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CS FOR SENATE BILL NO. 257(L&C)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-THIRD LEGISLATURE - SECOND SESSION
BY THE SENATE LABOR AND COMMERCE COMMITTEE
Offered: 4/30/24
Referred: Finance
Sponsor(s): SENATE RESOURCES COMMITTEE
A BILL
FOR AN ACT ENTITLED
"An Act relating to the Regulatory Commission of Alaska; relating to public utilities; 1
relating to electric reliability organizations; relating to the Alaska Energy Authority; 2
relating to the Railbelt Transmission Organization; and providing for an effective date." 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
* Section 1. AS 42.04.020(a) is amended to read: 5
(a) The commission consists of five commissioners appointed by the governor 6
and confirmed by the legislature in joint session. To qualify for appointment as a 7
commissioner, a person must be a member in good standing of the Alaska Bar 8
Association or have a degree from an accredited college or university with a major in 9
engineering, finance, economics, accounting, business administration, or public 10
administration and must have at least five years of actual experience in the
11
practice of law or in the field associated with the degree. [ACTUAL 12
EXPERIENCE FOR A PERIOD OF FIVE YEARS IN THE PRACTICE OF LAW 13
OR IN THE FIELD OF ENGINEERING, FINANCE, ECONOMICS, 14 33-LS1047\Y
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ACCOUNTING, BUSINESS ADMINISTRATION, OR PUBLIC 1
ADMINISTRATION IS EQUIVALENT TO A DEGREE.] 2
* Sec. 2. AS 42.05.381 is amended by adding a new subsection to read: 3
(p) A determination of whether an electric utility's rate is just and reasonable 4
may consider whether the purpose of the rate is to increase diversity of supply, 5
promote load growth, or enhance energy reliability or energy security. 6
* Sec. 3. AS 42.05.762 is amended to read: 7
Sec. 42.05.762. Duties of an electric reliability organization. An electric 8
reliability organization shall 9
(1) develop reliability standards that provide for an adequate level of 10
reliability of an interconnected electric energy transmission network; 11
(2) develop integrated resource plans under AS 42.05.780(a); 12
(3) establish rules to 13
(A) ensure that the directors of the electric reliability 14
organization and the electric reliability organization act independently from 15
users, owners, and operators of the interconnected electric energy transmission 16
network; 17
(B) equitably allocate reasonable dues, fees, and other charges 18
among all load-serving entities connected to the interconnected electric energy 19
transmission network for all activities under AS 42.05.760 - 42.05.790; 20
(C) provide fair and impartial procedures for the enforcement 21
of reliability standards; 22
(D) provide for reasonable notice and opportunity for public 23
comment, due process, openness, and balancing of interests in exercising its 24
duties; and 25
(4) prioritize the reliability and stability of the interconnected 26
bulk-electric system served by the electric reliability organization while 27
considering cost to the consumer [BE GOVERNED BY A BOARD THAT 28
(A) INCLUDES AS NONVOTING MEMBERS THE CHAIR 29
OF THE COMMISSION OR THE CHAIR'S DESIGNEE AND THE 30
ATTORNEY GENERAL OR THE ATTORNEY GENERAL'S DESIGNEE; 31 33-LS1047\Y
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AND 1
(B) IS FORMED AS 2
(i) AN INDEPENDENT BOARD; 3
(ii) A BALANCED STAKEHOLDER BOARD; OR 4
(iii) A COMBINATION INDEPENDENT AND BALANCED 5
STAKEHOLDER BOARD]. 6
* Sec. 4. AS 42.05 is amended by adding a new section to read: 7
Sec. 42.05.763. Governance of an electric reliability organization. (a) An 8
electric reliability organization shall be governed by a board of directors that is 9
(1) an independent board; 10
(2) a balanced stakeholder board; or 11
(3) a combination independent and balanced stakeholder board. 12
(b) The chair of the commission or the chair's designee and the attorney 13
general or the attorney general's designee shall serve as nonvoting members of the 14
board of directors of an electric reliability organization. 15
(c) A voting member of the board of an electric reliability organization must 16
(1) be appointed by a utility that participates in the electric reliability 17
organization; 18
(2) be a member in good standing of the Alaska Bar Association with 19
at least five years of actual experience in the practice of law; 20
(3) have a degree in engineering, finance, economics, accounting, 21
business administration, or public administration and at least five years of actual 22
experience in the field associated with the degree; or 23
(4) have owned, operated, overseen, or developed, for a period of at 24
least five years, a generation facility of at least 10 megawatts connecting at a 25
transmission voltage of 69 kilovolts or higher. 26
* Sec. 5. AS 42.05.765(a) is amended to read: 27
(a) An electric reliability organization shall develop, monitor, and enforce 28
reliability standards that ensure the stable operation of the interconnected bulk-29
electric system served by the electric reliability organization, coordinate with the 30
Railbelt Transmission Organization when developing reliability standards if the 31 33-LS1047\Y
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electric reliability organization serves the Railbelt, and file each reliability standard 1
or modification to a reliability standard with the commission as a new or revised tariff 2
provision. All users, owners, and operators of an interconnected electric energy 3
transmission network served by an electric reliability organization, including a user, 4
owner, or operator that is exempt from other regulation under AS 42.05.711 or another 5
provision of this chapter, shall comply with reliability standards contained in a tariff 6
that is approved by the commission. The commission may enforce a reliability 7
standard approved under this section. A reliability standard approved under this 8
section 9
(1) shall provide for the reliable operation of the interconnected 10
electric energy transmission network or of an interconnected electric energy 11
transmission network facility; 12
(2) may provide for 13
(A) protection from a cybersecurity incident; 14
(B) facility security; 15
(C) additions or modifications to an interconnected bulk-16
electric system facility to the extent necessary to provide for reliable operation 17
of the interconnected electric energy transmission network; 18
(3) may result in, but may not be designed for the purpose of, requiring 19
enlargement of interconnected bulk-electric system facilities or construction of new 20
transmission capacity or generation capacity. 21
* Sec. 6. AS 42.05.770 is amended to read: 22
Sec. 42.05.770. Regulations. The commission shall adopt regulations 23
governing electric reliability organizations, reliability standards, and modifications to 24
reliability standards consistent with this section. Regulations under AS 42.05.760 - 25
42.05.790 must 26
(1) require that an electric reliability organization's tariff include 27
[(A) STANDARDS FOR] nondiscriminatory standards for 28
[OPEN ACCESS TRANSMISSION AND] interconnection; 29
[(B) STANDARDS FOR TRANSMISSION SYSTEM COST 30
RECOVERY;] 31 33-LS1047\Y
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(2) provide a process to identify and resolve conflicts between a 1
reliability standard and a function, rule, tariff, rate schedule, or agreement that has 2
been accepted, approved, adopted, or ordered by the commission; 3
(3) allow an electric reliability organization to recover its costs through 4
surcharges added to the rate for each participating load-serving entity; costs 5
recovered each year under regulations adopted under this paragraph may not 6
exceed $1,200,000. 7
* Sec. 7. AS 42.05.772 is amended by adding a new subsection to read: 8
(b) A load-serving entity, including a load-serving entity otherwise exempt 9
from regulation under this chapter, in an interconnected bulk-electric system served by 10
an electric reliability organization shall adhere to the electric reliability organization's 11
reliability standards and coordinate with the electric reliability organization and, if 12
applicable, the Railbelt Transmission Organization to integrate the electric reliability 13
organization's reliability standards into operational procedures. 14
* Sec. 8. AS 42.05.790 is amended by adding new paragraphs to read: 15
(8) "Railbelt" has the meaning given in AS 44.83.750; 16
(9) "Railbelt Transmission Organization" means the transmission 17
organization established by AS 44.83.700. 18
* Sec. 9. AS 44.83.080 is amended to read: 19
Sec. 44.83.080. Powers of the authority. In furtherance of its corporate 20
purposes, the authority has the following powers in addition to its other powers: 21
(1) to sue and be sued; 22
(2) to have a seal and alter it at pleasure; 23
(3) to make and alter bylaws for its organization and internal 24
management; 25
(4) to adopt regulations governing the exercise of its corporate powers; 26
(5) to improve, equip, operate, and maintain power projects and bulk 27
fuel, waste energy, energy conservation, energy efficiency, and alternative energy 28
facilities and equipment; 29
(6) to issue bonds to carry out any of its corporate purposes and 30
powers, including the establishment or increase of reserves to secure or to pay the 31 33-LS1047\Y
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bonds or interest on them, and the payment of all other costs or expenses of the 1
authority incident to and necessary or convenient to carry out its corporate purposes 2
and powers; 3
(7) to sell, lease as lessor or lessee, exchange, donate, convey, or 4
encumber in any manner by mortgage or by creation of any other security interest, real 5
or personal property owned by it, or in which it has an interest, when, in the judgment 6
of the authority, the action is in furtherance of its corporate purposes; 7
(8) to accept gifts, grants, or loans from, and enter into contracts or 8
other transactions regarding them, with any person; 9
(9) to deposit or invest its funds, subject to agreements with 10
bondholders; 11
(10) to enter into contracts with the United States or any person and, 12
subject to the laws of the United States and subject to concurrence of the legislature, 13
with a foreign country or its agencies, for the construction, financing, operation, and 14
maintenance of all or any part of a power project or bulk fuel, waste energy, energy 15
conservation, energy efficiency, or alternative energy facilities or equipment, either 16
inside or outside the state, and for the sale or transmission of power from a project or 17
any right to the capacity of it or for the security of any bonds of the authority issued or 18
to be issued for the project; 19
(11) to enter into contracts with any person and with the United States 20
and, subject to the laws of the United States and subject to the concurrence of the 21
legislature, with a foreign country or its agencies for the purchase, sale, exchange, 22
transmission, or use of power from a project, or any right to the capacity of it; 23
(12) to apply to the appropriate agencies of the state, the United States, 24
and a foreign country and any other proper agency for the permits, licenses, or 25
approvals as may be necessary, to acquire, construct, maintain, and operate power 26
projects in accordance with the licenses or permits, and to obtain, hold, and use the 27
licenses and permits in the same manner as any other person or operating unit; 28
(13) to enter into contracts or agreements with respect to the exercise 29
of any of its powers, and do all things necessary or convenient to carry out its 30
corporate purposes and exercise the powers granted in this chapter; 31 33-LS1047\Y
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(14) to recommend to the legislature 1
(A) the pledge of the credit of the state to guarantee repayment 2
of all or any portion of revenue bonds issued to assist in construction of power 3
projects; 4
(B) an appropriation from the general fund 5
(i) for debt service on bonds or other project purposes; 6
or 7
(ii) to reduce the amount of debt financing for the 8
project; 9
(15) to carry out the powers and duties assigned to it under AS 42.45 10
and AS 44.83.700 - 44.83.750; 11
(16) to make grants or loans to any person and enter into contracts or 12
other transactions regarding the grants or loans; 13
(17) to promote energy conservation, energy efficiency, and alternative 14
energy through training and public education; 15
(18) to acquire a Susitna River power project, whether by construction, 16
purchase, gift, or lease, including the acquisition of property rights and interests by 17
eminent domain under AS 09; 18
(19) to perform feasibility studies and engineering and design with 19
respect to power projects; 20
(20) to acquire battery energy storage systems, whether by direct 21
ownership, purchase, grant, gift, or lease. 22
* Sec. 10. AS 44.83 is amended by adding new sections to read: 23
Article 5A. Railbelt Transmission Organization. 24
Sec. 44.83.700. Railbelt Transmission Organization. (a) The Railbelt 25
Transmission Organization is established in the Alaska Energy Authority for the 26
purpose of overseeing, managing, and developing the backbone transmission system 27
serving the Railbelt and conducting strategic planning to enhance the future transfer 28
capabilities, resilience, reliability, and efficiency of the backbone transmission system. 29
(b) The governance structure for the transmission organization must 30
(1) provide for oversight of the transmission organization by a 31 33-LS1047\Y
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management committee that is made up of 1
(A) representatives from each of the Railbelt utilities; 2
(B) the executive director of the authority; 3
(C) the chief executive officer of the applicable electric 4
reliability organization, or the chief executive officer's designee; 5
(D) an individual who represents a person, other than a public 6
utility, that owns or operates a facility for the generation of electricity; and 7
(E) an individual who represents a labor organization engaged 8
in collective bargaining with a Railbelt utility; 9
(2) include a conflict resolution process; and 10
(3) facilitate public participation in the operations of the transmission 11
organization. 12
(c) The provisions of AS 44.83.700 - 44.83.750 do not limit, extend, or 13
otherwise alter the rights and obligations as provided in AS 42.05.221 - 42.05.281 of a 14
public utility certificated under AS 42.05.221. 15
(d) Notwithstanding AS 44.83.090(b), the transmission organization is subject 16
to the jurisdiction of the commission. The commission shall adopt regulations under 17
AS 44.62 (Administrative Procedure Act) necessary to carry out its powers and duties 18
under AS 44.83.700 - 44.83.750, including defining by regulation the term "backbone 19
transmission asset." 20
Sec. 44.83.710. Powers and duties. (a) The transmission organization shall 21
(1) manage backbone transmission assets; 22
(2) follow reliability standards developed by the applicable electric 23
reliability organization; 24
(3) ensure the safe, resilient, reliable, efficient, and economical 25
operation and development of the backbone transmission system; 26
(4) preserve nondiscriminatory open access to the backbone 27
transmission system subject to legitimate technical constraints and congestion; 28
(5) maintain the capacity rights of legacy transmission owners to 29
access firm load and legacy generation resources served by the backbone transmission 30
system; 31 33-LS1047\Y
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(6) perform integrated transmission planning under AS 44.83.730; 1
(7) purchase, lease, or otherwise acquire effective operational control 2
of backbone transmission assets; 3
(8) subject to the approval of the commission, establish tariffs related 4
to the backbone transmission system under AS 44.83.720. 5
(b) The transmission organization may 6
(1) construct, own, and operate new backbone transmission assets; and 7
(2) enter into contracts, agreements, and partnerships that enhance 8
safety, resiliency, reliability, and efficiency of the backbone transmission system. 9
(c) The transmission organization may not exchange, donate, sell, or otherwise 10
convey a backbone transmission asset owned by the transmission organization without 11
approval of the legislature in advance of the effective date of the conveyance. 12
(d) The transmission organization shall ensure that work performed on new 13
construction and maintenance of backbone transmission assets controlled by the 14
transmission organization is prioritized to give first preference to the Railbelt utility 15
that serves the area in which the work is performed. The transmission organization 16
shall compensate the utility for reasonable and necessary expenses the utility incurs in 17
performing the work. The work must be performed subject to the terms and conditions 18
of any existing collective bargaining agreements. 19
(e) The transmission organization may adopt regulations necessary to 20
implement AS 44.83.700 - 44.83.750. 21
Sec. 44.83.720. Revenue mechanism. (a) The transmission organization shall 22
hold and administer a commission-approved open access transmission tariff that 23
ensures nondiscriminatory access to the backbone transmission system. 24
(b) The transmission organization shall adopt a commission-approved 25
transmission cost recovery methodology that ensures the reliability and sufficient 26
capacity of the backbone transmission system to support and promote state and 27
regional energy policies and a rigorous, dynamic economy. 28
(c) The cost recovery methodology for the transmission organization must, as 29
approved by the commission, 30
(1) pool backbone transmission system costs and allocate those costs 31 33-LS1047\Y
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through certificated load-serving entities on a coincident peak or load ratio share basis, 1
or a combination of both; and 2
(2) account for 3
(A) required backbone transmission system ancillary services; 4
(B) backbone transmission system congestion; and 5
(C) disruptions to the backbone transmission system that result 6
in the isolation of one geographical area of the backbone transmission system 7
from another for more than 24 hours. 8
(d) A Railbelt utility shall pass the commission-approved transmission costs 9
directly and transparently to the utility's customers. 10
(e) A Railbelt utility that provides service exclusively on the Kenai Peninsula 11
is not subject to the cost recovery methodology for the transmission organization until 12
(1) the transmission line between the Kenai Peninsula and Anchorage 13
is upgraded to a capacity of 230 kilovolts; or 14
(2) a high-voltage submarine cable between the Kenai Peninsula and 15
the area near Beluga is operational. 16
Sec. 44.83.730. Integrated transmission planning. (a) At least once every 10 17
years, the transmission organization shall, in consultation with stakeholders, create and 18
review an integrated transmission plan for the backbone transmission system. 19
(b) The integrated transmission plan must articulate the strategic trajectory, 20
operational blueprint, capital improvement funding requirements, and developmental 21
outlook for the backbone transmission system, considering projected load growth, 22
technological advancement, fuel supply projections, generation plans, safety, 23
resiliency, reliability, efficiency, and economic impacts. 24
(c) The transmission organization shall seek feedback and input from the 25
public throughout the integrated transmission plan development process to ensure that 26
the plan reflects a broad range of perspectives and addresses community and industry 27
concerns. 28
Sec. 44.83.740. Transfer management of assets. (a) To achieve the integrated 29
and streamlined governance of the backbone transmission system, the transmission 30
organization shall identify the existing backbone transmission assets that are part of 31 33-LS1047\Y
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the backbone transmission system, and the Railbelt utilities shall transfer management 1
of those assets to the transmission organization on or before July 1, 2026. 2
(b) The authority shall transfer backbone transmission assets identified under 3
(a) of this section that are owned or managed by the authority to the transmission 4
organization. 5
(c) A Railbelt utility shall pay penalties as determined by the commission for 6
failure to transfer management of backbone transmission assets to the transmission 7
organization as required under this section. 8
Sec. 44.83.750. Definitions. In AS 44.83.700 - 44.83.750, 9
(1) "backbone transmission system" means the backbone transmission 10
assets in the Railbelt that facilitate the transfer of large-scale electrical power between 11
or across separate geographical areas; "backbone transmission system" does not 12
include assets that would be considered distribution facilities or radial facilities under 13
the standards established by the Federal Energy Regulatory Commission; 14
(2) "commission" means the Regulatory Commission of Alaska; 15
(3) "interconnected electric energy transmission network" has the 16
meaning given in AS 42.05.790; 17
(4) "Railbelt" means the geographic region from the Kenai Peninsula 18
to Interior Alaska that is connected to a common electric transmission backbone; 19
(5) "Railbelt utility" means a public electric utility certificated to 20
operate in the Railbelt; 21
(6) "transmission organization" means the Railbelt Transmission 22
Organization established by AS 44.83.700. 23
* Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 24
read: 25
APPLICABILITY AND TRANSITION: ELECTRIC RELIABILITY 26
ORGANIZATIONS. (a) AS 42.05.763, added by sec. 4 of this Act, applies to an electric 27
reliability organization with a certificate issued or renewed by the Regulatory Commission of 28
Alaska on or after the effective date of sec. 4 of this Act, except that an existing member of 29
the board of a certificated electric reliability organization who does not meet the qualifications 30
may continue to serve until the member's successor is appointed.
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(b) AS 42.05.770(3), as amended by sec. 6 of this Act, applies to costs incurred by an 1
electric reliability organization on or after the effective date of sec. 6 of this Act. 2
* Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 3
read: 4
TRANSITION: AGREEMENT BETWEEN ALASKA ENERGY AUTHORITY 5
AND RAILBELT UTILITIES. To ensure the successful implementation of AS 44.83.700 - 6
44.83.750, added by sec. 10 of this Act, on or before July 1, 2025, the Alaska Energy 7
Authority and the Railbelt utilities, as defined in AS 44.83.750, added by sec. 10 of this Act, 8
shall develop an agreement to implement AS 44.83.700 - 44.83.750, added by sec. 10 of this 9
Act. The agreement must establish a governance structure for the Railbelt Transmission 10
Organization established under AS 44.83.700, added by sec. 10 of this Act, that is modeled 11
after the governance structure of the Bradley Lake Hydroelectric Project, as outlined in the 12
Bradley Lake Power Sales Agreement, including the creation, duties, and methods of the 13
Bradley Lake Project Management Committee, dispute resolution, budgeting, financing, and 14
delegation of operations, with any adjustments the parties to the agreement determine are 15
necessary to accommodate the requirements of AS 44.83.700 - 44.83.750, added by sec. 10 of 16
this Act. 17
* Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 18
read: 19
TRANSITION: INITIAL INTEGRATED TRANSMISSION PLAN AND CAPITAL 20
IMPROVEMENT PROGRAM. The Alaska Energy Authority shall immediately assume the 21
integrated transmission planning duties under AS 44.83.730, added by sec. 10 of this Act, 22
develop an initial integrated transmission plan as soon as practicable, and begin execution of a 23
five-year transmission capital improvement program based on the plan as soon as practicable. 24
The authority shall transfer the responsibility for the plan and program to the Railbelt 25
Transmission Organization established under AS 44.83.700, added by sec. 10 of this Act, 26
after the agreement establishing the governance structure of the organization under sec. 12 of 27
this Act has been executed. 28
* Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 29
read: 30
TRANSITION: REGULATORY COMMISSION OF ALASKA MEMBERS. An 31 33-LS1047\Y
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individual who is a member of the Regulatory Commission of Alaska on the day before the 1
effective date of sec. 1 of this Act continues to serve on the Regulatory Commission of Alaska 2
until the member's term expires and a successor is appointed and qualified. The governor shall 3
make appointments for vacancies that occur on or after the effective date of sec. 1 of this Act 4
in accordance with AS 42.04.020(a), as amended by sec. 1 of this Act. 5
* Sec. 15. Sections 12 and 13 of this Act take effect immediately under AS 01.10.070(c). 6
* Sec. 16. Except as provided in sec. 15 of this Act, this Act takes effect July 1, 2024. 7