Legislature(2025 - 2026)GRUENBERG 120
02/06/2025 01:30 PM House ENERGY
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| Presentation(s): Panel Discussion with 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 6, 2025
1:33 p.m.
MEMBERS PRESENT
Representative Ky Holland, Co-Chair
Representative Donna Mears, Co-Chair
Representative Chuck Kopp
Representative George Rauscher
Representative Mia Costello
MEMBERS ABSENT
Representative Bryce Edgmon
Representative Cathy Tilton
COMMITTEE CALENDAR
PRESENTATION(S): PANEL DISCUSSION WITH ALASKA UTILITIES
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
TRISH BAKER, Senior Management of Government Affairs
Chugach Electric Association
Anchorage, Alaska
POSITION STATEMENT: Participated in the Panel Discussion with
Alaska Utilities presentation.
BILL STAMM, President and CEO
Alaska Village Electric Cooperative
Anchorage, Alaska
POSITION STATEMENT: Participated in the Panel Discussion with
Alaska Utilities presentation.
JULIE ESTEY, Chief Strategy Officer
Matanuska Electric Association
Fairbanks, Alaska
POSITION STATEMENT: Participated in the Panel Discussion with
Alaska Utilities presentation.
KERIANN BAKER, Chief Strategy Officer
Homer Electric Association Inc.
Homer, Alaska
POSITION STATEMENT: Participated in the Panel Discussion with
Alaska Utilities presentation.
ASHLEY BRADISH, Director, External Affairs & Public Relations,
Golden Valley Electric Association
Fairbanks, Alaska
POSITION STATEMENT: Participated in the Panel Discussion with
Alaska Utilities presentation.
ACTION NARRATIVE
1:33:34 PM
CO-CHAIR KY HOLLAND called the House Special Committee on
Energy meeting to order at 1:33 p.m. Representatives Holland,
Mears, Kopp, Rauscher, and Costello were present at the call to
order.
^PRESENTATION(S): PANEL DISCUSSION WITH ALASKA UTILITIES
PRESENTATION(S): PANEL DISCUSSION WITH ALASKA UTILITIES
1:34:39 PM
CO-CHAIR HOLLAND announced that the only order of business would
be the Panel Discussion with Alaska Utilities by Representatives
from Homer Electric Association, Chugach Electric, Matanuska
Electric Association, Golden Valley Electric Association, and
Alaska Village Electric Co-Op.
1:35:57 PM
The committee took an at-ease from 1:35 p.m. to 1:38 p.m.
1:38:17 PM
TRISH BAKER, Senior Management of Government Affairs, Chugach
Electric Association, began the Panel Discussion with Alaska
Utilities by summarizing a press release regarding Chugach
Electric and Harvest Alaska, saying it presents a potential
solution for the Railbelt gas supply issue. Harvest Alaska
would own, operate, and develop a liquefied natural gas (LNG)
facility at the Marathon site on the Kenai Peninsula, making LNG
available to the Railbelt utility companies. The timeframe
would meet the existing contract expiration date of March 2028.
1:40:17 PM
MS. T. BAKER responded to a question from Representative Kopp,
explaining that there was no power purchase agreement at that
time but rather a potential solution. First the project would
need to go through the front-end engineering and design.
1:41:29 PM
MS. T. BAKER responded to a series of questions from Co-Chair
Holland and Representative Rauscher by explaining that
regardless of who provided it, storage would be needed and that
Harvest would deal with the permitting. The gas for the LNG
project would be purchased from the global market.
1:46:13 PM
BILL STAMM, President and CEO, Alaska Village Electric
Cooperative, addressed a question posed by Co-Chair Holland
regarding what the Railbelt could learn from the rural
utilities. He described the integration of renewable energy in
the smaller grids in rural communities and how the challenges of
isolated places provide both a benefit and a challenge. The
challenges always include balancing loads, storage, and the
requirements of providing steady power. Despite the smaller
size, he said there were similarities to the Railbelt despite it
serving a larger population because it is still an isolated
grid, and they have the same challenges of maintaining power
quality, injecting energy when it is available, and energy
storage.
1:48:18 PM
JULIE ESTEY, Chief Strategy Officer, Matanuska Electric
Association, described Alaska as a proving ground for new
technologies, explaining that many lessons could be learned from
rural utilities. She pointed out that using renewable energy
has been especially important for rural communities.
1:49:09 PM
KERIANN BAKER, Chief Strategy Officer, Homer Electric
Association, Inc., explained that diversification is one of the
top goals of Homer Electric Association. The association
doesn't want to be reliant on any one type of fuel or any one
type of supply. Price continues to be a crucial element and
streamlining the bureaucracy is also important.
1:52:06 PM
MS. T. BAKER explained that there are two projects that go hand
in hand. One would be combining the Grid Resilience and
Innovation Project (GRIP), a high voltage direct current (DC)
cable that would go from Nikiski to Beluga and would add
redundancy as well as increase capacity for power transfer. The
second would be completing the Dixon Diversion Project.
1:53:26 PM
MS. ESTEY agreed on the importance of GRIP and the Dixon
Diversion as primary elements for the Railbelt. She pointed out
that diversification needs redundancy and capacity. Not having
robust enough transmission capability can hold projects back.
She described several potential options including transporting
gas from the North Slope, looking at coal, and using wind power,
describing the positives and negatives of each.
1:56:03 PM
ASHLEY BRADISH, Director, External Affairs & Public Relations,
Golden Valley Electric Association, echoed the points made by
other members of the panel and emphasized that transmission is
key. She pointed out specific concerns regarding how much power
could be brought into the Railbelt with the existing structure
saying that Lower 48 grids could take on approximately 4,000
megawatts compared to 4 megawatts on the Railbelt before there
are system disturbances. In order to add projects, the
foundation would need to address increased capacity,
transmission, and redundance.
1:59:15 PM
MS. ESTEY responded to a question from Co-Chair Mears by stating
how excited the members of the Railbelt utilities were to be
working together on the Integrated Resource Plan (IRP), sharing
the different data points, subject matter experts, and
developing resources. The IRP process brings all those experts
together under one plan. The Railbelt's energy needs add
pressure to the process.
2:02:59 PM
MR. STAMM responded to a question from Representative Costello
by explaining that fuel economy and efficiency are king in rural
Alaska. They are the baseline of all the power generation the
rural communities have. He emphasized the need to reduce the
amount of diesel fuel used in rural settings, pointing out that
new technologies make it possible to harvest renewable resources
locally such as wind, solar, and hydro. He also discussed
economies of scale, explaining that the smaller the unit, the
more expensive it is, so some of the rural communities have
developed means for sharing because the larger the unit the more
load it can handle. For example, within the Alaska Village
Electric Cooperative (AVEC) there are 46 power plants to serve
58 communities rather than single units in each community. Even
if an all-Alaska plan came into being, there would still need to
be local backup generation
2:06:12 PM
MS. K. BAKER, in response to a question from Representative
Costello, pointed out that several utilities consolidated to
become Homer Electric. She also described the many ways in
which the Railbelt utilities have collaborated.
2:08:25 PM
MS. ESTEY addressed a question from Representative Costello
regarding collaboration among the Railbelt utilities by
comparing them to Lower 48 utilities and explaining their
similarities and differences. She explained that state statute
has driven all their bylaws, and if they wanted to divest more
than 15 percent to outside interests, they would need a super
majority to say "yes." The intent of that statute was to keep
the rights and control of local utilities in the hands of
Alaskans. Due to the distances between the Railbelt utilities,
the value of merging does not balance out the need for local
resources such as linemen, clearing crew, and member service
representatives. She echoed Ms. Baker's point that the Railbelt
utilities have collaborated in some very positive ways without
needing to dismantle the individual cooperative structures. She
explained that the Chugach purchase of Municipal Light & Power
(ML&P) made sense because they were not co-ops. She described
several collaborative models that could be used in the Railbelt
while still maintaining local autonomy.
2:11:54 PM
MS. T. BAKER acknowledged the concerns voiced by Representative
Holland regarding problems with the gas supply. She described
the difference between gas deliverability and gas supply,
characterizing the issue referenced by Co-Chair Holland as a gas
deliverability problem. She also pointed out the collaboration
which occurred during the 2023-2024 cold snap and how other
utilities on the Railbelt stepped up to help. She emphasized
the importance of adding the imported LNG before 2028.
2:17:01 PM
MS. K. BAKER emphasized that the utilities are not going to let
the power go out and people will not get cold. She pointed out
there was not one utility company at the table that would let
another utility go dark. She explained that the cooperative
principles highlight working with other cooperatives. It is
part of the utility co-op culture and is part of why they were
formed. Sharing knowledge, sharing people, sharing fuel is a
function of the Alaska Energy Authority (AEA). When the
utilities work together, the product is better.
2:19:01 PM
MS. BRADISH pointed out that the working model of the Railbelt
utilities was cooperation among cooperatives. She also returned
to an earlier point by explaining the critical need for
redundancy which would be achieved with the additional
transmission line.
2:20:10 PM
MR. STAMM added the perspective of the AVEC by emphasizing that
for the rural communities, fuel supply is critical. It is a
critical need for the supply chains to remain open. The number
of primary vendors which supply fuel to small communities in
rural Alaska has been reduced from three or four to two. Some
communities are entirely reliant on fly-in fuel, and suppliers
that fly in are using 1940's aircraft for which mechanical parts
are difficult to acquire. The needs of AVEC are sometimes out
strapped by a change in load. Usually those changes can be
anticipated but sometimes they are caught short. He described
the cooperation within AVEC because everyone wants to keep the
lights on.
2:23:04 PM
MS. ESTEY responded to a series of questions from Co-Chair
Holland by explaining that the Alaska Railbelt Reliability
Council (RRC) got a slow start, but there is excitement about Ed
Jenkins, the new CEO. A cost work analysis has been requested
to make sure there are benefits to ratepayers, making sure "the
spend" is worth the benefit. Once the short-term bridge is
solved, there are long-term decisions to make. There is
confidence that the process will allow for better decision
making.
2:26:35 PM
MS. T. BAKER, in response to a question from Co-Chair Holland,
explained that the integrated resource plan would happen later
in 2025.
2:27:26 PM
MS. K. BAKER added that Homer Electric looks forward to positive
changes with Ed Jenkins as CEO of the RRC, but adding that
position is expensive, and there will be some duplication within
the RRC what will come out of the Electric Reliability
Organizations (ERO). Some bureaucratic simplification would
help lower costs.
2:28:50 PM
MS. ESTEY responded to Representative Kopp's question regarding
transmission line power loss by saying that 20 percent is a
reasonable estimate.
2:30:56 PM
MS. ESTEY responded to a question from Representative Mears by
emphasizing that the value of long-term planning will be
measured by the key performance indicators being developed by
the RRC. The Matanuska Electric Association (MEA) supports the
processes, the collaborative approach, and including a broader
stakeholder group as part of that process. The long-term plan
will be where the value truly comes.
2:32:05 PM
MS. T. BAKER explained that the RRC is fulfilling the function
set by statute as the Electric Reliability Organization (ERO).
She clarified that the Railbelt Transmission Organization (RTO)
is a division of the Alaska Energy Authority. One of its
purposes is to establish an Open Access Transmission Tariff
(OATT) which would equitably divide the backbone transmission
costs among each of the utilities within the Railbelt's
transmission grid.
2:37:59 PM
MR. STAMM responded to a question from Co-Chair Holland by
emphasizing the importance of continuing the Power Cost
Equalization (PCE) program for the rural communities. Although
the communities are working to incorporate renewable energy,
nothing had yet replaced diesel generation. The primary need
for the AVEC is acquiring additional funding to support the
innovation and integration of renewable and local generation.
Clean, sustainable energy in rural areas will help bolster the
economies and create vibrant communities with access to clean
water, sewer, and better education.
2:40:00 PM
MS. ESTEY addressed Co-Chair Holland's question by reiterating
the importance of prioritizing reliable transmission and asked
what options are available for the state in funding
infrastructure. She explained that the "back of the envelope"
estimate for transmission upgrades is $1.9 billion. If other
funding solutions were to cover half of that amount, the other
half would pencil out to four to five dollars per member per
month with the exception of Fort Knox. The potential benefits
of transmission improvement could amount to 15 percent savings.
Coming up with the solutions would require working as a team
rather than working independently.
2:43:36 PM
MS. K. BAKER, in responding to Co-Chair Holland's question about
funding priorities and policy ideas, said she would add hydro
for baseload generation in addition to incentives for gas
supply. One opportunity the legislature would have to save the
utilities money is permit reform, specifically what it costs and
how long it takes.
2:46:52 PM
MS. K. BAKER responded to a question from Representative Kopp by
explaining that there were some significant hold-ups with state
permitting and urged the legislature to assist in streamlining
that process.
2:47:42 PM
MS. T. BAKER expanded on the topic by providing anecdotal
information which illustrated the gauntlet the utilities need to
go through because of the location of transmission towers. For
example, when new transmission lines were being constructed last
summer on the Seward Highway, they couldn't get a lane closure
permit in July because of fishing in the Kenai, and they
couldn't get a federal permit to enter the waters in August
because of the beluga whales. A similar situation dictates
permitting for the Bradley Lake Project. She specified that was
not a complaint but rather a reality of living in Alaska.
2:49:47 PM
MS. BRADISH responded to Co-Chair Holland's request for wrap-up
comments by saying she sounded like a broken record, but
transmission upgrades, finishing out phase one of GRIP, and the
Dixon Diversion would be Golden Valley's priorities.
2:50:46 PM
MS. ESTEY reiterated the importance of the legislature's
involvement in dealing with the transmission situation on the
Railbelt.
2:52:25 PM
MS. T. BAKER explained that gas supply has been the number one
priority for Chugach since 2022. She pointed out that the
potential solution from Harvest to provide LNG to the Railbelt
would be a game changer. Another high priority is the Dixon
Diversion and the transmission infrastructure to receive it.
2:54:47 PM
MR. STAMM reiterated that the gas supply issue along the
Railbelt affects rural and urban Alaska. He expressed concern
that rural energy goals have been very negatively impacted by
the U.S. Department of Energy freezes on alternative energy
funding because it puts $140 million of projects on hold.
2:59:35 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 2:59 p.m.
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