SB 152-COMMUNITY ENERGY FACILITIES  [Before the committee is CSSB 152 (33-LS0607\U)] 2:38:13 PM CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 152 "An Act relating to community energy facilities." 2:38:47 PM CHAIR BJORKMAN noted Robert Doyle, the chairman of the Regulatory Commission of Alaska (RCA) was available online to answer questions. 2:39:09 PM CHAIR BJORKMAN asked how SB 152 would work from the perspective of the RCA. 2:39:46 PM ROBERT DOYLE, Chair, Regulatory Commission of Alaska (RCA), Anchorage, Alaska, said the role of the RCA as envisioned by SB 152 is that the RCA would establish protocol to facilitate communication between the utilities and the subscriber organizations as outlined by the statute. He said the RCA is supportive of net metering and community solar farms, etc., acknowledging the growing interest of Alaskans [in renewable energy opportunities] and that they can save money. He said, if SB 152 does not move forward, RCA is considering opening a regulatory [approach] to see if it would be possible to increase net metering. He said the highest percentage of net metering in the railbelt currently is about seven percent in ATA, about five percent in Chugach and JVA, and he said MEA is probably around three percent. He said RCA was looking at getting to 20 percent [net metering]. He said getting to 20 percent would remove any caps and allow utilities to make sure that if there are costs associated with [net metering] that are having to be cross- subsidized, that would be addressed in SB 153. He said RCA would develop regulations to carry out SB 152. He said he did not expect any problematic surprises to emerge. 2:41:30 PM CHAIR BJORKMAN noted the mention of cross-subsidization and language in SB 152 that mentions utilities modifying their interconnection standards, fees and processes to facilitate cost-effective interconnection. He asked how SB 152 protects other consumers from having to pay for the connection of renewable projects to their utility system. 2:42:04 PM MR. DOYLE said the process would be developed by having hearings and getting facts from the various utilities. [The process] will be based upon the facts that are presented on the record. He said there is a point of regulating the electrons and, because, in net metering, it's different than just receiving the power. He explained [a ratepayer] could actually be generating the power and the power would go back to the utility and [the net metering ratepayers] would pay either an avoided cost or a negotiated cost. He said at some point, the normal transformer systems, the normal systems to regulate that power may have to be upgraded because there would have to be a mechanism by which the utilities would quantify [the electron exchange] and show the RCA exactly what it is so the people who are not net metering will not have to pay for something they do not benefit from. He said the RCA would analyze that through regulation and through the hearing process. He asked whether he had answered the question. 2:43:12 PM CHAIR BJORKMAN said yes. 2:43:14 PM CHAIR BJORKMAN referred to SB 152, page 3, line 11 which calls for the RCA to facilitate financing of projects and asked how that would work. 2:43:24 PM MR. DOYLE said that would be an interesting conversation that will occur in the hearing process. He said RCA does not currently facilitate the creation and financing of those projects but would be able to examine regulations and established processes and consider proposed energy projects such as the recently approved Chugach project and monitor them as pilot projects. That would allow them to work with actual numbers to have a rate chase in the future based on real numbers and real cost. He said RCA could facilitate that and would be able to work with Independent Power Producers (IPPs) and other groups developing community [renewable energy generation] projects who would want to be confident that RCA would not be exerting unwarranted status in the middle of financing efforts. [IPPs and other entities] want to have [processes] that are known, prudent and [consider] the interests of all the members of the co-op and the utility and not just the members that directly benefit from net metering. 2:44:47 PM CHAIR BJORKMAN noted SB 152, page 2, lines 17 - 18 and read, "The commission shall ensure that a community energy program does not have an adverse effect on the retail rates of an electric utility...". He expressed his appreciation for this provision in the bill. CHAIR BJORKMAN noted the mention of the Chugach pilot project and asked whether RCA had originally denied that project and subsequently reversed the denial. 2:45:20 PM MR. DOYLE said the first project was envisioned differently and ended up going through a full hearing. Based on that hearing, it was determined that cross-subsidization had not been well- addressed, and the project was denied. When the project was re- introduced as a smaller pilot project, [the developers] had addressed many of those [cross-subsidization] concerns and a hearing was not required. The project was approved after an adjudication. He described it as a small project with minimal impact, for which the developers worked out the details and communicated more information to the consumers and the RCA as [the project] was envisioned and grew. So, he said it was two different processes and two different programs [that RCA evaluated]. 2:46:18 PM CHAIR BJORKMAN restated that the RCA is confident that the cross-subsidization issues were dealt with and the pilot project moving forward is fair to all ratepayers. 2:46:27 PM MR. DOYLE affirmed his summary and said that is why RCA approved [the Chugach project]. 2:46:48 PM SENATOR BILL WIELECHOWSKI, District K, Alaska State Legislature, Juneau, Alaska, sponsor of SB 152 said the bill was filed over a year ago and that it had been through an exhaustive process, meeting with stakeholders and talking with utilities, and he said the bill had gone through many changes and had reached a state of consensus. He appreciated the committee's patience and cooperation and said he thought the bill was one that people across Alaska will appreciate. He said it would be good for the electrical grid, it will help save natural gas and it will help consumers save money. 2:47:47 PM CHAIR BJORKMAN solicited the will of the committee. 2:47:48 PM SENATOR GRAY-JACKSON moved to report CSSB 152, work order 33- LS0607\U, from committee with individual recommendations and attached fiscal note(s). 2:48:11 PM CHAIR BJORKMAN found no objection and CSSB 152 (L&C) was reported from the Senate Labor and Commerce Standing Committee. # 2:48:50 PM There being no further business to come before the committee, Chair Bjorkman adjourned the Senate Labor and Commerce Standing Committee meeting at 2:48 p.m.