Legislature(2023 - 2024)BARNES 124
03/21/2023 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Alaska Energy Authority | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
March 21, 2023
10:16 a.m.
MEMBERS PRESENT
Representative George Rauscher, Chair
Representative Tom McKay
Representative Stanley Wright
Representative Mike Prax
Representative Calvin Schrage
Representative Ashley Carrick
MEMBERS ABSENT
Representative Josiah Patkotak
COMMITTEE CALENDAR
PRESENTATION(S): ALASKA ENERGY AUTHORITY
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CURTIS THAYER, Executive Director
Alaska Energy Authority
Juneau, Alaska
POSITION STATEMENT: Gave a PowerPoint presentation, titled "AEA
Overview Presentation."
ACTION NARRATIVE
10:16:52 AM
CHAIR GEORGE RAUSCHER called the House Special Committee on
Energy meeting to order at [10:16 a.m.] Representatives
Carrick, Wright, Prax, McKay, and Rauscher were present at the
call to order. Representative Schrage arrived as the meeting
was in progress.
^PRESENTATION(S): ALASKA ENERGY AUTHORITY
PRESENTATION(S): ALASKA ENERGY AUTHORITY
10:18:25 AM
CHAIR RAUSCHER announced that the only order of business would
be a presentation by the Alaska Energy Authority.
10:18:44 AM
CURTIS THAYER, Executive Director, Alaska Energy Authority
(AEA), offered a PowerPoint, titled "AEA Overview Presentation"
[hard copy included in the committee packet]. He began on slide
2 and slide 3, stating that the Alaska State Legislature created
AEA in 1976, with the mission of reducing energy costs in
Alaska. He said AEA administers the power cost equalization
(PCE) program, provides grants and loans, works on energy
planning, and works with the Railbelt and rural utilities on
their energy generation facilities. He moved to slide 4 and
showed a map of active projects overseen by AEA, which spans
across all different forms of energy generation.
10:20:41 AM
The committee took an at-ease from 10:20 a.m. to 10:22 a.m.
10:22:42 AM
MR. THAYER, in response to a committee question, answered that
the map covers over 500 projects, including renewable energy
generation projects and projects in PCE communities.
MR. THAYER moved to slide 5 through slide 7 and gave an overview
of the Bradley Lake Hydroelectric Project. He stated that
Bradley Lake provides approximately 10 percent of the energy
used by the Railbelt utilities and is the largest source of
renewable energy in the state. Energy generated by Bradley Lake
costs 4 cents per kilowatt hour (kWh). He showed a chart with
the percentage of power received by each of the Railbelt
utilities from Bradley Lake.
MR. THAYER, in response to a committee question, answered that
the percentages were determined during the original discussion
of the project and reflect the percentages of the bonds paid by
each utility. In response to a follow-up question, he expressed
the agreement that the percentages of power received could be
perceived as a "purchase."
10:26:54 AM
MR. THAYER continued to slide 8 through slide 10 and gave an
overview of the upgrades to transmission lines. He said that
AEA and the Railbelt utilities have raised $166 million in
financing to build transmission lines from Bradley Lake to
improve its efficiency and the amount of power it can deliver.
He added that there would be no additional costs to ratepayers
or the state. He showed a map displaying transmission lines and
coverage areas of the Railbelt utilities. He said that the
Alaska intertie from Willow to Healy is owned by AEA, and it
allows Golden Valley Electric Association to benefit from lower
power costs, saving its ratepayers an average of $37 million
annually.
10:30:07 AM
MR. THAYER, in response to a committee question, answered that
upgrades to transmission lines would not have additional costs
to the state or ratepayers because additional payments made for
the bonds are eligible to go towards the Bradley Lake project.
In response to a follow-up question, he said that the excess
bond funds were redirected to the Bradley Lake project.
MR. THAYER, in response to a committee question, answered that
additional payments would be necessary when the bonds have
already been paid because it was a provision in the original
conception of the project.
10:35:44 AM
MR. THAYER continued to slide 11 and slide 12 and reiterated
that AEA administers the PCE program. He said the program
covers 193 communities, 91 utilities, and 82,000 Alaskans. He
said that residential users are eligible to receive PCE credits
up to 750 kWhs per month. Public facilities can receive PCE
credit up to 70 kWhs per month, multiplied by the number of
residents in the community.
MR. THAYER, in response to a committee question, stated that
approximately $1 billion is in the PCE endowment fund. He added
that the fund is overseen by the Department of Revenue.
MR. THAYER, in response to a committee question concerning how
the fund is structured, answered that a court case the previous
year resulted in a ruling stating that the fund is not
sweepable. He added that this is because of an accounting
issue. In response to a follow-up question, he said that
depending on the amount of funds generated by investment, a
certain amount of these funds could be allocated to certain
other appropriations. He added that such a scenario is
uncommon.
10:42:02 AM
MR. THAYER continued with slide 13 and gave an overview of PCE
eligibility. He stated that residential and community customers
are eligible, while state and federal facilities are not
eligible for PCE funds. Additionally, communities with rates
lower than the urban average are not eligible. In response to a
committee question, he stated that state or federal facilities
in rural communities would not benefit from PCE.
10:45:35 AM
The committee took an at-ease from 10:45 a.m. to 10:46 a.m.
10:46:31 AM
MR. THAYER, in response to a committee question, answered that
rural utilities benefit from PCE regardless of whether an
individual is a direct customer.
MR. THAYER continued to slide 14 and stated that AEA has been
involved in system upgrades for rural communities. He said that
197 communities are eligible for the program, and its goal is to
improve safety, efficiency, and reliability of energy systems in
rural communities. In response to a committee question, he
answered that AEA is 10 years behind on deferred maintenance.
In response to a follow-up question, he said that AEA tries to
prevent replacement from becoming necessary.
MR. THAYER, in response to a committee question, answered that
to extend the lifespan of systems, AEA sends out technicians to
do as much maintenance as possible. He added that a recent
survey was done for all equipment maintained by AEA. In
response to a committee question in regard to whether the state
capital match is separate from the PCE fund, he answered that
because of the excess of funds generated, the PCE fund has only
been used twice for systems upgrades.
10:53:19 AM
MR. THAYER moved to slides 15 through 19 and gave a brief
overview of bulk fuel upgrades and the power project fund (PFF)
loan program, which provides loans to build renewable energy
projects. He said that AEA has done work on 400 bulk fuel
upgrades in rural areas of Alaska. The deferred maintenance of
these facilities is $800 million. He said that AEA has $27.2
million in outstanding loans and $6.7 million available for new
loans. The current interest rate is 4.86 percent. He mentioned
the Hiilangaay and South Fork hydroelectric projects as examples
of successful projects brought about because of the availability
of these loans.
MR. THAYER, in response to a committee question, answered that
the South Fork hydroelectric project can provide power to other
homes because the owners sell the power generated to Matanuska
Electric Association (MEA).
MR. THAYER, in response to a committee question, answered that
Hydaburg is a PCE eligible community. In response to a follow-
up question, he said that King Cove has not applied for PCE. He
added that the state invested money into the community's
hydroelectric project to help it become energy self-sufficient,
which makes up for the PCE funds that the community is not
receiving.
11:00:20 AM
MR. THAYER continued to slide 20 through slide 24 and presented
more examples of projects that have benefited from the loan
program and the renewable energy fund (REF) grant program. He
said that the Willow Solar Farm expansion project provides 1.2
megawatt hours of energy and offsets 2 million pounds of carbon
dioxide annually. He said AEA has awarded 271 grants, totaling
$300 million for building renewable energy projects, and it has
31 new applicants requesting a total of $33 million. As
examples of projects receiving these grants, he mentioned the
Banner Peak Wind Farm expansion, the Whitman Lake Hydroelectric
Project, and the expansion of the Terror Lake Hydroelectric
Project.
MR. THAYER continued to slide 25 through slide 28 and gave an
overview of some federal funding made available by the
Infrastructure Investment and Jobs Act (IIJA). He said that $60
million would be made available to Alaska over five years to
increase grid resiliency. The grants from the federal
government would require a 15 percent match from the state and a
33 percent small utility match. He stated that a plan to
increase electric vehicle infrastructure was approved, which
will unlock $19 million for electric vehicle charging
infrastructure; AEA expects that Alaska may receive $52 million
over the course of the next five years. The charging stations
will be required to be built no more than 50 miles apart, with
the exception of Glitter Gulch.
MR. THAYER, in response to a committee question, answered that
"alternative fuel corridor (AFC)" is a term referring to the
possibility of building charging stations in these corridors.
In response to a follow-up question, he stated that AEA has not
received any requests other than from Anchorage to Fairbanks.
MR. THAYER, in response to a committee question, answered that
more federal funding could be received after work along the AFCs
is completed. In response to a follow-up question, he said that
Glitter Gulch is not operational during the winter, and the rest
of the plan, including this exception, was approved. In
response to a committee question concerning the estimated time
of completion, he answered working out logistics is a long
process, and in some respects AEA is still waiting on the
federal government.
11:10:06 AM
MR. THAYER continued to slide 29 and slide 30 and gave an
overview of opportunities offered by IIJA. He stated that
energy infrastructure projects in the state would receive a
total of $145 million. He showed a chart breaking down the
amount into purposes. He added that the only state match
required is $1.8 million for grid resiliency.
MR. THAYER moved to slide 31 and gave an overview of staffing
needs for AEA. He said that two project managers, a contracting
officer, a senior accountant, and a grant coordinator are needed
for administration of the projects being built with federal
dollars. An additional PCE technician is also needed, along
with some PCE salary adjustments.
MR. THAYER, in response to a committee question, answered that
AEA has only three vacancies, not including any new positions
that may be added. He noted that there are times when AEA is
unable to compete with the much higher salaries from the private
sector. In response to a follow-up question, he said that AEA
does have more ability than most state agencies to increase
salaries.
MR. THAYER, in response to a committee question concerning
tracking its divisions, answered that AEA is focused on
resiliency, redundancy, and reliability. He said that there are
no redundancies on the Railbelt, which could potentially cause
price issues in the future. He expressed uncertainty concerning
whether there is a way to determine the benefits of investing in
energy compared to state investment in other areas. He
maintained that energy is a statewide issue that needs
investment and work.
11:26:55 AM
MR. THAYER, in response to a committee question, stated that
AEA's circuit rider program is a group of technicians who travel
around rural Alaska providing training and assistance. In
response to a follow-up question, he stated that the program
mostly relies on federal funding. In response to another
follow-up question, he stated that there is still a backlog for
the program, which has resulted from the COVID-19 pandemic. He
stated that further discussion with his team would provide a
better answer to this.
11:33:30 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:33 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AEA Overview Presentation to House Energy Committee.pdf |
HENE 3/21/2023 10:15:00 AM |
AEA |