Alaska 2023-2024 Regular Session

Alaska House Bill HB121 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	HB0121a -1- HB 121
3	3	New Text Underlined [DELETED TEXT BRACKETED]
4	4
5	5	33-LS0626\A
6	6
7	7
8	8
9	9
10	10
11	11	HOUSE BILL NO. 121
12	12
13	13	IN THE LEGISLATURE OF THE STATE OF ALASKA
14	14
15	15	THIRTY-THIRD LEGISLATURE - FIRST SESSION
16	16
17	17	BY REPRESENTATIVE SUMNER
18	18
19	19	Introduced: 3/17/23
20	20	Referred: House Special Committee on Energy, Labor and Commerce
21	21
22	22
23	23	A BILL
24	24
25	25	FOR AN ACT ENTITLED
26	26
27	27	"An Act relating to a renewable portfolio standard; relating to electrical energy 1
28	28	transmission; relating to distributed energy systems; relating to power cost equalization; 2
29	29	relating to the Alaska Energy Authority; and providing for an effective date." 3
30	30	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
31	31	* Section 1. The uncodified law of the State of Alaska is amended by adding a new section 5
32	32	to read: 6
33	33	PURPOSE. The purpose of this Act is to establish a renewable portfolio standard that 7
34	34	requires certain electric utilities to derive increasing percentages of the utility's net electricity 8
35	35	sales from renewable energy resources. Nothing in this Act is intended to constitute 9
36	36	implementation by the Regulatory Commission of Alaska of the federal Public Utility 10
37	37	Regulatory Policies Act of 1978 (16 U.S.C. 2705). 11
38	38	* Sec. 2. AS 42.05.391(a) is amended to read: 12
39	39	(a) Except as provided in AS 42.05.306, a public utility may not, as to rates, 13
40	40	grant an unreasonable preference or advantage to any of its customers or subject a 14 33-LS0626\A
41	41	HB 121 -2- HB0121a
42	42	New Text Underlined [DELETED TEXT BRACKETED]
43	43
44	44	customer to an unreasonable prejudice or disadvantage. A public utility may not 1
45	45	establish or maintain an unreasonable difference as to rates, either as between 2
46	46	localities or between classes of service. A public utility offering net metering for 3
47	47	customers who install distributed energy systems is not engaging in rate 4
48	48	discrimination solely because some customers receive net metering. A municipally 5
49	49	owned utility may offer uniform or identical rates for a public utility service to 6
50	50	customers located in different areas within its certificated service area who receive the 7
51	51	same class of service. Any uniform or identical rate shall, upon complaint, be subject 8
52	52	to review by the commission and may be set aside if shown to be unreasonable. In this 9
53	53	subsection, "distributed energy system" has the meaning given in AS 42.05.930. 10
54	54	* Sec. 3. AS 42.05.780(a) is amended to read: 11
55	55	(a) An electric reliability organization shall file with the commission in a 12
56	56	petition for approval an integrated resource plan for meeting the reliability 13
57	57	requirements of all customers within its interconnected electric energy transmission 14
58	58	network in a manner that provides the greatest value, consistent with the load-serving 15
59	59	entities' obligations. An integrated resource plan must contain an evaluation of the full 16
60	60	range of cost-effective means for load-serving entities to meet the service 17
61	61	requirements of all customers, including additional generation, transmission, battery 18
62	62	storage, and conservation or similar improvements in efficiency. An integrated 19
63	63	resource plan must include options to meet customers' collective needs in a manner 20
64	64	that provides the greatest value, consistent with the public interest, regardless of the 21
65	65	location or ownership of new facilities or conservation activities. An integrated 22
66	66	resource plan must include options by which each load-serving entity may satisfy 23
67	67	the renewable portfolio standard under AS 42.05.900. 24
68	68	* Sec. 4. AS 42.05.785(a) is amended to read: 25
69	69	(a) A public utility, including a public utility that is exempt from other 26
70	70	regulation under AS 42.05.711 or another provision of this chapter, that is 27
71	71	interconnected with an interconnected electric energy transmission network served by 28
72	72	an electric reliability organization certificated by the commission may not construct a 29
73	73	large energy facility unless the commission determines that the facility 30
74	74	(1) is necessary to the interconnected electric energy transmission 31 33-LS0626\A
75	75	HB0121a -3- HB 121
76	76	New Text Underlined [DELETED TEXT BRACKETED]
77	77
78	78	network with which it would be interconnected; 1
79	79	(2) complies with reliability standards; [AND] 2
80	80	(3) would, in a cost-effective manner, meet the needs of a load-serving 3
81	81	entity that is substantially served by the facility; and 4
82	82	(4) is not detrimental to a load-serving entity's ability to meet the 5
83	83	renewable portfolio standard under AS 42.05.900. 6
84	84	* Sec. 5. AS 42.05 is amended by adding new sections to read: 7
85	85	Article 11A. Renewable Portfolio Standard. 8
86	86	Sec. 42.05.900. Renewable portfolio standard. (a) A load-serving entity that 9
87	87	is subject to the standards of an electric reliability organization under AS 42.05.760 10
88	88	shall comply with the renewable portfolio standard established in this section. Under 11
89	89	the renewable portfolio standard, a load-serving entity's portfolio shall include sales 12
90	90	from renewable energy resources in the following percentages: 13
91	91	(1) 25 percent by December 31, 2027; 14
92	92	(2) 55 percent by December 31, 2035; 15
93	93	(3) 80 percent by December 31, 2040. 16
94	94	(b) A purchase power agreement entered into between a load-serving entity 17
95	95	and a renewable electrical energy producer will be considered to satisfy all or part of 18
96	96	the percentages required under (a) of this section if 19
97	97	(1) the effective date of the purchase power agreement is before the 20
98	98	end of the compliance period; 21
99	99	(2) the purchase power agreement guarantees that the renewable 22
100	100	electrical energy producer will deliver the renewable electrical energy to the load-23
101	101	serving entity not later than two years after the compliance period; and 24
102	102	(3) the purchase power agreement is approved by the commission in 25
103	103	accordance with AS 42.05.381 and 42.05.431(a) and (b) before the end of the 26
104	104	compliance period; if the purchase power agreement is not approved by the 27
105	105	commission, the load-serving entity may be subject to a noncompliance fine under 28
106	106	AS 42.05.915. 29
107	107	(c) To qualify as part of a load-serving entity's portfolio, renewable energy 30
108	108	resources used by a load-serving entity must be located within the load-serving entity's 31 33-LS0626\A
109	109	HB 121 -4- HB0121a
110	110	New Text Underlined [DELETED TEXT BRACKETED]
111	111
112	112	service area, connected to the same interconnected electric energy transmission 1
113	113	network that serves the load-serving entity's customers, or located within the service 2
114	114	area of an electric utility whose customers receive power cost equalization under 3
115	115	AS 42.45.100 - 42.45.150. 4
116	116	(d) A load-serving entity may satisfy the renewable portfolio standard through 5
117	117	energy produced by distributed energy systems, regardless of whether the energy is 6
118	118	acquired by the load-serving entity or used by the customer. 7
119	119	(e) A load-serving entity's compliance with the renewable portfolio standard 8
120	120	shall be based on historical data, collected in a manner consistent with industry 9
121	121	standards and commission regulations. 10
122	122	(f) A load-serving entity shall design and implement an accounting system to 11
123	123	verify compliance with the renewable portfolio standard to ensure that renewable 12
124	124	electrical energy is counted only once for the purpose of meeting the renewable 13
125	125	portfolio standard. 14
126	126	(g) The commission shall, by regulation, develop a proxy for the ratio of net 15
127	127	energy acquired by a load-serving entity at metered intervals to total energy produced 16
128	128	from distributed energy systems. Using the proxy, the commission shall determine an 17
129	129	estimate of total energy produced by distributed energy systems available to satisfy a 18
130	130	load-serving entity's renewable portfolio standard. The commission shall update the 19
131	131	proxy developed under this subsection not less than once every five years. 20
132	132	(h) A load-serving entity may also satisfy the renewable portfolio standard 21
133	133	through renewable energy credits that qualify as part of the load-serving entity's 22
134	134	portfolio under AS 42.05.910. 23
135	135	(i) A load-serving entity may also satisfy the renewable portfolio standard 24
136	136	with energy consumption displaced because of energy efficiency investments made in 25
137	137	whole or part with payments under AS 42.05.915(g), if the displaced consumption is 26
138	138	documented under a program established by the state. 27
139	139	Sec. 42.05.905. Reporting. (a) Beginning March 1, 2025, a load-serving entity 28
140	140	subject to the renewable portfolio standard shall submit an annual report to the 29
141	141	commission that documents the load-serving entity's progress toward satisfying the 30
142	142	renewable portfolio standard under AS 42.05.900 in the preceding calendar year. The 31 33-LS0626\A
143	143	HB0121a -5- HB 121
144	144	New Text Underlined [DELETED TEXT BRACKETED]
145	145
146	146	annual report must document the entity's total production from distributed energy 1
147	147	systems and net electricity sales from renewable energy resources for the applicable 2
148	148	calendar year, document the entity's satisfaction of penalties imposed under 3
149	149	AS 42.05.915, and include the information required by the commission. 4
150	150	(b) The commission shall adopt regulations governing the reporting 5
151	151	requirements under (a) of this section to document compliance and minimize the 6
152	152	administrative costs and burden on a load-serving entity. 7
153	153	(c) The commission may investigate a load-serving entity's compliance with a 8
154	154	renewable portfolio standard and collect any information necessary to verify and audit 9
155	155	the information provided to the commission by the load-serving entity. 10
156	156	Sec. 42.05.910. Renewable energy credits. (a) To qualify as part of a load-11
157	157	serving entity's portfolio, renewable energy credits must be bundled renewable energy 12
158	158	credits from generation located within a load-serving entity's service area or connected 13
159	159	to the same interconnected electric energy transmission network that serves the load-14
160	160	serving entity's customers or must be purchased from generation located within the 15
161	161	service area of an electric utility that serves customers who receive power cost 16
162	162	equalization under AS 42.45.100 - 42.45.150. 17
163	163	(b) A renewable energy credit may be used only once and then must be 18
164	164	retired. 19
165	165	(c) Each load-serving entity is responsible for tracking and demonstrating that 20
166	166	a renewable energy credit used to comply with the renewable portfolio standard is 21
167	167	derived from a renewable energy resource, that the load-serving entity has not 22
168	168	previously used, traded, sold, or otherwise transferred the renewable energy credit, and 23
169	169	that the renewable energy credit is retired upon its use. 24
170	170	(d) A renewable energy credit may be traded, sold, or otherwise transferred for 25
171	171	value. 26
172	172	(e) Revenue received by a load-serving entity for the trade, sale, or transfer of 27
173	173	a renewable energy credit shall be credited to the load-serving entity's cost of power 28
174	174	adjustment to the benefit of the load-serving entity's customers. 29
175	175	Sec. 42.05.915. Noncompliance fine; waiver. (a) If the commission 30
176	176	determines that a load-serving entity failed to meet the renewable portfolio standard 31 33-LS0626\A
177	177	HB 121 -6- HB0121a
178	178	New Text Underlined [DELETED TEXT BRACKETED]
179	179
180	180	under AS 42.05.900, after notice and an opportunity for hearing, the entity is, each 1
181	181	year that the entity fails to meet the renewable portfolio standard, subject to a fine of 2
182	182	$20 for every megawatt hour that the entity is below the renewable portfolio standard. 3
183	183	(b) The commission may waive the noncompliance fine in whole or in part 4
184	184	upon determination that a load-serving entity is unable to meet the renewable portfolio 5
185	185	standard because of reasons outside the reasonable control of the load-serving entity as 6
186	186	set out in (c) of this section or the entity establishes a good cause for noncompliance 7
187	187	as set out in (d) of this section. 8
188	188	(c) The following events or circumstances are outside of a load-serving 9
189	189	entity's reasonable control: 10
190	190	(1) weather-related damage; 11
191	191	(2) natural disasters; 12
192	192	(3) failure of renewable electrical energy producers to meet contractual 13
193	193	obligations to the load-serving entity; 14
194	194	(4) transmission network constraint that prevents the load-serving 15
195	195	entity from partially or fully using renewable electrical energy for net electricity sales; 16
196	196	(5) global pandemics; and 17
197	197	(6) acts of war. 18
198	198	(d) The following factors may establish good cause for noncompliance: 19
199	199	(1) the actions taken by the load-serving entity to procure the 20
200	200	renewable electrical energy; 21
201	201	(2) the extent of good faith efforts by the load-serving entity to 22
202	202	comply; 23
203	203	(3) the lack of past failures to comply; 24
204	204	(4) the likelihood and amount of future renewable electrical energy to 25
205	205	be procured by the load-serving entity; 26
206	206	(5) the effect of the noncompliance fine on the load-serving entity 27
207	207	considering the size or ownership of the load-serving entity; 28
208	208	(6) the good faith effort by the load-serving entity to meet the 29
209	209	renewable portfolio standard after an event or circumstance enumerated in (c) of this 30
210	210	section. 31 33-LS0626\A
211	211	HB0121a -7- HB 121
212	212	New Text Underlined [DELETED TEXT BRACKETED]
213	213
214	214	(e) If the commission waives all or part of a noncompliance fine, the 1
215	215	commission may require additional reporting from a load-serving entity to 2
216	216	demonstrate the entity is taking all reasonable actions under its control to satisfy the 3
217	217	renewable portfolio standard. 4
218	218	(f) A fine paid by a load-serving entity under this section may not be included 5
219	219	or recovered in rates, but the load-serving entity may recover a payment made to a 6
220	220	customer under (g) of this section. 7
221	221	(g) A load-serving entity may, within one year after the commission imposes a 8
222	222	noncompliance fine, satisfy the fine by paying a customer all or a portion of the 9
223	223	customer's costs of installing a distributed energy system or energy efficiency 10
224	224	technologies. When paying customer costs of installing a distributed energy system, 11
225	225	the load-serving entity shall, if total requests for costs exceed the amount of the 12
226	226	noncompliance fine, prioritize customers with mean household annual incomes at or 13
227	227	below 80 percent of the median census district income where the load-serving entity of 14
228	228	the customer is located. 15
229	229	Sec. 42.05.920. Exemptions. (a) A load-serving entity is exempt from 16
230	230	compliance with the renewable portfolio standard under AS 42.05.900 if the aggregate 17
231	231	net electricity sales for all load-serving entities on the interconnected electric energy 18
232	232	transmission network meets or exceeds the aggregate renewable portfolio standard for 19
233	233	all load-serving entities on the interconnected electric energy transmission network. 20
234	234	(b) If an exemption under (a) of this section does not apply, a load-serving 21
235	235	entity is exempt from its first noncompliance with a renewable portfolio standard. An 22
236	236	exemption under this subsection does not apply for the compliance period ending 23
237	237	December 31, 2040. 24
238	238	Sec. 42.05.925. Net metering. (a) A load-serving entity subject to the 25
239	239	renewable portfolio standard under AS 42.05.900 shall monthly credit in a tariff the 26
240	240	account of a retail customer for the number of kilowatt-hours, at the full retail rate per 27
241	241	kilowatt-hour, of electric energy supplied by the customer's distributed energy system 28
242	242	to the load-serving entity. The tariff may not limit the aggregate capacity that 29
243	243	customers may install unless the commission, after a hearing, finds that capacity 30
244	244	limitation is necessary to protect system reliability. 31 33-LS0626\A
245	245	HB 121 -8- HB0121a
246	246	New Text Underlined [DELETED TEXT BRACKETED]
247	247
248	248	(b) For up to seven years after a customer's distributed energy system is 1
249	249	connected to the load-serving entity and generates power, a credit under (a) of this 2
250	250	section that exceeds the customer's monthly bill for service will roll over to the 3
251	251	following month and continue to roll over until used. Unused credits expire on 4
252	252	March 31 of each year. 5
253	253	(c) The credits under (b) of this section are not available for a distributed 6
254	254	energy system installed before July 1, 2023. 7
255	255	Sec. 42.05.930. Definitions. In AS 42.05.900 - 42.05.930, 8
256	256	(1) "bundled renewable energy credits" means renewable energy 9
257	257	credits that are sold or used together with their associated energy; 10
258	258	(2) "compliance period" means each period identified in 11
259	259	AS 42.05.900(a); 12
260	260	(3) "distributed energy system" means a renewable energy resource 13
261	261	that is located on any property owned or leased by a customer within the service 14
262	262	territory of the load-serving entity that is interconnected on the customer's side of the 15
263	263	utility meter; 16
264	264	(4) "interconnected electric energy transmission network" has the 17
265	265	meaning given in AS 42.05.790; 18
266	266	(5) "load-serving entity" has the meaning given in AS 42.05.790; 19
267	267	(6) "megawatt hour" means 1,000,000 watts of electricity being used in 20
268	268	one hour and includes the steam equivalent of a megawatt hour; 21
269	269	(7) "renewable electrical energy" means electricity or energy generated 22
270	270	from renewable energy resources; 23
271	271	(8) "renewable energy credit" means one credit equal to the generation 24
272	272	attributes of one megawatt hour that is derived from a renewable energy resource 25
273	273	located within the load-serving entity's service area or within the interconnected 26
274	274	electric energy transmission network where a load-serving entity's service area is 27
275	275	located, or purchased from generation located within the service area of an electric 28
276	276	utility that serves customers who receive power cost equalization under AS 42.45.100 29
277	277	- 42.45.150; where fossil and renewable fuels are co-fired in the same generating unit, 30
278	278	the unit is considered to generate renewable electrical energy in direct proportion to 31 33-LS0626\A
279	279	HB0121a -9- HB 121
280	280	New Text Underlined [DELETED TEXT BRACKETED]
281	281
282	282	the percentage of the total heat input value represented by the heat input value of the 1
283	283	renewable fuels; 2
284	284	(9) "renewable energy resource" means a resource, other than 3
285	285	petroleum, nuclear, natural gas, or coal, that naturally replenishes over a human, not a 4
286	286	geological, time frame, is ultimately derived from solar power, water power, or wind 5
287	287	power, comes from the sun or from thermal inertia of the earth, and minimizes the 6
288	288	output of toxic material in the conversion of the energy; in this paragraph, "resource" 7
289	289	includes 8
290	290	(A) solar and solar thermal energy, wind energy, and kinetic 9
291	291	energy of moving water, including 10
292	292	(i) waves, tides, or currents; 11
293	293	(ii) run-of-river hydropower, in-river hydrokinetic; 12
294	294	(iii) conventional hydropower, lake tap hydropower; 13
295	295	(iv) water released through a dam; and 14
296	296	(v) geothermal energy; 15
297	297	(B) waste to energy systems, including 16
298	298	(i) wood; 17
299	299	(ii) landfill gas produced by municipal solid waste or 18
300	300	fuel that has been manufactured in whole or significant part from 19
301	301	waste; 20
302	302	(iii) biofuels produced in the state; and 21
303	303	(iv) thermal energy produced from a geothermal heat 22
304	304	pump using municipal solid waste, including biogenic and 23
305	305	anthropogenic factions; 24
306	306	(10) "renewable portfolio standard" means the required percentage of a 25
307	307	load-serving entity's net electrical energy sales to customers in the entity's service area 26
308	308	that is represented by renewable electrical energy as required under AS 42.05.900(a); 27
309	309	(11) "transmission network constraint" means a lack of transmission 28
310	310	line capacity to deliver electricity without exceeding thermal, voltage, and stability 29
311	311	limits designed to ensure reliability of the interconnected electric energy transmission 30
312	312	network. 31 33-LS0626\A
313	313	HB 121 -10- HB0121a
314	314	New Text Underlined [DELETED TEXT BRACKETED]
315	315
316	316	* Sec. 6. AS 42.45.110(a) is amended to read: 1
317	317	(a) The costs used to calculate the amount of power cost equalization for all 2
318	318	electric utilities eligible under AS 42.45.100 - 42.45.150 include all allowable costs, 3
319	319	except return on equity, used by the commission to determine the revenue requirement 4
320	320	for electric utilities subject to rate regulation under AS 42.05. The costs used in 5
321	321	determining the power cost equalization per kilowatt-hour shall exclude any other type 6
322	322	of assistance that reduces the customer's costs of power on a kilowatt-hour basis and 7
323	323	that is provided to the electric utility within 60 days before the commission determines 8
324	324	the power cost equalization per kilowatt-hour of the electric utility. In calculating 9
325	325	power cost equalization, the commission may not consider validated costs or kilowatt-10
326	326	hour sales associated with a United States Department of Defense facility, revenue 11
327	327	from the sale of recovered heat, or revenue from the sale of renewable energy 12
328	328	credits acquired under AS 42.05.910. 13
329	329	* Sec. 7. AS 44.83.940 is amended by adding a new subsection to read: 14
330	330	(b) Not later than the first day of the first regular session of each legislature, 15
331	331	the authority shall submit a report to the senate secretary and chief clerk of the house 16
332	332	of representatives and notify the legislature that the report is available. The report 17
333	333	must identify the authority's progress in developing renewable energy resources in 18
334	334	rural regions of the state, evaluate renewable energy resource development in rural 19
335	335	regions, identify infrastructure necessary for rural renewable energy projects, and 20
336	336	evaluate the feasibility and cost of rural renewable energy projects. 21
337	337	* Sec. 8. This Act takes effect July 1, 2023. 22