Legislature(2015 - 2016)BUTROVICH 205
03/17/2015 01:00 PM Senate SPECIAL CMTE ON ENERGY
| Audio | Topic |
|---|---|
| Start | |
| SB57 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 57 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE SPECIAL COMMITTEE ON ENERGY
March 17, 2015
1:10 p.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Peter Micciche, Co-Chair
Senator Lyman Hoffman
Senator Bert Stedman
Senator Dennis Egan
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 57
"An Act relating to the development of state emission standards
in accordance with the federal Clean Air Act."
- MOVED CSSB 57(NRG) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 57
SHORT TITLE: CLEAN AIR ACT PLAN
SPONSOR(s): SENATOR(s) GIESSEL
02/20/15 (S) READ THE FIRST TIME - REFERRALS
02/20/15 (S) NRG, RES
03/17/15 (S) NRG AT 1:00 PM BUTROVICH 205
WITNESS REGISTER
SENATOR CATHY GIESSEL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 57.
JERRY MULLINS, Vice President
Government Affairs and External Relations
National Mining Association
Washington, D.C.
POSITION STATEMENT: Supports SB 57.
NORMAN ROKEBERG, Commissioner
Regulatory Commission of Alaska
Anchorage, Alaska
POSITION STATEMENT: Noted rulemaking concerns regarding the
Environmental Protection Agency.
ALICE EDWARDS, Deputy Commissioner
Division of Air Quality
Department of Environmental Conservation
Juneau, Alaska
POSITION STATEMENT: Stated no departmental position on SB 57.
ACTION NARRATIVE
1:10:23 PM
CO-CHAIR PETER MICCICHE called the Senate Special Committee on
Energy meeting to order at 1:10 p.m. Present at the call to
order were Senators Egan, Hoffman, Stedman, Co-Chair Bishop, and
Co-Chair Micciche.
SB 57-CLEAN AIR ACT PLAN
1:11:04 PM
CO-CHAIR MICCICHE announced the consideration of SB 57.
CO-CHAIR MICCICHE asked for a motion to adopt the CS for SB 57,
version: I, as the working document.
CO-CHAIR BISHOP moved that the committee adopt the CS for SB 57
[version 29-LS0523\I].
1:11:40 PM
CO-CHAIR MICCICHE announced that without objection, version: I
was before the committee as the working document.
1:11:46 PM
SENATOR CATHY GIESSEL, Alaska State Legislature, Juneau, Alaska,
said SB 57 is a response to some egregious regulation proposals
made by the Environmental Protection Agency (EPA). She read a
sponsor-statement as follows:
In June 2014, the EPA released a proposed rule to
regulate emissions from power generators. The proposed
rule has two main elements: 1) state-specific emission
reduction targets and 2) guidelines for the
development, submission, and implementation of state
plans to meet those targets. The EPA set Alaska's CO2
emissions reduction target at 26 percent by 2030.
First and foremost, SB 57 requires the Department of
Environmental Conservation (DEC) to seek a waiver or
similar exemption for Alaska to the EPA's proposed
rule known as "Existing Source Performance Standards"
under section 111(d) of the Clean Air Act. SB 57 also
provides guidance to DEC regarding the development of
a State Implementation Plan (SIP) should this rule go
into effect as it is currently proposed.
So what are some of the elements in the state's
implementation plan that the bill would prohibit; in
other words, the bill tells the department that the
plan should not result in:
1. Increased retail electric rates in a way that
would disproportionally affect households of low
or moderate income.
2. Less reliable electric service, resource
inadequacy, or transmission constraints.
3. Impairment of investments in existing electricity
generating capacity.
4. Impairment of the competitive position of
manufactures or other public or private sectors
of the state economy.
5. Decrease in employment in the state.
6. Decrease in state or local revenue.
You can see that there are some sidebars set around
what this plan could and could not do, specifically
could not do. We don't want negative effects on our
economy and on our citizens.
The EPA's proposed rule would cause significant
increases in Alaska's electrical rates, challenge the
reliability of electric service, and will effectively
preempt the state's energy policy. The state's plan
must include some specific and forcible measures and
responsible parties. Once approved by the EPA, the
state plan would be federally enforceable.
SB 57 is written to protect the state from EPA's
overreach and protect the citizens. So SB 57 is a tall
order, but we are not alone. 15 other states have
either passed legislation or resolutions in opposition
to EPA's section 111(d) of the Clean Air Act.
There are some folks asserting that this piece of
legislation is somehow copied from other organizations
and I will tell you that that is not true; this is
specifically written for Alaska by my office and
collaboration with other offices who have the same
concern I do. So this would set parameters that would
protect Rail Belt ratepayers from Seward to Anchorage
to the Interior.
1:15:49 PM
CO-CHAIR MICCICHE noted that the next committee of referral will
be Senate Resources. He stated that he has no need to hold on to
the bill and noted his intent to move the bill out of committee.
1:17:43 PM
JERRY MULLINS, Vice President, Government Affairs and External
Relations, National Mining Association, Washington, D.C., stated
that he supports SB 57. He revealed that 20 other state
legislatures are making sure that their State Implementation
Plans (SIP) complies with the President's Clean Power Plant Rule
without causing higher electricity rates or future reliability
issues. He pointed out that some states have passed legislation
that requires state legislatures to approve their SIP. He
revealed that there is worry the EPA can simply force a Federal
Implementation Plan (FIP) on states that are slow or do not
offer plans as fast as the EPA expects. He pointed out that the
EPA cannot simply go into a state and start telling power
plants, businesses, or households what to do regarding
electricity production or consumption. He summarized that making
sure a state has elected officials serving as a responsible
stakeholder regarding SIP development is the best path forward
to ensure that affordable and reliable electricity remains a
reality for all Alaskans.
CO-CHAIR MICCICHE asked Commissioner Rokeberg if he sees any
problems with SB 57 getting in the way of the Regulatory
Commission of Alaska's (RCA) processes or impeding the state on
complying with the EPA's requirements.
1:20:09 PM
NORMAN ROKEBERG, Commissioner, Regulatory Commission of Alaska,
Anchorage, Alaska, replied that his only concern is making sure
that all of the leadership and people of Alaska have a common
goal. He stated that the RCA has significant problems with the
EPA's rulemaking docket under 111(d) of the Clean Air Act. He
revealed that the RCA's executive branch worked hard in putting
together comments that were submitted to the EPA in December. He
explained that the most appropriate action was to request a
waiver from the EPA. He pointed out that Alaska is not connected
to the continental-grid and the impact from 111(d) on Alaska is
quite extraordinary. He revealed that Alaska had joined other
states in filing a lawsuit to set the EPA's rulemaking aside,
but noted that Alaska was subject to the EPA's imposition of a
plan if the state did not file a plan. He detailed that an EPA
drafted plan would be enforced by the EPA and subject to
citizen's suits. He summarized that he was concerned if Alaska
did not provide a SIP.
1:23:12 PM
CO-CHAIR MICCICHE closed public testimony. He noted letters of
support from the Teamster's Local 959, Fairbanks Chamber of
Commerce, Alaska Railbelt Cooperative Transmission & Electric
Company (ARCTEC), Alaska State Chamber of Commerce, Consumer
Energy Alliance-Alaska, Alaska Miners Association, and Golden
Valley Electric Association. He noted one letter of opposition
submitted by Ms. Whytal from Homer where she worries SB 57
prohibits DEC from hearing a very unique, state-specific
implementation plan. He asked Senator Giessel if SB 57 prohibits
a plan from being constructed.
SENATOR GIESSEL replied that SB 57 does the opposite. She
detailed that SB 57 urges DEC to create a plan that is specific
for Alaska in addition to asking for an exemption. She asserted
that there was no prohibition and her office had met with DEC.
She revealed that DEC understood SB 57's goal and the department
would carry its provisions forward.
CO-CHAIR MICCICHE thanked Senator Giessel and pointed out that
the committee was paying attention to letters of testimony and
that the sponsor was aware of the specified issues.
SENATOR EGAN asked if the Administration had a position on the
bill.
CO-CHAIR MICCICHE stated that he nor the sponsor could speak for
the Administration.
SENATOR GIESSEL concurred with Co-Chair Micciche.
1:25:42 PM
ALICE EDWARDS, Deputy Commissioner, Division of Air Quality,
Department of Environmental Conservation, Juneau, Alaska,
replied that she does not have a formal position from the
Administration on SB 57. She concurred with Commissioner
Rokeberg that DEC shares concerns regarding the provisions in
111(d) about having affordable and reliable power in the state.
She added that the department also shares the RCA's concerns
about the state's ability to meet both the bill's requirements
and the federal rule requirements that may be put into place.
She summarized that the department is concerned that the state
may end up with a federal plan rather than a state plan.
SENATOR EGAN asked if the federal plan would cost the state more
money.
MS. EDWARDS replied that DEC believes the analysis required
would cost a little bit more money than what normally is
prepared.
SENATOR EGAN specified that the state would have to spend a lot
of money fighting the federal government as other states were
doing.
MS. EDWARDS reiterated that the state had joined a lawsuit in
addition to requesting an exemption. She said the EPA's rules
were not known and there was uncertainty as to what steps should
be taken next.
1:27:59 PM
SENATOR EGAN opined that being involved in something does not
cost the state anything, but fighting a federal regulation costs
a lot of money.
CO-CHAIR MICCICHE noted that the fiscal note was $75,000 for
FY16 and $25,000 for FY17. He asked what the cost would have
been without SB 57. He opined that a plan would be produced
anyway once there was a regulation.
MS. EDWARDS specified that the costs identified in the fiscal
note address economic analysis that typically goes beyond what
DEC normally does. She specified that the fiscal noted
identified the contractual costs that go beyond the division's
technical capacity.
CO-CHAIR MICCICHE asked if the fiscal note reflected the cost of
DEC or another department.
MS. EDWARDS answered that DEC would be assumed to be contracting
for assistance.
CO-CHAIR MICCICHE opined that the bill pushes an understanding
of the impacts from federal regulations on the state's everyday
lives. He remarked that the state would just comply in the past
while sometimes not understanding the unintended consequences.
He said understanding the impact is a worthwhile investment
considering the hundreds of millions that would be costing the
state in the long run.
1:30:09 PM
CO-CHAIR BISHOP commended the bill's sponsor. He noted that the
Teamsters pointed out in a letter that 80 full-time employees
work at the Usibelli Coal Mine (UCM). He revealed that 47
percent of the Alaska Railroad's revenue comes from hauling UCM
coal. He asserted that the state needs to stand up and debate
the 111(d) rule, a rule that was clearly an over-reach attempt
by the EPA. He noted an article that detailed Denali National
Park as having the cleanest air of any national park in the U.S.
with a coal mine and producing coal plant located within 30
miles. He divulged that samplings over the past 35 years have
not mentioned anything regarding coal mine or coal plant
contaminants.
CO-CHAIR MICCICHE asked Senator Giessel to make her final
comments. He reiterated that SB 57 will be heard in the Senate
Resources Committee as well.
SENATOR GIESSEL commented that SB 57 may ask DEC to do a bit
more analysis than what was required in writing the SIP. She
opined that the cost of doing nothing was too high. She said
Alaska and other states know that the EPA's new regulations will
increase energy costs for citizens and businesses. She
summarized that states may be able to convince the EPA to
abandon the 111(d) rulemaking procedure.
1:32:27 PM
CO-CHAIR BISHOP moved that the committee pass the CS for SB 57
[29-LS0523\I] from the committee with individual recommendations
and attached fiscal note(s).
CO-CHAIR MICCICHE announced that hearing no objection, CSSB
57(NRG) passed from the Senate Special Committee on Energy.
1:33:09 PM
There being no further business to come before the committee,
Co-Chair Micciche adjourned the Senate Special Committee on
Energy hearing at 1:33 p.m.