ALASKA STATE LEGISLATURE  HOUSE SPECIAL COMMITTEE ON ENERGY  April 23, 2024 10:16 a.m. DRAFT MEMBERS PRESENT Representative George Rauscher, Chair Representative Tom McKay Representative Thomas Baker Representative Stanley Wright Representative Mike Prax Representative Calvin Schrage Representative Jennie Armstrong MEMBERS ABSENT  All members present COMMITTEE CALENDAR  HOUSE BILL NO. 328 "An Act relating to community energy facilities." - -- INVITED & PUBLIC TESTIMONY -- HOUSE BILL NO. 349 "An Act relating to leases of public land for renewable energy projects; and providing for an effective date." - -- INVITED & PUBLIC TESTIMONY -- COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 152(L&C) "An Act relating to community energy facilities." - PENDING REFERRAL PREVIOUS COMMITTEE ACTION  BILL: HB 328 SHORT TITLE: COMMUNITY ENERGY FACILITIES; NET METERING SPONSOR(s): REPRESENTATIVE(s) TOMASZEWSKI 02/15/24 (H) READ THE FIRST TIME - REFERRALS 02/15/24 (H) ENE, L&C 04/23/24 (H) ENE AT 10:15 AM BARNES 124 BILL: HB 349 SHORT TITLE: RENEWABLE ENERGY PROJECT LEASES SPONSOR(s): REPRESENTATIVE(s) GROH 02/20/24 (H) READ THE FIRST TIME - REFERRALS 02/20/24 (H) RES, ENE, FIN 03/08/24 (H) RES AT 1:00 PM BARNES 124 03/08/24 (H) Heard & Held 03/08/24 (H) MINUTE(RES) 03/11/24 (H) RES AT 1:00 PM BARNES 124 03/11/24 (H) Heard & Held 03/11/24 (H) MINUTE(RES) 03/22/24 (H) RES AT 1:00 PM BARNES 124 03/22/24 (H) 03/25/24 (H) RES AT 1:00 PM BARNES 124 03/25/24 (H) 03/27/24 (H) RES AT 1:00 PM BARNES 124 03/27/24 (H) Scheduled but Not Heard 04/01/24 (H) RES AT 1:00 PM BARNES 124 04/01/24 (H) Heard & Held 04/01/24 (H) MINUTE(RES) 04/05/24 (H) RES AT 1:00 PM BARNES 124 04/05/24 (H) Scheduled but Not Heard 04/08/24 (H) RES AT 1:00 PM BARNES 124 04/08/24 (H) Scheduled but Not Heard 04/09/24 (H) ENE AT 10:15 AM BARNES 124 04/09/24 (H) -- MEETING CANCELED -- 04/11/24 (H) ENE AT 10:15 AM BARNES 124 04/11/24 (H) -- MEETING CANCELED -- 04/15/24 (H) RES AT 1:00 PM BARNES 124 04/15/24 (H) Scheduled but Not Heard 04/16/24 (H) ENE AT 10:15 AM BARNES 124 04/16/24 (H) -- MEETING CANCELED -- 04/17/24 (H) RES AT 1:00 PM BARNES 124 04/17/24 (H) Moved CSHB 349(RES) Out of Committee 04/17/24 (H) MINUTE(RES) 04/18/24 (H) RES RPT CS(RES) NEW TITLE 3DP 5NR 1AM 04/18/24 (H) DP: MEARS, ARMSTRONG, DIBERT 04/18/24 (H) NR: MCCABE, SADDLER, WRIGHT, BAKER, MCKAY 04/18/24 (H) AM: RAUSCHER 04/18/24 (H) FIN REFERRAL REMOVED 04/18/24 (H) ENE AT 10:15 AM BARNES 124 04/18/24 (H) Heard & Held 04/18/24 (H) MINUTE(ENE) 04/23/24 (H) ENE AT 10:15 AM BARNES 124 WITNESS REGISTER DAVID GOFF, Staff Representative Mike Tomaszewski Alaska State Legislature Juneau, Alaska POSITION STATEMENT: On behalf of Representative Tomaszewski, prime sponsor, Introduced and gave a presentation on HB 328. MIKE JONES, representing self Homer, Alaska POSITION STATEMENT: Testified in opposition to HB 328. DYANI CHAPMAN, State Director Alaska Environment Anchorage, Alaska POSITION STATEMENT: Testified in support of HB 328. REPRESENTATIVE CLIFF GROH Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Answered committee questions on HB 349. CAMERON EBERSOLD, Staff Representative Groh Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Answered committee questions on HB 349. ACTION NARRATIVE 10:16:47 AM RAUSCHER called the House Special Committee on Energy meeting to order at 10:16 a.m. Representatives Wright, Armstrong, McKay, Baker, Prax, Schrage, and Rauscher were present at the call to order. HB 328-COMMUNITY ENERGY FACILITIES; NET METERING  10:18:00 AM CHAIR RAUSCHER announced that the first order of business would be HOUSE BILL NO. 328 "An Act relating to community energy facilities." 10:19:22 AM DAVID GOFF, Staff, Representative Mike Tomaszewski, Alaska State Legislature, On behalf of Representative Tomaszewski, prime sponsor, Introduced and gave a Presentation on HB 328. 10:19:57 AM MR. GOFF began the sponsor statement on HB 328, which read as follows [original punctuation provided]: Sponsor Statement House Bill 328: Community Energy This bill will increase options for renewable energy development, allow Alaskan ratepayers to lower their electric costs, and offset natural gas usage by establishing a virtual net metering program for small scale renewable energy generation. Currently, ratepayers for economically regulated utilities can utilize net metering, which lowers their electric bills based on the amount of electricity they generate from generators like solar panels or wind turbines. Unfortunately, many ratepayers including renters and condo owners are not able to take advantage of net metering because they do not have space available on-site. HB 328 will allow multiple ratepayers to pool their resources to receive net metering benefits from a single project. HB 328 will allow power generated from a single centralized and efficient renewable energy source to be purchased through a subscription for multiple utility customers. This subscription allows homeowners and tenants who might not have access to consistent solar or renewable energy sources to reap the benefits of cost savings, reliability, and other benefits to the community. Twenty states have established formal community energy programs, with several more that operate at the utility regulation level. This new effort could generate 7.3 GW of new solar capacity nationwide by 2030. Utility customers who subscribe to community energy projects save between 5 and 15% on their utility bill through monthly credits. Creating a community energy program in Alaska will allow the state to capture millions of dollars in investment for new renewable energy projects. It will lead to hundreds of new jobs in the energy industry. The announcement of $7 Billion in federal funding for residential and community solar projects will help pay for community energy projects. Several private investors in community solar projects have already reached out to express interest. Through this bill, an 8 percent increase in renewable energy on the Railbelt could help offset natural gas usage and address the supply issues for Cook Inlet natural gas. This bill will only apply to utilities that are economically regulated by the Regulatory Commission of Alaska, who will be responsible for reviewing and approving utilities' community energy programs. The RCA will have the authority to modify or waive the requirements of this bill to meet the needs of specific utilities. SB 152 will help utility customers save money, attract millions in investment, and help offset natural gas use in Cook Inlet while creating good jobs for Alaskans. Staff Contact: David Goff 907-465-4955 10:23:01 AM CHAIR RAUSCHER asked if there was a sectional analysis related to HB 328. 10:23:13 AM MR. GOFF began the sectional analysis on HB 328, which read as follows [original punctuation provided]: HB 328 Community Energy Facilities Sectional Analysis Section 1 adds new statutory sections relating to community energy facilities: AS 42.05.725 is a conforming section for applicability. AS 42.05.727 requires utilities to submit a community energy plan to the Regulatory Commission of Alaska for approval and to make their community energy program available to all subscriber organizations that request interconnection subject to a 50megawatt limit. AS 42.05.729 establishes bill procedures for community energy subscribers. Subsection (a) allows utilities to bill subscribers for all charges authorized by the utility's tariff. Subsection (b) prohibits utilities from charging subscribers additional fees without approval from the commission. Subsection (c) allows utilities to petition the commission to change their rates designs for community energy subscribers. Subsection (d) allows electrical cooperatives to invest in renewable energy projects, with the approval of their member owners. AS 42.05.731 establishes the authority of the commission to modify this program and adopt additional requirements by regulation. Subsection (a) allows the commission to waive or modify the requirements of this bill. Subsection (b) allows the commission to adopt regulations governing safety, power quality, and interconnection standards for community energy projects. AS 42.05.733 establishes community energy facilities and outlines the parameters for how these facilities can operate. Subsection (a) sets criteria for who may own a community energy facility. Subsection(b) sets procedures for enrolling and billing subscribers. Subsection (c) sets criteria for what must be included in a utilities community energy plan. Subsection (d) requires the commission to ensure that community energy plans that are targeted to low- to moderate income households are crafted to achieve tangible cost savings. Subsection (e) provides that a subscriber or subscription organization is not considered an electric utility. Subsection (f) establishes criteria for community energy facilities to be eligible. Subsection (g) establishes requirements for subscriber organizations. Subsection (h) defines "low-to moderate-income" household. AS 42.05.735 provides definitions of terms used in the bill. Section 2 requires the commission to adopt regulations necessary to implement this bill within one year of its effective date. 10:26:39 AM MR GOFF moved to the associated presentation on HB 328. He defined what community energy is and explained that it is popular and the fastest growing sector in the renewable energy sector. He explained how the current net metering program works, and how HB 328 would target users without net metering access. 10:28:29 AM CHAIR RAUSCHER asked for the source of the claims made on slide 4 and asked for a qualification of the numbers on the slide. 10:29:10 AM MR. GOFF responded that his assumption is correct and added that each utility is only allowed 50 Megawatts of energy from community solar. CHAIR RAUSCHER asked if Alaska has an expectation of the numbers used in the formula. MR. GOFF said he doesn't think there is a number secured yet because the bill sponsor is waiting for utilities companies to figure out their expectations/limits in regards to community energy. 10:30:27 AM MR. GOFF resumed his presentation on slide 6, and quickly moved to slide 7 to explain how HB 328 would expand options for net metering. He explained how the Regulatory Commission of Alaska would have oversight of a community energy program and said that the RCA may waive any requirement or law established by HB 328 in order to regulate community energy. He explained the process in order of start to finish of establishing a community energy project and explained the benefits of community energy. 10:33:49 AM CHAIR RAUSCHER asked Mr. Goff to explain each part of slide 10. MR. GOFF, in response to Chair Rauscher, broke down and explained net metering and how it is performed from ratepayer to utility company. He continued his answer by running through the slide. 10:35:54 AM MR. GOFF continued his presentation on the latter half of slide 10, which detailed the benefits of using community energy. 10:37:08 AM REPRESENTATIVE WRIGHT asked if there is a continuous benefit with a proposed tax credit or if it is a one-time benefit. MR. GOFF answered that it is a one-time credit, and the percentage of the cost credited varies year by year. 10:38:01 AM REPRESENTATIVE ARMSTRONG asked if a new 125-million-dollar Federal grant has been taken into account with regards to HB 349. MR. GOFF said he himself has not yet considered that grant. 10:38:51 AM MR. GOFF continued his presentation on slide 11, which detailed how HB 328 and community energy projects can lower energy bills in Alaska. He explained how HB 328 would create more jobs in investment, and that renewable energy sector has more jobs than fossil fuels. He said it would offset natural gas and improve grid resiliency and reliability by creating a system of redundancies. 10:42:09 AM CHAIR RAUSCHER asked if the presentation would be added to BASIS. 10:42:53 AM REPRESENTATIVE PRAX asked if the regulations would dictate how the utilities would pay their avoided cost or would that be negotiated for each project. 10:43:34 AM MR. GOFF answered that if someone is using the energy in a net metering scenario, the person is credited the price per Kilowatt (Kw) because they are not using the energy to begin with. He added that whatever excess energy they would produce would come at a much lower cost at the end of the month. 10:44:36 AM REPRESENTATIVE PRAX asked if Mr. Goff has checked with the utilities about his previous answer. MR. GOFF responded that he currently has a solar array at his house, so that is how he knows. REPRESENTATIVE PRAX said that on a large scale, renewables aren't reliable and expressed a concern that using renewables could increase costs to ratepayers. MR. GOFF said that HB 328 limits the amount that each utility company would be able to go into a certain sector of energy generation, so there would still be redundancies in the energy grid. 10:48:01 AM CHAIR RAUSCHER opened public testimony. 10:49:04 AM MIKE JONES, representing self, Testified in opposition to HB 328. He said that this bill would penalize people who use more traditional utilities options, criticized the reliability of renewable energy, and said that the net metering clause of the bill is flawed. He gave a series of perceived flaws and encouraged committee members to vote no on HB 328. 10:51:39 AM DYANI CHAPMAN, State Director, Alaska Environment, Testified in support of HB 328. She said this bill would allow individuals who can't afford energy on their own to obtain reliable and affordable energy. 10:52:44 AM CHAIR RAUSCHER closed public testimony. 10:53:02 AM The committee took an at-ease from 10:53 a.m. to 10:56 a.m. 10:56:28 AM CHAIR RAUSCHER announced that HB 328 was held over. HB 349-RENEWABLE ENERGY PROJECT LEASES  10:56:54 AM CHAIR RAUSCHER opened public testimony on HB 349. After ascertaining there was no one who wished to testify, he closed public testimony. 10:58:03 AM REPRESENTATIVE PRAX gave his understanding that the lease as defined in HB 349 must provide for recreational activities. 10:58:23 AM REPRESENTATIVE CLIFF GROH, Alaska State Legislature, Answered committee questions on HB 349. He directed the question to Cameron Ebersold. 10:58:30 AM CAMERON EBERSOLD, Staff, Representative Groh, Alaska State Legislature, Answered committee questions on HB 349. He said that Representative Prax's observation is correct, that HB 349 preserves access for other kinds of public uses. REPRESENTATIVE PRAX asked if the threat of vandalism to the renewable energy infrastructure had been taken to account when funding a project. 10:59:30 AM MR. EBERSOLD asked for clarification because HB 349 relates to licensing of the state land, determining the feasibility of a project and establishing lease terms. REPRESENTATIVE PRAX cited a windmill project in Fairbanks, Alaska that he believed was under threat from vandalism and asked how HB 349 would protect the renewable energy projects that it leases from vandalism. 11:00:52 AM REPRESENTATIVE GROH answered that he has never worked with a lease contract for renewable energy, but he thinks the individual contracts to develop the project would address the threat of vandalism, not the bill. REPRESENTATIVE PRAX confirmed that the protection would be addressed in the lease. REPRESENTATIVE GROH said he thinks so but directed the question to Mr. Ebersold for additional clarification. MR. EBERSOLD cited an experience from his childhood, highlighting that there is nothing that would stop someone from shooting or damaging the turbine. He said it would be up to the company to protect their property, not the Department of Natural Resources (DNR). 11:03:03 AM REPRESENTATIVE SCHRAGE gave a comment that the wind turbines on Kodiak are fenced off from access and added that Alaskans would rather shoot road signs before versus energy infrastructure. 11:04:10 AM CHAIR RAUSCHER said people shoot the pipeline, so people can shoot a wind turbine. He said people are going to do what they're going to do. 11:05:18 AM CHAIR RAUSCHER announced that HB 349 was held over. 11:05:34 AM ADJOURNMENT  There being no further business before the committee, the House Special Committee on Energy meeting was adjourned at 11:05 a.m.