Legislature(2025 - 2026)GRUENBERG 120
02/04/2025 01:00 PM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Alaska Utilities | |
| 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 4, 2025
1:00 p.m.
DRAFT
MEMBERS PRESENT
Representative Ky Holland, Co-Chair
Representative Donna Mears, Co-Chair
Representative Chuck Kopp
Representative Cathy Tilton (via teleconference)
Representative George Rauscher
Representative Mia Costello
MEMBERS ABSENT
Representative Bryce Edgmon
COMMITTEE CALENDAR
PRESENTATION(S): ALASKA UTILITIES
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
KERIANN BAKER, Chief Strategy Officer
Homer Electric Association Inc.
Homer, Alaska
POSITION STATEMENT: Presented a PowerPoint on Homer Electric
Association during the Alaska Utilities presentation.
ASHLEY BRADISH, Director of External Affairs & Public Relations
Golden Valley Electric Association
Fairbanks, Alaska
POSITION STATEMENT: Presented a PowerPoint on Golden Valley
Electric Association during the Alaska Utilities presentation.
JULIE ESTEY, Chief Strategy Officer
Matanuska Electric Association
Palmer, Alaska
POSITION STATEMENT: Presented a PowerPoint on Matanuska
Electric Association during the Alaska Utilities presentation.
TRISH BAKER, Senior Manager of Government Affairs
Chugach Electric
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint on Chugach Electric
during the Alaska Utilities presentation.
BILL STAMM, President & CEO
Alaska Village Electric Cooperative
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint on Alaska Village
Electric Cooperative (AVEC) during the Alaska Utilities
presentation.
ACTION NARRATIVE
1:00:10 PM
CO-CHAIR KY HOLLAND called the House Special Committee on Energy
meeting to order at 1:00 p.m. Representatives Costello, Kopp,
Rauscher, Mears, and Holland were present at the call to order.
Representative Tilton (via Teams) arrived as the meeting was in
progress.
The committee took a brief at-ease at 1:02 p.m.
^PRESENTATION(S): Alaska Utilities
PRESENTATION(S): Alaska Utilities
1:02:43 PM
CO-CHAIR HOLLAND announced that the only order of business would
be the Alaska Utilities presentation.
1:04:33 PM
KERIANN BAKER, Chief Strategy Officer, Homer Electric
Association Inc., participated in the Alaska Utilities
presentation. She explained her role at the Homer Electric
Association (HEA) and described HEA's unique board composition.
She presented a PowerPoint about HEA (copy included in the
committee packet) and showed slide 2 and slide 3, regarding
HEA's values and history.
1:09:22 PM
MS. KERIANN BAKER described the photo on slide 4 and continued
to slide 5 which provided highlights of HEA's 80 years of
service.
1:09:55 PM
MS. K. BAKER discussed slide 6, titled "The Numbers: HEA," which
detailed meters, miles, employees, and the average megawatt (MW)
load. She segued to slide 7, titled "Generation Asset
Portfolio," which showed photos and provided details regarding
electrical storage and generation. Moving to slide 8, titled
"Homer Electric Member Programs," she described the programs
available to members which included the following [original
punctuation provided]:
Real-time Outage Map
Outage Text Notification
Energy Calculator
Line of Credit Program
Budget Billing Program
Electronic Billing
Mobile App
Meters
Heat Pump Rebate
Net Metering Program
1:11:48 PM
MS. K. BAKER addressed utility challenges beginning with
financial updates shown on slide 10 and slide 11. She talked
about how inflation affects members and how HEA's costs have
risen over time.
1:13:33 PM
MS. K. BAKER directed the committee's attention to slide 12,
titled "Hazard Trees," which are a major cause of outages. She
explained that there has been a 568 percent increase in outages
caused by downed trees and referenced the fires in LA and Maui.
She said HEA is clearing its right of ways to address the issue
and played a video that illustrated the problem.
1:19:29 PM
MS. K. BAKER segued to slide 13 regarding fuel availability and
natural gas. She explained that HEA planned to replace one of
its less efficient natural gas units and is incorporating 30 MW
of solar. The goal is to reduce natural gas usage by 21 percent
annually. HEA would also be pursuing diversification of fuel
and energy mix at a cost that makes sense.
1:22:01 PM
MS. K. BAKER responded to a question from Representative
Rauscher by asking that the legislature involve HEA in proposed
solutions, pointing out the significant consequences of
legislative decisions. She recommended that the state consider
a diversified approach to energy.
1:24:59 PM
MS. K BAKER, in response to a question from Representative Kopp
regarding whether HEA's voice is equivalent to the voice of
other utilities, said that "the problem with raising a lady to
speak up, is that she speaks up," and expressed her belief that
HEA has the ability express itself and be heard. She introduced
HEA board members.
1:28:32 PM
ASHLEY BRADISH, Director of External Affairs & Public Relations,
Golden Valley Electric Association, participated in the Alaska
Utilities presentation and showed a PowerPoint titled, "Golden
Valley Electric Association Energy Outlook," (GVEA) (copy
included in the committee packet). She proceeded with slide 2,
titled "GVEA Snapshot," which described the membership the
service area, the number of powerlines, peak load, and the
generation facilities. Moving to slide 3, she described GVEA'S
2024 energy portfolio, which included four oil fired plants, two
coal fired plants, a hydroelectric facility, a wind farm, and a
solar farm.
1:33:42 PM
MS. BRADISH moved to slide 4 which addressed GVEA's challenges
including volatile energy costs, the natural gas supply, Bradley
Lake's temporary loss of hydro generation, and system
constraints, such as limited ability to integrate variable
energy, transmission capacity, and aging infrastructure.
1:38:47 PM
MS. BRADISH presented slides 5, 6, and 7, titled "Legislative
Priorities," which read as follows [original punctuation
provided]:
Railbelt Transmission
GVEA requests state support in matching federal GRIP
funds for Phase 1 upgrades to the Railbelt electric
transmission grid.
Capacity to transmit power between Railbelt service
areas is currently limited.
Allows the cheapest power to reach end-users
irrespective of location or energy source.
Provides opportunity to increase interregional
capacity between Homer and Anchorage, and add
redundancy and energy storage.
Facilitates clean energy projects at scale for energy
security and diversification.
GVEA supports state funding for upgrades to the
Railbelt electric transmission grid between Anchorage
and Healy.
Natural Gas Solution
GVEA supports measures to ensure short-term certainty
for importing LNG to Cook Inlet and supports state
efforts to assess the feasibility of a gasline
connecting the North Slope with the Railbelt, provided
a spur to Fairbanks is included.
GVEA expects to receive <1% of its power from natural
gas sources in 2025.
The Railbelt is facing a shortfall in Cook Inlet
natural gas as soon as 2027.
GVEA is working collaboratively with other Railbelt
utilities to explore gas supply alternatives that
could provide system-wide benefits to Railbelt
residents and businesses.
Currently, importing LNG to Cook Inlet is the most
feasible means to meet gas demand requirements in the
short term
Dixon Diversion Support
GVEA supports AEA's Dixon Diversion Project to
optimize the energy potential of the AEA-owned Bradley
Lake Hydroelectric Project.
Hydropower is the Railbelt's lowest-cost generation.
Project will increase Bradley Lake's annual energy
production by 50%, enough to power an estimated 24,000
30,000 homes.
Estimated to offset 1.5 billion cubic feet of natural
gas per year in Railbelt power generation.
Estimated completion is 2030.
1:42:05 PM
JULIE ESTEY, Chief Strategy Officer, Matanuska Electric
Association, participated in the Alaska Utilities presentation
and showed a PowerPoint regarding Matanuska Electric Association
(MEA) (copy included in the committee packet). She started her
presentation with slide 2 which featured a snapshot of MEA by
the numbers and moved to slide 3, which compared the cost of
electricity in different areas of the United States. She
explained that the current cost to bring power to MEA homes and
business is 22 cents per KWH.
1:46:21 PM
MS. ESTEY discussed the co-op priorities shown in slide 4 and
fuel supplies shown in slide 5. She emphasized that the gas
contract with Hilcorp expires in spring of 2028
1:48:30 PM
MS. ESTEY drew the committee's attention to the graphs on slide
6 and 7, pointing out that electric utilities used approximately
one-third of the available Cook Inlet Gas, but that MEA
represented only 10 percent of that Railbelt gas demand.
1:49:51 PM
MS. ESTEY turned to looming shortfalls illustrated on Slide 8,
noting that renewables would help solve the gas problem. She
showed slide 9 which illustrated a timeline of key fuel supply
milestones. She pointed out that there was a potential gap in
gas services between March of 2028 and 2030. There is one
proposed solar project during that gap, but it would be likely
that MEA would need to burn diesel at a cost to members that
could be three to four times as much. She explained that there
were other proposals, but none of them were date certain.
1:55:15 PM
MS. ESTEY responded to several questions from Representative
Costello regarding the cost of coal and diesel. She explained
that wind, solar, coal, and several forms of gas have been
coming in at approximately the same price range and with no
significant price breaks between projects. Diesel would be
three to four times as much as gas prices.
1:56:49 PM
MS. ESTEY continued the presentation with slide 10, titled
"Generation - all Options have Tradeoffs," which provided a
detailed comparison of three categories of electrical
generation: gas supply; renewables; and other clean energy. She
described the costs and benefits of various types of energy
supplies and sources. She discussed how renewable energy would
play a role but emphasized that short term liquified natural gas
(LNG) would still be needed until longer term options are in
place.
1:58:22 PM
REPRESENTATIVE RAUSCHER asked when the utility would start to
negotiate for imported LNG
MS. ESTEY responded to a question from Representative Rauscher
concerning the timelines for additional Cook Inlet gas drilling
as well as bringing imported LNG online. She explained that
those conversations were ongoing.
2:00:37 PM
REPRESENTATIVE KOPP asked whether MEA has concerns that the
focus on the LNG line suffocates the "all options on the table"
sentiment.
MS. ESTEY responded to a question by Representative Kopp
regarding whether the focus on LNG stifles consideration and
action on other sources of energy by saying it was absolutely a
concern. She emphasized the need to consider all options to
meet the needs of the Railbelt. She explained that MEA is
focused on reducing regret costs and optimizing flexibility.
2:03:30 PM
MS. ESTEY resumed the presentation with slide 11, titled "Energy
Diversification," which read as follows [original punctuation
provided]:
2024: 16% RENEWABLE
• Mostly from hydro generation (Eklutna and Bradley
Lake), and a small mix of solar and wind resources.
• 8.5 MW Solar Farm in Houston, Alaska came online
last fall.
2:04:07 PM
MS. ESTEY moved to slide 12, titled "The Railbelt," which showed
a map of the Railbelt power system, describing it as, "Connected
with single line between Homer up to Fairbanks." She pointed
out that the utilities are "not-for-profit, public power, making
decisions in the best interest of their residents and
communities." She showed slide 13, titled "Constraints on the
Railbelt Grid," which read as follows [original punctuation
provided]:
Technical Constraints
Inadequate physical infrastructure
Lack of adequate capacity
Lack of adequate redundancy
Economic Constraints
Limited economic dispatch
Wheeling distorts transactions
Small market limits options
No economies of scale
Institutional Constraints
No management and operation of assets for the benefit
of the whole.
2:07:14 PM
MS. ESTEY showed slide 14, titled " What Are The Hurdles?"
concerning the challenges faced by MEA. The slide read as
follows [original punctuation provided]:
• Transmission, transmission, transmission.
• All options have tradeoffs and are more expensive.
• Limited meaningful, region-wide collaboration.
• Uncertain federal and state policy and funding.
• Minimal free market competition and viable
developers.
• Did I mention transmission?
2:09:28 PM
MEA Goals
• Develop joint energy highway with unified oversight
and management of the backbone.
• Secure short to mid term gas supply (2028 2040).
• Work with state leaders and utilities to chart a
path forward on generation projects.
• Leverage Alaska's immense resources for a diverse
and secure generation portfolio.
MEA Ask: It's a critical time. Please help us keep all
generation options on the table.
2:10:47 PM
TRISH BAKER, Senior Manager of Government Affairs, Chugach
Electric, participated in the Alaska Utilities presentation and
showed a PowerPoint regarding Chugach Electric (copy available
in the committee packet). She explained that Chugach Electric
developed an integrated multi-decade resource plan that looks
forward and considers what could become economically viable when
current energy sources reach the end of their life span. She
moved to slide 4, titled " Current Chugach Generation Mix,
Diversification reduces risk," which showed the energy sources
used by Chugach Electric.
2:13:10 PM
MS. TRISH BAKER continued with slide 5, titled "What Chugach is
doing to address gas supply," which read as follows [original
punctuation provided]:
Continue investing in Beluga River Unit gas field
Progressing with imported LNG
Expanding our renewable energy portfolio
Advancing energy storage solutions
Supporting regional power sharing
2:15:54 PM
MS. T. BAKER moved to slide 6 and explained that Chugach sees
imported LNG as a bridge solution and referenced other
possibilities for the future. She emphasized the importance of
a firm contract for any of the potential solutions. In response
to questions from Representative Costello regarding slide 6, she
explained that it did not depict an actual place but rather was
an artistic AI illustration. In reference to whether Chugach
was pursuing its own facility separate from the governor's
proposal, she pointed out that such information is confidential.
2:18:23 PM
MS. T. BAKER responding to questions from Representative Kopp
and Representative Costello, clarified that Chugach was
aggressively pursuing its needs and would be considering a range
of energy solutions. She explained that the Dixon project is
projected to come on-line in 2030. She resumed the presentation
with slide 7, titled "Breakdown of Chugach Retail Electric
Bill," which detailed cost estimates of imported LNG; Hilcorp
natural gas; Beluga River natural gas; Renewables; and the costs
of power plants, transmission, and distribution.
2:20:45 PM
MS. T. BAKER directed the committee's attention to slide 9,
titled "90-mile Transmission Upgrade, Mid-town Anchorage to
Quartz Creek - Kenai Peninsula," which read as follows [original
punctuation provided]:
Transmission lines built in 1962
Project: 2012 - 2032, section by section
115 kV lines upgrading to 230 kV (kilovolts)
Reduce line loss; increase power transferability
Anchoring structures also being upgraded
MS. T. BAKER moved to slide 10, titled "Chugach supports GRIP
upgrades, Grid Resilience and Innovation Partnerships," which
read as follows [original punctuation provided]:
$206.5 million grant from the Department of Energy is
half the estimated project cost of $413 million
High Voltage Direct Current (HVDC) cable from Nikiski
to Beluga
Project will add capacity for access to low cost
energy and ensure reliable electric service
Project also includes Battery Energy Storage Systems
2:22:44 PM
MS. T. BAKER concluded her presentation with slides describing
Chugach's approach to decarbonization and renewable energy
featured on slides 12, 13, and 14, which read as follows
[original punctuation provided]:
Decarbonization Objective
Reduce Carbon Intensity
at least 35% by 2030
at least 50% by 2040
without a material negative impact on rates or
reliability
Community Solar Project
500-kilowatt installation
1,080 panels
Subscriptions for 1 to 20 panels
Energy credited to Chugach bill
Currently under construction
Completion estimated Summer 2025
RCA approval of tariff required before enrollments can
open
Dixon Diversion
Meltwater from Dixon Glacier would be diverted through
a tunnel to Bradley Lake
Bradley Lake Hydroelectric Project dam would be raised
to accommodate extra water
50% additional energy would be added to Bradley Lake
Hydroelectric Project
Project would reduce demand for natural gas by 1.5
bcf/year
2:25:48 PM
BILL STAMM, President & CEO, Alaska Village Electric
Cooperative, participated in the Alaska Utilities presentation
and showed a PowerPoint, titled "Alaska Village Electric
Cooperative, A Cooperative, But Different" (copy included in the
committee packet). He discussed the membership of the Alaska
Village Electric Cooperative (AVEC) board and introduced the
first female board member who has been serving for over 40
years. He called the committee members' attention to slide 2,
featuring a map of Alaska which highlighted AVEC communities.
He moved to slide 3 with photos that showed some of the unique
challenges of dealing with power in rural Alaska
2:32:14 PM
Mr. STAMM discussed the power generation in the rural
communities. He described differences between AVEC communities
and the Railbelt, pointing out that Railbelt power generation is
measured in megawatts but the AVEC communities measure power
generation in kilowatts. He showed slides 4 through 7, which
showed photos of New Stuyahok living facilities, a rural power
plant, the Native Store in Shaktoolik, and shipments of
materials. He explained that AVEC has been integrating wind
since 2000. The next slide was titled "Alaska Village Electric
Cooperative, Energizing Rural Alaska since 1968." It read as
follows [original punctuation provided]:
• Nonprofit 501(c)12 -Electric Cooperative
• 58 Rural Communities, 31,000+ Residents
• 46 Power Plants, 160 Diesel Generators
• 9.3M Gallons of Diesel in 2023 ($43.8)
• 525 miles of Distribution Lines
• 13 Wind Sites, 33 Wind Turbines, Serving 22
Communities
• $74.0M Annual Revenue
• 2023 Total Electricity Sold 126.3 MWh
2:42:09 PM
MR. STAMM described the graphs on slides 10 through 12 which
illustrated the relative size of communities by meter count, the
relative cost of rural power consumption, and the costs per
kilowatt-hour sold.
2:45:01 PM
MR. STAMM moved to slide 13 and slide 14 which described how
fuel is delivered to communities, the associated difficulties,
and the 2024 delivered fuel costs. The slides read as follows
[original punctuation provided]:
Fuel Delivery:
• Typically, May-Oct
• Lighterage Barges fill from Tankers and deliver to
coastal and river communities
• Bulk Fuel Storage, strive for 14 month's supply.
• Some communities are Fly-in only
Difficulties:
• Cost
• Aging infrastructure
• Limited Suppliers
• Weather
Barge Delivery:
$3.50 to $4.50 per gallon
Air Delivery:
$10.00 to $11.00 per gallon
2:48:19 PM
MR. STAMM, in response to a question from Representative Mears,
explained that projects incorporating renewables have been
hugely beneficial, but they are not a total solution. Renewable
energy has the potential of greatly reducing the reliance on
diesel so that they are "sipping diesel fuel instead of drinking
it by the cupful." He described the chart on slide 15, showing
the amount of diesel used when it is the sole source of energy
compared to a combination of diesel and wind. He segued to
slide 16 which showed a timeline of AVEC renewable energy
projects from 1999 to 2023.
2:51:46 PM
MR. STAMM described the photos on slide 17, titled "Logistics of
Material Delivery," which showed the challenges of delivering
equipment. He shared a personal anecdote and talked about how
critical a power loss can be in the rural communities.
2:56:15 PM
MR. STAMM explained Power Cost Equalization (PCE), showing slide
18, titled "How Does PCE Work?" which showed a graph regarding
PCE costs and a comparison of costs which read as follows
[original punctuation provided]:
PCE "FLOOR" = Average cost of power for Anchorage
Fairbanks and Juneau ($0.1992 for FY 2025)
PCE pays down 95% of the Difference between rural cost
of power and PCE floor.
Only for Residential and Community Facilities
2:58:22 PM
MR. STAMM responded to a question from Representative Costello
regarding how the PCE adjustment is shown on customers' bills.
He then moved to slide 19 and slide 20 which showed graphs
illustrating the impact of PCE and how it relates to heating
buildings.
2:59:36 PM
MR. STAMM showed slide 21, titled " Why is electricity expensive
in rural Alaska?" which read as follows [original punctuation
provided]:
• Small population AVEC's average village is ~400
people
• Small loads AVEC's average village load is ~160 kW
• No economies of scale, which in turn limits economic
growth
(Expensive power = Less consumption= Expensive power)
• Utilities are capital intensive, and capital is
expensive
• Isolated systems - reliability relies on (self)
redundancy
• Remote and difficult to access, transportation and
freight is expensive
• Fuel is expensive delivery and storage costs often
exceeds diesel purchase cost
• Operations and maintenance is more expensive,
freight, travel, lodging, it all adds up
In summary, the final slide addressed AVEC strategies to reduce
power cost and read as follows [original punctuation provided]:
Improve generation efficiency whenever possible
Minimize distribution losses whenever possible
Interconnect villages to improve economies of scale
Add renewable generation and energy storage where
economically feasible
Capture and sell recovered heat and excess wind energy
Promote energy education, workforce development
Support economic growth in communities we serve
3:02:28 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 3:02 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 1. HEA_presentation.pdf |
HENE 2/4/2025 1:00:00 PM |
|
| 2. GVEA Presentation to H Eng Cmte 2.4.2025.pdf |
HENE 2/4/2025 1:00:00 PM |
|
| 3. Presentation MEA HEN 2.4.25.pdf |
HENE 2/4/2025 1:00:00 PM |
|
| 4. Chugach_House Energy Committee Feb. 2025-compressed.pdf |
HENE 2/4/2025 1:00:00 PM |
|
| 5. AVEC_2025 House Energy.pdf |
HENE 2/4/2025 1:00:00 PM |