HB 151-ELECTRIC RELIABILITY ORGANIZATIONS  10:30:50 AM CHAIR HOPKINS announced that the final order of business would be HOUSE BILL NO. 151, "An Act relating to the regulation of electric utilities and electric reliability organizations; and providing for an effective date." [Before the committee, adopted as a working draft during the House Special Committee on Energy meeting on 2/20/20, was the proposed committee substitute (CS) for HB 151, Version 31-LS0870\E, Klein, 2/19/20 ("Version E").] 10:31:33 AM REPRESENTATIVE SPOHNHOLZ moved to adopt the proposed committee substitute (CS) for HB 151, Version 31-LS0870\G, Klein, 2/24/20, ("Version G") as the working draft. 10:31:52 AM REPRESENTATIVE PRUITT objected for discussion. 10:32:01 AM JOE G. HARDENBROOK, Staff, Representative Grier Hopkins, Alaska State Legislature, on behalf of the sponsor of HB 151, the House Special Committee on Energy, chaired by Representative Hopkins, reported that the Senate Special Committee on the Railbelt Electric System had adopted this same committee substitute as well as the attached intent language and had advanced its proposed bill to the Senate Finance Committee. He shared that Municipal Light and Power (ML&P) had relayed its concerns detailing the impact of the legislation on the Bradley Lake Project, both the dam and transmission lines. Although these were part of the Railbelt Electric system, they were exempted by statute from RCA oversight. He stated that the proposed bill was not an attempt to circumvent the statutes to exempt Bradley Lake from RCA regulation; however, the legislature intended that all the power suppliers on the Railbelt be subject to the reliability standards adopted by an electric reliability organization (ERO). When the Bradley Lake agreements expire, the project and its auxiliary infrastructure shall be subject to the terms of the proposed legislation. He acknowledged that there was active litigation regarding this issue. He stated that the committee substitute and the intent language were an attempt by the Alaska State Legislature to "stay out of the ongoing judicial matters and state the legislature's aims once the matter is settled." He shared that the ML&P had confirmed that the intent statement and the bill changes "adequately addressed their concerns." 10:33:50 AM MR. HARDENBROOK paraphrased a written statement [included in members' packets] showing the changes proposed under Version G, which read as follows [original punctuation provided]: Page 4, line 3: Under the "Reliability Standards" section amends the section to read "All users, owners and operators of an interconnected electric transmission network served by an ERO, including a user, owner or operator that is exempt from other regulation under AS 42.05.711 or another provision of this chapter, shall comply with reliability standards contained in a tariff that is approved by the commission." Page 8, line 20: inserts the words "including a public utility that is exempt from other regulation under AS 42.05.711 or another provision of this chapter." Following the word "utility." These changes were recommended by Legislative Legal to better reflect the intent of the legislation to require all interconnected utilities on the Railbelt and the providers of power, including but not limited to the AEA Bradley Lake project comply with the reliability standards adopted by a future Electric Reliability Organization. This is further spelled out in the attached Legislative Intent Language. 10:35:00 AM MR. HARDENBROOK paraphrased the Intent Statement for Version G [included in members' packets], which read as follows [original punctuation provided]: It is the intent of the Thirty-First Alaska State Legislature that under HB 151, reliability standards, electric reliability organization (ERO) tariff standards, planning terms, and project pre-approval requirements will ultimately apply across the entire interconnected Railbelt electric energy network. Broad application is necessary to achieve the desired efficiencies and reliability for Alaskans within the Railbelt. HB 151 does not in any way affect or change the existing relationship between the RCA and the Bradley Lake project agreements, contracts, and amendments exempt under AS 42.05.431(c). It is, however, the intent of the Alaska State Legislature that after the Bradley Lake project debt is satisfied and the AS 42.05.431(c) exemption expires, those agreements, contracts, and amendments shall be subject to HB 151. Should Bradley Lake project agreements, contracts, and amendments receive a future extension of the AS 42.05.431(c) exemptions, the Thirty-First Alaska State Legislature urges consideration of the relationship between Bradley Lake and associated infrastructure and projects, the Railbelt network, and the electric reliability organization, and emphasizes the intent to subject all interconnected network users, owners, or operators to the reliability standards, an electric reliability organization tariff, planning, and project pre-approval requirements. 10:37:32 AM REPRESENTATIVE PRUITT removed his objection to the motion to adopt the proposed committee substitute (CS) for HB 151, Version 31-LS0870\G, Klein, 2/24/20, as the working draft. There being no further objection, Version G was before the committee. 10:37:40 AM CHAIR HOPKINS moved on to public testimony on HB 151 [which had been left open from the House Special Committee on Energy meeting on 2/20/20]. After ascertaining that there was no one who wished to testify, he closed public testimony. 10:38:18 AM REPRESENTATIVE PRAX said that there were four generating facilities in Fairbanks: the University of Alaska; Doyon for Fort Wainwright; Eielson [Air Force Base], and Alyeska for Pump Station 9, and asked if these facilities had been involved in this discussion. 10:38:45 AM MR. HARDENBROOK offered his understanding that, although these entities did not provide power into the greater network, they had been part of the discussion, this legislation would not impact their operations other than to comply with the reliability standards. 10:39:26 AM ANTONY SCOTT, Commissioner, Regulatory Commission of Alaska (RCA), Department of Commerce, Community & Economic Development, relayed that the intent of the proposed bill was that interconnection within the overall system was subject to the reliability standards but beyond that "there's not much to talk about." 10:40:08 AM REPRESENTATIVE PRAX asked whether the four generating facilities had been contacted, noting that they were all connected to the grid. 10:40:44 AM JULIE ESTEY, Director of External Affairs, Matanuska Electric Association (MEA), in response to Chair Hopkins, said that an invitation had been extended to those four power producers to join in the conversation, and that several had applied to become part of the implementation committee. She added that they had also offered substantial input which had been taken into consideration. 10:41:42 AM MR. HARDENBROOK added that for more than a year the RCA had an ongoing process for public comment and had also solicited comments from independent power producers, shareholders, and consumers across the Railbelt. 10:42:12 AM REPRESENTATIVE PRUITT asked when the Bradley Lake project debt was due to be paid off. 10:42:33 AM MR. HARDENBROOK replied that the first bond indebtedness was scheduled to be paid off in July 2021. He explained that part of the conflict and discussion was related to the Battle Creek expansion proposed for the Bradley Lake project. He offered his belief that the litigation was involved with when the additional debt would be retired and, consequently, when there would be interaction with the statutes that govern the exemption of the project from RCA regulation. He pointed out that the intent language for the committee substitute stated that the intent of the legislature was for the statutes governing the RCA's participation in the Bradley Lake project to remain unchanged and that the process would play out before the terms of the proposed bill were applied to the Bradley Lake project. REPRESENTATIVE PRUITT shared his understanding for an expectation that the court had determined that the proposed legislation would be in effect based on the final date for the bond indebtedness. MR. HARDENBROOK expressed agreement, and referred to the second paragraph of the intent language, which read: the intent of the Alaska State Legislature that after the Bradley Lake project debt is satisfied and the AS 42.05.431(c) exemption expires, those agreements, contracts, and amendments shall be subject to HB 151. 10:44:34 AM REPRESENTATIVE SPOHNHOLZ moved to report CSHB 151, Version 31- LS0870\G, Klein, 2/24/20, out of committee with individual recommendations and zero fiscal notes. There being no objection, CSHB 151(ENE) was moved from the House Special Committee on Energy.