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HomeMy WebLinkAboutAEA Board Minutes May 19 2023Alaska Energy Authority BOARD MEETING MINUTES Friday, May 19, 2023 Anchorage, Alaska 1. CALL TO ORDER -,.ALASKA ENERGY AUTHORITY Chair Pruhs called the meeting of the Alaska Energy Authority to order on May 19, 2023, at 8:53 am. A quorum was established. 2. ROLL CALL BOARD MEMBERS Members present: Chair Dana Pruhs (Public Member); Vice -Chair Bill Kendig (Public Member); Albert Fogle (Public Member); Adam Crum (Commissioner DOR); Julie Sande (Commissioner DCCED); and Randy Eledge (Public Member). 3. AGENDA APPROVAL Vice -Chair Kendig requested to add an Executive Session after Item 7. Old Business, with personnel matters as the topic of discussion. There was no objection. There was no objection to approving the agenda with the amendment to include Executive Session after Item 7. Old Business. 4. PRIOR MINUTES — April 11, 2023 MOTION: A motion was made by Vice -Chair Kendig to approve the prior minutes of April 11, 2023. Motion seconded by Mr. Fogle. The motion to approve the minutes of April 11, 2023, passed without objection. S. PUBLIC COMMENTS,(2 minutes per person) There were no members of the public online or in -person who requested to comment. 6. NEW BUSINESS — None 7. OLD BUSINESS - None MOTION: A motion was made by Vice -Chair Kendig to enter into executive session to discuss confidential personnel issues. This is supported by the Open Meetings Act, which allows the Board to consider confidential matters in Executive Session. In this case, the Board believes that the subjects would have an adverse effect upon the finances of AEA and are protected by law, due to rules protecting personnel privacy and certain business information. Motion seconded by Mr. Fogle. Milk,. �. 813 W Northern Lights Blvd, Anchorage, AK 99503 • Phone: (907) 771-3000 - Fax: (907) 771-3044 • Email: info@akenergyauthority.org A roll call vote was taken and the motion to enter into Executive Session passed unanimously. EXECUTIVE SESSION: 8:57 am. Personnel Matters The Board reconvened its regular meeting at 9:31 am. Chair Pruhs advised that the Board did not take any formal action on matters discussed while in Executive Session. 8. DIRECTOR COMMENTS A. Responses to Board Questions from April Board Meeting Curtis Thayer, Executive Director and Secretary -Treasurer, informed that the responses to Board questions from the April Board meeting are contained within the packet. Vice -Chair Kendig asked if the cost to charge 50 kWh for an electric vehicle (EV) is comparable to one tank of gas. Mr. Thayer requested Audrey Alstrom, AEA Director of AEEE, to provide additional information. Ms. Alstrom discussed that EV charging ranges are dependent on the vehicle's battery capacity. Batteries with larger kWh have longer ranges. The 50 kWh example shown in the table is on the lower end, and is comparable to the Nissan Leaf. Its range is approximately 90 miles per full battery capacity charge. Vice -Chair Kendig noted that the provided chart and other charts he has reviewed show the levelized cost per EV charge compared to the cost of gas. He discussed his concern that the costs shown do not consider the cost to produce the EV and the cost to dispose of the batteries. Vice - Chair Kendig stated that the rates shown are subsidized rates mandated by Regulatory Commission of Alaska (RCA). He requested staff to invite RCA Commissioner Bob Doyle and RCA Commissioner Bob Picket to an AEA meeting to explain the complete picture of the EV costs. Vice - Chair Kendig noted that the Commissioners directed him to review the book "The Unpopular Truth: about Electricity and the Future of Energy." He believes the book provides a balanced view, and recommended that Board members read the book. Vice -Chair Kendig discussed that members are being provided with the upside of EVs without being provided a view of the downside. Chair Pruhs asked why the rates from Matanuska Electric Association (MEA) are double the rates of the other utilities. Vice -Chair Kendig explained that the utilities were given a range and MEA chose the rates that had the least effect on their members' rates. The other utilities chose to put more burden on their members. Ms. Alstrom explained that the table illustrated in the packet shows the rates that utilities can charge a vehicle at a charging station. It lists MEA's cost per kWh at .32 cents. She noted that Golden Valley Electric Association's (GVEA) current rate is .65 cents per kWh, and through RCA, has lowered their charging station rate to .15 cents per kWh. The utilities' residential rate would Alaska Energy Authority Page 2 of 9 be used if the EV was charging at home. Vice -Chair Kendig asked if the rates shown are for Level 3 charging stations. Ms. Alstrom agreed. Vice -Chair Kendig commented on his understanding that the charging stations are Level 2. Mr. Thayer agreed that most of the charging stations are Level 2 and are being changed to Level 3. Chair Pruhs requested explanation on how the commercial businesses that host the charging stations will charge the customer. Ms. Alstrom explained that charging stations usually take payments through an electronic application (app). The commercial charging station owner can choose to charge an additional amount over the utility rate, or they can provide the electricity at the utility rate with no extra fee, or they can charge a lower amount. Chair Pruhs asked if his understanding is correct that the residential charging fee is at the residential rate and is not subsidized. The commercial charging rate is subsidized to the amounts shown. Mr. Thayer discussed that commercial users have different rate classes depending on the power usage. Chair Pruhs asked if the amount of commercial charging utilization is tracked per quarter or per year. Ms. Alstrom believes the individual utilities would have access to that information. AEA receives the operational data from the chargers that AEA funds. Chair Pruhs asked Mr. Thayer if AEA has any role outside of installing the EV charging stations using the National Electric Vehicle Infrastructure (NEVI) funds. Mr. Thayer discussed that AEA does not have additional responsibilities outside of installing the charging stations with the NEVI funds. He noted another issue being reviewed by the Legislature is the lack of a fuel tax for EV users. The gasoline fuel tax is supposed to be used for road maintenance and EV users do not currently pay a fuel tax. Chair Pruhs indicated there is a tax on the tires. Vice -Chair Kendig suggested the possibility of charging a tax per kWh to be deposited into the highway funds. Vice -Chair Kendig commented on two charging stations that were inoperable: one in Girdwood and one in Anchorage. The Anchorage location has since been repaired. He expressed concern regarding the reliability of the charging stations to Fairbanks and what would happen if two of the charging stations were not working. Vice -Chair Kendig asked if the State has a certified evaluation of the electric charging stations. Mr. Thayer and Ms. Alstrom indicated the State does not conduct a certified evaluation of the electric charging stations. Vice -Chair Kendig recommended the issue be brought to the attention of the Legislature and the Governor for the State to test the charging stations. Mr. Thayer discussed reviewing the regulations and test procedure data of other states to use as a guideline. Vice -Chair Kendig commented that charging stations should be regulated like gas stations. He believes the Department of Transportation should review these issues. Chair Pruhs commented that the certification of the meters should be conducted by the utilities, rather than by the State. Mr. Thayer stated that there are no regulations on charging stations. Individual businesses can invest and install a charging station based upon the availability of the power at the location. The requirements for federal funding for charging stations include distances Alaska Energy Authority Page 3 of 9 between charging stations and the proximity to a particular road system. Ms. Alstrom added that the charging stations funded through the NEVI funds are required to be networked and to show their operational status. There were no additional questions. B. Governor's State Energy Security Task Force Mr. Thayer discussed that the kickoff meeting of the Alaska Energy Security Task Force was held on April 25, 2023. The meeting agenda and slides from that meeting are included in the Board packet. The Symposium Series will be open to the public and will be recorded for future viewing. The second meeting of the Task Force was held and reviewed foundational topics such as AEA, PCE, and ACEP. The next meeting is scheduled for June 27, 2023. Mr. Thayer indicated that he would continue to provide informational items of interest to Board members. He discussed that the Governor's goal is to reach the moonshot goal of 10-cent power for Alaska, as well as comparing Alaska's rates with national rates. Chair Pruhs asked if the 10-cent goal is approximately half of the current average cost of power. Mr. Thayer agreed. Chair Pruhs believes that there are only a few states in the Lower 48 with 10- cent power. Mr. Thayer agreed, and noted that the national average is approximately 16-cent power. Chair Pruhs inquired as to the cost averages throughout the different areas of Alaska. Mr. Thayer indicated that the Railbelt average is approximately 20-cent power for total cost. The fuel costs are less. Bradley Lake is four -cent power. Fire Island is 9.6-cent power, and natural gas is at 8-cent power. Mr. Thayer will provide the Board with the presentation that includes the cost breakdown by utility. Mr. Eledge asked if the costs described include transmission costs. Mr. Thayer explained that the all -in cost of 20-cent power includes transmission costs. Mr. Fogle asked if Bradley Lake could support the Railbelt if more capacity was added. Mr. Thayer noted that additional capacity to Bradley Lake would not support the Railbelt. He explained that Bradley Lake is 120 megawatts and supports approximately 10% of the Railbelt. The Bradley Lake Dixon Diversion project is expected to expand the support by another 5%. Mr. Thayer discussed that Susitna-Watana could support approximately half of the Railbelt at 450 megawatts. Mr. Fogle inquired as to the possibility of raising the lake level and putting in two more generators. Mr. Thayer explained that the Dixon Diversion will most likely raise the dam level 28 feet. There is a pit available for another generator, if needed. Bradley Lake was designed to have three 40- megawatt generators and the installation was two 60-megawatt generators. The pit has its own challenges regarding oscillation issues within the original design. The installation of batteries, as part of the required project work, will help with the oscillations. Chair Pruhs commented that in order to decrease the cost of power to reach the 10-cent goal, either the volume must increase, or a subsidy must be provided. He asked for Mr. Thayer's Alaska Energy Authority Page 4 of 9 feedback. Mr. Thayer explained that the Task Force is viewing that state in locational areas of the Railbelt, rural, and coastal. There is no predetermined solution regarding subsidies at this point. He noted the direct correlation between lowering the cost of energy on Railbelt and PCE funding. Mr. Thayer discussed that Canada, for example, has one rate for all users. The Task Force will review the options and levers available to reach the goal, including PCE, tax credits, and other Infrastructure Bill credits. Commissioner Crum supports the utilization of lowering the cost of energy for the Railbelt in order to positively affect the PCE funding. He expressed appreciation to Mr. Thayer for his efforts. Mr. Thayer indicated that he would continue to provide updates and information to the Board. There were no additional questions. C. AEA Infrastructure Awards Tracker: Mr. Thayer discussed that staff has developed a weekly tracking spreadsheet of the available infrastructure funding. The spreadsheet contains hyperlinks and pertinent information, such as stakeholders, scope and objectives, type of funding, required match, and staff point of contact. Mr. Thayer highlighted that the Legislature has designated $5 million as the 20% match for the Carbon Reduction Program, Port Electrification. AEA is partnering with Department of Transportation (DOT) and DCCED on this program. Mr. Thayer indicated that Commissioner Sande could provide additional information on this program. Chair Pruhs expressed appreciation to staff for creating the spreadsheet per his request. He looks forward to the monthly updates. Chair Pruhs asked for a color key to be contained within the spreadsheet. Mr. Thayer noted a key was included in the first draft and was accidentally excluded from the Board packet. The spreadsheet will be updated to include the key. Mr. Thayer noted the color code is as follows: • Green: AEA submitted an application • Yellow: AEA plans to submit an application or concept paper • Blue: AEA waiting for guidance • Orange: Application lead to be taken by other entities Chair Pruhs asked if AEA is partnering with private entities for any of the grants. Mr. Thayer indicated that the program is now open to for -profit companies. He noted that the utilities were the lead in GRIP 1 and 2, and AEA was the lead in GRIP 3. Mr. Thayer discussed the project applications. Determinations will be made in the fall. He commended the staff for the preparation of the concept papers and the applications. Mr. Thayer noted that Trident requested AEA partner with them on a concept paper to review geothermal power in Unalaska. Discussion continued regarding additional types of projects available for concept papers, applications, and funding. Chair Pruhs inquired as to ways that AEA can inform private entities about these opportunities. Mr. Thayer indicated that AEA has informed communities regarding the opportunity to apply for Alaska Energy Authority Page 5 of 9 grants in energy improvement in rural and remote areas. He discussed that AEA staff is available to provide technical assistance to communities in completing the application, if needed. Chair Pruhs asked if there is a segue for AIDEA to assist with additional monies after the grant funding is utilized. Mr. Thayer believes there could be a segment for that possibility. He commented that AEA does not give tax advice. However, there is information provided on the website that lists available tax credits and some of the tax credits are stackable. Chair Pruhs commented on the challenges for small business owners and small communities to understand the complicated process of applying for grants and loans. Randy Ruaro, AIDEA Executive Director, discussed that AIDEA has a 37-page memorandum available that explains the tax credits. He believes that staff can create a one -page matrix that outlines the key tax credits. He reiterated the disclaimer that staff is not providing tax advice. Chair Pruhs suggested the matrix information is included in presentations given to communities and businesses. Mr. Fogle recommended AEA staff present to different Chambers of Commerce to discuss the tax credit opportunities. Mr. Thayer informed that the information is on AEA's website and is being advertised as available. He noted that the Chamber of Commerce circuit will begin soon. Commissioner Sande complimented Mr. Thayer and AEA staff for their collaboration and assistance in utilizing the limited use State cruise ship funding for the eligible coastal communities. The efforts are key in maximizing and advancing economic development and in ensuring that the port visitors have a positive experience. She expressed appreciation to Mr. Thayer for his efforts. A brief at -ease was taken. i. Electric Vehicle Update Mr. Thayer reviewed the Electric Vehicle Update provided in the Board packet. The site host application deadline was May 15, 2023. Thirty-four applications were received and are under review. The results should be available by May 23, 2023. The Alaska Electric Vehicle Working Group (AKEVWG) quarterly meeting will be held next week. Additionally, a NEVI workshop is planned for June 10, 2023. Mr. Thayer commented that AEA has a good working relationship and partnership with DOT. He noted that Commissioner Ryan Anderson was complimentary of AEA's efforts and supports AEA's partnership on the port electrification application. ii. Bipartisan Infrastructure Law (BIL) — Sec. 40101(d) — Preventing Outages and Enhancing the Resilience of the Electric Grid Formula Grants Application Mr. Thayer advised that a copy of the BIL, Section 40101 (d) is included in the Board packet. The application was filed last year. The amount is $60 million over the course of five years, and requires a State match of $1.8 million. This is the second year that the match and the federal receipt authority has been requested. The process is ongoing and should move forward as planned. The Alaska Energy Authority Page 6 of 9 total amount for last year and this year will be approximately $22 million. iii. Industrial Decarbonization and Emissions Reduction Demonstration -to -Deployment (DE-FOA-0002936) Near -Net -Zero Facility Build Project — Trident / AEA Concept Paper Mr. Thayer informed that this item was discussed earlier in the meeting. The concept paper is included in the Board packet. Trident is the lead and AEA is listed as a team member. The determination will be made in a few months if the process can move forward to the application phase. D. Inflation Reduction Act (IRA)in i. IRA Tax Incentive Overview Mr. Thayer indicated this item was discussed under the AEA Infrastructure Awards Tracker agenda item. E. Capital Budget — Unknown until Session ends (5/17/2023) Mr. Thayer informed that additional information will be available at the next Board meeting. The overview is that AEA received all funding requested in the operating budget and all funding requested in the capital budget, including $140 million of federal receipt authority. The session ended last night, and the final information will be provided to members. Mr. Thayer reviewed specific line item amounts that were included in the budget: Statewide Grid Resilience at $1.8 million; Power System Upgrades at $7.5 million; Bulk Fuel was doubled to $11 million; Dixon Studies and Hydro Studies at $5 million; full funding of the Renewable Energy Program at $5million; Renewable Energy Fund (REF) at $17 million; Delta Phase III Power at $3 million; and Black Rapids Training Site at $12.7 million. Mr. Thayer discussed that AEA has been given five new staffing positions dedicated to infrastructure. Offers have been extended for two of the positions. Mr. Thayer expressed appreciation to AEA staff, especially Rebecca Garret, Karin St. Clair, Conner Erickson, Tim Sandstrom, Amy Adler, Pam Ellis, Audrey Alstrom, and Jennifer Bertolini for their diligent efforts. F. Legislative Update Mr. Thayer discussed the legislative update information and the PowerPoint presentations are provided in the packet. He conveyed particular support from Senator Stedman and Representative Edgmon. G. Cook Inlet Gas Supply — Included in the packet H. Community Outreach — Included in the packet Alaska Energy Authority Page 7 of 9 t. Articles of Interest - Included in the packet J. Next Regularly Scheduled AEA Board Meeting Wednesday, June 21, 2023 Mr. Thayer informed that the next regularly scheduled AEA Board meeting is June 21, 2023. He discussed that AEA was requested to provide promotional items to potential investors next week at the Governor's Sustainability Conference. The information is included in the packet. Mr. Thayer highlighted that Brandy Dixon, AEA, along with about 12 staff members have focused their efforts on the success of the conference. The current attendance number is over 800 people, with 150 speakers and subject matter experts worldwide. Mr. Eledge asked Mr. Thayer for AEA's total capital budget amount. Mr. Thayer stated that the federal receipt authority was approximately $145 million. The State UGF increased by $15 million to $50 million. Mr. Thayer indicated that the $82 million with DOT and DCCED, and the $52 million from the NEVI Program are not held by AEA. Mr. Thayer will provide a distinct breakdown of the budget funding at the next meeting. Mr. Thayer discussed that the Governor's carbon package was passed by the Legislature. An amendment was included that AEA's Renewable Energy Fund will receive 20% of anything sold through carbon credits. The bill was spearheaded through Department of Revenue and Senator Bishop. The Department of Natural Resources will administer the plan. Mr. Thayer expressed his understanding that the schedule includes one to two years to write the regulations and another one to two years to implement the regulations. Mr. Fogle asked if AEA and AIDEA are anticipating delays in the annual audit. Mr. Thayer indicated that auditors are on the premises this week conducting preliminary work. He anticipates that the process is on track to meet the October audit deadline. AEA is fully staffed, and no problems are anticipated. He noted that Clay Christian is the new CFO, and he is available to answer any questions. Mr. Christian discussed that staff has been meeting with the auditors. Processes are ongoing to ensure that the requirements are fulfilled for AEA and AIDEA to obtain signed opinions by the target date of October 25, 2023. This includes expediting items from other parts of the State structure that have caused delays in the past. Mr. Fogle asked what completion date was indicated in the RFP for the auditors. Mr. Thayer does not have the Eide Bailly auditor's contract with him today to confirm the date. The October 25, 2023 date meets the State deadline. Mr. Fogle believes the deadline was either October 1st or September 15th, which has not been met in years. He is hoping to meet the deadline. Mr. Thayer explained that AEA and AIDEA's fiscal year ends June 30th, after which the books can be closed. However, AEA and AIDEA depend on other parts of government to close their books before AEA and AIDEA can close its books. A sequencing of events must occur. Last year, there were staffing issues and AIDEA was on time and AEA was late. The year before, AEA was on time and AIDEA was late. The goal this year is for both entities to be on time. Alaska Energy Authority Page 8 of 9 9. BOARD COMMENTS Mr. Eledge is pleased that the Legislature recognizes the efforts of AEA and its leadership. He believes this is a tribute to both Mr. Thayer and the staff. Mr. Eledge acknowledged the accomplishment. Mr. Kendig expressed appreciation for the good meeting and extensive information provided by the staff. Mr. Fogle asked for the September and October meeting dates. Ms. Bertolini advised the meetings will be held on September 21" and October 25t". Mr. Fogle requested a reminder is sent to members regarding the meeting dates for the rest of the year. Ms. Bertolini agreed. Mr. Fogle requested the audit is released a week before the October 25t" meeting for the Board to review the audit and approve it at the October meeting. Mr. Thayer commented that a Bradley Lake Hydro Project trip is in the process of being scheduled in June due to interest from legislators who helped fund the Dixon Diversion Project. Mr. Eledge asked if any of the Board members will be available to attend the Energy Conference. He regrets that he is unable to attend. Vice -Chair Kendig indicated that he will attend all three of the days. Mr. Thayer noted that Commissioner Sande and Commissioner Crum will be in attendance all three of the days. Chair Pruhs thanked the members. He welcomed Mr. Christian to his new position, and expressed appreciation to Mr. Thayer and staff for the information, especially the work -in -progress spreadsheet. He suggested that a column is included to identify the projects that were implemented. Mr. Thayer made a last comment that $1.6 million was funded this morning from a competitive grant that was applied for last year. Federal receipt authority is currently within the budget for those funds. 10. ADJOURNMENT There being no further business of the Board, the AEA meeting adjourned at 10:56 am. ����itr�rrrrrrr VGY,q O' c"GOA�o�q rF � Curtis Thayer, Executive Director /Secretary- ;, SEAL.: 197E rrrrr�t »� Alaska Energy Authority Page 9 of 9