Legislature(2015 - 2016)CAPITOL 17
03/31/2015 10:15 AM ENERGY
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|Presentation: American Transmission Company|
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 78-REGULATORY COMMISSION OF ALASKA 10:21:54 AM CO-CHAIR COLVER announced that the first order of business would be HOUSE BILL NO. 78, "An Act bearing the short title of the 'Alaska Competitive Energy Act of 2015'; and relating to the Regulatory Commission of Alaska." 10:22:09 AM REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, sponsor, informed the committee the proposed committee substitute (CS) for HB 78 was a much leaner bill, and comments on the CS have been solicited from affected parties. The first part of the CS allows independent power producers (IPPs) to know what the costs are to generate electricity, and to request from the Regulatory Commission of Alaska (RCA) how those costs were calculated by the utility. The second part relates to transmission and the costs to transmit power through transmission lines. Representative Wilson reminded the committee of the situation regarding [Fire Island Wind Phase 2], which was discussed at a previous hearing, and that IPPs need to know these costs before financing can be obtained. Further, if a utility refuses to provide this information, as a last resort, RCA would adjudicate. She expressed her hope that during the hearing process there will be positive progress regarding discussions between utilities and IPPs. CO-CHAIR COLVER requested a sectional analysis. REPRESENTATIVE WILSON began a sectional analysis: section 2 creates a new section to implement requirements applicable to electric utilities with respect to qualifying facilities (QFs), small renewable energy, and cogeneration facilities as required under federal statutes and regulations. Subsection (a) requires electric utilities to comply with Federal Energy Regulatory Commission (FERC) rules related to purchasing power from QFs and other related obligations. Subsection (b) exempts QFs from certain state laws and regulations as required under federal law. Subsection (c) authorizes RCA to issue orders requiring electric utilities to comply with obligations under this section. Subsection (d) limits the applicability of this section to electric utilities that are subject to the RCA ratemaking authority - this language was drawn directly from the federal statute. Subsection (e)( 1) defines avoided cost according to federal law. Subsection (e)(2) defines qualifying facility by referring to definitions specified in federal law. Representative Wilson pointed out that the aforementioned reduces the number of costly requirements of the utilities, and thus is "a much friendlier version to the utilities." Section 3, new subsections (d)-(f), assure open access to electric transmission facilities as provided on a fair, reasonable, and nondiscriminatory basis. Subsection (d) requires electric utilities to establish joint use interconnection and transmission service within a reasonable time and for reasonable compensation. Subsection (e) confirms the electric utility may recover from connecting entities costs incurred in providing for joint use, interconnection, and transmission service, while at the same time ensuring that the charges imposed are fair, reasonable, and nondiscriminatory. Subsection (f)(1) defines reasonable compensation, subsection (f)(2)-(3) define the terms transmission and distribution. She advised this change "puts the studies on the backs of the IPP, versus the utility." Lastly, section 4 amends AS 42.05.321 to improve consistency and to make clear that RCA oversight authority encompasses joint use, interconnection, and transmission service. Representative Wilson noted that the sponsors worked closely with RCA to align the bill with federal law, and to make it possible for Alaska to produce its own electricity at low cost and with less dependence on oil. 10:29:50 AM CO-CHAIR COLVER asked whether the legislation uses the Public Utility Regulatory Policies Act (PURPA) as a model for implementing joint use and provisions for buying power from IPPs. REPRESENTATIVE WILSON said correct. In further response to Co- Chair Colver, she explained the avoided cost issue was addressed by requiring that the current averages provided by utilities are broken down into the cost of each source of energy; for example, Golden Valley Electric Association (GVEA) generates power in many ways, and an IPP needs to know the cost of each source in order to compete. Secondly, IPPs need to know the cost of transmitting power, so they can add that cost to their total cost, and enter negotiations with a utility. CO-CHAIR VAZQUEZ referred to RCA Dockets I-15-001 and R-13-002, and asked how they would affect the proposed legislation. REPRESENTATIVE WILSON responded that pending RCA rulings may resolve the transmission issue in the bill. CO-CHAIR VAZQUEZ said RCA has been charged with completing a related study due 6/15. REPRESENTATIVE WILSON said yes. CO-CHAIR COLVER surmised the bill is not just an access to transmission issue in regards to a transmission cooperative (Transco) or an independent system operator (ISO), but also a framework for RCA to provide oversight for joint use of transmission facilities and power purchase agreements in areas that are not on the Railbelt grid, or that are not overseen by an ISO or a transmission cooperative. REPRESENTATIVE WILSON agreed, and added that the bill would also allow power to be sold in Canada should there be excess after first serving Alaskans. CO-CHAIR VAZQUEZ asked whether the Alaska Independent Power Producers Association (AIPPA) is submitting comments on the related active RCA dockets. 10:35:14 AM REPRESENTATIVE WILSON said yes. CO-CHAIR VAZQUEZ observed that the Alaska Power Association is reviewing the CS. CO-CHAIR COLVER inquired as to how the approach in the CS differs from RCA Docket I-15-001. REPRESENTATIVE WILSON acknowledged the approach is similar, but until the RCA docket is adopted, the sponsors' intent remains to ensure that there are opportunities for IPPs to invest in Alaska. CO-CHAIR VAZQUEZ appreciated the work accomplished by the sponsors, RCA, and IPPs. She stated there is value in waiting for RCA to finish its work, as there are many changes to come for the Railbelt transmission system. REPRESENTATIVE WILSON reminded the committee that the bill will be vetted in the House Labor and Commerce Standing Committee for RCA issues, and then in the House Finance Committee. 10:38:43 AM REPRESENTATIVE TALERICO moved to adopt the proposed committee substitute for HB 78, labeled 29-LS0259\N, Nauman, 3/18/15, as the working draft. 10:39:09 AM CO-CHAIR COLVER objected for the purposes of discussion. REPRESENTATIVE TALERICO urged the committee to adopt the proposed CS. 10:39:36 AM CO-CHAIR COLVER removed his objection. There being no further objection, Version N was before the committee. HB 78 was held over.
|Proposed CS for HB 78 Ver N.pdf||
HENE 3/31/2015 10:15:00 AM