State legislators in Juneau are in their third week of the 2020 session. Traditionally, the Legislature’s early focus is on agency budgets by subcommittees of the House Finance subcommittees.
By custom, the House originates the operating budget and the initial capital budget is developed in the Senate, with both bodies working off Gov. Mike Dunleavy’s proposals submitted in mid-December.
However, one substantial policy bill already being worked on is Senate Bill 123, which would give the Regulatory Commission of Alaska the power to enforce a set of reliability standards and integrated planning among independent electric utilities serving the Interior-Southcentral Alaska ‘railbelt’ regions
The railbelt refers to Interior Alaska, Mat-Su, Anchorage and the the Kenai Peninsula, which are connected by the Alaska Railroad.
Matanuska Electric Association is playing a leading role in developing the legislation. The overall goal is to ensure more efficient, as well as reliable power generation and transmission.
This has been a long time coming. Efforts have been underway for years to bring the separate railbelt electric utilities together on integrated planning for new projects, reliability standards and eventually the efficient sharing of electricity through the railbelt grid, so that the least-costly power is available.
Also, a set of rules would be agreed to allow independent, mostly private power producers access to the railbelt grid. A more recent focus has been on cyber-security protections.
For different reasons most of the voluntary efforts at coordination have failed but the Regulatory Commission of Alaska has lacked the legal authority, which regulatory commissions have in most other states, to enforce coordination in achieving lower costs for consumers.’
The bill now in the Legislature would change that. It grew out of a request by the Legislature to the RCA to encourage cooperation among the utilities and, failing that, methods the regulatory commission could use in enforcing it.
The legislation sets up a framework for uniform electric interconnection technical standards so that if power is transmitted from one utility to another through the grid it will flow smoothly, without hitches that could trip up a system and cause a disruption. The utilities have worked a lot on this voluntarily but until recently had two different sets of standards. Now they have agreed on one, but SB 123 will provide a mechanism for the regulatory commission to enforce it.
Another outcome of the bill will be required integrated planning and approval by the RCA for major new power generation and transmission facilities, to avoid duplication.
The bill isn’t passed yet but it has a lot of horsepower behind it. Sen. John Coghill, R-Fairbanks, a veteran legislator who chairs a special Senate committee, is ramrodding the bill. Similar legislation is pending in the House, where the Energy Committee of that body has sponsored HB 151.
The House committee has held one hearing but most of the committee work is being done in the Senate. The House committee has also adopted the language of SB 151 as part its bill, a common legislative procedure that will speed final passage once SB 123 is voted on in the Senate. Previously there had been differences between the House and Senate versions.
On a related energy matter, Gov. Mike Dunleavy voiced strong support for renewable energy in his Jan. 27 State of the State speech. “Inexpensive energy, especially electricity, will be the basis that drives the future economy. If Alaska does it right, we have an opportunity to lead this nation in cheap energy,” the governor said in his speech.
“Whether its tidal, hydro, solar, biomass, wind or geothermal, we have more potential to deploy renewable energy than anywhere else on the planet,” Dunleavy continued.
The governor is keeping specific ideas to himself so far but one of his interests is in the potential Susitna hydro project, according to people who have talked with the governor recently.
According to people who have talked with him about energy in recent days, the governor is interested in knowing what it would cost to complete the Susitna project’s regulatory work on a license from the Federal Energy and Regulatory Commission. Securing the license, which is the major federal approval needed, would make the project “shovel ready” if there is sufficient demand for the power and financing can be arranged.
Former Gov. Gov. Bill Walker stopped work on Susitna when state revenues plunged in 2015 and 2016, and after the state had spent $197 million toward the FERC license. There was also an effort toward licensing in the early 1980s but the project envisioned then was much bigger and involved two separate dams. The more recent proposal was for one dam.
The state has had several energy projects over the years with big investments in hydro projects in Southeast and Southcentral coastal regions as well as the Renewable Energy Fund (REF) to finance renewable projects like wind power and local hydro in small mostly rural communities, to offset high diesel costs. About 80 of the REF projects are now operating and although the program hasn’t had an infusion of new state money in the last two years several projects started earlier are still under development, with engineering and planning work being done. There may also be REF money reallocated from projects that were funded, but then canceled, according to sources familiar with the program.