SB 7: "An Act directing the Regulatory Commission of Alaska to provide a report to the legislature relating to electrical transmission in certain areas of the state; and providing for an effective date."

00 SENATE BILL NO. 7 01 "An Act directing the Regulatory Commission of Alaska to provide a report to the 02 legislature relating to electrical transmission in certain areas of the state; and providing 03 for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 REVIEW OF ELECTRIC UTILITY INTERCONNECTION. (a) The commission 08 shall, not later than July 1, 2016, or as soon as practicable thereafter, provide a report to the 09 legislature determining whether creating an independent entity that meets the requirements of 10 (b) of this section to manage the electrical transmission facilities in the Railbelt area is the 11 best option to provide for effective and efficient electrical transmission, including economical 12 distribution, reliability of electrical service, and nondiscriminatory, open access to 13 transmission services. The commission shall also provide suggested legislation and changes to 14 the regulations of the commission in the report.

01 (b) In the report under (a) of this section, the commission shall evaluate the creation 02 of an independent entity that 03 (1) is organizationally independent from the commission; 04 (2) is directed by a board of directors of stakeholders; 05 (3) has operational authority over the electrical transmission facilities of the 06 Railbelt area; 07 (4) has the exclusive responsibility to maintain the reliability of the electrical 08 transmission facilities of the Railbelt area; 09 (5) will maximize the use of existing electrical transmission resources and 10 will, where possible, avoid duplication of facilities; 11 (6) has the power to 12 (A) adopt, maintain, and reinforce reliability standards by adopting an 13 equivalent national reliability standard; 14 (B) plan, coordinate, and condition necessary additions and 15 improvements to the transmission system; 16 (C) manage the interconnection of new generation facilities; 17 (D) administer a universal tariff and employ a pricing system to 18 promote the efficient use and expansion of transmission systems and generation 19 facilities; 20 (E) manage parallel path flow and transmission congestion; 21 (F) function as a single control area operator that facilitates regional 22 electricity pooling and economical distribution to maximize the efficiency of electric 23 generation. 24 (c) While preparing the report described in (a) of this section, the commission shall 25 assume that 26 (1) rate recovery is ensured through the planning, permitting, and construction 27 phases of projects planned by the independent entity; 28 (2) existing agreements between generation facilities will be honored to allow 29 cost recovery of existing investments; 30 (3) standard and tariff rates will be just, fair, and reasonable for all ratepayers 31 and allow transitional rates to minimize the effect on an individual utility;

01 (4) existing transmission systems used for the benefit of the Railbelt area will 02 be allowed full cost recovery from the independent entity, including costs for depreciation, 03 interest, margin, operations, maintenance, applicable taxes, and general and administrative 04 expenses necessary for the operation of a transmission system. 05 (d) The report required in this section may not affect current open dockets. Until the 06 issuance of the report, the commission shall continue with activities necessary to preserve 07 existing operations that affect the reliability of the interconnected utilities in the Railbelt area. 08 (e) In this section, "commission" means the Regulatory Commission of Alaska. 09 * Sec. 2. This Act takes effect immediately under AS 01.10.070(c).