Legislature(2015 - 2016)BUTROVICH 205
03/18/2015 03:30 PM Senate RESOURCES
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|Confirmation Hearing: Department of Natural Resources|
* first hearing in first committee of referral
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SB 57-CLEAN AIR ACT PLAN 3:55:35 PM CHAIR GIESSEL announced SB 57 to be up for consideration and invited her staff to explain the bill. [CSSB 57(NRG), 29- LS0523\G was before the committee.] 3:55:54 PM VIVIAN STIVER, staff to Senator Giessel, sponsor of SB 57, Alaska State Legislature, Juneau, Alaska, explained that the Environmental Protection Agency (EPA) released a proposed rule regulating emissions for power generators; it has two elements: statewide emissions reduction targets and guidelines for development and implementation plans for those reductions. She explained that the EPA has set Alaska's CO emission 2 reduction target at 26 percent by 2030. SB 57 requires the Department of Environmental Conservation (DEC) to seek a waiver or a similar exemption from the proposed rule known as the Existing Source Performance Standards Under Section 111(d) of the Clean Air Act (CAA). SB 57 provides guidance to DEC regarding the development of a state implementation plan should this rule become effective. The plan will not result in increased retail or service rates in any way that are disproportionate to households of low or moderate income, less reliable electrical service, resource inadequacy or transmission constraints, impairment of investment in existing electrical generating capacity, impairment of the competitive position of manufacturers or other public or private sectors of the state's economy, a decrease in employment in the state or a decrease in state revenues. The bill also requires the DEC to prepare a report to the legislature that analyzes the effects on the power generating sector of the affordability of electricity from diverse sources of generation, the type and amount of electricity generating capacity in the state that is likely to be eliminated or switched to another fuel, investment in electricity generating capacity and other infrastructure, the amount of investment necessary to offset retirements of electric generating capacity and maintain generation reserve margins, potential risk to electric reliability and resource adequacy risk and transmission constraints, and the amount by which retail electricity prices in the state are forecasted to increase under the plan. MS. STIVER said the bill also provides, should that plan be put in place, consideration of the disproportionate amount of the increase in the cost of electricity and the effects of the employment and other economic factors on consumers. SENATOR COSTELLO asked if any other states that are concerned about the ability to comply with the reduction targets are asking for a waiver prior to the rule being adopted. MS. STIVER answered that 15 other states had passed resolutions in regard to the EPA's proposed rule. SENATOR COSTELLO asked what the difference is between a waiver and an exemption. MS. STIVER replied the waiver may be on portions of the rule that don't apply in the state and an exemption would take the state completely out of the rule. SENATOR STOLTZE said the bill has a $100,000 fiscal note and asked if there is existing money. SENATOR STEDMAN said this is a big issue that is being forced on states nationwide and more information is needed about strategy to counteract it. 4:05:01 PM CHAIR GIESSEL said committee backup had numerous articles and letters from Senate leadership, the Miners Association, and various state organizations who are all aware of this that will point out how this has been getting addressed. SENATOR STEDMAN said he is aware, but the public, the end consumer, needs to become aware, because they are the ones who will have to pay for it. 4:07:02 PM SENATOR WIELECHOWSKI said if the idea is to get an Alaska specific plan, which he applauds, this bill seems to undercut it because the majority of the language is taken verbatim from model legislation financed by the Koch brothers. MS. STIVER answered that she looked at numerous prepared documents specifically containing electrical generation business language. This is a great tool that outlines why the state is not capable of meeting this rule and she hopes DEC will use it in negotiations with the federal government. 4:08:20 PM NORMAN ROKEBERG, Commissioner, Regulatory Commission of Alaska (RCA), Anchorage, Alaska, said he was available to answer questions on SB 57. He commented that initially the comments provided by the SOA were the result of a multi-agency task force put together by the governor last year in response to the promulgation of the EPA rule. The Alaska Energy Association (AEA), the Port Authority, the RCA, DEC and the governor's office worked together with two dozen people and devoted several months meeting to file comments with the EPA by December 1, 2014. Those comments indicated that the rule mandated a 26 percent reduction in greenhouse gases by 2030. Analysis done by the task force indicated that Alaska would not be able to achieve that particular goal. The governor chose to move forward by enjoining the Murray Coal Case that questioned the legality and constitutionality of the rule and says that Alaska should be exempt. To his knowledge, Alaska is the only state requesting an exemption, Mr. Rokeberg said. Some 15 states do not want to participate in filing a State Implementation Plan (STIP). Alaska makes an extraordinarily good case for an exemption, because it is not connected with a North American grid whereas almost all other portions of the Lower 48 are. Electric utilities can buy bulk electrical services through bidding processes throughout the country and are able to obtain power with renewable resources and have engaged in major energy efficiency programs. MR. ROKERBERG said it was essential to work with the congressional delegation in doing everything possible to convince the EPA to exempt Alaska. Part of the problem with the plan is the only areas affected under the proposed rule are the five generating units in the Railbelt area; the rest of the state is not included. Therefore, references in the bill talking about electrical consumers and economic development in the state are a little bit off mark. He said the SOA had invested billions of dollars in energy generation, efficiencies and renewable in the last decade, and the problem is that EPA gives Alaska no credit for the money it has spent before, because its energy investments have been in thermal and folks being able to keep their homes warm. 4:14:43 PM Because the focus is on the Railbelt, the very large amounts of money invested in renewables, particularly wind and hydro, Alaska does not receive any credit in terms of computing its greenhouse gas amount. In their comments they requested that the EPA give Alaska credit for the amount of investment and the renewables it has undertaken statewide so far. CHAIR GIESSEL asked if he would be available on Friday and he said he would be. She then said she would hold SB 57.