Legislature(2025 - 2026)GRUENBERG 120
01/30/2025 01:00 PM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Alaska Power Association Transmission and Generation | |
| 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
January 30, 2025
1:03 p.m.
MEMBERS PRESENT
Representative Ky Holland, Co-Chair
Representative Donna Mears, Co-Chair
Representative Bryce Edgmon
Representative Chuck Kopp
Representative Cathy Tilton
Representative George Rauscher (via Teams)
Representative Mia Costello
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION(S): Alaska Power Association Transmission and
Generation
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MICHAEL ROVITO, Deputy Director
Alaska Power Association
Anchorage, Alaska
POSITION STATEMENT: Co-offered the Alaska Power Association
Transmission and Generation presentation.
EDWARD JENKIN, CEO
Railbelt Reliability Council
Palmer, Alaska
POSITION STATEMENT: Co-offered the Alaska Power Association
Transmission and Generation presentation.
LOU FLORENCE, Chairman
Railbelt Reliability Council Board
Fairbanks, Alaska
POSITION STATEMENT: Answered questions regarding the Railbelt
Reliability Council during the Alaska Power Association
Transmission and Generation presentation.
ACTION NARRATIVE
1:03:15 PM
CO-CHAIR DONNA MEARS called the House Special Committee on
Energy meeting to order at 1:03 p.m. Representatives Edgmon,
Kopp, Tilton, Costello, Rauscher (via Teams), Holland, and Mears
were present at the call to order. Representative Edgmon
arrived as the meeting was in progress.
^ PRESENTATION(S): Alaska Power Association Transmission and
Generation
PRESENTATION(S): Alaska Power Association Transmission and
Generation
1:05:13 PM
CO-CHAIR MEARS announced that the first order of business would
be a PowerPoint regarding the Alaska Power Association as part
of Transmission and Generation presentation.
1:03:37 PM
MICHAEL ROVITO, Deputy Director, Alaska Power Association,
presented a PowerPoint regarding the Alaska Power Association's
focus on transmission and generation, titled "Alaska's Electric
Utilities: Powering the Last Frontier" [hard copy included in
the committee file]. He showed slide 2, which explained the
mission statement of the Alaska Power Association (APA) as being
"dedicated to assisting our members in accomplishing their goals
of delivering electric energy and other services at the best
value to their customers." He briefly summarized the history of
the APA and explained that it not only delivered electrical
energy but also provided services such as communications and
technical assistance. He moved to slide 3, which listed the
APA's electric utility members, pointing out the range of
utility companies in APA's membership, including what he
believed was the smallest electric co-op in the United States,
INN Electric Cooperative serving Iliamna, Newhalen, and
Nondalton.
MR. ROVITO then showed slide 4, titled "Alaska's Electric
Utilities: Powered by Alaskans," which read as follows [original
punctuation provided]:
• Alaska's electric utilities serve the people. Their
mission is crucial to the economy and life in general.
• Utility leadership lives in the communities and has
a vested interest in seeing their communities succeed.
• Every utility in APA's membership is working hard to
diversify its generation and increase their
sustainability.
• Electric utilities have a responsibility to
carefully manage the power grid, and they make
decisions deliberately with safety, reliability, and
costs in mind
MR. ROVITO showed slide 5 which summarized the five types of
utility structures in Alaska. These included cooperative non-
profit member-owned; non-profit municipal electric utilities
owned by local governments; investor-owned for-profit utilities;
tribal-owned electric utilities; and joint action agencies. He
explained that despite their differences, the goal they all have
in common is to provide safe, reliable, affordable electric
power in Alaska.
1:13:38 PM
MR. ROVITO pointed out that Alaska is unique among the states in
the number of Alaskans receiving their power from a not-for-
profit compared to the Lower 48. As a result, most Alaska
utility companies have a different structure because they take
factors into consideration other than simply making a profit.
He showed slide 6, titled "By the Numbers," which read as
follows [original punctuation provided]:
More than 90 percent of Alaskans receive their power
from a not-for-profit cooperative, municipal utility,
or a tribally-owned utility.
Compared to the lower 48 with only 28 percent of power
produced through cooperative, municipal, or tribal
utility (72 percent from IOUs) *EIA Data
MR. ROVITO described the unique power systems in Alaska,
comparing them to rural utilities in the Lower 48 which are
accessible by road, and which are interconnected to a larger
regional grid. He pointed out that most of Alaska does not have
that aspect. He showed slide 7, titled "Alaska's Unique
Electric Systems," which read as follows [original punctuation
provided]:
Alaska has a unique electric grid system due to its
vast and sparsely populated geography. There are more
than 150 islanded, stand-alone electrical grids
serving rural villages.
The largest transmission grids are in Southeast Alaska
and the Railbelt. Although these serve a vast majority
of Alaskans, they are significantly smaller than grids
in the rest of the country and are all islanded.
Due to the state's electric reality, utilities are
pioneers in microgrid operation and technological
innovation. From batteries to renewables to time-
tested operational expertise in harsh unforgiving
conditions.
1:17:51 PM
MR. ROVITO showed slide 8 [mis-labeled 7], "Generation Sources
Across Alaska," which listed Alaska's sources for generating
electricity and read as follows [original punctuation provided]:
Natural Gas 47%
Hydropower 26%
Petroleum (diesel,naptha) 13%
Solar >1%
Wind 2%
Coal 11%
1:19:18 PM
MR. ROVITO agreed with Representative Edgman's observation that
these numbers will be fascinating in 10 years because of
continuing advances in technology. In response to
Representative Edgmon's questions concerning the frozen funding
for clean energy grants and the Grid Resilience and Innovation
Partnerships (GRIP) matching funds, Mr. Rovito explained that
APA is tracking and working with the National Rural Electric
Cooperative Association as well as Senator Murkowski's office.
He described the adverse effects of the funding issues resulting
from the President's executive orders to pause funding on
renewable energy projects.
1:22:16 PM
MR. ROVITO moved to slide 9, titled "Potential Future Generation
Sources," which included micronuclear, tidal, other
hydrokinetic, geothermal, biomass, and "something we haven't
heard of yet." He briefly discussed each of these energy
sources and their potential in Alaska.
1:24:16 PM
MR. ROVITO addressed a series of questions posed by
Representatives Costello, Holland, and Mears regarding
micronuclear power generation. He explained that the technology
is evolving, and the startup costs are still very high. He
described micronuclear as a potential game changer with vast
differences from older nuclear generators, commenting, "It's not
your grandfather's nuclear." A pilot project is being planned
for Eielson Air Force Base.
1:27:17 PM
MR. ROVITO explained that Alaska electrical utilities are
looking at different ways to move away from a single source of
fuel because there is increased energy security when a community
has diversified energy sources. This is especially true of
rural communities that have been entirely reliant on oil. He
showed slide 10, titled "Alaska's Electric Utilities Continue to
Diversify," which read as follows [original punctuation
provided]:
• Diversification of electric systems has been
underway for some time.
• Rural and Railbelt utilities are integrating solar,
wind, batteries and looking at other clean energy
sources in ways that are technically and economically
feasible.
• Diversification can lead to increased energy
security.
• Diversification Projects consist of both utility-
built and electricity purchased from independent power
producers (IPPs).
• Focus on reliability, economic, and technical
feasibility.
• Important to note renewable energy is not always a
cheaper alternative.
1:29:59 PM
MR. ROVITO responded to questions from Co-Chair Holland and
Representative Costello regarding clean coal and
decarbonization. He stated that APA is "generation source
agnostic" and is in favor of whatever generation source is the
right one for the membership. He said he understands there have
been advances in clean coal, but he could not speak to the
technology. As to decarbonization, a number of the electric
cooperatives have adopted carbon reduction goals.
1:32:45 PM
MR. ROVITO responded to a question from Representative Kopp
concerning sources of power for the Railbelt utilities by
explaining that a number of fuel sources are being considered
and that no solutions should be taken off the table. The goal
is to keep power reliable and affordable.
1:34:49 PM
MR. ROVITO addressed the issue of power generation in rural
communities, agreeing with Co-Chair Mears' comments regarding
the fragility of systems reliant entirely on deliveries of
diesel to remote sites. He pointed out that as certain
technologies advance, they may well become part of the solution
for rural villages. He described the decision matrix that goes
into adding different sources of power. He showed slide 11,
titled "Considerations for Integrating Renewables," which read
as follows [original punctuation provided]:
• It's more complicated than just putting up wind and
solar.
• Electric utilities must consider:
• Grid stability and reliability Ensuring
intermittent resources don't upset the balance of
the grid.
• Infrastructure upgrades Enhancing
transmission lines and other grid management
systems.
• Energy Storage Manage variability and storage
of excess energy.
• Economic considerations Cost of integrating
renewables, backing up intermittent renewables
with base load power and the cost of new
infrastructure, etc.
• Baseload Power = the minimum level of continuous
power required to meet the constant demand for
electricity on the grid.
Alaska Powerline Podcast May 2, 2024, episode
Understanding the Challenges of Variable Energy
1:38:32 PM
MR. ROVITO responded to questions from Co-Chair Holland and
Representative Kopp regarding power integration and storage by
explaining that the APA utility organizations are looking
closely at these issues. He discussed research into seasonal
storage using batteries that would be advanced enough to store
energy from solar panels during the long summer months for use
during the dark months. He commented that some of the national
labs and technology companies are coming to Alaska because "if
it can work in Alaska, it can work anywhere." The National
Renewable Energy Laboratory (NREL) has an office in Fairbanks
because it wants to test the technologies.
1:44:36 PM
MR. ROVITO spoke of the importance of renewable energy for
Alaska and how the state can be an investment partner with
Alaska's electric utilities. He showed slide 12, titled
"Renewable Energy Fund (REF)," which read as follows [original
punctuation provided]:
• State grant program designed to reduce and stabilize
energy costs through the development of renewable
energy projects.
• APA supports full funding of the grant program in
the FY26 budget.
• 2023 Report findings (AEA):
• 60% of grants used to support the creation of a
new project.
• 90% of grants used for fuel displacement
purposes.
• 94% of grants have achieved this goal.
• Offset approx. 85 million gallons of diesel
fuel.
• REF grants lower impact on rates and can help
advance projects quicker.
MR. ROVITO discussed the importance of diversifying power
generation to meet the challenges of rural Alaska which has the
most remote communities in the United States. He showed slide
14, titled "Alaska's Rural Electric Utilities," which read as
follows [original punctuation provided]:
• Alaska's rural utilities are the most isolated in
the United States.
• This makes reliability even more crucial.
• For most rural communities, there is no neighbor to
draw power from in an emergency.
• Rural utilities often rely on diesel generators
due to their lack of connection to larger grids.
• Ongoing efforts to integrate renewable resources
like wind, solar, hydropower, and batteries to reduce
dependence on diesel.
MR. ROVITO moved to slide 15, titled "Rural Utilities Challenges
and Opportunities," which read as follows [original punctuation
provided]:
Challenges:
• High cost of fuel and transportation, especially in
remote areas.
• Harsh weather conditions and geographic isolation.
• Lack of interconnection.
• Small ratepayer base.
Opportunities:
• Dedicated and talented workforce putting solutions
into play.
• Federal and state investment in infrastructure.
• Technologies becoming more feasible in rural
communities.
• Preservation and continuation of Power Cost
Equalization Program.
• Seeing more collaboration with other entities now in
the energy space.
• More relationships with IPPs.
1:50:17 PM
MR. ROVITO emphasized the importance of the Power Cost
Equalization (PCE) program in rural Alaska. He moved to slide
15, titled "Power Cost Equalization," which read as follows
[original punctuation provided]:
"The Monetary Infrastructure for Rural Alaska"
• Economic Assistance - The PCE program provides
economic assistance to rural communities where the
cost of electricity can be three to five times higher
than in urban areas.
• Sustainability - By lowering electricity costs, the
program helps ensure the sustainability of remote
economies that depend on reliable, centralized power.
• Continued Support - The PCE program remains a
critical component of Alaska's energy strategy,
supporting rural communities and promoting economic
stability.
MR. ROVITO showed slides 17 and 18, titled "Railbelt Electric
Utilities," which read as follows [original punctuation
provided]:
• Four cooperatives and one municipal utility
• Golden Valley Electric Association, Matanuska
Electric Association (the oldest co-op), Chugach
Electric Association (the largest co-op/electric
utility), Homer Electric Association, City of Seward
• Incorporated as co-ops in the 1940s.
• The Railbelt serves about 75 percent of Alaska's
population.
• The grid is a mix of energy sources:
• Natural gas
• Hydropower Bradley Lake provides 10% of
Railbelt electricity
• Solar
• Wind
• Diesel
• Coal
• Working with Alaska Energy Authority to upgrade and
modernize the grid.
• This is crucial for maximum use of large-scale
energy projects.
• Working with IPPs to add diverse energy options.
• Constructing community solar projects to allow more
Alaskans to invest in solar energy.
• Railbelt energy costs impact PCE rate for rural
communities.
Above all keeping safety, reliability, and costs
paramount.
1:52:56 PM
MR. ROVITO referred to Representative Costello's previous
question about the Railbelt's transmission lines and the grid
upgrades, explaining that work is underway to modernize the
transmission grids. He showed slide 17, titled "The importance
of an unconstrained grid," which read as follows [original
punctuation provided]:
• Electric utilities across the country are working to
upgrade their transmission grids.
• Increased Capacity: Upgrading the grid allows for
the integration of more renewable energy sources,
which are often located far from where the power is
needed, and increases the ability to transfer
electricity from one area of the grid to another in a
reliable manner.
• Grid Flexibility: Modernized grids can better handle
the variability and intermittency of renewable energy,
ensuring a stable supply.
• Continuous Power Supply: Redundancy ensures that
there are multiple pathways for electricity to flow,
so if one path fails, others can take over, reducing
the risk of outages.
• Resource Efficiency: Allows for a more effective use
of resources to reduce costs and use of limited and
often expensive fossil fuels.
• Investment in upgrading the transmission
infrastructure of the Railbelt will lead to more
opportunities for diversification and energy security
1:56:44 PM
MR. ROVITO, in response to a question by Representative Edgmon,
clarified that "grid" refers to the infrastructure and the
"transmission line" that the GRIP grant refers to is just the
line itself. He then moved to slide 18, titled "How can the
legislature help?" which read as follows [original punctuation
provided]:
• Do not take any solutions off the table.
• Work closely with electric utilities to craft
legislation that promotes reliability and
affordability.
• State should be an investment partner on electric
infrastructure upgrades.
• While electric utilities have the same mission, they
face different circumstances.
• It is important to consider the unique aspects of
individual utilities when writing legislation.
1:58:47 PM
MR. ROVITO, in response to a question from Co-Chair Holland
about the Governor's Task Force on Energy Security, stated that
the recommendation with the most impact was the Railbelt
transmission system upgrade. He explained there are many
challenges in the state, and a variety of solutions will be
needed.
2:04:59 PM
The committee took a brief at-ease at 2:04 p.m.
2:05:24 PM
CO-CHAIR MEARS announced that the next order of business would
be a PowerPoint regarding the Railbelt Reliability Council (RRC)
as part of Transmission and Generation presentation.
EDWARD JENKIN, CEO, Railbelt Reliability Council, presented a
PowerPoint, titled "The Railbelt Reliability Council (RRC)
Presentation to House Energy" [hard copy included in the
committee packet]. He described the importance of diversifying
generation sources to meet the needs of the Railbelt grid. He
showed slide 2 which was an outline of the presentation. He
explained the term "bulk electric system" includes both
transmission and generation resources and that the mission of
the RRC is to develop a regional plan for integrating Railbelt
resources. He moved to slide 3, titled "The Railbelt Bulk
Electric System," which read as follows [original punctuation
provided]:
• An interconnected network of ~700 miles of
highvoltage transmission lines, providing a physical
path to serve approximately 750 MW peak load from ~2
GW of installed generating capacity
• Operated by 5 interconnected public utilities, 1 DoD
contractor, and the State of Alaska.
• Encompassing three regions connected by single
transmission lines with stability limits of about 10%
of the peak load.
• Providing electricity for nearly ¾ of Alaska's
population.
MR. JENKIN discussed the challenges of creating a network from
interconnected utility systems operated by five different
companies. These companies provide a "day ahead dispatch
service" on a schedule to ensure that load and generation
matches at all times. As long as they balance, they run at
60herz (Hz) which is what the system is designed for, and the
protection systems assume a 60hz load. Each of the utility
companies are responsible for putting together a schedule and
operating at reasonable similarity in order to maintain the
integrity of the system. Automatic systems monitor those
systems on a four-to-six cycle basis, much less than a second,
and adjustments are frequently sent to the generators to make
sure 60hz is maintained. Significant collaboration must occur
within the Railbelt to maintain the system. Through the
direction of the regulatory commission of Alaska, Chugach
Electric Association and Matanuska Electric Association formed a
single operating entity, so they would have a single load
balancing area. This simplifies the coordination of the system.
He noted that utilities are jointly looking at single generation
resources and looking forward to the Railbelt Integrated
Resource Plan (RIRP) to consolidate and create efficiency while
looking at larger projects moving forward.
2:16:25 PM
MR. JENKIN responded to a question from Co-Chair Mears regarding
the issue of maintaining balance and regulating loads. He
explained that every load-balancing area must maintain enough
reserve to operate their system, and if there is an issue, they
can respond in order to get the system back to 60hz. If the
load deviates there must be enough regulation available to
manage that deviation.
2:17:57 PM
MR. JENKIN, in response to a question from Representative Kopp,
explained that 60hz is the frequency of the power system used by
the United States and Canada, and it is what all the appliances
use. He explained what happens when a power system has both
less and more than 60hz and what it means to "shed load" to
rebalance to maintain 60hz. All the utilities monitor the loads
to maintain 60hz. He described the issue of stability limits
with a single transmission for the Railbelt and what types of
events trigger a line to "trip out" and cause an outage. He
explained that increasing interconnections between locations
will improve the strength of the system and improve the transfer
limits.
2:21:54 PM
MR. JENKIN described the events that led to the creation of a
regional organization which would look at overall resource
planning and necessary transmission improvements. This took
place when the Railbelt utility companies started to replace
older generation with new more economic systems which increased
efficiency. He showed slide 4, titled "Why the RRC - Reduce
Long-Term Costs," which read as follows [original punctuation
provided]:
• Generation Planning
• Utility Generation
• CEA 2013 - 200MW 3X1 Combined Cycle Facility
(w/ ML&P)
• MEA 2014 171MW Reciprocating Engine Facility
• ML&P 2016 129MW 2X1 Combined Cycle Facility
• Transmission System Concerns
2:26:31 PM
MR. JENKIN, in response to a question from Representative
Edgmon, described the funding issues facing the Railbelt utility
companies as they seek to improve transmission and satisfy the
needs of their consumers. He discussed the regional approach to
the issue as well as what is currently funded and what is not.
2:30:44 PM
MR. JENKIN discussed additional concerns faced by the Railbelt
utilities and the necessity for development of standards
including the need for critical infrastructure protection
standards, protection from cyber-attacks, and the need for
unified standards so the utilities are working with the same
standards and generation models to maintain 60hz. He moved to
slide 5, titled "Why the RRC Ensure Reliability," which read
as follows [original punctuation provided]:
Reliability Standards Development and Enforcement
• System Modeling
• Generation and Load Balancing
• Facilities Interconnection
• Transmission Planning
• Monitoring and Enforcement
2:33:48 PM
MR. JENKIN responded to a question from Representative Costello
by summarizing the technicalities of capacity and reserves. He
touched on how the technology of batteries has improved the
ability to store reserves. He pointed out that reserves are
primarily for identified contingencies and integrated resource
planning.
2:36:19 PM
MR. JENKIN responded to a question from Co-Chair Holland by
discussing the resource planning aspects of the budget. He
pointed out that there would likely be a temporary increase in
budget for implementation of the integrated resource planning
and bringing on additional resources. Those investments should
result in future decreases in the budget.
2:39:50 PM
LOU FLORENCE, Chairman, Railbelt Reliability Council Board,
responded to a question from Representative Holland by
describing the process the RRC goes through to set the budget.
It is a formalized budgetary process with detailed line-items.
The budgets from 2024 and 2025 had to be submitted to the
Regulatory Commission of Alaska which goes to a public docket
for comment. There is a balancing mechanism so that if the
allocated money is not spent, then the following year it will
result in a surcharge adjustment. This process has a good deal
of scrutiny, so there is confidence in that work. There will be
a ramp up in 2025 in order to implement the integrated resource
plan. That is projected to peak in 2026, and then the RRC will
see a longer-term change in the budget.
2:43:22 PM
MR. JENKIN showed slides 6, 7, and 8, briefly summarizing each.
The slides were titled "Who is the RRC," and read as follows
[original punctuation provided]:
Legislatively Established Electric Reliability
Organization
• Establish reliability standards through an open and
transparent public process (AS 42.05.765).
• Monitor and enforce compliance with reliability
standards, including investigation of alleged and
possible imposition of penalties for confirmed
compliance violations (AS 42.05.775).
• Develop and adopt a comprehensive Integrated
Resource Plan (IRP) for the applicable Bulk Electric
System (AS 42.05.780).
Commission Regulated
• The commission shall adopt regulations governing
electric reliability organizations (AS 42.06.770)
Who Pays for the RRC
• The RRC is funded through a surcharge that is
allocated to load-serving entities (Railbelt
utilities) through the ERO tariff.
• As public-power utilities, the only way to pay for
these costs is through consumer electric rates or
operating margins.
• As anticipated in the regulations, most LSEs have
implemented a transparent per-KWh line item on
customer bills, similar to the Regulatory Cost Charge.
A stakeholder organization
• The RRC is governed by a thirteen voting-member :
• 6 utilities (CEA, GVEA, HEA, MEA, Seward, Doyon
Utilities)
• Alaska Energy Authority
• 2 Independent Power Producers
• 1 seat advocating for residential-small
commercial interests (Alaska Public Interest
Research Group)
• 1 seat advocating for large commercial and/or
industrial users (Fairbanks Gold Mining Inc./
Kinross)
• 1 seat representing electricity consumers who
advocate in support of the reduction of
environmentally harmful greenhouse gas emissions
and/or other environmental concerns regarding the
Railbelt electric system (Renewable Energy Alaska
Project)
• 1 independent, non-affiliated member
• The RCA and RAPA each hold one non-voting, ex-
officio seat on the Board
2:50:10 PM
MR. JENKIN moved to slide 9, titled "Who is the RCC," and
provided a summary of the staff, the technical advisory group,
and the working groups comprised of stakeholders. He advanced
to slide 10, titled "Program Status Integrated Resource
Planning," which read as follows [original punctuation
provided]:
Integrated Resource Planning
• Staffing
• Policy Development
• Independent Technical Expertise
• 2026 Completion
MR. JENKIN completed his presentation with a brief summary of
slide 11, titled, "Program Status - Standards" which read as
follows [original punctuation provided]:
Standards Development
• Weekly operational standards working group meetings
• Four standards before the RCA for approval
• Additional standards before the RRC Board for
transmittal
• Critical Infrastructure Protection standards
development started
• 28 Standards to be completed in 2025
2:55:52 PM
MR. JENKIN addressed questions from Representative Kopp and Co-
Chair Holland by acknowledging that the work will be
transformative. He explained that the work between rural Alaska
and the Railbelt is a shared venture. The work done in rural
areas regarding integrating smaller generation can also be
applied to the Railbelt.
3:00:24 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 3:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska's Electric Utilities - Michel Rovito APA.pdf |
HENE 1/30/2025 1:00:00 PM |
Transmission |
| RRC Legislative Presentation.pdf |
HENE 1/30/2025 1:00:00 PM |
Transmission |