Legislature(2015 - 2016)CAPITOL 17

02/02/2016 10:15 AM ENERGY

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Audio Topic
10:18:36 AM Start
10:18:48 AM HB187
11:20:19 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 187 RAILBELT ELECTRICAL TRANSMISSION AUTH. TELECONFERENCED
Heard & Held
-- Teleconference Listen Only --
         HB 187-RAILBELT ELECTRICAL TRANSMISSION AUTH.                                                                      
                                                                                                                                
10:18:48 AM                                                                                                                   
                                                                                                                                
CO-CHAIR COLVER announced  that the only order  of business would                                                               
be HOUSE BILL  NO. 187, "An Act creating  the Railbelt Electrical                                                               
Transmission  Authority;  and  relating  to  the  duties  of  the                                                               
Regulatory Commission of Alaska."                                                                                               
                                                                                                                                
10:20:00 AM                                                                                                                   
                                                                                                                                
STEVE  KONKEL, Staff,  Representative  Jim  Colver, Alaska  State                                                               
Legislature, and staff to the  House Special Committee on Energy,                                                               
said  he  would address  the  issues  of an  independent  systems                                                               
operator (ISO) - and its  alternative, a unified systems operator                                                               
(USO)  -  along  with  electrical   transmission  issues  in  the                                                               
Railbelt area of  Alaska, as related to HB 187.   He advised that                                                               
the  foregoing  subjects  have  been of  great  interest  to  the                                                               
Regulatory  Commission of  Alaska (RCA)  and the  legislature for                                                               
the  past two  years.   The topics  of the  presentation were  as                                                               
follows:   electrical  transmission  and region-wide  generation;                                                               
utilities  in the  Railbelt area:   four  electrical cooperatives                                                               
and   two  municipal   utilities;   previous   studies  on   grid                                                               
unification;  RCA report  to the  legislature issued  on 6/30/15;                                                               
transmission  company  (Transco)  proposal;  independent  systems                                                               
operator; unified  systems operator;  benefits and  challenges of                                                               
ISO or  USO mechanism  for pooling  and economic  dispatch [slide                                                               
1].   Mr.  Konkel  noted  that the  electrical  utilities in  the                                                               
Railbelt  are connected  by an  integrated  transmission line  to                                                               
Golden Valley  Electric Association (GVEA),  Matanuska Electrical                                                               
Association  (MEA),  Chugach  Electric Association  (CEA),  Homer                                                               
Electric  Association (HEA),  Anchorage Municipal  Light &  Power                                                               
(ML&P) and  [City of Seward,  Seward Electric System]  [slide 2].                                                               
Grid  unification has  been discussed  since the  passage of  the                                                               
Public Utility Regulatory  Policy Act of 1978  (PURPA) because of                                                               
the  benefits  to the  electrical  utility  industry garnered  by                                                               
separating transmission and generation  in the Lower 48; however,                                                               
in Alaska,  the system differs.   There have been studies  of the                                                               
benefits  of  an integrated  transmission  system  - known  as  a                                                               
Transco - and testimony from  interested parties was heard during                                                               
the  1/28/16 hearing  on HB  187.   He explained  that a  Transco                                                               
would either  be a  for-profit or a  nonprofit entity  whose main                                                               
task  would  be to  invest  in  transmission upgrades,  planning,                                                               
construction, and maintenance [slide 3].                                                                                        
                                                                                                                                
10:23:48 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL  asked whether  a  Transco  can function  in                                                               
either a for-profit or a nonprofit status.                                                                                      
                                                                                                                                
MR.  KONKEL  advised  that  the   proposals  are  submitted  from                                                               
companies  which  are  established  as  one  or  the  other;  for                                                               
example, the American Transmission  Company (ATC) is a for-profit                                                               
company,  and the  Alaska Railbelt  Cooperative Transmission  and                                                               
Electric  Company (ARCTEC)  have  both submitted  proposals.   He                                                               
said, "It  could be  either for-profit  or parts  of it  could be                                                               
for-profit, parts  of it could be  profit ... this would  have to                                                               
be regulated by  the RCA, and the RCA, if  [the Transco] invested                                                               
additional  money in  the Railbelt  grid, would  allow a  rate of                                                               
return."                                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL  expressed his  understanding that  ARCTEC is                                                               
not a transmission company but is  a USO.  However, the status of                                                               
"a Transco,  a company that's  going to ...  build infrastructure                                                               
or, you  know, improve our transmission  lines" is predetermined;                                                               
for example, ATC is a for-profit company.                                                                                       
                                                                                                                                
MR.  KONKEL agreed.   He  returned attention  to slide  3, noting                                                               
that  for  the  proposed  Transco  approach,  financing  is  very                                                               
important, and  studies have shown that  additional investment is                                                               
needed to  move electricity through the  service territories, and                                                               
the rate  of return  would be  based on regulation  by RCA.   Mr.                                                               
Konkel provided a  brief history of recent  activities related to                                                               
the  generation of  electricity in  the  Railbelt:   in 2014  the                                                               
legislature appropriated  $250,000 to RCA  for a study  which was                                                               
completed by the  Alaska Center for Energy and  Power (ACEP); RCA                                                               
sent a  letter to the  Alaska State Legislature on  6/30/15 which                                                               
outlined five  key findings and  recommendations in terms  of the                                                               
benefits of an  integrated grid and economic  dispatch;  benefits                                                               
of an  integrated grid and  economic dispatch flow  to consumers;                                                               
economic dispatch  as a  direct result  of PURPA  saves consumers                                                               
millions of  dollars; PURPA  has been  updated; nondiscriminatory                                                               
access to  the grid is  also an issue;   major savings  from grid                                                               
integration  are estimated  by ACEP  to  be $50  million to  $150                                                               
million, which is  of great interest in this budget  climate.  In                                                               
addition, forming a  Transco is an approach  to grid integration,                                                               
and RCA set  two deadlines:  9/30/15 for the  first status report                                                               
from  the  utilities, and  [December  31,  2015] for  the  second                                                               
status report.   Both reports  have been signed and  submitted by                                                               
all of  the utilities and  are included in the  committee packet.                                                               
[Regulatory Commission of Alaska]  also expressed interest in the                                                               
concept  of  region-wide  management,  planning,  and  integrated                                                               
resources planning, thus another deadline  of 1/31/16 was set for                                                               
submittals related  to recommendations comparing the  concepts of                                                               
an ISO  to those  of a  USO.  Mr.  Konkel reminded  the committee                                                               
that according to  previous testimony, the key  terms for forming                                                               
an ISO  or a USO  are "independence" and "governance"  related to                                                               
whether  the members  of the  board of  directors for  either are                                                               
focused on  the benefits for  the region, or on  specific service                                                               
territories [slide 4].                                                                                                          
                                                                                                                                
10:30:16 AM                                                                                                                   
                                                                                                                                
CO-CHAIR COLVER  asked for  the difference between  an ISO  and a                                                               
USO.                                                                                                                            
                                                                                                                                
MR.  KONKEL opined  there is  a philosophical  difference in  the                                                               
amount of  utility representation  on each  respective board.   A                                                               
USO   board  could   consist  of   all   utilities  and   members                                                               
representing the public interest; an  ISO envisions it would have                                                               
the   capability   to  run   a   region-wide   system  with   the                                                               
participation  of  utilities,  but  without  utilities  having  a                                                               
majority interest on the board.                                                                                                 
                                                                                                                                
CO-CHAIR  COLVER  asked  for  an  explanation  of  the  briefings                                                               
requested by RCA, and its intent in this regard.                                                                                
                                                                                                                                
MR. KONKEL explained that RCA  made findings and recommendations.                                                               
The findings  are that  there are  benefits from  integration and                                                               
economic dispatch  which can  be realized,  and that  RCA prefers                                                               
that the utilities working together  develop a voluntary approach                                                               
to  do  so.   However,  RCA  also said  it  would  work with  the                                                               
legislature  and the  executive branch  toward implementation  if                                                               
the  voluntary  approach  does   not  make  sufficient  progress.                                                               
Further, RCA  expects to  see - from  the reports  requested from                                                               
the   utilities  -   the  progress   made  by   each  and   their                                                               
arrangements.                                                                                                                   
                                                                                                                                
CO-CHAIR COLVER  opined barriers between the  utilities are being                                                               
broken  down  and they  are  now  looking  for common  ground  to                                                               
facilitate economic dispatch.                                                                                                   
                                                                                                                                
MR. KONKEL agreed that is  true for some.  However, participation                                                               
from  all  of the  parties  is  needed  in  order to  move  power                                                               
throughout  the system  and to  add renewable  power where  it is                                                               
needed.                                                                                                                         
                                                                                                                                
REPRESENTATIVE WOOL  surmised independent power  producers (IPPs)                                                               
will  be included  along with  the utilities.   He  recalled that                                                               
recently some  of the utilities downplayed  the estimated savings                                                               
from economic  dispatch, and asked  whether all of  the utilities                                                               
agree  that  savings  from  economic  dispatch  could  reach  $50                                                               
million to $100 million.                                                                                                        
                                                                                                                                
10:35:29 AM                                                                                                                   
                                                                                                                                
MR.  KONKEL expressed  his understanding  that all  of utilities,                                                               
ARCTEC,  and  ATC, agree  with  RCA  that there  are  substantial                                                               
benefits from  grid integration  and economic  dispatch; however,                                                               
utilities  want  to  recover  costs for  their  ratepayers.    He                                                               
assured the House  Special Committee on Energy that  he has heard                                                               
that  all   of  the  utilities   agreed  that  there   should  be                                                               
nondiscriminatory access for qualifying facilities.                                                                             
                                                                                                                                
CO-CHAIR  COLVER   asked  Mr.  Konkel  to   explain  why  utility                                                               
executives  testified  recently that  a  systems  operator and  a                                                               
Transco   are  needed   because  the   utilities  have   incurred                                                               
substantial  -   but  unequal  -  debt   to  increase  generation                                                               
capacity.  He asked:                                                                                                            
                                                                                                                                
     Did you talk with many  of the executives and the folks                                                                    
     in  utilities on  how they're  trying  to balance  cash                                                                    
     flows,  and that  they felt  like they  needed both  of                                                                    
     those systems to be in place for it to work?                                                                               
                                                                                                                                
MR. KONKEL said he met  with some utility representatives but did                                                               
not  discuss specific  plans for  financing and  the recovery  of                                                               
debt.    The  aforementioned  problem  has  developed  over  four                                                               
decades during  which utilities have invested  in new facilities,                                                               
thus there is  excess capacity and needed rates of  return to pay                                                               
for  said facilities.   Although  the  point of  unequal debt  is                                                               
pertinent,  another   point  is  how  to   redistribute  regional                                                               
benefits.   Modeling  is  one answer,  but there  needs  to be  a                                                               
negotiated settlement among  the utilities.  The  savings from an                                                               
integrated system  are sufficient  to allow utilities  to recover                                                               
from their  investments, and  also to  provide a  direct economic                                                               
benefit to  consumers in the Railbelt.   He relayed that  most of                                                               
the utilities urge for patience,  due to complex negotiations and                                                               
that  working  groups will  progress  at  different rates.    Mr.                                                               
Konkel  opined a  road map  and milestones  are needed,  with the                                                               
exception that  all have  agreed with  the idea  of a  Transco to                                                               
deal  with  grid  integration.   However,  there  are  still  the                                                               
following key  questions:  How  to approach  integrated resources                                                               
planning? How much generation is  needed? Are the new investments                                                               
environmentally acceptable?  Does the project pay  for itself? Do                                                               
people want the project?  Unquestioned  is the need for an ISO or                                                               
a USO.                                                                                                                          
                                                                                                                                
10:41:01 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  TILTON referred  to  the concept  of winners  and                                                               
losers,  and  inquired   as  to  whether  a   "win-win"  type  of                                                               
settlement has been proposed.                                                                                                   
                                                                                                                                
MR. KONKEL  suggested that the  negotiations could  be structured                                                               
through RCA  as a single-text  negotiation, using the  RCA letter                                                               
to the  legislature.   He opined  the letter  was very  clear and                                                               
articulated a plan  and milestones, although a  change of culture                                                               
may be required.                                                                                                                
                                                                                                                                
CO-CHAIR COLVER said  the situation is similar  to the successful                                                               
negotiations  related to  gas-balancing agreements  on the  North                                                               
Slope.  He remarked:                                                                                                            
                                                                                                                                
     Because   there's   different   amounts   of   savings,                                                                    
     depending on who's got the  cheapest power, so they ...                                                                    
     told  us ...  that you  needed the  transmission entity                                                                    
     and the independent system operator  and then there has                                                                    
     to  be  benefits  that  flow  from  each  because  each                                                                    
     individual utility  has different cost  structures. And                                                                    
     so that  the benefits  need to flow,  you need  both of                                                                    
     them to make it work.  ... There's different cash flows                                                                    
     involved.  ...   You  can't  just  do   a  transmission                                                                    
     cooperative  that  may   benefit  some  utilities,  and                                                                    
     burden   others,  but   with  the   independent  system                                                                    
     operator  and  in  combination  with  the  transmission                                                                    
     [cooperative] ... benefits can flow to both.                                                                               
                                                                                                                                
CO-CHAIR COLVER  added that the  governance structure is  also an                                                               
issue and he was also  told highly-paid professional members were                                                               
needed on an independent board of directors.                                                                                    
                                                                                                                                
MR. KONKEL said:                                                                                                                
                                                                                                                                
     That's exactly  the point  behind the  Public Utilities                                                                    
     Regulatory  Policy  Act,  is  this  separation  between                                                                    
     transmission.    And   open  competitiveness  and  open                                                                    
     access is good for renewables,  but it's, it's good for                                                                    
     the system, system-wide, and it's  good for the cost of                                                                    
     power  production,  and more  level,  more  of a  level                                                                    
     playing field, and the governance issues are huge.                                                                         
                                                                                                                                
10:45:08 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE CLAMAN  expressed his understanding that  a USO is                                                               
comprised of power  companies without a consumer  presence on its                                                               
governing   board;  a   "pure"  ISO   would  have   no  utilities                                                               
represented on  its governing board.   He surmised  the committee                                                               
is discussing a  combination of a USO and an  ISO, with consumers                                                               
and  utilities on  the board,  and with  the utilities  holding a                                                               
minority position.                                                                                                              
                                                                                                                                
MR. KONKEL agreed.  He said:                                                                                                    
                                                                                                                                
     One other way to think  about governance ... is 'How do                                                                    
     we maximize  the benefit to  Railbelt consumers?'   So,                                                                    
     if  somebody brings  to the  board expertise  in power-                                                                    
     pooling ... that could help  increase that benefit from                                                                    
     reducing the  cost of power and  distributing, and what                                                                    
     we don't  want is people  with a special  interest that                                                                    
     want  to be  on  the board  to  protect [their  special                                                                    
     interest] because  that will mean the  region-wide view                                                                    
     will have to be compromised.                                                                                               
                                                                                                                                
REPRESENTATIVE  CLAMAN  observed  that  nationally,  groups  with                                                               
specialized  interests are  often  the power  generators, but  in                                                               
Alaska  there  are  individual  consumers  and  large  commercial                                                               
entities,  such   as  mining  companies,  that   fit  within  the                                                               
definition of power consumers.                                                                                                  
                                                                                                                                
MR.  KONKEL  advised  that Alaska  can  benefit  from  experience                                                               
gleaned  elsewhere; however,  Alaska  knowledge  is important  in                                                               
order  to   expand  the   electrical  grid   without  subsidizing                                                               
uneconomic projects.                                                                                                            
                                                                                                                                
10:48:57 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL  asked whether the estimated  $900 million in                                                               
needed infrastructure  includes the  Susitna-Watana Hydroelectric                                                               
Project (Susitna-Watana).  He expressed  his understanding that a                                                               
Transco would build the infrastructure  and the projects would be                                                               
paid for by charges to ratepayers through increased rates.                                                                      
                                                                                                                                
MR.  KONKEL  responded  that  the  estimated  $900  million  does                                                               
include  Susitna-Watana.    Benefits from  grid  integration  and                                                               
investments would reach to all  ratepayers, and are of relatively                                                               
low cost when  compared to a major investment  in generation such                                                               
as Susitna-Watana.                                                                                                              
                                                                                                                                
REPRESENTATIVE WOOL observed  that four of the  six utilities are                                                               
cooperatives,  and system  integration  will  save the  ratepayer                                                               
money.   He questioned whether  the fact that four  utilities are                                                               
member-owned  cooperatives,  which  are not  trying  to  maximize                                                               
profit,  is beneficial  to system  integration,  rather than  six                                                               
private, for-profit entities trying to maximize profit.                                                                         
                                                                                                                                
MR.  KONKEL  stated that  cooperative  utilities  in Alaska  have                                                               
evolved  historically due  to  lower electrical  loads.   In  the                                                               
Lower  48, there  would be  one  or two  entities for  electrical                                                               
loads of  similar size.   He  opined there is  a clear  vision of                                                               
grid integration and economic dispatch.                                                                                         
                                                                                                                                
CO-CHAIR COLVER described the ownership  of the grid, and pointed                                                               
out there  are bottlenecks at  Bradley Lake that  impede economic                                                               
dispatch between  the utilities.   One hurdle to  grid management                                                               
is that some utilities have  more invested in infrastructure than                                                               
others  thus it  is difficult  to balance  ownership and  equity.                                                               
Another  question is  the  role of  the  Alaska Energy  Authority                                                               
(AEA), Department  of Commerce, Community &  Economic Development                                                               
(DCCED), in the ownership of the system.                                                                                        
                                                                                                                                
10:55:02 AM                                                                                                                   
                                                                                                                                
MR.  KONKEL observed  that moving  electrons throughout  the grid                                                               
efficiently  is   important  to  lowering  costs;   however,  the                                                               
transmission of  power through multiple  service areas  adds cost                                                               
through  pancaking,  which  is  a  series  of  tariffs  that  add                                                               
transmission costs  at each area.   A Transco approach  can solve                                                               
this problem  by developing  a postage stamp  rate, which  is one                                                               
rate for each electron put into  the grid, or by a unified system                                                               
of tariffs,  which is  close to  one price,  but that  allows for                                                               
slight adjustments in rates.                                                                                                    
                                                                                                                                
CO-CHAIR COLVER inquired as to  whether the solution could be the                                                               
creation  of a  cooperative that  would develop  internal tariffs                                                               
related to the distance of  transmission, and that would share in                                                               
the cost  of upgrades to the  system.  Or another  solution could                                                               
be  to bring  in a  fully  capitalized entity  and negotiate  for                                                               
contributing capital and shares thereof.                                                                                        
                                                                                                                                
MR. KONKEL agreed  that a cooperative is possible,  but to expand                                                               
and  strengthen  the grid  will  require  financing based  on  an                                                               
acceptable  rate of  return and  regulated  by RCA.   In  further                                                               
response to Co-Chair  Colver, he opined the role of  AEA would be                                                               
to  continue  to  be  responsible   for  feasibility  studies  on                                                               
Susitna-Watana and  on integrated  resources power planning.   He                                                               
noted that AEA  "takes positions on these things  ...."  Further,                                                               
AEA's  testimony to  RCA  was  that there  are  benefits to  grid                                                               
integration and to economic dispatch.   Mr. Konkel cautioned that                                                               
AEA's testimony  may be  affected by its  board of  directors and                                                               
its role that can  be similar to that of a  utility.  He returned                                                               
to the  presentation, noting that  three key milestones  that RCA                                                               
set out in its 6/30/15 letter to the legislature were:                                                                          
                                                                                                                                
        · first status report on Transco was issued 9/30/15                                                                     
          and was signed by all of the utilities                                                                                
        · second status report was issued 12/22/15 and                                                                          
          reported on progress                                                                                                  
        · third report dated 1/31/16 is currently being                                                                         
          interpreted by RCA                                                                                                    
                                                                                                                                
MR. KONKEL,  in response to  Co-Chair Colver, said for  the third                                                               
milestone RCA  is looking  for insight  into how  an ISO  and USO                                                               
would take advantage  of the benefits of grid  unification - from                                                               
the prospective of  the utilities - along with  a progress report                                                               
within  a timeframe.    Other challenges  recognized  by RCA  are                                                               
balkanization,   the  many   contested  regulatory   proceedings,                                                               
problems    with   moving    power   through    various   service                                                               
jurisdictions,  and the  institutional  structure  of the  region                                                               
which necessitates a culture change  related to grid integration,                                                               
economic dispatch, and open competition [slide 5].                                                                              
                                                                                                                                
11:03:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL  asked whether some ratepayers  will pay more                                                               
or less due to their proximity to electric generation.                                                                          
                                                                                                                                
MR. KONKEL  acknowledged that this  is an issue that  still needs                                                               
to be resolved; in fact, the  exact level of the benefits of grid                                                               
unification  to ratepayers  is undetermined,  although there  has                                                               
been progress.   He continued  to slide  6, and pointed  out that                                                               
benefits from a  more efficient operation of  the regional system                                                               
are estimated to be greater than $50 million annually.                                                                          
                                                                                                                                
MR. KONKEL  advised establishing an  ISO or  a USO is  a critical                                                               
and complicated  issue, although RCA  has set up two  dockets, I-                                                               
15-001,  and  I-13-001,  which deal  with  grid  integration  and                                                               
transmission,  qualifying facilities  for  renewable energy,  and                                                               
access to  the grid.  In  addition, RCA has established  that the                                                               
Railbelt electrical region  needs a non-asset owning  entity - an                                                               
ISO or a USO  - in conjunction with a Transco.   He said creating                                                               
the  Transco is  progressing, but  creating an  ISO/USO has  been                                                               
slow and  uncertain; although the  utilities "seem to  be willing                                                               
to go  forward" many  questions have been  raised.   One approach                                                               
RCA can take  is to pause and see what  the utilities accomplish,                                                               
or  it can  ask  for  legislative authority  to  address the  ISO                                                               
issue.  He  concluded that the transmission "side"  is moving and                                                               
does  not  require  new  legislation,  but  does  need  agreement                                                               
between   the  utilities.     Policies   of  the   executive  and                                                               
legislative branches  of government  need to  involve all  of the                                                               
parties [slide 9].                                                                                                              
                                                                                                                                
11:11:17 AM                                                                                                                   
                                                                                                                                
CO-CHAIR COLVER asked  Mr. Konkel to contact  AEA and familiarize                                                               
the committee with  its various projects and assets,  so that the                                                               
committee can make recommendations.  He added:                                                                                  
                                                                                                                                
     So  that we  can like  maybe have  a recommendation  on                                                                    
     what role they  would have, going forward.  ... We have                                                                    
     oversight  over what  they're doing  and  to a  certain                                                                    
     extent, it's a state-owned asset.                                                                                          
                                                                                                                                
MR.  KONKEL said  he is  well-versed  in this  field through  his                                                               
experience with  power plant  construction and  at the  Oak Ridge                                                               
National Laboratory,  U.S. Department  of Energy, and  noted that                                                               
AEA  has  issued its  most  recent  Renewable Energy  Fund  (REF)                                                               
report.    He  spoke  to  the value  of  competitiveness  in  the                                                               
electrical energy marketplace in Alaska.                                                                                        
                                                                                                                                
REPRESENTATIVE  WOOL returned  attention to  the response  to RCA                                                               
from  the  utilities,  dated  9/30/15,  found  in  the  committee                                                               
packet.  On page 3, paragraph 2 read [in part]:                                                                                 
                                                                                                                                
     Independent Transmission Company                                                                                           
     ... Governance of the Transco must balance the need to                                                                     
        effectively operate and invest in the Railbelt's                                                                        
     transmission infrastructure ....                                                                                           
                                                                                                                                
REPRESENTATIVE  WOOL   surmised  the  Transco  would   be  making                                                               
investment decisions  about the overall transmission  system, and                                                               
inquired as to the governance of the Transco.                                                                                   
                                                                                                                                
MR. KONKEL said  the Transco is not governed by  an ISO but works                                                               
in  conjunction  with  regional   planning  for  generation;  the                                                               
Transco  may  buy  all  of   the  transmission  assets  from  the                                                               
utilities, or follow one of many business models.                                                                               
                                                                                                                                
REPRESENTATIVE WOOL  directed attention  to the same  document on                                                               
page 6,  paragraph 4, which  read [in  part][original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     Governance                                                                                                                 
     The Governance Subgroup has been tasked with creating                                                                      
     the Transco's governance and organizational structure                                                                      
     ....                                                                                                                       
                                                                                                                                
                                                                                                                                
REPRESENTATIVE WOOL  observed that  the foregoing relates  to the                                                               
structure of the Transco, the  company that owns the transmission                                                               
lines, and not the systems operator.                                                                                            
                                                                                                                                
MR. KONKEL said  correct.  He added that the  Transco's tasks are                                                               
straightforward such  as economic dispatch,  integrated resources                                                               
planning, and "the like."                                                                                                       
                                                                                                                                
11:15:35 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  CLAMAN  explained  that  the  legislature  has  a                                                               
choice  to advance  a bill  that  would dictate  what an  ISO/USO                                                               
looks like in Alaska, or to  let the utilities continue a process                                                               
through RCA  to develop  an ISO  that responds  to representation                                                               
from the interests  of consumers and utilities.   He advised that                                                               
the  Alaska  State  Legislature  can  take  action  if  there  is                                                               
consensus to do so.                                                                                                             
                                                                                                                                
MR.  KONKEL  agreed.    In  further  response  to  Representative                                                               
Claman, he  agreed that if  Susitna-Watana were removed  from the                                                               
estimate  of  needed transmission  upgrades,  the  cost would  be                                                               
reduced significantly.                                                                                                          
                                                                                                                                
REPRESENTATIVE TILTON  supported allowing  the utilities  to work                                                               
together and  make progress through  RCA.  In addition,  she said                                                               
the ultimate winners in this endeavor should be the ratepayers.                                                                 
                                                                                                                                
MR. KONKEL  agreed.  He opined  RCA wants to see  milestones such                                                               
as identifying  problems, viable alternatives, an  open grid, and                                                               
economic dispatch, which are in the best interest of consumers.                                                                 
                                                                                                                                
CO-CHAIR COLVER  concluded that the committee  highly regards and                                                               
supports the leadership of RCA,  and its efforts to make progress                                                               
toward  an ISO/USO  and a  Transco.   After further  filings from                                                               
RCA, the committee will review the findings with its staff.                                                                     
                                                                                                                                
[HB 187 was held over.]                                                                                                         

Document Name Date/Time Subjects
Scheduling Memo HENE Week Feb 1-5 (Konkel28Jan).pdf HENE 2/2/2016 10:15:00 AM
HB187 Second hearing date Feb 2 (2016) No Mtg Feb 4
HB 187 Issues TRANSCO_ISO_USO (Staff_Briefing_2Feb2016_Rvn).pdf HENE 2/2/2016 10:15:00 AM
HB 187
HB187_1stStatusRpt RCA (RailbeltMilestone_Docket No. I-15-001_Filed30Sept2015).pdf HENE 2/2/2016 10:15:00 AM
HB 187
HB187 Docs 2nd Submittal to RCA Railbelt (22Dec2015)sk.pdf HENE 2/2/2016 10:15:00 AM
HB 187