SB 177-MICROREACTORS  1:29:17 PM CHAIR PATKOTAK announced that the next order of business would be CS FOR SENATE BILL NO. 177(RES), "An Act relating to nuclear facility siting permits; and relating to microreactors." CHAIR PATKOTAK noted that this is the committee's first time to hear CSSB 177(RES) but that the committee has twice heard the companion bill, HB 299, and taken public testimony on HB 299. 1:29:49 PM CHRISTINA CARPENTER, Director, Division of Environmental Health, Department of Environmental Conservation (DEC), introduced CSSB 177(RES) on behalf of the Senate Rules Standing Committee, sponsor by request of the governor. She explained that CSSB 177(RES) would define a microreactor according to the federal definition and would create a specific carve-out from the ongoing study and legislative siting requirements. She related that Senator Jesse Kiehl worked with DEC on language for two amendments that were incorporated into the bill by the Senate Resources Standing Committee. She explained that in lieu of the current ongoing study requirements for six state agencies, CSSB 177(RES) would direct DEC to coordinate and submit comments from those agencies to the U.S. Nuclear Regulatory Commission when an Alaska sited microreactor license application is put forward. She said a second amendment added language to the bill that explicitly obtains legislative siting approval for unorganized boroughs. MS. CARPENTER deferred to Mr. Travis Million of the Copper Valley Electric Association (CFEA) to provide further testimony on CSSB 177(RES). She noted that CVEA is an electrically isolated electric cooperative in Interior and Southcentral Alaska, serving Valdez, Glennallen, and the surrounding Copper River Basin, a vast service territory of 160 miles north to south and 100 miles east to west. She said CVEA is currently conducting a feasibility study of micro modular reactor (MMR) technology with the Ultra Safe Nuclear Corporation (USNC). 1:32:37 PM TRAVIS MILLION, CEO, Copper Valley Electric Association (CVEA), provided a PowerPoint presentation [hard copy included in the committee packet], titled "Looking into Nuclear." He displayed the second slide, "AGENDA," and said he will review why CVEA is looking at nuclear, what MMR is and isn't, the environmental and safety concerns, the feasibility study, and what CVEA is doing thus far for stakeholder engagement. MR. MILLION proceeded to the third slide, "WHY NUCLEAR." He stated that in June [2021] the CVEA board developed a strategic plan for the cooperative, with one of the five major goals being to develop a plan to reduce the cooperative's use of diesel fuel for power generation on its system. He related that CVEA is nearly 100 percent hydropower in the summer, with an annual average of 70 percent hydropower. In the winter, he continued, CVEA must rely on diesel fuel at its generation plants that use either diesel or a fossil fuel called light straight run (LSR), which comes from the Petro Star Refinery, and which puts CVEA at the whim of what fuel prices do. He pointed out that in January 2021 CVEA paid under $2 per gallon for fuel and that in March 2022 CVEA paid nearly $4.50 per gallon, plus at times the fuel cost spiked to over $5 per gallon for delivery to CVEA's power plants. Mr. Million noted that this year winter came early, resulting in CVEA going from an average 30 percent hydro spread over the winter to 20 percent hydro, causing some of the biggest increases seen in CVEA's history; normally the rate is about $0.19 per kilowatt hour in the summer when on hydropower, but it spiked to over $0.42 per kilowatt hour this winter. He said the CVEA board wants to develop a plan to get off diesel fuel and to find ways to get rid of the fluctuation of fuel cost so that long term energy cost is stable for many years to come. He also noted that reducing emissions from fossil fuel power plants is a major concern of the CVEA board. The CVEA board has considered wind power, he continued, but the CVEA service territory has marginal Class 2 winds with high turbulence, so wind doesn't work. Mr. Million said solar power works great in the summer, but CVEA is already 100 percent hydropower then and that doesn't solve the cooperative's wintertime issues. He said CVEA has looked at geothermal, biomass, every hydro asset that could be available in its region, and interties like the Railbelt Intertie project. 1:36:02 PM MR. MILLION addressed the two photographs on the fourth slide, "MICRO MODULAR REACTOR (MMR)?" He said the light water reactors depicted in these photos are currently deployed throughout the U.S. and the world and they are typical in the gigawatt or thousands of megawatt range. But, he continued, these are not what is being talked about with micro modular reactors. MR. MILLION moved to the fifth slide, "MMR SIZE COMPARISON." He explained that the upper left picture shows the footprint of a standard light water reactor, typically about a gigawatt in size and taking up 50-plus acres. The reactor building, he added, is the red cylindrical building in the middle of the picture. He then drew attention to the blue rectangle on the lower right and explained that it is the footprint of a micro modular reactor like the one CVEA is looking at through Ultra Safe Nuclear Corporation (USNC) and which takes up approximately five acres. He said the yellow square is the reactor building, which is about the size of a 40-foot Conex buried vertically in the ground. To provide a size comparison, he noted that the green rectangle to the left of the MMR is a football field, and that the MMR is essentially the size of two football fields. MR. MILLION turned to the sixth slide, "What is a microreactor and why?" He stated CVEA is looking at this technology because it fits the cooperative's system very well, which is about a 20- megawatt summertime load, peaking at about 15 megawatts in the wintertime. With CVEA's little bit of hydro, he said, a 10- megawatt reactor would be about the perfect size to take care of wintertime needs. A second benefit in addition to producing electricity, he noted, is the microreactor's process heat, which could be utilized for industrial applications, specifically in the Valdez area. He specified that a microreactor meets CVEA's needs by reducing carbon emissions from its diesel power plants, by addressing safety with this newer technology, and by having a long-time stable cost because the design that CVEA is looking at has between 20 and 40 years between needing to refuel. 1:38:54 PM MR. MILLION continued to the seventh slide, "Ultra Safe Nuclear FCM Fuel," and stated that this microreactor uses TRISO fuel. He explained that the blue dots in the picture are the uranium pellets, which are about the size of a poppy seed. These poppy seed pieces of uranium are triple coated in silicon carbide, he continued, and then they are set in an array as shown in the picture where they are again coated in more silicon carbide and graphite. He said this keeps all the radiation intact and prevents it from leaking out and from thermally "running away"; it keeps the temperature from coming up. It is called "walkaway safe," he continued, because if there is a failure to the cooling system, personnel can walk away since by physics it is going to keep its temperature regulated on its own and that is one of the nice things with this fuel design. Mr. Million further noted that this fuel design was implemented in the 1970s, so it's not new technology. What is new, he said, is the manufacturing technologies and the three-dimensional printing that now allow mass production of this fuel. TM MR. MILLION displayed the eighth slide, "MMR Energy System REM 2-Unit Layout for Remote Energy Management." He stated that the diagrammatic represents a generic layout of a two-reactor plant of about 10 megawatts, like what CVEA is currently considering. Regarding water used for steam generation becoming radioactive, he said it's a closed water system. He specified that the two reactors depicted on the left are cooled with helium, and since helium is an inert gas, it cannot absorb any radiation. Heat is taken from the reactor to a heat exchanger where one side of the heat exchanger has helium and the other has molten salt, he continued. The molten salt heats up from that reaction, then it goes through another heat exchanger where the other side has water or steam. Through this process, Mr. Million stated, there is no way for the radiation to propagate down and get into the water source. This closed loop totally contained system, he added, doesn't require a river or any body of water for cooling. MR. MILLION discussed the ninth slide, "Projects in Development." He advised that if CVEA's feasibility study goes through, the cooperative will not be the first one given USNC is currently working on a project set to come online in 2026 at Chalk River in Canada. He said USNC also has a project in place with the University of Illinois where a test reactor will be put in the middle of campus where it will be utilized and tested through the university's radiological engineering department. So, he continued, if it pencils out for CVEA to move forward with this project, the cooperative would be number three of the USNC deployed reactors. However, he noted, the project would be the first commercial reactor potentially within the nation and within USNC's fleet. 1:42:53 PM MR. MILLION moved to the tenth slide, "CVEA/USNC Joint Feasibility Study." He related that the economics is a big driver as to whether this will work; it won't be as cheap as CVEA's hydropower, but it would be far less than what CVEA is presently paying for diesel. So, he said, CVEA is shooting for something in between that will balance generation costs throughout the year to be the same rate year round. The feasibility study is looking at potential locations to determine whether there is a mix that could work well there, he continued. The only downfall, he noted, is that there is presently no industrial application for the heat in the Copper Basin. He related that the feasibility study is looking at benefits, concerns, and issues for the community. He explained that given USNC is the manufacturer of this technology and involved with the feasibility study, CVEA brought in an Anchorage engineering firm, Electric Power Systems (EPS), a firm that works with every utility in Alaska, primarily designing generation distribution transmission as well as installing, operating, and commissioning these things. He said EPS is doing most of the feasibility study from the standpoint of integration and cost, as well as some of the environmental impact, and USNC is looking primarily at the nuclear side of the feasibility study. Mr. Million estimated that the feasibility study would be completed by the end of summer [2022], at which time the CVEA board will take public comment and then decide whether to move forward. MR. MILLION continued to the eleventh slide, "CVEA & USNC Engagement," and discussed stakeholder engagement. He explained that CVEA normally wouldn't start talking to the public until a feasibility study had been conducted and the results were in hand; however, given the word "nuclear" can be a trigger point for people, he said CVEA wanted to get out front and hear the concerns of communities and what opportunities CVEA might be overlooking that could be integrated into the feasibility study. In Valdez presentations have been given to the city council, he stated, and open public meetings have been held in Valdez and with the Greater Copper Basin Chamber of Commerce. One-on-one meetings with individual stakeholders have also been undertaken, he noted. He related that most of the questions are similar, such as how CVEA is dealing with the safety concerns, the environmental concerns, and getting rid of the hazardous waste. MR. MILLION addressed the issue of waste. He said CVEA has been given a guarantee by USNC. Refueling would occur once every 20- 40 years, he related, and when the fuel comes out it will be stored in a cask that is safe to be around and which is how most nuclear waste is stored in the U.S. today. The fuel would sit on site anywhere from six months to two years to allow it to cool, he said, and once cooled USNC would transport it out of Alaska and at that point it is USNC's responsibility to dispose of the [spent] fuel at either an interim USNC storage facility or through the U.S. Government to dispose of it in a long-term storage solution. Mr. Million explained that the Nuclear Regulatory Commission requires that funding be put in place when licensing a nuclear reactor like this, such that if the company were to go out of business there would already be funds in place to get rid of the nuclear fuel waste at that point in time. 1:48:12 PM REPRESENTATIVE RAUSCHER thanked Mr. Million for such an in-depth presentation. CHAIR PATKOTAK inquired about the dollar amount that would be put aside at licensing for long-term fuel storage. MR. MILLION replied that CVEA isn't far enough along into the feasibility study to know what those costs might be. 1:49:04 PM REPRESENTATIVE GILLHAM offered his understanding that HB 199 is the companion bill to SB 177. He recalled that there wasn't much opposition to HB 199, but said he is getting lots of opposition to CSSB 177(RES). He asked whether there is a difference in the two bills that is creating the current opposition that wasn't there before. MR. MILLION responded he isn't sure why the opposition would be different given the bills are identical except for the two amendments on the Senate side. He said most of the opposition he has heard has been consistent on both the House and Senate sides, and he personally hasn't heard any additional opposition. REPRESENTATIVE GILLHAM stated that most of the opposition has to do with storage. He related that he didn't get this opposition when discussing HB 199, so he is curious as to why he is now. 1:50:28 PM REPRESENTATIVE FIELDS asked whether CVEA is negotiating a ramp down in prices with USNC assuming that as the company deploys more of these across the U.S. it can achieve profitability at a lower price point than in the initial negotiation. MR. MILLION answered that this will be coming up through the feasibility study since CVEA is looking at different options, such as whether CVEA owns and operates or whether USNC owns and operates and CVEA buys the power. So, he continued, CVEA will look at that for a long-term contract if it buys power through USNC. He allowed that Representative Fields has a good point to keep in mind. 1:51:33 PM REPRESENTATIVE HANNAN asked whether anything in existing statute prevents CVEA from applying for permission and siting. MR. MILLION replied, "Not necessarily anything that precludes us from being able to do it, but definitely some ... hurdles." He said having to bring a siting requirement to the legislature and trying to get that approved could be difficult depending on who is in the legislature in any given year. So, he continued, the amendments to the bill would make it easier and more attractive for the manufacturers to want to look at Alaska for deploying these, especially in remote communities. While he won't say it is a hindrance, he added, it could be potentially more difficult to get siting authority as the statute is written today. REPRESENTATIVE HANNAN asked whether Mr. Million can point to where those challenges are in the existing statute or whether it is something that an agency has said will be problematic. MR. MILLION responded he has heard it through agencies and through his knowledge of the process anything coming through the legislature versus keeping it more of a local control is going to be more time consuming and burdensome. He said he is answering the question on the standpoint that anytime siting the land must go through the state or federal government it can be a very time-consuming process [as opposed to going through an agency] like DEC or U.S. Bureau of Land Management (BLM). REPRESENTATIVE HANNAN asked whether Mr. Million was led to believe that CVEA's project could not go forward without a change in statute. MR. MILLION answered no, CVEA wasn't told one way or another whether it could go through based on statute. 1:53:38 PM REPRESENTATIVE HANNAN presumed that because CVEA's feasibility study is not yet done, there is not an exact site where CVEA would want the project. She offered her understanding, based on current statute and what CSSB 177(RES) attempts to do, that if Mr. Million were here today with a specific site, the committee could approve it. She said much of the hesitation from legislators and the opposition being heard is that it would throw out a requirement that any specific nuclear projects come before the legislature along with the ability for everyone in the state to engage on a project and get answers to their questions about where the waste will be stored and what the local hazards are from tsunami to earthquake, as opposed to it being up to a local government, a utility, and state agencies that have had no previous regulatory oversight with nuclear and no additional dollars through staffing according to their own fiscal note. That is the hesitation for many people, she said, not CVEA's individual project. She asked whether she is correct in understanding that CVEA is five to seven years from needing it and that CVEA's feasibility study this summer should lead to a specific location. MR. MILLION replied that the feasibility study should give CVEA a couple different potential locations and CVEA would make its decision on whether to go ahead based on that and economics, as well as other considerations. REPRESENTATIVE HANNAN said she looks forward to hearing about a specific project next year. 1:56:06 PM REPRESENTATIVE FIELDS asked whether the Municipality of Anchorage would have local control oversighting of microreactors should this bill pass. He further asked whether there are differences among the different types of jurisdictions apart from the unorganized boroughs. MS. CARPENTER responded that under [CSSB 177(RES)], organized boroughs would have the ability to make that siting authority, and if a borough is unorganized then the legislature would retain that siting authority. REPRESENTATIVE FIELDS surmised that that means the Anchorage Assembly would have the authority to say where such a facility could be sited within the Municipality of Anchorage. MS. CARPENTER answered that is correct, the Municipality of Anchorage would be able to have that authority. REPRESENTATIVE FIELDS requested that the committee chair obtain confirmation that this is also the interpretation of Legislative Legal Services because that might provide some assurance for Anchorage residents that there is a degree of public review. CHAIR PATKOTAK confirmed he would do so. He said he thinks it is like any other situation that comes up that unorganized boroughs don't have the authority to determine for themselves, and it runs through the House and Senate Community and Regional Affairs Standing Committees. REPRESENTATIVE HANNAN requested that Legislative Legal Services advise the committee on whether first-class boroughs without planning and zoning authority and second-class cities can have their city councils [issue] permits. 1:59:31 PM REPRESENTATIVE GILLHAM asked whether the reason behind microreactors is for a more stable energy source or for cost. MR. MILLION replied that the biggest thing for CVEA is lower energy cost and long-term stability over at least a 40-year life of the plant. He pointed out that a 40-year life of the plant is the life of the license on a microreactor, and it can be renewed after that, much like CVEA's hydropower plants typically have a 40- or 50-year license and then CVEA renews the license to extend it. Long-term, stable, lower-cost energy is the primary driver, he added. REPRESENTATIVE GILLHAM asked what CVEA will do with its hydropower plants. MR. MILLION responded that what is nice about this technology is it doesn't have to come on and stay on, it can be turned off and on as needed. He said CVEA would run 100 percent hydropower when hydropower is available and bring the reactor down either just to produce heat for industrial processes or shut it down until it is needed at the beginning of winter, then ramp it up with the wintertime generation. Doing that, he noted, would extend the life of the fuel even longer, so if the fuel has a 10-year life when run at 100 percent for 24 hours a day, 7 days a week, 365 days a year, then running it at half the time would get almost a 20-year life out of the fuel. 2:01:18 PM CHAIR PATKOTAK opened public testimony on CSSB 177(RES), then closed it after ascertaining that no one wished to testify. 2:01:40 PM The committee took an at-ease from 2:01 p.m. to 2:02 p.m. 2:02:28 PM CHAIR PATKOTAK stated that the committee would conduct potential follow-up on CSSB 177(RES) on 5/10/22. [CSSB 177(RES) was held over].