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HomeMy WebLinkAboutLegislation-Chapters 18 & 19 SLA 1993— Legislation (Chapters 18 & 19 SLA 1993) AIDEA nA kk Ww we BYRD 29 31 ¢ . Chapter 18 AN ACT Transferring certain projects of and amending and transferring programs of the Alaska Energy Authority to the Deparment of Community and Regional Affairs; relating to the Alaska Energy Authority; permitting the Alaska Industrial Development and Export Authority to issue revenue bonds for certain plants or facilities for energy resources; permitting udlides to form Joint action agencies; authorizing the Alaska Indusirial Development and Export Authority to issue revenue bonds for power transmission interties; relating to rates for a public utiliry thar sends of receives power over certain power transmission inmerties: relating to the power cost equalization and capital improvement fund; amending the purpose of the Railbelt energy fund. * Section 1. FINDINGS AND INTENT. (a) The legislature finds that adequate, reliable. electric service at affordable rates is a necessary ingredient of a modem society and a prosperous developing economy. The legislature further finds that at the current stage of social and economic development in the state, direct participation by the stare is necessary to assist in the development of a regional electric ansmission infrastructure and to assist in holding rates in high cost service areas to affordable levels. * See. 4. AS 42.05.431 is amended by adding a new subsection to read: (h) When secting or reviewing rates for a public utiliry that sends or receives power over the power transmission interties between Fairbanks and Healy or between Anchorage and the Kenai Peninsula, the commission shall consider those costs that have not been directly assigned to other individual generating utilities by the utilicy responsible for the construction of the intertie to have been incurred for the system existing on the effective date of this subsection. HCS CSSB 106(FIN) 4 -2- AIDEA 4 “ } SSR RRROG i w& - NI nwnW & wry Chapter 18 _ Sec. 42.45.040. SOUTHEAST ENERGY FUND. The Southeast energy fund is established as a separate fund. The fund consists of money transferred to it under AS 42.45.050. The department may make grants from the Southeast energy fund to utilities participating in the power transmission intertie between the Swan Lake and Tyee Lake hydroelectric projects for power projects, for repayment of loans, and for Payments on bonds. Sec. 42.45.050. FOUR DAM POOL TRANSFER FUND. (a) The four dam pool transfer fund is established in the department. The fund consists of repayments of principal and income thar would have been deposited in the former power development revolving loan fund under former AS 44.83.500. (0) Subject t appropriation, the department shall transfer the balance of the four dam pool transfer fund each month in accordance with this subsection. Subject to appropriation (1) 40 percent of the balance in the four dam pool transfer fund shall be transferred to the power cost equalization and rural electric capitalization fund to be used for power cost equalization and fural electric projects; (2) 40 percent of the balance in the four dam pool transfer fund shall be wansferred to the Southeas: energy fund to be used for power projects for utilides participating in the power transmission intertie berween the Swan Lake and Tyee Lake hydroelectric projects; and (3) 20 percent of the balance in the four dam pool transfer fund shall be transferred to the power project fund to be used for statewide utiliry projects. AIDEA Chapter 18 * Sec. 23. AS 44.88.105(d) is amended to read: 6 7 (d) The chairman of the authoricy shall annually, no later than January 2, 8 certify in writing to the governor and the legislature the amount, if any, required to 9 restore a capital reserve fund to the capital reserve fund requirement. The legislarure 10 may appropriate to the authority the amount certified by the chairman of the authority. 11 The authoriry shall deposit the amounts appropriated under this subsection during a 12 fiscal year in the proper capital reserve fund. Nothing in this section creates a det or 13 liability of the state. In this subsection, “capital reserve fund” means a capital reserve 14 fund that _ | (1) is created under this section on or before January 1, 1989; [, OR] ee 16 (2) secures refunding bonds if the refunding bonds are issued to refund 17 bonds that are secured by a capital reserve fund created under this section on or before 18 - January 1, 1989; or 19 (3) secures bonds issyed on or after the effective date of this section 20 for a power transmission intertie. 21 * Sec. 24. AS 44.88.155(d) is amended to read: 22 (d) A loan participation purchased by the authority with assets of the enterprise 23 development account or with proceeds of bonds secured by assets of the enterprise 24 development account 25 (1) mmy not exceed $10,000,000; however, in the case of a loan 26 D 2 Dower tra: he loan participation ms ceed 27 $10,000,000 with legistative aporoval: 23 (2) may not be purchased unless 29 (A) the project applicant is not, or, if the applicant is not a 0 single proprietorship, all members of the business enterprise or enterprises “_~ 31 constituting the project applicant are not, in default on another loan made by -33- HCS CSSB 106(FIN) AIDEA Fan Co ony HA & YH — le ee —_ ie iolliosiicalen testbed lulite tate SSRYRREGRK 31 Chapter 18 the state or by a public corporation of the state; and (B) at least 20 percent of the principal amount of the loan is retained by the loan originator, (3) may not be purchased if the loan to be purchased exceeds the cos: of the project or 75 percent of the appraised value of the project, whichever is less, unless the amount of the loan in excess of this limit is federally insured or guaranteed or is insured by a qualified mortgage insurance company; (4) may noc be purchased if the participation in the loan to be purchased is for a term longer than three-quarters of the authority's estimate of the life of the project or 25 years from the date the loan is made, whichever is earlier, however, int f i fe © i intertie, the term than is ma (5) may be made only if the participation in the loan to be purchased contains amortization provisions; the amortization provisions (A) must be complete and satisfactory to the authoriry and require periodic payments by the borrower, (B) may allow the loan originator to amortize the portion of the loan retained by the loan originator using a shorter amortization schedule than the amortization schedule for the portion of the loan held by the authority if (i) im the authority’s opinion, the project financed can support the increased debt service; and (ii) the accelerated amortization schedule is required to induce the originator to make the loan; (6) may be made only if the participation in the loan to be purchased is in the form and contains the terms and provisions with respect to insurance, repairs, alterations, payment of taxes and assessments, default reserves, delinquency charges, default remedies, acceleration of maturity, secondary liens, and other matters the authority prescribes; and (7) may be made only if the participation in the loan to be purchased is secured as to repayment by a mortgage or other security instrument in the manner the authority determines is feasible to assure timely repayment under a loan agreement HCS CSSB 106(FIN) -34- AIDEA a 1 entered into with the borrower. 2 * Sec. 25. AS 44.88.155(g) is amended to read: 3 (g) Notwithstanding any other provision of this section, the authority may 4 waive or modify the requirements of this section as it considers appropriate and 5 prudent in order to finance a project if the authority intends to own the project gc in 6 order to finance 2 power transmission intertie project. 7 * Sec. 26. AS 44.88.900(10) is amended to read: 8 (10) “project” means 9 (A) a plant or facility used or intended for use in connection 10 with making, processing, preparing, transporting, or producing in any manner, 11 goods, products, or substances of any kind or namre or in connection with 12 developing or utilizing a narural resource, or extracting, smelting, transporting, 13 converting, assembling, or producing in any manner, minerals, raw materials, 14 chemicals, compounds, alloys, fibers, commodities and materials, products, or 1s substances of any kind or nature; 16 (B) a plant or facility used or intended for use in connection 17 with a business enterprise; 18 (C) commercial activity by a small enterprise; 19 (D) a plant or faciliry demonstrating technological advances of 20 new methods and procedures and prototype commercial applications for the 21 exploration, development, production, transportation, conversion, and use of 22 energy resources; i 23 (E) infrastructure for a new tourism destination faciliry or for 24 the expansion of a tourism destination facility; 2s (F)__a_ plant or facility. other than a pignt or facility 26 described in (D) of this paragraph, for the generation, transmission, 8 -35- HCS CSSB 10&(FLN) AIDEA 8 wo on HD A Chapter 18 - * Sec. 29. The Alaska Industrial Development and Export Authority may issue bonds to finance the acquisition, design, and construction of a power transmission intertie of at least 138 kilovolts between Healy and Fairbanks and owned, for the benefit of all of the utilities participating in the intertie, by Golden Valley Electric Association, Inc. The principal amount of the bonds may not exceed $60,000,000. * Sec. 30. The Alaska Indusaial Development and Export Authority may issue bonds to finance the acquisition, design, and construction of a power transmission intertie of at least 138 kilovolts between Anchorage and the Kenai Peninsula to be owned, for the benefit of all of the utilides participating in the interties, by Chugach Electric Association, Inc. The principal amount of the bonds may not exceed $60,000,000. * Sec. 31. The Alaska Industrial Development and Export Authority may issue bonds to finance the acquisition, design. and construction of a power transmission intertie of at least 115 kilovolts berween the Swan Lake and Tyee Lake hydroelectric projects and owned, for the benefit of all of the utilises participating in the intertie, by Ketchikan Public Utilities. The principal amount of the bonds may not exceed $40,000,000. * Sec. 32. The Alaska Induscrial Development and Export Authority may issue bonds to 7 finance the acquisition, design, and construction of a power transmission intertie of at least 138 kilovolts berween Sutton and Glennallen and owned, for the benefit of all of the utilities participating in the intertie, by Copper Valley Electric Association. The principal amount of the bonds may not exceed $25,000,000. * Sec. 33. APPLICABILITY. ‘The repeal of statutes by sec. 28 of this Act does not affect existing bonds or actions that have been taken under the repealed provisions. HCS CSSB 106(FIN) -36- AIDEA 9 10 11 12 Chapter 19 AN ACT Making appropriations for grants and loans for hydroelectric projects including power transmission interties, to capitalize certain funds for energy grant and loan programs in the state, including the power cost equalization and rural electric capitalization fund, to the Department of Community and Regional Affairs for operating costs related to power projects and programs and to capitalize the Railbelt energy fund. * Section 1. (a) Subject to the conditions set out in (b) and (c) of this section, the sum of $43,200,000 is appropriated from the Railbelt intertie reserve (sec. 159, ch. 208, SLA 1990) to the Department of Administration for payments as a grant under AS 37.05.316 to Golden Valley Electric Association for the benefit of all the utilities participating in the intertie for design and construction of a power transmission intertie of at least 138 kilovolts between Healy and Fairbanks. AIDEA 10 wow mnt anaunawn = 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 29 31 Chapter 19 (b) The appropriation made by (a) of this section is contingent upon the execution of a written agreement between the electric utilities participating in the Healy-Fairbanks power transmission intertie, the Department of Administration, and the Alaska Industrial Development and Export Authority that provides that the participating utility or utilities agree to (1) pay the design and construction costs for the Healy-Fairbanks power transmission intertie that exceed $43,200,000: (2) pay the operation and maintenance costs of the Healy-Fairbanks power wansmission intertie; and (3) allocate, in proportion to the system peak demands of the utilities participating in the intertie, less a 1.5 mill per kilowatt hour charge for all energy assessed to the line paid by the receiving utility, (A) the costs of construction that exceed the amount of the grant under this section; (B) the operation and maintenance costs; and (C) the costs that may reasonably be charged for services provided. ' including transmission to the intertie. (c) The appropriation made by (a) of this section is contingent upon the execution of a written agreement between the electric utilities participating in the intertie and the department in which Golden Valley Electric Association agrees to provide the other participating utilities access to the intertie for the purpose of assured access to resources. economy energy transactions, and other similar uses. * Sec. 2. (a) Subject to the conditions set out in (b) and (c) of this section, the sum of $46,800,000 is appropriated from the Railbelt intertie reserve (sec. 159, ch. 208, SLA 1990) to the Department of Administration for payment as a grant under AS 37.05.316 to Chugach Electric Association for the benefit of all the utilities participating in the intertie for design and construction of a power transmission intertie of at least 138 kilovolts between Anchorage and the Kenai Peninsula. (b) The appropriation made by (a) of this section is contingent upon the execution of a written agreement between the electric utilities participating in the Anchorage-Kenai Peninsula power transmission intertie, the Department of Administration, and the Alaska HCS CSSB 126(FIN) 2. AIDEA 11 wow ony nn & BW we Yee BRERRREBKRESVSeVIAATEORASY Chapter 19 Industrial Development and Export Authority that provides that the participating utility or uulities agree to (1) pay the design and construction costs for the Anchorage-Kenai Peninsula power transmission intertie that exceed $46,800,000: (2) pay the operation and maintenance costs of the Anchorage-Kenai Peninsula power transmission intertie; and (3) allocate, in proportion to the system peak demands of the utilities participating in the intertie less a 1.5 mill per kilowatt hour charge for all energy generated by the Bradley Lake hydroelectric project purchased by the receiving utlity, (A) the costs of construction that exceed the amount of the grant under this section; (B) the operation and maintenance costs; and (C) the costs that may reasonably be charged for services provided, including transmission to the intertie. (c) The appropriation made by (a) of this section is contingent upon the execution of a writen agreement between the electric utilities participating in the intertie and the department in which Chugach Electric Association agrees to provide the other participating uulides access to the intertie for the purpose of assured access to resources, economy energy transactions, and other similar uses. * Sec. 3. The balance in the Railbelt intertie reserve, after the appropriations made by secs. | and 2 of this Act are paid, is appropriated to the Railbelt energy fund (AS 37.05.520). * Sec. 4. (a) Subject to the conditions set out in (b) - (d) of this section, the sum of $35,000,000 is appropriated from the Railbelt energy fund (AS 37.05.520) for deposit in the power project fund (AS 42.45.010) for payment as a loan under AS 42.45.010 to the participating utilities for the design and construction of a power transmission intertie of at least 138 kilovolts between Sutton and Glennallen. (b) Notwithstanding AS 42.45.010(g), repayments of principal and interest on the loan for which an appropriation is made under (a) of this section are appropriated to the Railbelt energy fund (AS 37.05.520). (c) The appropriation made by (a) of this section is contingent on the participating utility or utilities and the Department of Community and Regional Affairs entering into an -3- HCS CSSB 126(FIN) AIDEA 12 wo ern nn & VN = 10 ll 12 13 14 15 16 — 17 18 19 20 21 Chapter 19 agreement for a loan at zero interest for a term of SOQ years. (d) The appropriation made by (a) of this section is contingent upon the completion of a feasibility study and finance plan satisfactory to the Department of Community and Regional Affairs as set out in former AS 44.83.181. (e) In this section, “participating utilides” means the utility or utilities participating in the design, construction, operation, and maintenance of the power transmission interte between Sutton and Glennallen. * Sec. 5. (a) Subject to the conditions set out in (b) and (c) of this section, the sum of $20,000,000 is appropriated from the Railbelt energy fund (AS 37.05.520) for deposit in the power project fund (AS 42.45.010) for payment as a loan under AS 42.45.010 to the participating utilities for design and construction of a power transmission intertie of at least 115 kilovolts berween the Swan Lake and Tyee Lake hydroelectric projects. (b) Notwithstanding AS 42.45.010<g), repayments of principal and interest on the loan for which an appropriation is made under (a) of this section are appropriated to the Railbelt energy fund (AS 37.05.520). (c) The appropriation made by (a) of this section is contingent on the participating utility or utilities and the Department of Community and Regional Affairs entering into an agreement for a loan at three percent interest for a term of 15 years. (d) In this section, “participating utilities” mean the utilities participating in the design, construction, operation, and maintenance of the power transmission intertie between the Swan Lake and Tyee Lake hydroelectric projects. AIDEA 13