Major bills still in flux as Legislature enters final days

The Legislature’s adjournment is just days away and many of the most pressing issues of the 2024 are still unresolved. It could be a messy ending, with bills being jammed together as legislators scramble to navigate a logjam of legislation.

The procedure is called “bill stuffing” and it involves inserting language or even whole bills into another measure that is more advanced. It happens in most legislative sessions but this year to a far greater degree, it seems.

It can save time but it can also lead to mistakes that are costly to undo later. It speeds, but also circumvents, a lengthy and complex path a bill usually takes through the House and Senate.

It can also short-circuit public review. Most bills being “stuffed” have been reviewed by legislators in other committees, but sometimes not.

This year Sen. Bert Stedman, cochair of the Senate Finance Committee, is pushing back. “Bill stuffing is not beneficial,” Stedman said last week in a briefing.

True to his sentiment, when a bill landed in the finance committee laden with six other bills inserted in a previous committee Stedman had them stripped. They continue in their previous form as separate proposals but given the short time left in the session most will die.

Among the stuffed-in bills the Senate committee deleted was a measure increasing state taxes on Hilcorp Energy, the major oil and gas producer in Cook Inlet. An amendment added to House Bill 50, which establishes a state program for injection and safe storage of carbon dioxide, by Sen. Bill Wielechowski, D-Anch. would increase Hilcorp’s tax bill by over $100 million a year.

That could fund a lot of needed programs short of funds but it will also likely reduce the money Hilcorp can invest in sustaining natural gas production from aging wells in Cook Inlet.

Wielechowski argues Hilcorp’s corporate status as an “S” Corporation, which exempts it from paying the state corporate income tax, is unfair because most corporations organized as traditional “C” corporations pay the corporate income tax, which 9.4 percent of net income.

The Senate’s finance committee kicked the amendment out on the grounds that anything this important needs a more thorough review which comes with a stand-alone bill.

Legislators also felt there is a public interest in avoiding any reduction of Hilcorp’s work in the Inlet, where gas production is expected to begin declining in 2027.

Important bills yet unresolved include a proposed reduction in state natural gas royalties to spur new gas development in the Inlet as well as legislation to reform state regulation of electric power transmission. This is aimed to remove impediments to new renewable energy projects planned in Southcentral and Interior Alaska.

The royalty reduction bills are making progress with a state House version sponsored by Rep. George Rauscher, R-Sutton now at an advanced stage in the House Finance Committee. A Senate version, sponsored by the Senate Resources Committee, was moved from that committee last Thursday after several days of detailed review. It is now in the Senate Finance Committee.

The two bills are similar in reducing royalty both for gas and oil in the Inlet but differ in other details. They are now positioned to pass to the other body soon, and will likely be merged.

These are important bills because reducing the royalty is seen as the quickest way to encourage production from known gas deposits in the Inlet that are now uneconomic and in time to soften the looming shortage of gas.

Meanwhile, the electric power transmission legislation is of almost equal importance in meeting the looming energy problem. That’s because renewable wind and solar projects can reduce the need for utilities to generate power with natural gas, which helps prolong the gas supply.

But as of Thursday the transmission legislation, which is complex, appeared bogged down by disagreements among electric utilities in Southcentral and Interior Alaska.

Matanuska Electric Association and Golden Valley Electric Association of Fairbanks are in favor of a bill that is at an most advanced stage. The bill would form a new entity to manage transmission of power in the “railbelt” power grid. Chugach Electric Association of Anchorage and Homer Electric Association oppose the bill, however.

Transmission system reform is a key priority for Gov. Mike Dunleavy. Among the governor’s goals are the setting of uniform tariffs, or tolls, charged on transmission of power by others on transmission lines owned by utilities.

The Southcentral-Interior “railbelt” power grid is a transmission system of segments of lines owned by the different utilities along its route including Matanuska Electric. These rates are different. The sum of them can make the generation and sales of power by an independent developer of wind or solar to a customer at the other end of the transmission system uneconomic.

Just this happened a few years when Cook Inlet Region, Inc., of Anchorage, wanted to expand its Fire Island wind project and to sell the power to customers in Fairbanks. However, the “pancaking” of the different toll fees along the railbelt grid raised the cost of delivered power so high that the expansion was uneconomic.

Given lack of agreement among the utilities, as of Thursday at least, there is a good chance this legislation will fail. If that happens, new wind and solar projects may not happen.

“All this renewable energy is just pie in the sky if the new power can’t be transmitted efficiently through the grid,” said Sen. Click Bishop, R-Fairbanks, who is cochair of the Senate Resources Committee.

Meanwhile, the Finance committees in both the and Senate busy. These committees must review legislation that has a financial impact on state agencies and programs, which most bills do.

Last Thursday, for example, the House Finance Committee had 19 bills scheduled in a morning session but work on 14 had to be cancelled because of time constraints. In an afternoon session the committee was able to take up eight bills for consideration.

Work on the state budget is proceeding smoothly, however. A House-Senate conference committee is moving steadily through the state operating budget to resolve differences between the House and Senate versions.

Meanwhile, the House passed the state capital budget last week and sent it to the Senate. Most of the differences between the House and Senate priorities were worked out informally, however. The Senate is likely to simply agree to the House changes, further streamlining the budget process this year.