Alaska 2023-2024 Regular Session

Alaska Senate Bill SB101 Compare Versions

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

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11	11	SENATE BILL NO. 101
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13	13	IN THE LEGISLATURE OF THE STATE OF ALASKA
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15	15	THIRTY-THIRD LEGISLATURE - FIRST SESSION
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17	17	BY SENATORS TOBIN, Gray-Jackson, Kawasaki
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19	19
20	20	Introduced: 3/15/23
21	21	Referred: Labor & Commerce, Finance
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23	23
24	24	A BILL
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26	26	FOR AN ACT ENTITLED
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28	28	"An Act relating to a renewable portfolio standard; relating to electrical energy 1
29	29	transmission; relating to distributed energy systems; relating to power cost equalization; 2
30	30	relating to the Alaska Energy Authority; and providing for an effective date." 3
31	31	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
32	32	* Section 1. The uncodified law of the State of Alaska is amended by adding a new section 5
33	33	to read: 6
34	34	PURPOSE. The purpose of this Act is to establish a renewable portfolio standard that 7
35	35	requires certain electric utilities to derive increasing percentages of the utility's net electricity 8
36	36	sales from renewable energy resources. Nothing in this Act is intended to constitute 9
37	37	implementation by the Regulatory Commission of Alaska of the federal Public Utility 10
38	38	Regulatory Policies Act of 1978 (16 U.S.C. 2705). 11
39	39	* Sec. 2. AS 42.05.391(a) is amended to read: 12
40	40	(a) Except as provided in AS 42.05.306, a public utility may not, as to rates, 13
41	41	grant an unreasonable preference or advantage to any of its customers or subject a 14 33-LS0365\R
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45	45	customer to an unreasonable prejudice or disadvantage. A public utility may not 1
46	46	establish or maintain an unreasonable difference as to rates, either as between 2
47	47	localities or between classes of service. A public utility offering net metering for 3
48	48	customers who install distributed energy systems is not engaging in rate 4
49	49	discrimination solely because some customers receive net metering. A municipally 5
50	50	owned utility may offer uniform or identical rates for a public utility service to 6
51	51	customers located in different areas within its certificated service area who receive the 7
52	52	same class of service. Any uniform or identical rate shall, upon complaint, be subject 8
53	53	to review by the commission and may be set aside if shown to be unreasonable. In this 9
54	54	subsection, "distributed energy system" has the meaning given in AS 42.05.930. 10
55	55	* Sec. 3. AS 42.05.780(a) is amended to read: 11
56	56	(a) An electric reliability organization shall file with the commission in a 12
57	57	petition for approval an integrated resource plan for meeting the reliability 13
58	58	requirements of all customers within its interconnected electric energy transmission 14
59	59	network in a manner that provides the greatest value, consistent with the load-serving 15
60	60	entities' obligations. An integrated resource plan must contain an evaluation of the full 16
61	61	range of cost-effective means for load-serving entities to meet the service 17
62	62	requirements of all customers, including additional generation, transmission, battery 18
63	63	storage, and conservation or similar improvements in efficiency. An integrated 19
64	64	resource plan must include options to meet customers' collective needs in a manner 20
65	65	that provides the greatest value, consistent with the public interest, regardless of the 21
66	66	location or ownership of new facilities or conservation activities. An integrated 22
67	67	resource plan must include options by which each load-serving entity may satisfy 23
68	68	the renewable portfolio standard under AS 42.05.900. 24
69	69	* Sec. 4. AS 42.05.785(a) is amended to read: 25
70	70	(a) A public utility, including a public utility that is exempt from other 26
71	71	regulation under AS 42.05.711 or another provision of this chapter, that is 27
72	72	interconnected with an interconnected electric energy transmission network served by 28
73	73	an electric reliability organization certificated by the commission may not construct a 29
74	74	large energy facility unless the commission determines that the facility 30
75	75	(1) is necessary to the interconnected electric energy transmission 31 33-LS0365\R
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79	79	network with which it would be interconnected; 1
80	80	(2) complies with reliability standards; [AND] 2
81	81	(3) would, in a cost-effective manner, meet the needs of a load-serving 3
82	82	entity that is substantially served by the facility; and 4
83	83	(4) is not detrimental to a load-serving entity's ability to meet the 5
84	84	renewable portfolio standard under AS 42.05.900. 6
85	85	* Sec. 5. AS 42.05 is amended by adding new sections to read: 7
86	86	Article 11A. Renewable Portfolio Standard. 8
87	87	Sec. 42.05.900. Renewable portfolio standard. (a) A load-serving entity that 9
88	88	is subject to the standards of an electric reliability organization under AS 42.05.760 10
89	89	shall comply with the renewable portfolio standard established in this section. Under 11
90	90	the renewable portfolio standard, a load-serving entity's portfolio shall include sales 12
91	91	from renewable energy resources in the following percentages: 13
92	92	(1) 25 percent by December 31, 2027; 14
93	93	(2) 55 percent by December 31, 2035; 15
94	94	(3) 80 percent by December 31, 2040. 16
95	95	(b) A purchase power agreement entered into between a load-serving entity 17
96	96	and a renewable electrical energy producer will be considered to satisfy all or part of 18
97	97	the percentages required under (a) of this section if 19
98	98	(1) the effective date of the purchase power agreement is before the 20
99	99	end of the compliance period; 21
100	100	(2) the purchase power agreement guarantees that the renewable 22
101	101	electrical energy producer will deliver the renewable electrical energy to the load-23
102	102	serving entity not later than two years after the compliance period; and 24
103	103	(3) the purchase power agreement is approved by the commission in 25
104	104	accordance with AS 42.05.381 and 42.05.431(a) and (b) before the end of the 26
105	105	compliance period; if the purchase power agreement is not approved by the 27
106	106	commission, the load-serving entity may be subject to a noncompliance fine under 28
107	107	AS 42.05.915. 29
108	108	(c) To qualify as part of a load-serving entity's portfolio, renewable energy 30
109	109	resources used by a load-serving entity must be located within the load-serving entity's 31 33-LS0365\R
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113	113	service area, connected to the same interconnected electric energy transmission 1
114	114	network that serves the load-serving entity's customers, or located within the service 2
115	115	area of an electric utility whose customers receive power cost equalization under 3
116	116	AS 42.45.100 - 42.45.150. 4
117	117	(d) A load-serving entity may satisfy the renewable portfolio standard through 5
118	118	energy produced by distributed energy systems, regardless of whether the energy is 6
119	119	acquired by the load-serving entity or used by the customer. 7
120	120	(e) A load-serving entity's compliance with the renewable portfolio standard 8
121	121	shall be based on historical data, collected in a manner consistent with industry 9
122	122	standards and commission regulations. 10
123	123	(f) A load-serving entity shall design and implement an accounting system to 11
124	124	verify compliance with the renewable portfolio standard to ensure that renewable 12
125	125	electrical energy is counted only once for the purpose of meeting the renewable 13
126	126	portfolio standard. 14
127	127	(g) The commission shall, by regulation, develop a proxy for the ratio of net 15
128	128	energy acquired by a load-serving entity at metered intervals to total energy produced 16
129	129	from distributed energy systems. Using the proxy, the commission shall determine an 17
130	130	estimate of total energy produced by distributed energy systems available to satisfy a 18
131	131	load-serving entity's renewable portfolio standard. The commission shall update the 19
132	132	proxy developed under this subsection not less than once every five years. 20
133	133	(h) A load-serving entity may also satisfy the renewable portfolio standard 21
134	134	through renewable energy credits that qualify as part of the load-serving entity's 22
135	135	portfolio under AS 42.05.910. 23
136	136	(i) A load-serving entity may also satisfy the renewable portfolio standard 24
137	137	with energy consumption displaced because of energy efficiency investments made in 25
138	138	whole or part with payments under AS 42.05.915(g), if the displaced consumption is 26
139	139	documented under a program established by the state. 27
140	140	Sec. 42.05.905. Reporting. (a) Beginning March 1, 2025, a load-serving entity 28
141	141	subject to the renewable portfolio standard shall submit an annual report to the 29
142	142	commission that documents the load-serving entity's progress toward satisfying the 30
143	143	renewable portfolio standard under AS 42.05.900 in the preceding calendar year. The 31 33-LS0365\R
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147	147	annual report must document the entity's total production from distributed energy 1
148	148	systems and net electricity sales from renewable energy resources for the applicable 2
149	149	calendar year, document the entity's satisfaction of penalties imposed under 3
150	150	AS 42.05.915, and include the information required by the commission. 4
151	151	(b) The commission shall adopt regulations governing the reporting 5
152	152	requirements under (a) of this section to document compliance and minimize the 6
153	153	administrative costs and burden on a load-serving entity. 7
154	154	(c) The commission may investigate a load-serving entity's compliance with a 8
155	155	renewable portfolio standard and collect any information necessary to verify and audit 9
156	156	the information provided to the commission by the load-serving entity. 10
157	157	Sec. 42.05.910. Renewable energy credits. (a) To qualify as part of a load-11
158	158	serving entity's portfolio, renewable energy credits must be bundled renewable energy 12
159	159	credits from generation located within a load-serving entity's service area or connected 13
160	160	to the same interconnected electric energy transmission network that serves the load-14
161	161	serving entity's customers or must be purchased from generation located within the 15
162	162	service area of an electric utility that serves customers who receive power cost 16
163	163	equalization under AS 42.45.100 - 42.45.150. 17
164	164	(b) A renewable energy credit may be used only once and then must be 18
165	165	retired. 19
166	166	(c) Each load-serving entity is responsible for tracking and demonstrating that 20
167	167	a renewable energy credit used to comply with the renewable portfolio standard is 21
168	168	derived from a renewable energy resource, that the load-serving entity has not 22
169	169	previously used, traded, sold, or otherwise transferred the renewable energy credit, and 23
170	170	that the renewable energy credit is retired upon its use. 24
171	171	(d) A renewable energy credit may be traded, sold, or otherwise transferred for 25
172	172	value. 26
173	173	(e) Revenue received by a load-serving entity for the trade, sale, or transfer of 27
174	174	a renewable energy credit shall be credited to the load-serving entity's cost of power 28
175	175	adjustment to the benefit of the load-serving entity's customers. 29
176	176	Sec. 42.05.915. Noncompliance fine; waiver. (a) If the commission 30
177	177	determines that a load-serving entity failed to meet the renewable portfolio standard 31 33-LS0365\R
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181	181	under AS 42.05.900, after notice and an opportunity for hearing, the entity is, each 1
182	182	year that the entity fails to meet the renewable portfolio standard, subject to a fine of 2
183	183	$20 for every megawatt hour that the entity is below the renewable portfolio standard. 3
184	184	(b) The commission may waive the noncompliance fine in whole or in part 4
185	185	upon determination that a load-serving entity is unable to meet the renewable portfolio 5
186	186	standard because of reasons outside the reasonable control of the load-serving entity as 6
187	187	set out in (c) of this section or the entity establishes a good cause for noncompliance 7
188	188	as set out in (d) of this section. 8
189	189	(c) The following events or circumstances are outside of a load-serving 9
190	190	entity's reasonable control: 10
191	191	(1) weather-related damage; 11
192	192	(2) natural disasters; 12
193	193	(3) failure of renewable electrical energy producers to meet contractual 13
194	194	obligations to the load-serving entity; 14
195	195	(4) transmission network constraint that prevents the load-serving 15
196	196	entity from partially or fully using renewable electrical energy for net electricity sales; 16
197	197	(5) global pandemics; and 17
198	198	(6) acts of war. 18
199	199	(d) The following factors may establish good cause for noncompliance: 19
200	200	(1) the actions taken by the load-serving entity to procure the 20
201	201	renewable electrical energy; 21
202	202	(2) the extent of good faith efforts by the load-serving entity to 22
203	203	comply; 23
204	204	(3) the lack of past failures to comply; 24
205	205	(4) the likelihood and amount of future renewable electrical energy to 25
206	206	be procured by the load-serving entity; 26
207	207	(5) the effect of the noncompliance fine on the load-serving entity 27
208	208	considering the size or ownership of the load-serving entity; 28
209	209	(6) the good faith effort by the load-serving entity to meet the 29
210	210	renewable portfolio standard after an event or circumstance enumerated in (c) of this 30
211	211	section. 31 33-LS0365\R
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215	215	(e) If the commission waives all or part of a noncompliance fine, the 1
216	216	commission may require additional reporting from a load-serving entity to 2
217	217	demonstrate the entity is taking all reasonable actions under its control to satisfy the 3
218	218	renewable portfolio standard. 4
219	219	(f) A fine paid by a load-serving entity under this section may not be included 5
220	220	or recovered in rates, but the load-serving entity may recover a payment made to a 6
221	221	customer under (g) of this section. 7
222	222	(g) A load-serving entity may, within one year after the commission imposes a 8
223	223	noncompliance fine, satisfy the fine by paying a customer all or a portion of the 9
224	224	customer's costs of installing a distributed energy system or energy efficiency 10
225	225	technologies. When paying customer costs of installing a distributed energy system, 11
226	226	the load-serving entity shall, if total requests for costs exceed the amount of the 12
227	227	noncompliance fine, prioritize customers with mean household annual incomes at or 13
228	228	below 80 percent of the median census district income where the load-serving entity of 14
229	229	the customer is located. 15
230	230	Sec. 42.05.920. Exemptions. (a) A load-serving entity is exempt from 16
231	231	compliance with the renewable portfolio standard under AS 42.05.900 if the aggregate 17
232	232	net electricity sales for all load-serving entities on the interconnected electric energy 18
233	233	transmission network meets or exceeds the aggregate renewable portfolio standard for 19
234	234	all load-serving entities on the interconnected electric energy transmission network. 20
235	235	(b) If an exemption under (a) of this section does not apply, a load-serving 21
236	236	entity is exempt from its first noncompliance with a renewable portfolio standard. An 22
237	237	exemption under this subsection does not apply for the compliance period ending 23
238	238	December 31, 2040. 24
239	239	Sec. 42.05.925. Net metering. (a) A load-serving entity subject to the 25
240	240	renewable portfolio standard under AS 42.05.900 shall monthly credit in a tariff the 26
241	241	account of a retail customer for the number of kilowatt-hours, at the full retail rate per 27
242	242	kilowatt-hour, of electric energy supplied by the customer's distributed energy system 28
243	243	to the load-serving entity. The tariff may not limit the aggregate capacity that 29
244	244	customers may install unless the commission, after a hearing, finds that capacity 30
245	245	limitation is necessary to protect system reliability. 31 33-LS0365\R
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249	249	(b) For up to seven years after a customer's distributed energy system is 1
250	250	connected to the load-serving entity and generates power, a credit under (a) of this 2
251	251	section that exceeds the customer's monthly bill for service will roll over to the 3
252	252	following month and continue to roll over until used. Unused credits expire on 4
253	253	March 31 of each year. 5
254	254	(c) The credits under (b) of this section are not available for a distributed 6
255	255	energy system installed before July 1, 2023. 7
256	256	Sec. 42.05.930. Definitions. In AS 42.05.900 - 42.05.930, 8
257	257	(1) "bundled renewable energy credits" means renewable energy 9
258	258	credits that are sold or used together with their associated energy; 10
259	259	(2) "compliance period" means each period identified in 11
260	260	AS 42.05.900(a); 12
261	261	(3) "distributed energy system" means a renewable energy resource 13
262	262	that is located on any property owned or leased by a customer within the service 14
263	263	territory of the load-serving entity that is interconnected on the customer's side of the 15
264	264	utility meter; 16
265	265	(4) "interconnected electric energy transmission network" has the 17
266	266	meaning given in AS 42.05.790; 18
267	267	(5) "load-serving entity" has the meaning given in AS 42.05.790; 19
268	268	(6) "megawatt hour" means 1,000,000 watts of electricity being used in 20
269	269	one hour and includes the steam equivalent of a megawatt hour; 21
270	270	(7) "renewable electrical energy" means electricity or energy generated 22
271	271	from renewable energy resources; 23
272	272	(8) "renewable energy credit" means one credit equal to the generation 24
273	273	attributes of one megawatt hour that is derived from a renewable energy resource 25
274	274	located within the load-serving entity's service area or within the interconnected 26
275	275	electric energy transmission network where a load-serving entity's service area is 27
276	276	located, or purchased from generation located within the service area of an electric 28
277	277	utility that serves customers who receive power cost equalization under AS 42.45.100 29
278	278	- 42.45.150; where fossil and renewable fuels are co-fired in the same generating unit, 30
279	279	the unit is considered to generate renewable electrical energy in direct proportion to 31 33-LS0365\R
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283	283	the percentage of the total heat input value represented by the heat input value of the 1
284	284	renewable fuels; 2
285	285	(9) "renewable energy resource" means a resource, other than 3
286	286	petroleum, nuclear, natural gas, or coal, that naturally replenishes over a human, not a 4
287	287	geological, time frame, is ultimately derived from solar power, water power, or wind 5
288	288	power, comes from the sun or from thermal inertia of the earth, and minimizes the 6
289	289	output of toxic material in the conversion of the energy; in this paragraph, "resource" 7
290	290	includes 8
291	291	(A) solar and solar thermal energy, wind energy, and kinetic 9
292	292	energy of moving water, including 10
293	293	(i) waves, tides, or currents; 11
294	294	(ii) run-of-river hydropower, in-river hydrokinetic; 12
295	295	(iii) conventional hydropower, lake tap hydropower; 13
296	296	(iv) water released through a dam; and 14
297	297	(v) geothermal energy; 15
298	298	(B) waste to energy systems, including 16
299	299	(i) wood; 17
300	300	(ii) landfill gas produced by municipal solid waste or 18
301	301	fuel that has been manufactured in whole or significant part from 19
302	302	waste; 20
303	303	(iii) biofuels produced in the state; and 21
304	304	(iv) thermal energy produced from a geothermal heat 22
305	305	pump using municipal solid waste, including biogenic and 23
306	306	anthropogenic factions; 24
307	307	(10) "renewable portfolio standard" means the required percentage of a 25
308	308	load-serving entity's net electrical energy sales to customers in the entity's service area 26
309	309	that is represented by renewable electrical energy as required under AS 42.05.900(a); 27
310	310	(11) "transmission network constraint" means a lack of transmission 28
311	311	line capacity to deliver electricity without exceeding thermal, voltage, and stability 29
312	312	limits designed to ensure reliability of the interconnected electric energy transmission 30
313	313	network. 31 33-LS0365\R
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317	317	* Sec. 6. AS 42.45.110(a) is amended to read: 1
318	318	(a) The costs used to calculate the amount of power cost equalization for all 2
319	319	electric utilities eligible under AS 42.45.100 - 42.45.150 include all allowable costs, 3
320	320	except return on equity, used by the commission to determine the revenue requirement 4
321	321	for electric utilities subject to rate regulation under AS 42.05. The costs used in 5
322	322	determining the power cost equalization per kilowatt-hour shall exclude any other type 6
323	323	of assistance that reduces the customer's costs of power on a kilowatt-hour basis and 7
324	324	that is provided to the electric utility within 60 days before the commission determines 8
325	325	the power cost equalization per kilowatt-hour of the electric utility. In calculating 9
326	326	power cost equalization, the commission may not consider validated costs or kilowatt-10
327	327	hour sales associated with a United States Department of Defense facility, revenue 11
328	328	from the sale of recovered heat, or revenue from the sale of renewable energy 12
329	329	credits acquired under AS 42.05.910. 13
330	330	* Sec. 7. AS 44.83.940 is amended by adding a new subsection to read: 14
331	331	(b) Not later than the first day of the first regular session of each legislature, 15
332	332	the authority shall submit a report to the senate secretary and chief clerk of the house 16
333	333	of representatives and notify the legislature that the report is available. The report 17
334	334	must identify the authority's progress in developing renewable energy resources in 18
335	335	rural regions of the state, evaluate renewable energy resource development in rural 19
336	336	regions, identify infrastructure necessary for rural renewable energy projects, and 20
337	337	evaluate the feasibility and cost of rural renewable energy projects. 21
338	338	* Sec. 8. This Act takes effect July 1, 2023. 22