Legislature(2025 - 2026)GRUENBERG 120
02/13/2025 01:30 PM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Aea Progress Update | |
| Overview: Renewable Energy Fund, Round 17 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 13, 2025
1:33 p.m.
DRAFT
MEMBERS PRESENT
Representative Ky Holland, Co-Chair
Representative Donna Mears, Co-Chair
Representative Bryce Edgmon
Representative Chuck Kopp
Representative George Rauscher
Representative Mia Costello
MEMBERS ABSENT
Representative Cathy Tilton
COMMITTEE CALENDAR
PRESENTATION(S): AEA PROGRESS UPDATE
- HEARD
OVERVIEW: RENEWABLE ENERGY FUND~ ROUND 17
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CURTIS THAYER, Executive Director
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Co-presented the PowerPoint, titled "Alaska
Energy Authority, AEA Progress Update" and answered questions
during the overview of the Renewable Energy Fund.
CONNER ERICKSON, Planning Director
Alaska Energy Authority
Anchorage, Alaska
POSITION STATEMENT: Co-presented the PowerPoint, titled "Alaska
Energy Authority, AEA Progress Update" and gave an overview of
the Renewable Energy Fund.
ACTION NARRATIVE
1:33:48 PM
CO-CHAIR MEARS called the House Special Committee on Energy
meeting to order at 1:33 p.m. Representatives Edgmon, Kopp,
Rauscher, Costello, Holland, and Mears were present at the call
to order.
^PRESENTATION(S): AEA Progress Update
PRESENTATION(S): AEA Progress Update
1:34:41 PM
CO-CHAIR MEARS announced that the first order of business would
be a continuation from the January 23, 2025, update by the
Alaska Energy Authority.
1:35:33 PM
CURTIS THAYER, Executive Director, Alaska Energy Authority
(AEA), presented a PowerPoint, titled "Alaska Energy Authority,
AEA Progress Update" [hard copy included in the committee
packet]. He began on slide 3, titled "Renewable Energy and
Energy Efficiency Programs" and pointed out the list of public
outreach programs, which included working groups on electric
vehicles, solar energy, and wind energy. He pointed out the
focus of various types of renewable energy, such as biomass,
energy storage, heat recovery, and others, as listed on the
slide. He discussed the possibility of nuclear energy in rural
Alaska.
MR. THAYER moved to slide 4 and discussed the federal funding
allocation of $74 million. He stated that these funds are for
home energy and appliance rebates. He stated that AEA has been
working in conjunction with the Alaska Housing Authority to
modify a program for distribution of these funds, with no state
match required. He discussed the status of these funds, as they
have been placed on pause by the current federal administration.
He noted that this award was conditional, and a contract has not
been signed. He moved to slide 5, titled "Solar for All." He
pointed out that these federal funds are designated for solar
projects in disadvantaged communities, but these funds have also
been put on hold by the current federal administration. He
noted that no match is required to receive this grant. He moved
to slide 6, titled the "Grid Resilience Formula Grant Program."
He stated that this is formula-based funding, requiring a 15
percent state match and a 33 percent small utility match. He
noted that this funding has also been put on hold by the current
federal administration.
MR. THAYER moved to slide 7, titled "Black Rapids Training Site
(BRTS) Defense Community Infrastructure Pilot Program." He
noted that AEA has partnered with the Golden Valley Electric
Cooperative (GVEA), and the grant was awarded to GVEA to extend
the transmission line 34 miles along the Richardson Highway to
BRTS. He explained that three diesel generators that are
nearing the end of their useful lives power BRTS, and the
training grounds facility would be closed without this update.
He noted that this has not been affected by the federal funding
freeze, and no state match is required. He noted that the slide
on the National Electric Vehicle Infrastructure (NEVI) program
has been removed, as this funding has been suspended.
1:41:05 PM
MR. THAYER, in response to a question from Representative
Rauscher, stated that the GVEA transmission line would go out of
Delta Junction for 34 miles to the training center. He
expressed uncertainty concerning how far out of Delta Junction
towards Fairbanks the line would extend.
MR. THAYER, in response to a question from Co-Chair Holland
concerning the funding for the new High-Voltage Direct Current
(HVDC) line, stated that this funding was $206 million from a
federal grant. He noted that the state matched the funds and
AEA appropriated bonds to the project; however, this project has
also been paused by the federal government. He discussed the
nuances concerning this grant, as there is a signed grant
agreement, with some money reimbursed. He stated that the
project is currently moving forward using state and AEA funding.
MR. THAYER, in response to a follow-up question concerning the
restructuring of AEA's bond authority, explained the bond issue
with the Bradley Lake Hydroelectric Project. He pointed out
that the project is moving forward, and the financing is being
matched with federal funding for the next two years. He noted
that state bonds are not being used, so the interest from these
bonds would go back into the project, while the utilities would
be reimbursing AEA based on the reduced cost of power.
MR. THAYER, in response to a question from Co-Chair Mears,
stated that AEA is allowed to retain the interest from bond
money. He discussed the governor's budget regarding the
interest AEA would be able to retain for projects. He also
noted that AEA would be able to retain certain federal tax
credits, as written into the governor's budget. He pointed out
that normally these tax credits would go back to the state. He
expressed the opinion that when AEA retains tax credits,
ratepayers would see the benefit.
1:52:28 PM
CONNER ERICKSON, Planning Director, Alaska Energy Authority, co-
presented the PowerPoint, titled "Alaska Energy Authority, AEA
Progress Update." On slide 9, he discussed AEA's new electronic
library. He explained that the library creates more
transparency for the workings of AEA. He noted that it was
established in 2023 with the funds from AEA and the Denali
Commission. He pointed out that there has been public interest
in the library, as it now has over 14,000 available documents.
He discussed the cost savings and the availability of older
documents.
MR. ERICKSON, in response to a question from Representative
Edgmon concerning the Susitna-Watana Hydroelectric Project
documents, stated that he would follow up to the committee with
the number of documents available. He said, "There are
definitely a plethora of documents related to Su-Wa," as the
library is a "one-stop" shop for AEA documentation.
REPRESENTATIVE EDGMON expressed the understanding that this is
probably the largest collection of documents related to this one
project.
MR. ERICKSON moved to slide 10 and discussed the Power Project
Fund (PPF) loan program. He stated that it is a long-standing
program, providing working capital, construction funding,
preliminary design, and feasibility reconnaissance funding for
many different types of energy projects, including both fossil
fuel and renewable energy projects. He pointed out the number
of current loans and the "healthy" balance of the program. He
noted that the funding needs from the program would depend on
the other sources of available funding.
1:57:37 PM
MR. THAYER, in response to a question from Co-Chair Holland,
stated that AEA would not be requesting to recapitalize PPF, and
he explained his understanding that borrowers would prefer to
pay off their balances early.
MR. ERICKSON added that more borrowers are interested in the
program, and the borrowed amounts have increased.
MR. THAYER gave the example that if a large loan request came
through, the loan committee would be responsible for this, along
with the board of directors. He explained that if the amount
were over $5 million, this loan would need to be approved by the
legislature.
CO-CHAIR MEARS expressed the understanding that last year the
projects were in abeyance, as there was not sufficient capital
for loans. She questioned whether there is more interest in the
program because it is being recapitalized.
MR. THAYER pointed out that now there is available funding, AEA
would be actively advertising the program again. He pointed out
on slide 11 the outstanding PFF loan program projects. The
slide listed the interest rate, current balance, and initial
balance of each project.
CO-CHAIR MEARS commented on the value of this program to the
state and the necessity of keeping it funded.
MR. ERICKSON pointed out that since its inception the program
has funded over 110 operational projects. He noted that these
completed projects have resulted in the displacement of 100
million gallons of diesel per year.
2:02:14 PM
REPRESENTATIVE EDGMON expressed the understanding that the money
going into the Renewable Energy Fund (REF) program would be for
project development, and this would also be "feeding into the
fledgling renewable energy industry." He opined that because
the funding may be frozen, the program may not continue. He
questioned the presenter's opinion on this.
MR. THAYER expressed agreement. He pointed out that the REF
program has had more success than other programs, but project
feasibility must be determined. He noted that the REF program
is funding a large solar farm and two windfarms. He added that
85 percent of these projects go into rural Alaska. Pointing out
some other examples, he reiterated that 100 million gallons of
diesel has been displaced. He discussed the past and future
funding of the REF program. He reiterated that the program
across the state has been a "winner." In response to a follow-
up question, he discussed the program's synergy with the Alaska
Housing Finance Corporation (AHFC) and its subsidiary green
bank. He noted that AEA has created a new job for making loans
with the green bank in rural Alaska.
CO-CHAIR HOLLAND commented that the REF program has grown
independent power producers (IPPs) in adjunct with the
utilities. In determining REF loans, he questioned whether the
type of project would be considered, such as an IPP project or a
public utility project.
MR. THAYER expressed the understanding that 90 percent of all
IPPs received money from the REF program. He stated that this
is the first step in determining whether a project is viable.
He suggested that REF is fueling the success of IPPs in the
state. In response to a follow-up question concerning the
Emerging Technology Fund program being used as a tool, he
pointed out that the program was ended because it was not
considered viable. He expressed the opinion that new
technologies are not needed; rather, the new technologies that
exist need to be "put to work."
2:10:37 PM
^OVERVIEW: RENEWABLE ENERGY FUND, ROUND 17
OVERVIEW: RENEWABLE ENERGY FUND, ROUND 17
[The committee proceeded to the final order of business, which
was an overview of the Renewable Energy Fund, Round 17.]
CONNER ERICKSON, Planning Director, Alaska Energy Authority
(AEA), gave an overview of the Renewable Energy Fund (REF)
program as a continuation of the AEA PowerPoint, titled "Alaska
Energy Authority, AEA Progress Update" [hard copy included in
the committee packet]. On slide 15, he discussed the Renewable
Energy Fund Advisory Committee (REFAC). He stated that AEA
works in close cooperation with REFAC for project funding
recommendations and policy matters. He pointed out that four of
the nine members of REFAC are legislators.
REPRESENTATIVE COSTELLO questioned the interface between the
working groups listed on slide 6 and AEA. She questioned the
creation of a nuclear energy working group.
CURTIS THAYER, Executive Director, Alaska Energy Authority
(AEA), responded that the University of Alaska leads the effort
on nuclear energy in the state, while AEA is only a part of
this. He noted that currently working groups would only be
dealing with proven technology, and micronuclear energy has not
been proven up to this point. He discussed the process between
AEA and the working groups.
2:14:25 PM
MR. ERICKSON moved to slide 16 and discussed the REF grant
program guidelines. He stated that these projects must
incorporate renewable energy technologies. He pointed out that
battery storage systems projects would be included because they
would incorporate renewable energy. He stated that there is a
carve out for natural gas projects but no applications for this
have been submitted.
MR. THAYER, in response to a question from Representative Kopp,
pointed out that state funds are used for the REF program;
therefore, the program has no frozen federal funds.
MR. THAYER, in response to a question from Representative
Edgmon, stated that when the REF program was setup, the 2010
energy policy had been maintained. He noted that the Alaska
Energy Security Task Force has overseen the changes in renewable
energy in rural Alaska, and this has ensured that the REF
program was keeping up with new technologies.
REPRESENTATIVE EDGMON commented on the vast differences in the
renewable energy industry that have occurred since 2010.
2:17:50 PM
MR. ERICKSON, continuing the overview, spoke about REF applicant
eligibility. He stated that eligible applicants include
electric utilities that hold a certificate of public convenience
and necessity, independent power producers (IPPs), and local
governments. He moved to slide 17 and pointed out the four
stages of the REF program evaluation process, as follows:
evaluation of the applicant, evaluation of the project, initial
project ranking, and final project ranking. He pointed out that
third-party contracts would conduct the cost-benefit ratio
analyses, and the Department of Natural Resources would be
consulted concerning land use issues. He stated that AEA would
do the project ranking. He noted that matching funds would not
be required, but this could earn points for an applicant. He
pointed out that other criteria considered would be the
community's cost of energy, project readiness, project
sustainability, and public benefit.
MR. ERICKSON, in response to a request for examples, pointed out
that the Egegik project was funded by the REF program. He noted
that tidal projects score lower because of the nascent nature
and feasibility of these. He stated that some recommendations
from REFAC would be provided to applicants, adding that no
projects are considered "bad," they are just ranked. In
response to a follow-up question concerning risk factors or
bias, he stated that risk tolerance is considered, but it would
not be a final determining factor. He noted that the program
has worked to guide the trajectory of the energy industry in the
state, steering it from "the brink." He noted that the program
took some risky projects early on, but these projects have
become less risky with time. He gave examples of some of these
projects.
2:26:07 PM
MR. ERICKSON moved to slide 18, which addressed the funding
limits for REF Round 17. He noted that this is done on a
project-by-project basis. He moved to slide 19, which compared
REF capitalization for past fiscal years and the current
proposed Round 17. He pointed out the per-year change in
appropriations, and he thanked the committee for their efforts.
On slide 20, he summarized the applications received for REF
Round 17. He pointed out that not all nine energy regions of
the state are represented, and he explained that AEA does not
make recommendations on the applications. He noted the uptick
in applications for battery system projects, along with solar,
wind, and hydro projects. He pointed out that slide 21 showed a
geographic distribution of Round 17 project recommendations.
MR. ERICKSON moved to slide 22 and slide 23, which showed the
applicants for REF Round 17. He noted that the governor's
budget has already funded some projects, while others would be
sent to the legislature for funding decisions. He briefly
described each project on the list.
MR. THAYER offered to provide a writeup to the committee on each
of the scored applicants listed.
MR. ERICKSON, detailing the projects funded in the governor's
budget, stated that the City of Pelican is applying for a
relicensing project for an existing hydroelectric dam. If not
funded, he said this community could be 100-percent reliant on a
diesel generator. He pointed out that the Naknek Electric
Association's project is one-half solar and one-half battery-
operated. He noted that the community already has solar, so
this project has been proven. He pointed out that the Goat Lake
Hydro project is a reconnaissance project, as there is already
an existing dam facility in Southeast, and this project would
add water to the dam. Moving to the next project listed, he
pointed out the Nuvista Kwethluk wind and battery project,
explaining its extensive problems. He stated that the project's
goal would be to use the existing wind turbines. Next, he noted
the battery project in Quinhagak, which would maximize the use
of the wind turbines already there. He noted that the biomass
heating system project for the City of Nenana is in its final
phase.
MR. ERICKSON, going through the list of projects that need
funding from the legislature, discussed the Kongiganak solar
energy project.
2:34:47 PM
CO-CHAIR HOLLAND, concerning the projects that the legislature
would be required to fund, requested an explanation of the
community benefits for each project. He questioned how the
chart should be read to understand the comparison of benefits
for each project.
MR. ERICKSON responded that the order of projects on the list is
not based on an incremental reduction of the benefits to each
community. He stated that this is partly because the costs in
rural communities are higher than in non-rural communities. He
noted that these projects reflect the need of each community, as
a community would submit an application per its need. He
expressed the opinion that the leveraging of additional funding
would need to be considered, as well as household energy costs
in the community. For example, he explained that a community
might not be displacing much fuel, while its general cost of
energy is high; therefore, the benefit would be greater. In
response to a follow-up question concerning analysis done on
community savings, he stated that there is not a single answer
to the question. He explained that the details of the project
would provide a much greater view of how it would be ranked. He
gave examples of this.
MR. ERICKSON moved to the next project on the list, which
concerned a Railbelt wind diversification project. He stated
that this is a feasibility project for three additional wind
sites. He pointed out that there was an estimate of the gas
displacement and energy production based on the preliminary
design. Moving down the list, he stated that the Homer energy
recovery project is small. He noted that this would entail
installing a turbine with a release valve within the city's
municipal water system. He stated that this would be a test
project.
CO-CHAIR MEARS noted that Homer Electric's natural gas contract
is almost at its end, so this should be a key project.
MR. ERICKSON moved to the next project on the list, which
involved the installation of electronic thermal stoves. He
noted that there is an existing windfarm at Atmautluak, and the
thermal stoves would access the excess wind energy during the
peak of energy production. He stated that this would offset the
usage of heating oil in this community. He stated that the
Southeast Alaska Power Agency (SEAPA) has a project to install a
third turbine for the peak load at its hydroelectric facility
for the communities of Petersburg, Wrangell, Ketchikan, and
Metlakatla.
MR. ERICKSON, in response to a question from Co-Chair Mears,
expressed agreement that the SEAPA project would be helpful, as
it would expand the use of heat pumps. He expressed agreement
that this project would provide ancillary benefits.
MR. ERICKSON pointed out that the storage system project in
Chevak would be a battery system attached to a windfarm that
already exists. He pointed out that this would alleviate some
of the diesel usage, and it would provide grid stability. He
moved to the Knutson Creek hydro project, explaining that this
would be a small project that is based on the needs of the
commercial fishing industry. While the load would be in the
summertime, he said that it would benefit the community all
year. He stated that the Akiachak solar energy project would be
an augmentation to existing solar energy there, and this would
add to the community's capacity. He continued, stating that the
Nome Joint Utility System has a project to install a solar farm
alongside a preexisting wind project. He stated that this would
provide stability during the summer when the wind power is
lacking, allowing for a greater diesel fuel displacement.
MR. ERICKSON moved down the list to the Hunter Creek
hydroelectric feasibility study project in the Matanuska-Susitna
Valley. He stated that this would offset the consumption of
natural gas in the Railbelt. He pointed out the Chignik
hydroelectric power system project would increase hydro project
for the City of Chignik. He noted that this would be a match to
a project set to receive federal funding; however, the federal
funding has been put on pause. He pointed out that the final
project on the list is a Kenai Peninsula solar project that
would be selling power to Homer Electric. He noted that the
final design and construction of this project needs completing.
He moved to slide 24, which showed all projects that have been
funded under the REF program.
2:50:29 PM
MR. ERICKSON, in response to a question from Representative
Rauscher, clarified that there are 18 recommendations for REF
Round 17. In response to a follow-up question, he clarified
that the column labeled "HEC" refers to household energy costs.
He stated that this represents a combination of electrical and
heating costs for the residents in a community.
MR. ERICKSON stated slide 24 charts the equitable distribution
of funds across the different regions of the state. He remarked
that even though AEA looks to provide equitable funding, it is
limited on its ability to make recommendations to applicants.
He moved to slide 25, which shows the efficacy of the program in
terms of implementation of renewable energy projects in the
state. He suggested that the program has saved communities
"hundreds of thousands of dollars" by replacing diesel.
CO-CHAIR MEARS commented that having unreliable power would
create additional costs to communities. She suggested that
there are other savings not included in these numbers.
MR. ERICKSON expressed agreement. He noted that combining
technologies also creates savings to communities.
CO-CHAIR MEARS added that complementary technologies could take
diesel power offline for days.
2:55:00 PM
CO-CHAIR HOLLAND questioned whether there are any preexisting
reports on historical benefits of the different projects. He
suggested that having these long-term results would help with
future investments.
MR. ERICKSON responded that this information is available;
however, it may not be in a format that is easy to comprehend.
He stated that there is a list on AEA's website under the REF
program of all the funded projects, and this includes the
details of each of these projects. He added that there is an
impact analysis for the program, which attests to the success of
the program.
MR. THAYER offered to provide this information to the committee.
CO-CHAIR MEARS expressed appreciation to the presenters and made
closing comments.
2:57:33 PM
ADJOURNMENT
There being no further business before the committee, the House
Energy Special Committee meeting was adjourned at 2:57 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2025.02.10 AEA Progress Update (Cont'd) Presentation to House Energy Committee (Final).pdf |
HENE 2/13/2025 1:30:00 PM |
Alaska Energy Authority |
| 2025.02.18 AEA_Response_HouseEnergyCommittee FINAL.pdf |
HENE 2/13/2025 1:30:00 PM |
AEA |
| AEA_REF_Round17_Recommendations_Jan2025.pdf |
HENE 2/13/2025 1:30:00 PM |
AEA |
| REF_Round_17_Recommended_Projects_Summaries_Report_Jan2025.pdf |
HENE 2/13/2025 1:30:00 PM |
AEA |
| REF_Round_17_Status_Report_FINAL_Jan2025.pdf |
HENE 2/13/2025 1:30:00 PM |
AEA |