Legislature(2025 - 2026)SENATE FINANCE 532
03/26/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Alaska Energy Authority | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
March 26, 2025
9:01 a.m.
9:01:26 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Mike Cronk
Senator James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
None
ALSO PRESENT
Curtis Thayer, Executive Director, Alaska Energy Authority;
Tim Sandstrom, Chief Operating Officer, Alaska Energy
Authority, Juneau; Senator Cathy Giessel.
SUMMARY
^ALASKA ENERGY AUTHORITY
9:02:26 AM
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY,
(AEA) discussed, "AEA Progress" (copy on file). He looked
at slide 2, "AEA Board of Directors." He pointed to slide
3, "About AEA":
AEA's mission is to reduce the cost of energy in
Alaska. To achieve this mission, AEA strives to
diversify Alaska's energy portfolio enhancing
reliability, resiliency, and redundancy.
Railbelt Energy (Owned Assets)
.notdef Bradley Lake Hydroelectric Project
.notdef Alaska Intertie
.notdef Sterling to Quartz Creek Transmission Line
.notdef High Voltage Direct Current Transmission Line
Power Cost Equalization
.notdef $48 Million Program
.notdef 192 Rural Communities
.notdef 91 Electric Utilities
.notdef 80,000+ Alaskans
Rural Energy
.notdef Bulk Fuel Upgrades
.notdef Rural Power System Upgrades
.notdef Circuit Rider Program
.notdef Electrical Emergency Assistance
Renewable Energy and Energy Efficiency
.notdef Renewable projects: biomass, electric vehicles,
hydroelectric, solar, and wind
.notdef Federal programs: NEVI, Solar for All, and Home
Energy and High Efficiency Rebate Allocations
Grants and Loans
.notdef Renewable Energy Fund
.notdef Power Project Fund
Energy Planning
.notdef Alaska Energy Security Task Force
.notdef State Energy Security Profile
.notdef Electronic Library
.notdef Energy Data Resources
.notdef 40101(d) Grid Resilience Program
9:07:51 AM
Mr. Thayer looked at slide 5, "Bradley Lake Hydroelectric
Project":
.notdef Energized in 1991, the Bradley Lake Hydroelectric
Project is Alaska's largest renewable energy source.
It is located 27 air miles northeast of
.notdef The 120 MW facility provides low cost energy to
550,000+ people on the Railbelt.
.notdef Bradley Lake's annual energy production is ~10
percent of Railbelt electricity at
4.5 cents/kWh (or 54,400 homes/year) and over $20
million in savings per year for
Railbelt utilities from Bradley Lake versus natural
gas.
.notdef The AEA, in partnership with Railbelt utilities, is
studying the Dixon Diversion Project, which would
increase the annual energy production of Bradley Lake
by 50 percent (the equivalent of up to 30,000 Bradley
Lake Hydroelectric Project)
Co-Chair Stedman assumed that the 4.5 cents/kWh at Bradley
Lake was the delivery rate, and not the rate to the meter.
He stressed that there should be a comparison with the rate
at the meter and its equivalency.
9:10:44 AM
Mr. Thayer pointed to slide 6, "Dixon Diversion Project":
$342 Million
The AEA is studying the Dixon Diversion Project to
optimize the Bradley Lake Hydroelectric Project's
energy potential. Like the West Fork Upper Battle
Creek Diversion Project, the Dixon Diversion Project
would divert water from Dixon Glacier to increase
Bradley Lake's annual energy production by 50 percent.
.notdef Located five miles from Bradley Lake and would
utilize existing powerhouse at Bradley Lake.
.notdef Estimated annual energy 100,000 200,000 MWh
(the equivalent of up to 30,000
.notdef Estimated to offset 1.5 billion cubic feet of
natural gas per year in Railbelt power generation
(equal to 7.5 percent of Alaska's unmet natural
gas demand projected for 2030).
.notdef Estimated completion is 2030.
9:11:11 AM
A video about the Bradley Lake Project was played for the
committee.
Co-Chair Stedman queried the FERT update on the project.
Mr. Thayer replied agreed to provide that information.
9:15:43 AM
Mr. Thayer pointed to slide 7, "Grid Resilience and
Innovation Partnerships (GRIP): HVDC Line":
.notdef Provides a redundant pathway between the Southern
(Kenai Peninsula) and Central (Anchorage and Mat Su)
Regions
.notdef Eliminates the single point of failure inherent in
the previous system (the system will still be subject
to single point of failure between Willow and Healy)
.notdef Allows for more renewable power to be added to the
grid and distributed across the Railbelt
.notdef Increases the ability to share power between the
Southern, Central, and Northern Regions of the
Railbelt, allowing the most economical power to be
used at all times The AEA secured $206.5 million for
GRIP Topic Area 3: Grid Innovation through the U.S.
Department of Energy's Grid Deployment Office. A cost
share of 100 percent, or $206.5 million, is required
for a total project amount of $413 million.
The project includes constructing high voltage direct
current (HVDC) submarine cables as a parallel
transmission route from the Kenai Peninsula to
Anchorage.
A video about the Alaska Electric Transmission lines was
played for the committee.
9:20:43 AM
Mr. Thayer addressed slide 8, "Sterling to Quartz Creek
(SQ) Transmission Lines":
In 2020, AEA acquired the SQ Transmission Lines, as
part of the Bradley Lake Hydroelectric Project.
.notdef Location 39.4 miles of 115 kilovolt (kV)
transmission and out of use 69 kV transmission from
Sterling to Quartz substation (Kenai Lake).
.notdef Benefits
The AEA ownership ensures better cost alignment,
reduce line losses, increased reliability, and more
timely repairs and upgrades.
.notdef Status 69 kV line decommissioned and removed;
engineers are designing and are procuring equipment
for the upgrade of the existing 115 kV line to 230 kV.
Construction has started on the first section.
.notdef Cost Estimated cost to upgrade line is $90 million
for the SQ transmission line and Sterling to Soldotna
transmission line.
Mr. Thayer discussed slide 9, "Battery Energy Storage
Systems (BESS) for Grid Stabilization":
.notdef Scope
The BESS projects consist of an upgrade to the
existing BESS system in the North, and new BESS in the
Southern, and Central regions of the grid. The
Northern BESS is located at Fairbanks, the Southern
BESS is located at Kenai, and the Central Region BESS
will be located at Anchorage. The BESS will be needed
to fully realize the benefits of a 230 kV bulk power
supply system, regulate energy from various
generation, and increase resilience.
.notdef Benefits Increase system resilience, transfer
capability, more efficient use of system, and lowers
impediments to additional renewable generation
development.
.notdef Schedule
- Southern (Kenai) In service
- Central (Anchorage) In service
- Northern (Fairbanks) Engineering and design
.notdef Budget $28 million in services to dampen
oscillation
Senator Kaufman queried the process for funding the ongoing
maintenance. He remarked on the unfunded deferred
maintenance needs.
Mr. Thayer replied that there was a management committee
that oversees that maintenance, and the utilities paid for
the maintenance of the assets.
9:27:15 AM
A video about Rural Alaska Infrastructure played for the
committee.
Co-Chair Hoffman recalled meeting with individuals from
Senator Olson's district that were concerned about their
fuel tanks, and the stress of the fines from the utilities.
9:31:37 AM
TIM SANDSTROM, CHIEF OPERATING OFFICER, ALASKA ENERGY
AUTHORITY, JUNEAU, replied that there were two projects in
that area to repair the tank.
Co-Chair Hoffman wanted to see progress on that issue.
Mr. Thayer highlighted slide 11, "Power Cost Equalization
(PCE)":
The PCE program was established in 1985 as one of the
components of a statewide energy plan.
The cost of electricity for Alaska's rural residents
is notably higher than for urban residents. The PCE
lowers the cost of electric service paid by rural
residents. Ultimately ensuring the viability of rural
utilities and the availability of reliable,
centralized power.
9:34:01 AM
Co-Chair Hoffman wondered whether there was an expansion of
the Power Cost Equalization (PCE) program.
Mr. Thayer replied in the negative.
Mr. Thayer displayed slide 12, "Rural Power System
Upgrades":
.notdef The AEA's Rural Power Systems Upgrade program
improves power generation in Alaska villages with less
than 2,000 people.
.notdef Approximately 170 communities are eligible for the
program, which replaces outdated, inefficient
mechanical systems with new electronically controlled
generator sets.
.notdef Due to declining funds, rural power systems are not
upgraded timely, and communities are left with aging
systems at risk of failure.
.notdef The AEA evaluates several factors when prioritizing
projects for funding at this time, deferred
maintenance is estimated at $300 million
Co-Chair Stedman asked about the cheap gas to the Rail
Belt. He requested an update of the comparison of fuel
types and cost at the meter.
Mr. Thayer responded that he would provide an updated
comparative cost.
Co-Chair Hoffman asked when the committee could expect that
update.
Mr. Thayer replied that an updated comparison could be done
by the following week.
Mr. Thayer addressed slide 13, "Bulk Fuel Upgrades
.notdef The AEA designs and builds modern, code compliant
bulk fuel facilities through our Bulk Fuel Upgrade
program
.notdef In Alaska, there are over 400 bulk fuel facilities
each sized to support the village.
.notdef Most of the facilities are older than 40 years, with
many exceeding 50 years , and they average 100,000
gallons in size.
.notdef However, aging infrastructure poses several safety
risks for rural communities, e.g., corrosion, erosion,
and environmental.
.notdef The AEA maintains an inventory and assessment
priority need based list so far, deferred maintenance
is estimated at $1 billion
9:40:05 AM
Co-Chair Hoffman wondered where the picture was taken.
Mr. Thayer replied that he would provide that information.
Mr. Thayer pointed to slide 15, "Circuit Rider Program
Mr. Thayer highlighted slide 17, "Grid Resilience Formula
Grant Program IIJA 40101(d)":
.notdef Under 40101(d), AEA anticipates receiving $60
million in federal formula grants to catalyze grid
resilience projects. In August 2023, the first two
years of allocations, $22.2 million , were awarded to
.notdef The AEA's competitively solicited applications for
the initial federal formula allocation in February
2024. The AEA selected three projects for sub awards,
totaling $20.9 million.
In December 2024, DOE issued final approvals for the
sub award projects. Due to pauses on funding for IIJA
programs, the issuance of sub award agreements have
been delayed but are anticipated to be finalized in Q2
2025.
.notdef In August 2024, AEA received $17,627,018 in federal
program formula funds for fiscal year 2025, requiring
$2.6 million in state matching funds. The AEA is
working with DOE to determine next steps.
.notdef Resilience measures include but are not limited to:
- Relocating or reconductoring powerlines
- Improvements to make the grid resistant to extreme
weather
- Increasing fire resistant components
- Integrating distributed energy resources like
microgrids and energy storage
.notdef Formula based funding requires a 15 percent state
match and a 33 percent small utility match
Mr. Thayer pointed to slide 18, "National Electric Vehicle
Infrastructure (NEVI) Program":
.notdef The AEA and the Alaska Department of Transportation
and Public Facilities (DOT and PF) continue to deploy
the State of Alaska NEVI Plan.
.notdef On November 25, 2024, AEA and DOT and PF received
approval of the fiscal year 2025 plan. This unlocked
$11 million in addition to $30 million available from
previous fiscal years.
.notdef In fall 2023, the first round of Alaska NEVI awards
were announced.
The AEA and DOT and PF selected projects in nine
communities for a total investment of $8 million.
Private entities will own and operate the new charging
stations.
.notdef Phase 2 will develop charging infrastructure in more
than 30 communities along Alaska's Highway System and
the Marine Highway System.
National Electric Vehicle Infrastructure
9:44:03 AM
Co-Chair Hoffman wondered whether there was communication
at the federal level that would be in jeopardy.
Mr. Thayer replied, "no."
Senator Kiehl recalled that the Volkswagen settlement funds
had gone into the early stages of the electric vehicle
charging, but wondered if any funds remained to leverage
the project.
Mr. Thayer replied that those moneys were expanded, so that
was how AEA got into the electrical vehicle business.
Mr. Thayer discussed slide 19, "Solar for All":
.notdef In April 2024, AEA and the Alaska Housing Finance
Corporation (AHFC) were selected for a $62.5 million
grant from the Environmental Protection Agency's Solar
for All program.
- The AEA is developing community
solar in disadvantaged communities.
- The AHFC is developing residential
rooftop solar for low income households.
.notdef Program benefits:
- Energy cost savings,
- Increased resiliency,
- Distributed solar energy for low
income and disadvantaged households,
- Workforce development, and
- Reduction in greenhouse gas
emissions.
.notdef No match required for this competitive grant.
Mr. Thayer pointed to slide 20, "Home Energy and High
Efficiency Rebate Allocations
Home Efficiency Rebates
.notdef Rebates for energy efficiency retrofits range from
$2,000 --$4,000 for individual households and up to
$400,000 for multifamily buildings.
.notdef Grants to states to provide rebates for home
retrofits.
.notdef Up to $2,000 for retrofits reducing energy use by 20
percent or more, and up to $4,000 for retrofits saving
35 percent or more.
.notdef Maximum rebates amounts are doubled for retrofits of
low and moderate income homes.
.notdef Alaska's allocation: $37.4 million; no State match
required.
.notdef Funding is estimated to be available between
fall/winter 2025.
Home Electrification and Appliance Rebates
.notdef Rebates for low and moderate income households to
save energy and money toward energy upgrades made to
their primary residence.
.notdef Includes means testing and will provide 50 percent
of the project cost to residents with incomes between
80 to 150 percent. Rebates of 100 percent for incomes
below 80 percent of area medium income, with similar
tiers for multifamily buildings.
.notdef Includes a $14,000 cap per household, with an $8,000
cap for heat pump costs, $1,750 for a heat pump water
heater, and $4,000 for electrical panel/service
.notdef Other eligible rebates include electric stoves,
clothes dryers, and insulation/air sealing measures.
.notdef Alaska's allocation: $37.1 million; no State match
required.
.notdef Funding is estimated to be available between
fall/winter 2025.
Mr. Thayer highlighted slide 21, "Black Rapids Training
Site (BRTS) Defense Community Infrastructure Pilot
Program":
The AEA partnered with Golden Valley Electric
Cooperative (GVEA) and was awarded this grant from the
Office of Local Defense Community Cooperation under
the Defense Community Infrastructure Pilot Program.
Federal Receipt authority of $15.7 million received in
fiscal year 2024. No State match is required
The GVEA will use the funds to extend a transmission
line 34 miles along the Richardson Highway to BRTS.
Currently, BRTS is powered by three diesel generators
that are nearing the end of their useful lives. This
extension will improve long term sustainability and
reliability for BRTS by tying them into GVEA's power
grid.
Mr. Thayer addressed slide 22, "Federal Funding Awards and
Pending Applications."
9:50:31 AM
Mr. Thayer discussed slide 24, "Renewable Energy Fund (REF)
Grand Program":
Established in 2008, REF provides grant funding
(subject to Legislative approval) incentivizing the
development of qualifying and competitively selected
renewable energy projects. The program is designed to
produce cost effective renewable energy for heat and
power to benefit Alaskans statewide.
Mr. Thayer spoke to slide 25, "REF Round 17 Recommended
Projects to Legislature
Co-Chair Hoffman asked about the work in Fairbanks on
micronuclear power.
9:54:32 AM
Mr. Thayer replied that AEA was supportive of exploring
nuclear energy.
Co-Chair Hoffman remarked that people were already
investing in nuclear energy.
Mr. Thayer replied that there was not a current investment
for nuclear power due to the most immediate need of bulk
fuel.
Co-Chair Hoffman wondered whether there could be further
examination of the other entities and their investments in
the Lower 48 that were utilizing nuclear energy.
Mr. Thayer agreed to provide that information.
Senator Cronk wondered how much of the PCE earnings was
available each year.
Mr. Thayer responded that it was managed by the Permanent
Fund Corporation. He explained that the first $48 million,
and anything after that went to the community assistance at
$30 million. He stated that beyond that $78 million, there
was a "cascading waterfall" that allowed for additional
earnings up to $25 million to be used for bulk fuel loans,
powerhouse upgrades, or the Renewable Energy Fund.
Mr. Thayer thanked the committee.
Co-Chair Hoffman discussed committee business.
ADJOURNMENT
10:02:17 AM
The meeting was adjourned at 10:02 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2025.03.25 AEA Progress Presentation to Senate Finance Committee (Final).pdf |
SFIN 3/26/2025 9:00:00 AM |
|
| 032625 AEA Presentation backup Executive Summary SuDam.pdf |
SFIN 3/26/2025 9:00:00 AM |