SB 180-LNG IMPORT FACILITIES  4:18:00 PM CHAIR GIESSEL announced the consideration of SENATE BILL NO. 180 "An Act relating to the regulation of liquefied natural gas import facilities by the Regulatory Commission of Alaska." 4:18:29 PM INTIMAYO HARBISON, Staff, Senator Cathy Giessel, Alaska State Legislature, Juneau, Alaska, said SB 180 would repeal AS 42.05.711(v). This would return the authority to regulate the import of liquified natural gas to the Regulatory Commission of Alaska (RCA). He explained that the RCA previously had this authority; however, this was removed during the previous legislature. SB 180 repeals that change. 4:19:11 PM SENATOR HUGHES shared her understanding that the previous legislature deliberated at length before changing the policy in question. She noted that the policy has been in effect a short time. She pointed out that the Federal Energy Regulatory Commission (FERC) has jurisdiction over liquified natural gas (LNG) import facilities. She said SB 180 would add an additional layer of oversight. She shared her understanding that the chair of the RCA supported the exemption. She wondered why a repeal is needed. She opined that it makes sense for FERC to have jurisdiction. 4:19:59 PM CHAIR GIESSEL explained that this change was in House Bill 50, Section 49 and was not extensively deliberated. She recalled a meeting in January of 2025, during which the RCA commissioner expressed concern about the wording of that section. She recalled a meeting of the RCA on or around April 20, 2025, during which Enstar requested permission to recover $4.6 million in costs associated with its LNG import development. She briefly explained this request, which RCA rejected. She recalled that, at that time, there was confusion related to the authority of FERC. CHAIR GIESSEL referred to 15 CFR 717b, which states FERC has authority over siting, construction, expansion, or operation of an LNG terminal. She clarified that FERC does not have control over rate-setting and the cost of the gas produced. She reiterated that there is confusion over the authority of FERC. She reiterated and emphasized that FERC does not have authority over the price regulation of imported LNG. She added that, similarly, FERC does not have authority over the gas purchased from a platform in Cook Inlet. She reiterated that AS 42.05.711(v) has created this confusion; therefore, SB 120 would repeal that language and return to oversight of LNG rates and price regulation to RCA. FERC would continue to regulate its listed functions. 4:23:32 PM SENATOR HUGHES recalled that the change was added to House Bill 50 late in the legislative session. She stated that House Bill 394 also contained the change and was deliberated. She recalled that the industry supported the change at that time. She shared her understanding that the Resource Development Council has concerns. She shared her understanding that the language in House Bill 394 - language that was later added to House Bill 50 - did not remove RCA authority over LNG rates and price regulation. She reiterated her concern that SB 120 would add an additional layer that could result in legal action. She stated that industry testimony is necessary. She recalled that RCA previously testified that the language in House Bill 394 was not problematic. She expressed confusion and stated that, if RCA has changed its position, she would like to know why. 4:24:50 PM CHAIR GIESSEL clarified that SB 120 repeals language that caused confusion; it does not add more layers. 4:25:09 PM CHAIR GIESSEL announced invited testimony on SB 120. 4:25:13 PM JOHN ESPINDOLA, Commissioner and Chair, Regulatory Commission of Alaska (RCA), Anchorage, Alaska, said that he is unable to speak to the Enstar filing referenced by Chair Giessel. He stated that RCA issued an order on April 22, 2025. He explained that 3 AAC 48.105 allows a party 15 days from that date to file a petition for reconsideration. RCA is still within the reconsideration period for that order. He stated that the order cites the regulatory jurisdictional authority of the commission as it relates to rates. He confirmed that RCA does have jurisdiction over rates; however, RCA believes that the repeal of AS 42.05.711(v) would eliminate any uncertainty regarding its jurisdiction over the review of gas supply agreements or terminal use agreements for public utilities using the services of an LNG import facility. 4:26:31 PM SENATOR MYERS noted that under current statute, RCA cannot regulate an LNG facility. He asked whether RCA is currently able to regulate a contract between the facility and the utility. 4:26:52 PM MR. ESPINDOLA replied yes. He clarified that RCA believes it maintains the authority to regulate those contracts. 4:27:01 PM SENATOR MYERS asked what authority RCA would gain from repealing AS 42.05.711(v). He pointed out that RCA can still regulate the rate charged to the consumer via the contract. 4:27:36 PM MR. ESPINDOLA replied that RCA would not gain any authority by repealing AS 42.05.711(v). He clarified that the repeal would eliminate the uncertainty of the jurisdictional boundaries of RCA. 4:28:05 PM SENATOR MYERS asked for a detailed explanation of how the process would change if the RCA was able to regulate the LNG import facility. 4:28:28 PM MR. ESPINDOLA replied that the import facility would not be subject to RCA regulation. This is the case regardless of whether the statute in question is repealed. He clarified that the rates passed on to ratepayers would fall within RCA jurisdiction. He reiterated that the facility would not fall under RCA jurisdiction. He stated that he was not chair of RCA when RCA testified regarding House Bill 394 and House Bill 50 and is not able to speak to that testimony. 4:29:12 PM SENATOR MYERS shared his understanding that SB 120 would give RCA control over rates; however, RCA already has that control because RCA is able to regulate the contract. He asked for further clarification as to why the repeal is necessary. 4:29:38 PM MR. ESPINDOLA clarified that RCA does not believe it is necessary to repeal the language. 4:29:50 PM SENATOR CLAMAN asked for confirmation of his understanding that RCA can already do what SB 120 would allow RCA to do. 4:30:19 PM MR. ESPINDOLA asked Senator Claman to repeat the question. 4:30:26 PM SENATOR CLAMAN repeated his question. He asked for confirmation of his understanding that, from the perspective of RCA, SB 120 is unnecessary in terms of the power of RCA to regulate the price consumers are paying for potentially imported LNG. 4:30:45 PM MR. ESPINDOLA confirmed this understanding. 4:30:51 PM SENATOR CLAMAN asked whether RCA holds the position that, despite already having that authority, it would nevertheless be advantageous to clarify the authority of RCA by removing AS 42.05.711(v). 4:31:07 PM MR. ESPINDOLA replied yes. He clarified that repealing AS 42.05.711(v) would eliminate the uncertainty related to the jurisdiction of RCA. 4:31:19 PM CHAIR GIESSEL recalled that during the most recent Enstar case, the two property entities argued the legislature had an intent to restrict the jurisdiction of RCA by adopting AS 42.05.711(v). She stated that the following language was removed: For ratemaking purposes, the commission shall consider the investment of a public utility in an LNG import of export facility. CHAIR GIESSEL explained that removing this language created confusion. Some argued that RCA does not have jurisdiction over ratemaking. She stated that, at that meeting, RCA disagreed and argued that it maintains jurisdiction to consider gas supply and terminal use agreements and is not barred by statute from doing so. 4:32:58 PM CHAIR GIESSEL pointed out the confusion that arose during that meeting and briefly discussed the statute responsible for that confusion. She acknowledged that RCA believes it maintains jurisdiction over the rate setting. However, because some have argued that RCA does not have jurisdiction over ratemaking, the issue of whether the jurisdiction falls to FERC or RCA may come up each time RCA attempts to exercise its authority over rate setting. 4:34:43 PM SENATOR CLAMAN asked whether the RCA would be subject to significant risk if it was determined that RCA did not have proper statutory authority. He asked for confirmation that SB 120 would simply remove any doubt related to the jurisdiction of RCA. 4:35:36 PM RICHARD GAZAWAY, Administrative Law Judge, Regulatory Commission of Alaska, Anchorage, Alaska, stated that he was not involved in the docket in question. However, he recalled concerns regarding ambiguous language related to the jurisdiction of RCA over rates for purchases from a liquified natural gas (LNG) facility. He indicated that RCA disagreed with the determination. He stated that clarification would eliminate any ambiguity. 4:36:55 PM CHAIR GIESSEL opened public testimony on SB 180; finding none, she closed public testimony. 4:37:11 PM CHAIR GIESSEL held SB 180 in committee.