Legislature(2015 - 2016)BELTZ 105 (TSBldg)
04/05/2016 01:30 PM Senate LABOR & COMMERCE
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|Confirmation Hearing: Alaska Gasline Development Corporation Board of Directors|
* first hearing in first committee of referral
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SB 193-EXTEND EXEMPTION FOR SMALL POWER PLANTS 3:19:51 PM CHAIR COSTELLO announced the consideration of SB 193; "An Act extending the exemption from regulation by the Regulatory Commission of Alaska for certain facilities or plants generating energy from renewable energy resources." [CSSB 193(NRG) was before the committee.] 3:19:53 PM JESSE LOGAN, Staff, Senator Lesil McGuire, Alaska State Legislature, introduced SB 193 on behalf of the sponsor. He said the bill seeks to extend the regulatory exemption for power plants utilizing renewable resources of under 65 megawatts from January 2016 to January 2020. The electrical demand of this very small and dispersed population of Alaska is generally served by regulated utilities. The Regulatory Commission of Alaska is challenged and charged with certifying utilities, regulated rates, resolving disputes, and protecting customers. However, Alaska has seen increasing private sector investment in the development of renewable energy systems across the state. Alaska has exempted small power producers from regulations provided they sell power on a wholesale basis to regulated utilities that distribute the power to local customers. The exemption lowers the barrier cost of entry, but it expired on January 1, 2016. He noted regulations can increase the cost of a project and pose barriers to investment, and also increase the cost of government. SB 193 continues to put Alaska in a middle ground between a thoroughly deregulated market and a highly regulated electrical market. This arrangement maintains state oversight on the power purchasing agreement and thereby continues to provide a layer of protection to rate payers. He provided an example of Fire Island Wind, the CIRI subsidiary that sells wind power to Chugach Electric in Southcentral Alaska, which came to light as a result of deregulation. 3:22:20 PM BOB PICKETT, Chairman, Regulatory Commission of Alaska, offered to answer questions related to SB 193. CHAIR COSTELLO asked if the exemption has worked as planned. MR. PICKETT said it's fair to say that the initial concerns have been alleviated. How it will work going forward, if it's extended, will hopefully add clarification about avoidable costs. The commission has not taken a position on the bill, but the narrow exemption has performed as envisioned. 3:24:56 PM DUFF MITCHELL, Executive Director, Alaska Independent Power Producers Association, testified in support of SB 193. The exemption has resulted in a growing cadre of power producers. Alaska is the only state that regulates small power producers. He called it state overreach. This bill does nothing but extend what is already on the books. CHAIR COSTELLO asked how many members are in the association. MR. MITCHELL said nine. CHAIR COSTELLO noted that RCA provides oversight, and federal regulations address concerns the public might have. MR. MITCHELL opined that the legislation does not fix state overreach. He maintained that Alaska is over regulated for small power producers. SB 193 maintains what is already permitted. 3:27:06 PM CHAIR COSTELLO held SB 193 in committee with public testimony open.