenges facing the Railbelt. He
continued to slide 5 and stated that the utilities, AEA, and the
Regulatory Commission of Alaska have created a vision that seeks
a "collaborative future." Continuing to slide 6, he stated that
the utilities and regulators have created a 12-to-15-year plan
that will upgrade transmission along the Railbelt, costing
approximately $2.9 billion. He said that all the proposed
transmission lines would undergo the National Environmental
Policy Act (NEPA) process. He said that Phase 1 of the plan
would build transmission from Bradley Lake to Lake Lorraine,
including both a rebuild of the current system and a second
transmission line. He stated that rebuilding the current
transmission lines and building a new system of transmission
lines would be necessary for utilizing new and renewable sources
of energy generation.
10:33:03 AM
MR. HICKEY stated that he has related to the U.S. Department of
Energy (DoE) the opinion that Alaska's electrical grid would be
a good place to test decarbonization of a grid because of the
smaller size and subsequent cost.
MR. HICKEY continued to slide 7 and slide 8, expressing the
opinion that the transmission project is important because
Alaska currently lacks reliability in its transmission lines.
He explained that the amount of natural gas available is
decreasing and the Railbelt needs to look at other sources of
energy generation, which requires improvements in transmission.
He advised that the improvements in transmission and energy
storage will increase efficiency and lower energy costs. He
said the PCE program is tied to the cost of energy on the
Railbelt, and that lowering costs on the Railbelt allows for
more money to be contributed toward PCE.
10:34:54 AM
REPRESENTATIVE PRAX asked if the transmission project plan took
the possibility of a natural gas pipeline from the North Slope
into account.
MR. HICKEY answered that transmission upgrades are necessary
regardless of the source of energy. In response to a follow-up
question, he stated that the location and cost of the
transmission was being considered.
REPRESENTATIVE PRAX expressed his concern that decarbonization
would be shifting the dependence on hydrocarbons for dependence
on the minerals needed for renewable energy storage.
10:37:48 AM
CHAIR RAUSCHER asked about the possibility of buying 10 micro-
nuclear reactors as opposed to more transmission lines. He
opined whether this would have a greater impact on reducing
rates. He acknowledged that this plan is very unlikely.
MR. HICKEY answered that for the economy of scale to support
such an action, it would require the participation of all
Railbelt utilities. He added that enacting such a plan would
still require the transmission lines to be upgraded because the
utilities would need to be connected when the reactors were down
for maintenance.
10:40:21 AM
MR. HICKEY continued with slide 8, noting that the Railbelt
serves critical infrastructure, including: the Ted Stevens
Anchorage International Airport, which is the fourth busiest
cargo airport in the world; five military bases; mines for rare
Earth minerals; and a federally designated strategic seaport.
MR. HICKEY moved to slide 9 and gave the background for the
current transmission line proposals. He said that Governor Mike
Dunleavy "challenged" the Railbelt utilities and AEA to create a
plan to serve the future of the Railbelt. He noted that with
the passage of the federal Bipartisan Infrastructure Law, there
is increased opportunity for federal funding to aid in building
new transmission. He said that GMRP was developed to improve
the economy of scale and give the Railbelt opportunities for
energy source diversification. He suggested that an additional
effect would be a reduction in electrical rates.
10:42:52 AM
MR. HICKEY continued to slide 10, displaying a map showing
Railbelt transmission and battery energy storage systems along
the Railbelt. He showed the placement of existing lines
compared to the lines being proposed. He pointed out the new
line going from Soldotna to Healy and the line tying the Copper
Valley electric system to the Railbelt. He mentioned the
possibility of another potential hydroelectric project roughly
the size of Bradley Lake called the Tiekel River Project. In
response to a committee question, he stated that there would be
new transmission lines going through Anchorage.
MR. HICKEY continued that there is a new energy storage battery
in Soldotna, with plans to add one in Anchorage and Fairbanks.
On slide 11, he gave the three opportunities for federal
funding: grid resilience, smart grid, and grid innovation. He
noted that a third application was put in by the state, as the
eligible entity. He stated that the first two applications were
put in by the Matanuska Electric Association (MEA). He moved to
slide 12 and pointed out that the state must be involved in the
plan, as without funding from the state there would be
significant rate increases. He advised that receiving federal
funding would require the same amount of investment from the
state.
MR. HICKEY stated that the federal government has moved forward
with AEA's applications on grid resiliency and the smart grid,
as seen on slide 13. He explained that out of 144 applications
moving forward on the first topic, 10 grants will be awarded,
and out of 157 applications on the second topic, 25 to 40 grants
will be awarded. He said that the state is still waiting to
hear back on the third topic, grid innovation. On slide 14, he
said that the applications for federal funding are part of the
first funding cycle in the Bipartisan Infrastructure Bill.
10:51:29 AM
REPRESENTATIVE PRAX asked if it was "worth the risk" to complete
parts of the project individually without knowing if the state
would receive federal grants for the other applications.
MR. HICKEY answered that in accepting this as the state's plan,
the answer would be yes. He opined that the project needs to be
completed "either way."
REPRESENTATIVE PRAX commented that the effects of not receiving
federal funding could be increased taxes and less state money to
fund other areas. He warned that there could be consequences
for completing only part of the project.
MR. HICKEY responded that each part of the project has its own
benefit. Upgrades to the Sterling to Quartz Creek line would
reduce losses of energy produced by Bradley Lake by 3 or 4
percent. In response to a follow up question, he said that the
math on the projects is part of the NEPA process.
10:54:38 AM
REPRESENTATIVE SCHRAGE asked how the planned funding of the
project would be affected by the proposed spending caps.
MR. HICKEY expressed uncertainty.
10:56:19 AM
REPRESENTATIVE CARRICK asked if there was a priority list for
the project in the event that the legislature decided to fund
only part of it.
MR. HICKEY answered that part of the application process is
listing the priorities within the project, and the work on this
is currently ongoing. In response to a follow-up question, he
said that Phase 1 of the project would require $1.26 billion of
state funding, which would fund the transmission line upgrades
up to the central region of the Railbelt.
MR. HICKEY continued to slide 15 and said that the plan would
create benefits for rural communities, and these benefit plans
are part of the application process.
11:00:51 AM
CHAIR RAUSCHER asked where the data for rural communities
originates.
MR. HICKEY responded that the Regional Railbelt Coordination
group is currently collecting this data and it has some data
available from the previous census.
11:01:39 AM
MR. HICKEY skipped to slide 17 and reviewed the timeline for the
grant selection process and when the proposals were submitted.
He reiterated that the Regional Railbelt Coordination group has
been invited to apply for the first two proposals and is waiting
to hear back on the third. He stated that the amount of money
for the grants would be approximately $50 million to $70 million
for the first proposal, $15 million for the second proposal, and
$300 million for the third proposal. There would not be any
financial commitments immediately; however, what was said in the
application would bind the financial commitments.
11:04:43 AM
REPRESENTATIVE SCHRAGE asked if it would be possible to subject
the amount of money allocated during the reward negotiation
process to oil revenues.
MR. HICKEY answered that the primary focus is to secure funding,
if possible. He expressed the belief that the federal
government would want something more specific when it comes to
the numbers involved.
11:06:41 AM
REPRESENTATIVE CARRICK asked about the increased energy storage
needs if more renewable energy is used in the future.
MR. HICKEY answered that there is more than one way to store
energy, such as batteries and pond storage at hydroelectric
plants. He stated that grid stabilization is the current
priority, as energy used from storage would be quickly used.
11:10:04 AM
REPRESENTATIVE SCHRAGE voiced his concern that the speed of the
process could make the Railbelt Reliability Council (RRC) less
effective, and he asked what impact it could have on public
input.
MR. HICKEY answered that the RRC should be placed in charge of
the plan when it is finished being set up, but it will take some
time to reach this point. He added that there will be much more
time for public input when the NEPA process begins.
11:15:23 AM
CHAIR RAUSCHER asked when Alaska would receive the funding if
the state's application were accepted.
MR. HICKEY stated that award negotiations would occur in the
fall and winter of 2023, and the following NEPA process would
take between three and five years.
11:17:47 AM
MR. THAYER reiterated that the Railbelt is in historic alignment
with the need to upgrade the transmission system.
11:18:57 AM
The committee took a brief at-ease.
11:19:54 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:20 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Modernizing the Railbelt Grid-House Energy Committee 2-14-23.pdf |
HENE 2/14/2023 10:15:00 AM |