HomeMy WebLinkAboutAESTF Report Volume II Supplemental Information 2023TABLE OF CONTENTS
Volume 1: Alaska Energy Security Task Force Report
Executive Summary ........................................................................................1
Section I. Introduction ....................................................................................8
Section II. Planning Process .........................................................................16
Section III. Energy in Alaska ..........................................................................24
Section IV. Energy Priorities ......................................................................................32
Priority A. Railbelt Transmission, Generation, and Storage.....................................................34
Priority B. Coastal Generation, Distribution, and Storage .......................................................42
Priority C. Rural Generation, Distribution, and Storage...........................................................52
Priority D. State Energy Data.......................................................................................................60
Priority E. Incentives and Subsidies ............................................................................................68
Priority F. Statutes and Regulations............................................................................................76
Section V. Next Steps..................................................................................100
Appendices:
Appendix I. Administrative Order No. 344 and 345
Appendix II. Additional Action Detail Summary
Appendix III. Definitions
Volume 2: Alaska Energy Security Task Force Report
Supplemental Information
Appendix IV. Energy Symposium Series
Appendix V. Energy Data Report
Appendix VI. Meeting Material Documentation
Appendix VII. Public Comment Documentation
ALASKA ENERGY SECURITY TASK FORCE REPORT
Presented by John Crowther, Derek Nottingham, Jhonny Meza, and John Burdick
Division of Oil & Gas
Alaska Department of Natural Resources
2022 Cook Inlet Gas Forecast
July 2023 AESTF Presentation
AgendaINTRODUCTION& P REFACE
• Department actively manages lease holdings and units in Cook
Inlet – through the annual plan of development review process.
• We are evaluating other proactive management actions to support
investment and development in Cook Inlet.
• Held last special lease sale in December 2022 to coincide with
Congressionally directed federal sale – next state sale coming this
Fall/Winter.
• Department is working to facilitate gas storage through lease
amendments to existing leases and support further commercial,
operational, and regulatory alignment around storage.
• Department is prioritizing the release of tax-credit seismic and well
data that is statutorily eligible for release.
• Department continues to be informational resource for all
interested parties.
22023-07-13 2022 Cook Inlet Gas Forecast
AgendaOUTLINE
•Cook Inlet Geology and Resource
•Cook Inlet Supply and Demand Evolution
•Cook Inlet Recovery Act and Resulting Activity
•Overview of Division of Oil and Gas Cook Inlet Studies
•2022 Cook Inlet Gas Forecast
• Methodology
• Economic constraints
• Forecast - outcomes
• Comparison to previous studies
32023-07-13 2022 Cook Inlet Gas Forecast
C OOK I NLET G EOLOGY
4
Two Sources of Gas In Cook Inlet Basin
1. Biogenic gas from coals.
2. Oil migrated from source rocks,
creating associated gas.
2023-07-13 2022 Cook Inlet Gas Forecast
C OOK I NLET G AS R ESOURCES
52023-07-13 2022 Cook Inlet Gas Forecast
Known accumulations yet to be fully developed (based on various sources)
and largely excluded from the scope of the forecast:
Cosmopolitan (BlueCrest)
Kitchen Lights Unit (Furie/HEX)
North Fork (Vision)
~ a dozen additional known prospects
Total ~ 300 to 700 BCF
Undiscovered gas in CI per USGS (Mean Values) – DNR’s study is not an
alternative or contrary review of this data:
Conventional gas ~ 13.7 TCF [USGS, 2011]
Unconventional gas ~ 5.3 TCF [USGS, 2011]
Southern Cook Inlet OCS ~ 1.2 TCF [BOEM, 2011)
Total ~ 20 TCF
C OOK I NLET F IELDS O VERVIEW :
G AS P RODUCTION H ISTORY
4Note: State Lands Only2023-07-13 2022 Cook Inlet Gas Forecast
0
20
40
60
80
100
120
140
160
Production of Cook Inlet gas by lessee from State-owned oil and
gas leases
XTO
Unocal
Smaller company
Pioneer
MOA ML&P
Marathon
Furie group
Exxon
ConocoPhillips
Chugach Electric
Chevron
BlueCrest
AIX
Hilcorp
Furie
Chugach
Electric
MOA
ML&P
0
25
50
75
100
125
150
175
200
225
250
Gas production (including reinjection) in Cook Inlet SEAVIEW
BIRCH HILL
PIONEER
KITCHEN LIGHTS
NIKOLAEVSK
KENAI LOOP
NORTH FORK
KASILOF
KUSTATAN
THREE MILE CREEK
HANSEN
ALBERT KALOA
LONE CREEK
W FORELAND
DEEP CREEK
MOQUAWKIE
REDOUBT SHOAL
WOLF LAKE
STUMP LAKE
W FORK
IVAN RIVER
PRETTY CREEK
NICOLAI CREEK
LEWIS RIVER
BEAVER CREEK
STERLING
GRANITE PT
TRADING BAY
MIDDLE GROUND SHOAL
KENAI C.L.U.
SWANSON RIVER
NINILCHIK
KENAI
W MCARTHUR RIV
BELUGA RIVER
NORTH COOK INLET
MCARTHUR RIVERNote: State + Federal + Private Lands
INTELLIGEN CE THAT WORKS
THINKBRG.COM
INTELLIGEN CE THAT WORKS
Cook Inlet Gas Supply Project
Phase I Assessment
Regulatory Commission of Alaska
June 28, 2023
Presenters:
John Sims (ENSTAR)
Lieza Wilcox (BRG)
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Working Group Participants
Demand Group
2
State Agencies
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Key Conclusions
Cook Inlet gas cannot fully meet demand forecast beyond 2026 with current
proved reserves or beyond early/mid 2030s assuming incremental local supply
development
While continuing to work on Cook Inlet options, other project(s) must be pursued
due to lead time to implement
It is vital for the Alaska utilities to have control of the pace of option development
due to the impending gas shortage
Several viable options to supplement and Cook Inlet gas supply need to be
progressed further in the next phase of this project (Phase II) to enable a
sanction decision on one option by the end of 2023
3
INTELLIGEN CE THAT WORKS
Supply and Demand Assumptions
1. Long-term natural gas demand for interconnected Alaska utilities
Forecast supplied by the utilities, and provides basis for capacity planning assumptions
ENSTARs stable gas demand for heating, GVEAs plan to incorporate more natural gas
generated electricity into its system, and potential range of outcomes for renewable power
generation and beneficial electrification all impact potential demand outcomes
High, Medium, and Low natural gas demand forecast represents reasonable expectations and
timelines for clean energy uptake and a range of winter temperatures
2. Cook Inlet Supply
Used DNRs 2022 Cook Inlet Mean Truncated supply forecast as the base case assumption
for future gas coming from Cook Inlet
Uncontracted Cook Inlet reserves are ~290 BCF in 2027-2040
DNR anticipates gas supply gap to develop in 2027
Used DNRs 2018 gas availability study to estimate incremental Cook Inlet supply and price
levels beyond base case
4
INTELLIGEN CE THAT WORKS
Supply and Demand Assumptions (Cont.)
5
Contracted and Potential Cook Inlet Supply vs. Demand Forecast
0
10
20
30
40
50
60
70
80
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040BCF
DNR Truncated Mean Case Supply Incr. Cook Inlet 1 Incr. Cook Inlet 2
Demand Low Demand Contracted Supply
Total CI Volume: 950 BCF
753 BCF
90 BCF
105 BCF
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Range of Potential Gas Requirements Associated with
Renewable Power Adoption
6
Electric Utility
Gas Demand
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Scope and Assessment of Options
7
1. Option scope development and screening-level evaluation
Created or adopted (from project developers) conceptual scope and cost estimates for ten
most viable options
Developed estimated cost of supply in $2023 (todays dollars) using consistent volumes up to
each options ability to supply gas
INTELLIGEN CE THAT WORKS
Scope and Assessment of Options (Cont.)
8
2. Created a prioritized system of scoring different options with guidance from the utilities Working
Group on prioritization. Options were scored based on ten criteria. Uniformly, the top three criteria
received the highest priority scores.
1) Schedule risk
2) Reliability of supply during operations
3) Delivered cost of supply per Mcf
4) Flexibility / Scalability
5) Project complexity and integration into current system
6) Permitting
7) Environmental impact
8) Size of direct investment by utilities
9) Local economic impact
10)Carbon efficiency
INTELLIGEN CE THAT WORKS
Key Project Option Metrics
9
Gas Supply Options (Private Ownership)
Cost of Supply
TotalMidstreamGasSupply
Volume
Capital
Investment
Timeline from
decision YE2023Option
$/Mcf$/Mcf$/McfBcf/year$ mmyears
$9.3 - $25.5Included$9.3 - $25.5up to ~23up to $1500 -
$20003 - 4Cook Inlet Gas1
$28.1 - $37.0$26.8 $34.2$1.3 $2.6up to 105~ $8,7906 - 7
In-State Pipeline
(Private)2 (a)
$12.0 - $13.6$3.4 - $4.7$8.6 - $8.9up to 55$768 4 - 5Kenai LNG3
$12.6 - $14.2$4.0 - $5.3$8.6 - $8.9up to 55$876 6 - 7
Greenfield Port and
Regas4
$12.2 - $13.9$3.6 - $5.0$8.6 - $8.9up to 55$698 4 - 6FSRU - Own/Lease5
$21.6 - $23.0$13 - $14$8.6 - $8.9up to 25$5634 - 5
Barge / Small LNG
Carrier6
$4.4 - $5.8$3.1 $1.3 $2.6up to 183~$43,0007 - 8Alaska LNG7
$25 - $32$22.5 - $29.5$2.50~9$321 3 - 4
LNG Truck and/or
Rail8
~$25Included~$25~1n/aUnknownRenewable Natural
Gas9
$>32n/an/an/aunknown12+Hydrogen (green)10
INTELLIGEN CE THAT WORKS
Key Project Option Metrics (Cont.)
10
Gas Supply Options (State Participation)
The assessment also considered how cost of supply of certain options with long-term benefits to the State of Alaska
can be impacted by alternative financing with State participation
Cost of Supply
TotalMidstreamGasSupply VolumeCapital
Investment
Timeline from
decision YE2023Option
$/Mcf$/Mcf$/McfBcf/year$ mmyears
$9.2 - $12.6$7.8 - $9.9$1.3 $2.6up to 105~ $8,7906 - 7
In-State Pipeline
(Subsidized 80%)2 (b)
$7.3 - $10.0$5.9 $7.4$1.3 $2.6up to 105~ $8,7906 - 7
In-State Pipeline
(State Owned)2 (c)
$10.9 - $12.2$2.3 - $3.3$8.6 - $8.9up to 55$876 6 - 7
Greenfield Port and
Regas (Subsidized
80%)
4 (b)
$10.8 - $12.0$2.2 - $3.1$8.6 - $8.9up to 55$876 6 - 7
Greenfield Port and
Regas (State Owned)4 (c)
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Top Scoring Options for Meeting Future Demand
11
A. In-State Pipeline
Construct a 24-inch pipeline that can meet local demand and provide opportunity for future industrial customer
supply
Only viable with state participation / subsidy due to relatively small utility demand
Provides broad benefits across the state
Current forecast indicates that this is a long-term option, and would not meet schedule for near-term shortfall
B. Kenai LNG
In cooperation with owner, modify existing export facility to utilize dock and potentially storage tanks in the
short term, accelerating project timeline to meet shortfall
C. Floating Storage and Regasification Unit (FSRU)
Pursue options to utilize FSRU at existing or modified dock facilities in Nikiski, accelerating project timeline to
meet shortfall
D. Cook Inlet Gas Supply
Remains a preferred top-scoring option but is not sufficient to meet long-term demand forecast
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Results of Options Scoring
12
Option Scoring Results (Max Score of 5)
3.46
2.75
3.42 3.42
2.96
2.60
2.96
2.39
2.67 2.88 2.70
1.35
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1. CI Gas
Supply
2(a). In-State
Pipeline
(Private)
2(b). In-State
Pipeline
(80/20
Subsidized)
2 (c). In-State
Pipeline
(State-
Owned)
3. Kenai
LNG
4. GF Port
Re-Gas
5. FSRU 6. Small LNG
Carrier
7. Alaska
LNG
(w/export)
8. LNG
Trucking
9. RNG 10. HydrogenScore
INTELLIGEN CE THAT WORKS
Recommendations and Next Steps
13
A. Utilities individually continue to work with Cook Inlet producers and the State to secure additional
contracted supply and promote alternative development
B. As the utilities Working Group, pursue several top-scoring options in order to further define
scope, schedule and commercial viability, specifically:
Modification of existing Kenai LNG facility (via commercial discussions with owner)
Scope definition and planning for FSRU option
Greenfield site selection and feasibility assessment for LNG imports if retrofit options
become unavailable
Market survey to further define availability and cost of LNG
Optimization and feasibility assessment of the In-State Pipeline option with AGDC and
State of Alaska in areas of permitting critical path and financing structure
INTELLIGEN CE THAT WORKS
Recommendations and Next Steps (Cont.)
14
C. Refine cost of supply estimates for the three top-scoring options (FRSU, Kenai LNG, In-State
Pipeline), develop procurement strategy
D. Complete permitting due diligence of all top-scoring options and identify key bottlenecks and
showstoppers
E. For top-scoring options, develop draft venture model, project finance structure and plan of
engagement with capital markets
F. Identify one permanent solution or multiple short and long-term options to pursue by 1Q 2024 in
order to meet the supply shortfall projected in 2027-2028
C OOK I NLET F IELDS O VERVIEW :
P RODUCTION BY F IELD
Field Operator and lessees 2022 Gas
Production
2022 Oil
Production
Kenai Loop AIX Energy LLC 1.17 bcf
Nicolai Creek Amaroq Resources, LLC 0.1 bcf
Hansen Bluecrest Alaska Operating LLC 0.58 bcf 770 bopd
Redoubt Shoal Cook Inlet Energy, LLC.0.07 bcf 879 bopd
West McArthur River Cook Inlet Energy, LLC.0.00 bcf 240 bopd
Kitchen Lights Furie Operating Alaska, LLC; Cornucopia Oil & Gas Company;
A. L. Berry; Danny Davis; Taylor Minerals, LLC; Corsair Oil & Gas 4.02 bcf
Beaver Creek Hilcorp Alaska, LLC 3.72 bcf 629 bopd
Beluga River Hilcorp Alaska, LLC; Chugach Electric Association 11.07 bcf
Deep Creek Hilcorp Alaska, LLC 1.17 bcf
Granite Pt Hilcorp Alaska, LLC 1.16 bcf 2,199 bopd
Ivan River Hilcorp Alaska, LLC 3.37 bcf
Kenai Hilcorp Alaska, LLC 5.53 bcf
Kenai C.L.U.Hilcorp Alaska, LLC 0.68 bcf
Lewis River Hilcorp Alaska, LLC 0.24 bcf
McArthur River Hilcorp Alaska, LLC 6.08 bcf 2,631 bopd
Middle Ground Shoal Hilcorp Alaska, LLC 0 bcf 0 bopd
Nikolaevsk Hilcorp Alaska, LLC 0.08 bcf
Ninilchik Hilcorp Alaska, LLC 11.52 bcf
North Cook Inlet Hilcorp Alaska, LLC 10.93 bcf
Seaview Hilcorp Alaska, LLC 0.06 bcf
Swanson River Hilcorp Alaska, LLC 3.65 bcf 705 bopd
Trading Bay Hilcorp Alaska, LLC 0.4 bcf 794 bopd
North Fork Vision Operating, LLC 1.13 bcf
7
https://dog.dnr.alaska.gov/Information/MapsAndGis
bcf = billion
cubic feet
2023-07-13 2022 Cook Inlet Gas Forecast
bopd = barrels of oil
per day
S OUTHCENTRAL G AS D EMAND :
D EMAND BY U SER T YPE
Kenai LNG Plant
• Nikiski liquified natural gas (LNG) facility is
operated by Trans-Foreland Pipeline Co. LLC –
which is a sub of Marathon Petroleum.
• Last exported LNG was 2015.
• Department of Energy (DOE) authorization for
exporting LNG expired in 2018.
• Dec. 2020 Federal Energy Regulatory
Commission (FERC) approved LNG Imports to
this facility an annual capacity up to 1.8 billion
cubic feet (bcf) per year.
8
Nutrien Fertilizer Plant
• Second largest ammonia/urea plant in U.S.
• Shut down and mothballed in 2007, however
Nutrien maintains permits and remains
interested in reopening the plant.
• Gas prices relative to Lower 48 makes
economics difficult.
• Potential source for blue hydrogen/blue
ammonia.
2023-07-13 2022 Cook Inlet Gas Forecast
0
25
50
75
100
125
150
175
200
225
Demand for Cook Inlet gas
(source: EIA)
Interior LNG
Fertilizer Plant
Kenai LNG
O&G field operations in Cook Inlet
Residential use in Cook Inlet
Electric power use in Cook Inlet
Commercial use in Cook Inlet
Fertilizer
Plant
Kenai
LNG
Export
C OOK I NLET R ECOVERY A CT AND R ESULTING
A CTIVITY
92023-07-13 2022 Cook Inlet Gas Forecast2023
0
5
10
15
20
25
30
35
40
45
Cook Inlet Basin: Tax System and Wells Drilled
Development Exploratory Stratigraphic Test
ELF
1977
– Mar.
2006
ACES Jul. 2007 – Dec. 2013
PPT
Apr. 2006 –
Jun. 2007
SB21 (MAPA):Jan. 2014 – now
HB247: 2017 – now
HB280 CIRA (2010)
Active:
• Discovery royalty AS 38.05.180(f)(4)
Expired or repealed in 2016 or with HB 247:
Before CIRA
• Exploration Incentive credit: AS 38.05.180(i)
• Alternative Credit for Exploration: AS 43.55.025(a)
• Gas Exploration and Development credit:
AS 43.20.043
• Qualified Capital Expenditure credit:
AS 43.55.023(a)
•Small Producer Credit AS 43.55.024: Qualification
deadline May 2016
• Carried Forward Annual Loss Credit: Expired with
HB 247
CIRA
• Well Lease Expenditure Credit AS 43.55.023(l)
• Gas Storage Facility Credit AS 43.20.046
• Cook Inlet Jack-Up Rig Credit AS 43.55.025(a)(5)
and (l)
C OOK I NLET N ATURAL G AS :
L OCAL P REVAILING VALUE VS H ENRY H UB
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
Natural gas prices: Cook Inlet vs. Henry Hub
Source: Department of Revenue
Henry Hub gas price Prevailing value of Cook Inlet gas
2023-07-13 2022 Cook Inlet Gas Forecast 10
E XPLORATION & D EVELOPMENT IN C OOK I NLET:
C OOK I NLET F UTURE P RODUCTION
11
The CI Basin depends on successful
exploration.
• The CI Basin has been producing for over 60 years.
• Continuous exploration has led to 13 new oil and gas
units coming online, and over 450 wellbores drilled
since year 2000.
• Of the ~200 million cubic feet per day (mmcfd) of
produced gas in 2021, ~80% came from wells drilled
less than 20 years ago.
• Exploration/delineation within and outside the units is
crucial to continued security of gas supply for the
basin.
69%
53%
20%
31%
47%
80%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2010 2021
Share of production from well vintages
Wells drilled pre-2000 Wells drilled post 2000
2023-07-13 2022 Cook Inlet Gas Forecast
O VERVIEW OF D IVISION OF O IL & G AS
C OOK I NLET S TUDIES
2009 - Preliminary Engineering and Geological Evaluation of Remaining
Cook Inlet Gas Reserves
Consisted of engineering and geologic evaluations of 28 currently producing Cook Inlet
gas fields to derive estimates of remaining Proved and Probable reserves.
Applied single deterministic Decline Curve Analysis (DCA) and Material Balance
(MBAL) engineering methods to publicly available production and pressure data
obtained from Alaska Oil and Gas Conservation Commission (AOGCC).
Did not address economics of drilling additional wells, recompleting existing wells,
optimizing infrastructure, and the ability to sell the gas into the Cook Inlet market.
Proved + Probable reserves estimated at 1.14 trillion cubic feet (tcf).
2011 - Cook Inlet Natural Gas Production Cost Study
Investigated investment requirements around various targeted reserves.
Addressed commercial viability of remaining gas by postulating conceptual plans to
produce natural gas from the Cook Inlet Basin to meet a demand of 90 billion cubic feet
(bcf) per year.
122023-07-13 2022 Cook Inlet Gas Forecast
O VERVIEW OF D IVISION OF O IL & G AS
C OOK I NLET S TUDIES (C ONTINUED )
2015 - Updated Engineering Evaluation of Remaining Cook Inlet Gas Reserves
An update to 2009’s study of 34 currently or historically producing Cook Inlet gas fields to derive
estimates of remaining Proved and Probable reserves.
Applied single deterministic DCA and MBAL engineering methods to publicly available production
and pressure data obtained from AOGCC.
Did not address prospective (undiscovered), contingent (discovered, non-producing), and 3P
(Proved + Probable + Possible) reserves.
Proved + Probable reserves estimated at 1.18 trillion cubic feet (tcf).
2018 - Cook Inlet Natural Gas Availability
Built on three previous DOG Cook Inlet gas studies, while incorporating future supplies by
formulating hypothetical development projects required to produce undeveloped volumes and
estimate each project’s economic viability.
500–800 bcf of additional gas is economic to develop at a price range around $6-8/thousand cubic feet (real 2016 dollars).
P50 reserves estimate of 700 bcf when price is $8 per thousand cubic feet (mcf).
132023-07-13 2022 Cook Inlet Gas Forecast
C URRENT S TUDY – S COPE AND A SSUMPTIONS
2022 - Cook Inlet Gas Forecast
Technical reserves assessment of 90 different gas & oil pools using publicly available production data obtained from AOGCC.
Decline Curve Analysis (DCA) used to estimate volumes from currently producing well set. Type Curve(s) were developed to
estimate volumes from future development wells.
Discovered resources contingent upon more favorable commercial conditions and undiscovered (prospective) resources were
not included in the forecast.
Estimated field level economic limits were used in the “truncated” forecast cases.
Forecasted volumes do not account for gas produced from gas storage to avoid duplicative gas volumes produced.
Flat gas demand of 70 billion cubic feet per year does not assume future additional requirements nor does it assume possible
substitutes or increasing efficiency in consumption both for energy producers and commercial or domestic consumers.
142023-07-13 2022 Cook Inlet Gas Forecast
Key Assumptions:
Assumes 15 development wells per year until 2030, and no new wells beyond that. That is not a prediction that no drilling will
occur after that date, it was the horizon for which 15 wells per year was assumed to be reasonable.
Assumes gas price is flat, with escalation for inflation. Does not forecast market changes responding to supply/demand.
Does not include contribution from non-producing known prospects and does not forecast likelihood of their development.
C OOK I NLET D EVELOPMENT W ELL H ISTORY
(P RE -PANDEMIC , 2009-2019)
15
0
5
10
15
20
25
30
35
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average
Cook Inlet Development Wells
Average annual development wells drilled:
2023-07-13 2022 Cook Inlet Gas Forecast
M ODELING THE E CONOMIC L IMIT FOR EACH F IELD :
S TRUCTURE OF THE MODEL
16
1. The technical forecast of oil and gas is run through an economic model.
Upstream companies unlikely to operate their fields at a sustained loss (i.e., negative cash flows).
If marginal revenue associated with production of oil and gas in a field is not large enough to cover marginal expenditure, then the operator will likely stop production.
Marginal expenditure includes costs, royalty / overriding royalty payments, and taxes.
Remaining technically recoverable gas production beyond the economic limit point will not be available to the market.
2. Structure of the economic model:
2023-07-13 2022 Cook Inlet Gas Forecast
mcf = thousand cubic feet
bbl = barrel
Production of gas for sale Not all gas produced is available to the market: Small share used for in-field operations and enhanced oil
recovery.
Revenue Proxy for gas prices between some Cook Inlet producers and local utilities.
Costs One-size-fits-all approach for costs allowing for differences based on proximity to infrastructure (offshore
vs. onshore, West vs. East).
Royalty Share of gross revenues: 12.5%.
Overriding royalty interest Another claim on gross revenues: percentage varies.
Taxes O&G production tax ($1/bbl and $0.177/mcf ceilings) and O&G property tax.
F ORECAST U NTRUNCATED
H IGH -M ID -L OW -M EAN S TREAMS
17
Low Case (P1)
Total Gas Reserves (bcf) 843.2
Gas (bcf)832.4
Associated Gas (bcf) 10.8
Mid Case (P1)
Total Gas Reserves (bcf) 1,101.4
Gas (bcf)1,079.3
Associated Gas (bcf) 22.1
High Case (P1)
Total Gas Reserves (bcf) 1,404.0
Gas (bcf)1,361.7
Associated Gas (bcf) 42.3
Mean Case (P1)
Total Gas Reserves (bcf) 1,108.8
Gas (bcf)1,085.2
Associated Gas (bcf) 23.6
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Cook Inlet Gas Forecast
Historical Low Case Mid Case High Case Mean Case
2023-07-13 2022 Cook Inlet Gas Forecast
F ORECAST
T RUNCATED H IGH -M ID -L OW -M EAN S TREAMS
18
Low Case (P1)
Total Gas Reserves (bcf) 602.5
Gas (bcf)597.2
Associated Gas (bcf) 5.3
Mid Case (P1)
Total Gas Reserves (bcf) 823.9
Gas (bcf)807.9
Associated Gas (bcf) 16.0
High Case (P1)
Total Gas Reserves (bcf) 1,108.9
Gas (bcf)1,066.6
Associated Gas (bcf) 42.3
Mean Case (P1)
Total Gas Reserves (bcf) 820.2
Gas (bcf)803.2
Associated Gas (bcf) 17.0
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Cook Inlet Gas Forecast
Historical Low Case Mid Case High Case Mean Case
2023-07-13 2022 Cook Inlet Gas Forecast
F ORECAST VS A CTUALS
(T HROUGH M AY 2023)
192023-07-13 2022 Cook Inlet Gas Forecast
F ORECAST
A NNUALIZED G AS V OLUME (U NTRUNCATED )
202023-07-13 2022 Cook Inlet Gas Forecast
-
20
40
60
80
100
120
Cook Inlet Gas
Annualized Volume Forecast
Annual High Case Annual Mid Case Annual Mean Case Annual Low Case Demand
F ORECAST A NNUALIZED G AS V OLUME (T RUNCATED )
21
-
20
40
60
80
100
120
Cook Inlet Gas
Annualized Volume Forecast
Annual High Case Annual Mid Case Annual Mean Case Annual Low Case Demand
2023-07-13 2022 Cook Inlet Gas Forecast
F ORECAST P ROVED D EVELOPED
& P ROVED U NDEVELOPED
222023-07-13 2022 Cook Inlet Gas Forecast
0
10
20
30
40
50
60
70
80
90
100
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041
Cook Inlet Gas
Proved Developed & Proved Undeveloped (Untruncated Mean Case)
Proved Developed (Mean Case)Incremental Proved Undeveloped (Mean Case)Demand
F ORECAST P ROVED D EVELOPED
& P ROVED U NDEVELOPED
23
-
10
20
30
40
50
60
70
80
90
100
Cook Inlet Gas
Proved Developed & Proved Undeveloped (Truncated Mean Case)
Proved Developed (Mean Case)Incremental Proved Undeveloped (Mean Case)Demand
2023-07-13 2022 Cook Inlet Gas Forecast
DOG S TUDIES C OMPARED
24
7,756 8,308 8,542 8,876
1,142
1,183 700 820 8,898
9,491 9,242
9,696
-
2,000
4,000
6,000
8,000
10,000
12,000
2009 Study 2015 Study 2018 Study 2022 Study
Cumulative Gas Produced At Time of Study Total Estimated Reserves .
Mean
Case
2023-07-13 2022 Cook Inlet Gas Forecast
E XPLORATION & D EVELOPMENT IN C OOK I NLET:
C OOK INLET U NDISCOVERED R ESOURCE
•Undiscovered, Technically Recoverable Oil
& Gas (USGS 2011):
• mean conventional oil 599 million barrels of oil
• mean conventional gas 13.7 trillion cubic feet
• mean unconventional gas 5.3 trillion cubic feet
•Undiscovered, Technically Recoverable
Gas:
• 1.2 trillion cubic feet additional mean resource
assessed in Southern Cook Inlet OCS
(BOEM 2011) South of the USGS study area.
• In general, access to additional area provides
opportunities for locating and commercializing
currently undiscovered resources.
252023-07-13 2022 Cook Inlet Gas Forecast
Q UESTIONS ?
262023-07-13 2022 Cook Inlet Gas Forecast
P ETROLEUM R ESOURCE
M ANAGEMENT S YSTEM
27
Proved Reserves (P1)
=
Proved Developed Gas Pool-Level Decline Curve
Analysis
+
Proved Developed Associated Gas Pool-Level
Decline Curve Analysis
+
Proved Undeveloped Type Curve Analysis
2023-07-13 2022 Cook Inlet Gas Forecast
S COPE & A PPLICATION
•Evaluated 90 different gas & oil pools in the Cook Inlet Basin as
defined by AOGCC.
Historical production considered through year-end 2021.
•Probabilistic High-Mid-Low DCA forecasts performed at Pool-level
for gas and associated gas.
Pool forecasts begin January 2022.
Length of untruncated forecast projections mostly held to 20 years,
depending on reservoir performance.
Field-level oil forecasts were generated to determine economic field oil rate
that directly impact produced associated gas forecasts.
•Type Curves used for future development assumed a steady drilling
pace of 15 development wells per year based on historical
development wells drilled between 2009 and 2019.
•DCA & Type Curve forecasts are run through economic model to
derive economic limits for each field by using revenue, fiscal, and
cost factors to estimate remaining Proved & Proved Undeveloped
reserves.
•DCA & Type Curve forecasts are then combined and aggregated to
produce a basin-wide forecast.
282023-07-13 2022 Cook Inlet Gas Forecast
T ECHNICAL M ETHODOLOGY
Decline Curve Analysis
• Extrapolates recent trends of production decline into the
future.
• Probabilistic forecasts were generated for currently
producing pools to show a range of possible production into
the future.
Uses statistical bootstrapping method in addition to traditional
DCA to derive a quantifiable probabilistic range of outcomes,
including High (P10), Mid (P50), and Low (P90) cases.
Weighted toward recent production history.
Engineering judgement applied to honor field development
and reservoir constraints.
29
Type Curve Analysis
• Generated from a population of representative wells in
respective pools, intended to characterize behavior of future
wells drilled in pools.
Accounts for both geological parameters and reservoir
conditions.
• Grounded in decline curve & statistical analysis using
historical production data.
• Based on both historical development wells drilled between
2009 and 2019 and confidential information received from
operators for specific fields that remain active and continue
to develop in the Cook Inlet basin.
DCA & Type Curve forecasts are then combined
and aggregated to produce a basin-wide forecast.
2023-07-13 2022 Cook Inlet Gas Forecast
D ATA R ELEASE THROUGH THE TAX C REDITS P ROGRAM
302023-07-13 2022 Cook Inlet Gas Forecast
DNR releases well &
seismic data collected
under the tax credit
program (past the
statutory holding period)
for a nominal charge.
For the State:
o Increases subsurface
resource knowledge
o Utility in managing State
lands
o Purposed to incentivize
new and additional
investment
For Industry/Research:
o Lower barrier to entry
o Further published
research/training
o Development of new
technologies
Source: DNR/DOG Tax Credit Seismic Surveys for Public Release Source: DNR/DOG Tax Credit Well Data for Public Release
AgendaEXPLORATION& D EVELOPMENT IN C OOK I NLET:
2000 THROUGH 2021
Recent Cook Inlet exploration activity comprises seismic, aerial surveys, and drilling of exploratory and stratigraphic test wells.
312023-07-13 2022 Cook Inlet Gas Forecast
H ISTORY OF C OOK I NLET TAX C REDIT P ROGRAM :
D ESIGN AND PURPOSE
The purpose of the Cook Inlet Tax credits is to “entice companies ‘to invest more money in Alaska and drill more wells’ so that
the possibility of both discovery and production could be ‘substantially’ increased.”
Minutes, Senate Finance Committee, May 13, 2003, summarizing comments from Sen. Wagoner regarding
AS 43.55.025(a) tax credits contained in SB 185
Primary Cook Inlet Credits
AS 43.55.023(l) *
Well Lease Expenditure Credit
• In effect from 2010 – 2017 for Cook Inlet
• Credit equal to 40% of well or seismic cost (decreased to 20% in 2017)
• Not available for North Slope
AS 43.55.025(a) *
Alternative credit for exploration
• In effect from 2003 – 2016 for Cook Inlet (2010 for Jack-Up Rig Credit)
• Credit equal to 30% or 40% of well or seismic cost (increased from 20%
in 2008)
• Distance restrictions from existing wells or units to qualify
Other Major Tax Credits
AS 43.55.023(a)
Qualified Capital Expenditure Credit
• In effect from 2006 – 2017 for Cook Inlet
• Credit equal to 10% - 20% of capital expenditures
AS 43.55.023(b)
Carried Forward Annual Loss Credit
• In effect from 2006 – 2017 for Cook Inlet
• Credit equal to 25% of annual loss (increased in 2007)
Additional Considerations
• Credits could be certificated, and either traded or
repurchased by the State
• * These credits have DNR data submittal requirements
322023-07-13 2022 Cook Inlet Gas Forecast
1
Alaska LNG Project
Alaska Energy Security Task Force
July 13, 2023
2
Alaska Gasline Development Corporation
AGDC
•Independent, public corporation owned by the State of Alaska
•Created by the Alaska State Legislature
Mission
•Maximize the benefit of Alaska’s vast North Slope natural gas resources through
the development of infrastructure necessary to move the gas to local and
international markets
Alaska Stand Alone Pipeline (ASAP)
•Environmental Impact Statement and Record of Decision Complete
•Put on hold when focus shifted to Alaska LNG
Alaska LNG Project
•Provides best opportunity for long term, low cost, secure energy for Alaskans
2
3
Alaska LNG Project
The Alaska LNG Project is not
the project you heard or read
about over the last 20 years.
Today’s Project:
•Cost competitive
•Benefits the state
•Transitions to the private sector
•Environmentally friendly
•Has all major permits and
authorizations
3
Alaska LNG: Gas for Alaskans & Export
4
NorthSlope
GasSupply
& ACC
Natural Gas
Pipeline
• Fairbanks
• AnchorageAlaskaLNG
Facility • Nikiski
North Slope Gas Supply
•40 Tcf of naturalgas stranded inPrudhoe Bay and
Point Thomson
•More than enough gas for 30-years
Arctic Carbon Capture (ACC) Plant
•Located in Prudhoe Bayadjacent to existing gas plants
•Removes CO2 from feed gas for sequestration or
enhanced oil recovery
Natural Gas Pipeline
•807 miles from Prudhoe Bay to Nikiski, following TAPS
and highway system
•Provides gas to Alaskans and LNG facility
Alaska LNG Facility
•20-MTPA LNG Facility
•Converts natural gas to LNG for export to Asia
Completed
•Federal Energy Regulatory
Commission (FERC)
Environmental Impact
Statement (EIS) and Order
•Department of Energy (DOE)
Supplemental EIS and Export
Orders
•Land rights-of-way (ROW):
about 93% of Project area
•Approved Cultural Resources
Management Plan
•Major Facility Air Permits
Major Permits and Authorizations
5
Regulatory Work Took Over a Decade
Major Permitting for Alaska LNG Occurred 2012 - 2023
•Scoping and pre-filing work
•Two major impact statements totaling over 6,000 pages of analysis
•Agency response documentation totally more than 150,000 pages
•Over a billion dollars
Permits and Approvals are Legally Tied to the Project - Not Easily
Transferred to New Project/Scope
•Purpose and need
•Impacts
•Footprint
Can Build in Phases
•Examples: Pre-build pipeline, start with one train at the liquefaction facility
Alaska LNG Phase 1 Pipeline
Phase 1:
Gas to Alaskans
Phase 2:
LNG Exports
PTU
Gas
PTU
Pipeline
Fairbanks
Lateral
Fairbanks
Users
PBU
Gas
LNG
Facility
LNG Exports
ACC
Gas is sourced from
the Point Thomson
Unit (PTU): Pre-build
scope does not
include Arctic Carbon
Capture (ACC),
pipeline compressor
stations, or the LNG
Facility.
Full Alaska LNG
Project scope is
constructed, including
the ACC, pipeline
compressor stations,
and the LNG Facility.PTU
Gas
Fairbanks
Users
Southcentral
Users
Southcentral
Users
Positive Climate Impact
8
Source: Greenhouse Gas Lifecycle Assessment: Alaska LNG Project
Eliminating
Constructing
16,0000
Wind
Turbines
19 coal
power
plants
Alaska LNG will have the same
GHG impact as:
Alaska LNG can reduce GHG
emissions by more than 77 million
tonnes of CO2 per year.
Alaska LNG can have one of the
greatest GHG benefits of any
project in the world.
Lifecycle GHG Emissions for
Natural Gas vs. Coal Power
LNG Demand Forecast
Global LNG Supply/Demand Balance
Forecast, 2021-2050
Global Decarbonisation Demand Scenario
Partial Transition Scenario
Post-FID liquefaction capacity
Source: Gas Strategies
LNG Market is Still Growing
•Demand growth will outpace current
and planned LNG capacity
•LNG growth expected as part of energy
transition, as natural gas emits half the
greenhouse gases as coal
Investors and Buyers want LNG
•New LNG projects expected to be
sanctioned. Most new projects have
some degree of energy transition
planning
•Under both energy transition scenarios,
LNG demand exceeds supply for the
expected life of the Alaska LNG Project
Size of Alaska LNG Supply
9
Strong Economics
10
Alaska LNG’s Cost of Supply is Well Below
Market Prices
•$6.55 cost of supply delivered to Asia is lower
than competing market prices*
Brent Linked: $9.24 ($77 Brent x 12%)
U.S. Gulf Coast: $7.30 ($2.30 Henry Hub + $5.00)
JKM: $19.50 (spot price)
•LNG will be sold at market prices, providing for
significant financial upside to Alaska LNG investors
and the State of Alaska
•2023 update to account for recent construction
inflation, 45Q tax credits, and financial return
expectation Raw Gas
and Fuel
$1.45
ACC
$0.80
Pipeline
$1.35
Liquefact
ion
$2.25
Shipping
$0.70
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$6.55: Delivered
Cost of Supply
*As of June 8, 2023
Priority Supply for Alaskans
•Alaska LNG is designed to
provide system capacity to
ship natural gas to
Alaskans
•The pipeline has 500
MMcfd of capacity in
excess of the LNG Plant’s
needs
•All 500 MMcfd is prioritized
for Alaskans
•Current Alaska natural gas
demand is about 220 MMcfd
•Allows for long-term Alaska
natural gas demand growth
11 * Source: Energy Information Administration
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
2010 2012 2014 2016 2018 2020
Alaska LNG vs Historic Cook Inlet
Natural Gas Prices
Alaska LNG In-State Price Range
Significant Energy Savings
•Southcentral households/businesses can
save up to $1,000 in energy costs (more in
the Interior)
•Communities without access to natural gas
will benefit from Rural Energy Fund
Low-Cost Gas for Alaskans
•The Alaska LNG in-state price is estimated to
be between $4 -$5 per MMBtu
•Significant reduction from current prices,
saving Alaskans hundreds of dollars per year*
Lower Cost Energy for Alaskans
Natural Gas Heating Oil Electricity
$/MMBtu $/gal $/kWh
5.00 0.69 0.02
10.00 1.38 0.03
15.00 2.07 0.05
20.00 2.76 0.07
25.00 3.45 0.09
30.00 4.14 0.10
Not all Alaskans use natural gas.
This table converts the price of
natural gas to other energy
sources used in Alaska.
12
Alaska Resource Use
Revenue from gas sales will offset declining oil revenues
Project maximizes use of existing oil and gas infrastructure
•Upstream infrastructure and large-scale production facilities are already in place on the North Slope
13
Alaska LNG: New State Revenue
Significant revenue generated by Alaska LNG, even with no
State of Alaska investment in construction.
*Does not include AGDC revenue from return on investment-to-date or future State investments.
State of Alaska
Department of
Revenue Analysis
(April 2023)
(600)
(400)
(200)
-
200
400
600
800
1,000
1,200
1,400
1,600
2022 2027 2032 2037 2042 2047 2052 2057
Annual State Revenues ($ Nominal)
Property Tax Corporate Income Tax Royalties Production Tax
14
Alaska LNG Investment
•AGDC is seeking private investors to take
Alaska LNG through Front-End Engineering
and Design (FEED) and to a Final
Investment Decision (FID)
•Goldman Sachs is under agreement to raise
investment capital for Alaska LNG
•AGDC is targeting approximately $150M
development capital to get to FID
•3rd Party FEED costs, project management,
legal/commercial, 8 Star Alaska overhead
•Investors will receive majority interest in 8 Star
Alaska and Alaska LNG
•Capital Raise Process:
•Goldman Sachs has set out a structured capital raise
process and leading financial investment
engagement
•Goldman Sachs is only engaging with investors with
the financial strength and expertise to advance the
project
Alaska LNG CIM (Confidential
Information Memorandum)
•Developed by Goldman Sachs
•Distributed to potential investors under
confidentiality agreements
•Contains 60+ pages of detailed financial
projections, commercial status, and
investment terms
15
Alaska LNG Execution Strategy
AGDC’s Role: Transition to Private
Investors
•AGDC is seeking qualified partners and investors to
advance Alaska LNG to FID
•AGDC created the project company 8 Star Alaska,
LLC (8 Star) to function as the parent company of
the project
•AGDC is transitioning Alaska LNG assets under 8
Star and is selling 75% equity ownership of the
company to investors in exchange for taking the
project to FID
•AGDC will retain a 25% carried interest in 8 Star
8 Star’s Role: Manage Alaska LNG
through FID
•8 Star will be managed by private investors with
AGDC being a minority owner
•8 Star will be the project manager and retain
oversight of all 3 aspects of the project through to
FID
•8 Star ownership is likely to consist of one “lead
party” with other strategic partners owning
minority stakes
•At FID, 8 Star will raise the construction capital for
each of the three project subcomponents
After InvestmentNow
16
Investment Highlights
17
Utility Supply Agreement
•AGDC offered agreements to Alaskan utilities that will ensure
they receive gas supply on preferential terms from Alaska LNG.
•These agreements are with 8 Star Alaska, LLC and will bind
future investors in Alaska LNG
•Key Terms
Alaska utilities will be provided natural gas from Alaska LNG on priority
terms to supply residential, commercial, and small industrial customers
The price will be no higher than that paid by the LNG facility for natural
gas supply (lowest cost possible)
In the event of an interruption, Alaska utilities will be prioritized over
LNG exports
Ensure utility demand growth up to 500 MMcfd, over 2x growth
Ability to adjust take-or-pay commitments in response to changes in
demand or new renewable sources of energy
18
Alaska Affordable Energy for Rural Alaska
•Required by Alaska Statute 37.05.610
•The purpose is to provide a source of funds for appropriation
to develop infrastructure to deliver energy to areas of the
state that do not have direct access to the Alaska LNG pipeline
•The Alaska Affordable Energy Fund is to receive an annual
deposit of 20% of state royalty revenue after paying into the
Permanent Fund
19
Gas Sales Agreement – Producers
•Investors have identified that gas supply terms are needed prior to
investing development capital
•Securing these agreements is a top priority for AGDC
•Need for gas supply terms has been communicated to the Producers
DOR Commissioner Crum and DNR Commissioner Boyle joined meetings to
stress the importance of the project to Alaska
Goldman Sachs joined meetings to communicate investors’ views on the
importance of gas supply
•AGDC has transmitted gas supply precedent agreements to Producers
8 Star Alaska, LLC is the buyer in the agreements so it will be binding on future
investors
Establishes, price, term, volume, and commitment to buy and sell gas
Fully-termed gas supply agreements will be negotiated by the private project
developer prior to FID
Mixed level of engagement from the Producers
20
LNG Sales Agreements
•Active negotiations with multiple LNG offtakers/buyers are underway
Negotiations are fairly advanced with ongoing price discussions
Buyers include traditional Asian utility buyers, LNG traders, and oil and gas
companies
All buyers are credit worthy and large-scale market participants
•Alaska LNG is uniquely able to offer a combination of prices
Brent-linked, Henry Hub, JKM, and fixed-price offering
20-year term with an aggregate price floor that can cover system tolls and debt
service
•Some buyers are considering “equity offtake” where they would invest in the
project at FID in exchange for LNG supplied at cost
•In total, AGDC is currently in discussions for 125% of project capacity
(25 MTPA)
•All conversations under confidentiality agreements
21
In Summary – Alaska LNG...
Increases Production:
•Provides infrastructure to get stranded gas to market
•Provides another 30+ years of North Slope production and increases
condensate production
•Provides lower cost, clean-burning gas for Alaskans (no imports needed)
•Contributes to state revenue
•Provides bridge to ammonia and hydrogen production
Minimizes Impacts:
•Extensively scrutinized with multiple requirements to minimize impacts
•Maximizes use of existing infrastructure and resources
•Lowers global greenhouse gas emissions
•Uses existing corridors – TAPS, utility corridor, highway
•Regulated under strict U.S. and Alaska legal requirements
22
Energy Security – Alaska
•Cook Inlet gas supply is uncertain
•Utilities are evaluating potential
alternative natural gas supplies
•Alaska LNG is the best option to
replace Cook Inlet gas
•Secure, low-cost supply for Alaskans
•Alaska LNG will ensure priority
natural gas supply for Alaskans
23
Getting in Touch with AGDC
Contact Information
AGDC
http://www.agdc.us/
https://agdc.us/contact-agdc/
Alaska LNG
https://alaska-lng.com/
https://alaska-lng.com/contact-us/
Social Media
Twitter https://twitter.com/alaskalng
Facebook https://www.facebook.com/AKGaslineDevelopmentCorp
LinkedIn www.linkedin.com/in/alaska-gasline-development-corporation-607418245
Telephone
Phone: 907-330-6300
Toll Free: 1-855-277-4491
Post
3201 C Street, Suite 505
Anchorage, Alaska 99503
AGDC Common Acronyms
ACC Arctic Carbon Capture GTP Gas Treatment Plant
AFN Alaska Federation of Natives HH Henry Hub
AGDC Alaska Gasline Development Corporation Kbblsd Thousand Barrels per Day
ANCSA Alaska Native Claims Settlement Act LNG Liquefied Natural Gas
ANVCA Alaska Native Village Corporation Association LOI Letter of Intent
AOGCC Alaska Oil and Gas Conservation Commission M3 Cubic Meters
Bbl Barrel MMBtu Metric Million British Thermal Unit
Bblsd Barrels per Day MT Metric Tons
Bcf Billion Cubic Feet MTPA Million Tonnes Per Annum
Bcfd Billion Cubic Feet Per Day NETL National Energy Technology Laboratory
BLM Bureau of Land Management NPRA National Petroluem Reserve Alaska
CCS Carbon Capture and Sequestration ROW Right-Of-Way
CO2 Carbon Dioxide TAPS Trans-Alaska Pipeline System
CO2E CO2 Equivalent Tbtu/yr Trillion British Thermal Units per Year
DOE Department of Energy Tcf Trillion Cubic Feet
EA Environmental Assessment TPA Tonne per Year
EIS Environmental Impact Statement
EPC Engineering, Procurement & Construction
FEED Front End Engineering Design
FERC Federal Energy Regulatory Commission
25
AGDC.us
PROVIDING ELECTRICITY IN RURAL
ALASKA
ALASKA ENERGY SECURITY TASK FORCE
JULY 20, 2023
Alaska Village Electric Cooperative
Bill Stamm President & CEOKasigluk, AK
•Nonprofit 501(c)12 -Electric Cooperative
•8,300 Members, 11,500 Meters
•58 Rural Communities, 31,000+ Residents
•48 Power Plants, 160 Diesel Generators
•9.1M Gallons of Diesel in 2022 ($35.3M)
•515 miles of Distribution Lines, 4,752 Poles
•12 Wind Sites, 32 Wind Turbines, Serving 20
Communities
•$60.7M Annual Revenue
•2022 Total Electricity Sold 124.5 MWh
2
ALASKA VILLAGE ELECTRIC COOPERATIVE
Energizing Rural Alaska since 1968
•48 Full-time employees in Anchorage
•24 Full-time travelling technicians
•11 Full-time employees in Bethel
•2 Full-time Operators in Yakutat
•120 Part-time local Power Plant Operators
3
Relative “Size” of Community by Meter Count
4
Toksook Bay, AK
Marine Fuel Supply Routes
Tank Farm
Power Plant
Distribution
Stebbins, AK
Renewable Generation
System-wide 2022
Pitka’s Point/Saint Mary’s Togiak
Net Wind Generation 4.5 MWh
Net Solar Generation* 0.2MWh
Total Renewable Gen 4.7MWh (5% )
Diesel Fuel Displaced 343,000 gallons
(based on 13.7 kWH/gal)
Equivalent Cost of Diesel $1,338,000
(based on $3.90/gal)
* Primarily due to Shungnak-Kobuk Solar IPP
•Steady load growth due to
increased electrification and
acquisitions since 1970
•Large step increase due to
acquisition of Bethel in 2014
•Consistently low Line Loss,
6.6% in 2022
•Comparatively low power
consumption for population
size of 31,000 people.
(< ½ of Juneau or Fairbanks)
POWER CONSUMPTION
2022 AVERAGE COST TO OPERATE PER KWH SOLD
Where the Money Comes From
12
80%
20%
Why is electricity expensive in rural Alaska?
•Small populations – AVEC's average village is ~400 people
•Small loads – AVEC's average village load is ~160 kW
•No economies of scale, minimal commercial and industrial loads
(Expensive power = Less Development)
•Utilities are capital intensive; require lots of physical plant
•Isolated systems - reliability relies on self-redundancy
•Remote and difficult to access, limited infrastructure, equipment, resources
•Fuel is expensive – diesel delivery and storage cost often exceeds purchase cost
•Operations and maintenance is more expensive, freight, travel, lodging, it all adds up
•Availability of qualified personnel is limited, especially as complexity increases
AVEC strategies to reduce power cost
•Improve generation efficiency whenever possible
•Minimize distribution losses whenever possible
•Interconnect villages to improve economies of scale
•Welcome cost-effective new communities
•Add renewables and energy storage where economically
feasible
•Capture and sell recovered heat, excess wind energy
•Promote energy education, workforce development, and
economic opportunity
14
15
St. Mary’s Family of Projects
•900kW EWT Wind Turbine and Distribution Upgrades
•20 Mile Intertie to Mt. Village
•410,000-gallon Bulk Fuel Storage
•3MW Power Plant
•GBS Energy Storage (2023)
Thank You,
Bethel Census Area Communities
(excluding Bethel)
11 AVEC Communities (median
number of residents = 377)
14 Independent Communities
(median number of residents = 441)
How is AVEC doing?Pathways to Renewable Energy Development
37 conditions/factors
analyzed using qualitative
comparative analysis
24 communities included
in the analysis
3 explanatory factors:
high capacity, pooling of
resources, no additional
subsidy beyond PCE
Presence of a
RE Project
Community
Capacity
No additional
subsidy
Pooled
Resources
No additional
subsidy
Pathway 1
Pathway 2
Example:
Kongiganak
Example:
Unalakleet
Statistically significant variables:
1) Delivered cost of fuel
2) Non-fuel costs
3) Line loss (kWhs of electricity
produced but not sold)
4) Diesel efficiency
5) Non-PCE rate ($/kWh)
6) PCE rate ($/kWh)
7) Proportion of available PCE
credits for qualifying community
facilities used
Variables Statistically Significant
% of CF Funds a Community is Eligible for UsedThe PCE Program allows
communities to apply a subsidy
to power used by community
facilities such as the washeteria,
tribal hall, street lights or
water/sewer treatment plant
The maximum allowable sales
eligible for the PCE credit (70
kWhs/month/resident)
AVEC
Communities
Independent
Communities
PCE-Eligible Community Facilities References (published)
Economic Drivers, Technical Strategies, Technological Niche Development, and Policy Implications
by Holdmann, Wies, Vandermeer. Published in Proceedings of IEEE (2019):
https://ieeexplore.ieee.org/document/8801901
Critical pathways to renewable energy transitions in remote Alaska communities: A comparative analysis
by Holdmann, Pride, Poelzer, Nobel, Walker. Published in Energy Research and Social Science (2022): https://www.sciencedirect.com/science/article/abs/pii/S221462962200216X
Case History of the Alaska Village
Electric Cooperative
Does Ownership
Matter: Quantitative Analysis of
Goldilocks Zone: Balancing Local
Control Versus Economies of Scale
in Remote Rural Electricity Utilities
Standalone Rural Electric Utilities
Challenges Solutions?
Personnel – Finding and Keeping:
•Utility clerk, power plant operators, meter readers
•Diesel mechanic, electrician, lineman, bookkeeper
•Hybrid power plants require high level of training for complex controls
and equipment integration/repairs
•Detailed Job Descriptions
•On-site training and pay enough hours to do the job right
•Compensation commensurate with performance – evaluate annually
•Bring in student interns (14+ can work in office, 16+ in power plant)
•Partnerships with nearby communities
•Tribal Consortium/Borough/ANCSA Corp (“loose” coop) - Assistance that
doesn’t require giving up local control
•Hire high end consultants/technicians to do complex services on hybrid
systems
High Costs – Extremely Low Sales
•Lime Village (pop. 6) (utility has 15 R, 6 CFs, 1 C, 1 F/S) $1.77/kWh - $.76
•Self-generation? Utility consist of a repairman and fuel sales?
Collections – hard to collect from family and friends •Pre-Pay Metering – limited stock remaining reserved for existing
installations. AMPY system no longer in production.
Board Members must navigate complicated issues •Board training
Municipalities and Tribes may choose to retain ownership/operation of the community electric utility because:
•The Council, with community input, gets to determine how the utility will make power and run the utility. Or…
•It creates local jobs, including board/council seats that pay stipends for attending meetings. Or…
•The Council can control customer rates and payment plans. Or…
•A utility can be a source of revenue. Or…
•AVEC said no.
Standalone Rural Electric Utilities
Several do an exceptional job under tough circumstances - mostly due to the good fortune of having a motivated
and devoted staff – and good partners. It doesn’t matter how many people are left; it matters who is left.
Creative Solutions
Chaninik Wind Group – villagers help each other install wind turbines, install dual meter bases, and repair equipment
whenever possible.
NWAB Independent Power Producers/Community Solar – Tribe/Community owns renewable generation and sell kWhs to the
utility. The kWhs become a fuel cost and eligible for PCE with each fuel report. The utility’s customer and PCE rates don’t
change much if at all, but the IPP can use the revenue to repair/replace/increase renewable energy generation.
Nikolski (pop. 41 and growing)– Use Power Plant Operator Pairs (1 woman and 1 man). Man does the generator work while
the woman documents everything on the plant log.
Started with TDX Power training 3 pairs. Those folks trained 2 more pairs.
They pay someone in Anchorage to do administrative work for utility as none of them want to do that job.
Standalone Rural Electric Utilities
POWER COST EQUALIZATION BUTTS HEADS WITH RENEWABLE ENERGY
ONE EXAMPLE:
Puvurnaq Power Company – Kongiganak, AK. According to Manager Rod Phillip, PPC has reduced imported diesel fuel for
village heat and power by 50% since installing (5) 100 kW wind turbines and Electric Thermal Stoves (ETS) that utilize excess
wind kWhs to produce heat for residential customers.
The RCA included those excess wind kWhs when calculating the utility’s PCE rate. This caused a decrease in the PCE rate.
They further reduced the PCE rate by deducting the revenue (which sells for $0.10/kWh) from the utility’s expenses when
calculating their PCE rate.
PPC’s PCE rate was only reduced by $0.03 this time, which seems a small difference - $22.50 on 750 kWhs. But it will
become more significant with the planned addition of more wind turbines, more ETS, and EV charging.
Reducing diesel should be incentivized, not penalized.
Standalone Rural Electric Utilities
Connie Fredenberg
Utility Management Assistance
907-444-6220
conniefredenberg@mtaonline.net
Working hard to work myself out of a job.
Alaska Rural Energy:
Challenges & Opportunities
for Reducing Costs
Northwest Arctic Borough
& NANA Regional
Why are we here ?
Brent Crude oil prices over time
2008 Energy Summit
Community Gasoline$/G
Retail
Stove oil $/G
Retail
SalesTax
included
Util. & AVEC
Cost $ Barge/Air
FY2022 -FY2023
NWABS
Cost $
FY2023-FY2024
Kotzebue KIC and KEA 8.99 9.12 6%3.71 KEA/ 3.20 4.54/4.7605
Kotzebue Vitus 7.99 7.57 6%
Kotzebue Crowley
7.80 7.97 6%
Ambler 14.42 14.42 3%4.49 /11.50 6.07/6.2505
Kobuk 13.91 15.45 3%N/A 6.07/6.2505
Shungnak 14.03 15.05 2%5.45 / 11.50 6.07/6.2505
Kiana 7.98 7.73 3%2.82/4.18 4.71/5.0005
Noorvik 7.21 6.18 4%2.96/4.63 4.71/5.0005
Selawik 5.68 6.58 6.5%2.854.52 4.71/5.0005
Buckland 7.65 7.66 6%2.13-3.547 5.25/5.0005
Deering 5.50 5.20 3%2.13-4.057 4.71/5.0005
Kivalina 6.52 6.52 2%2.78/4.18 5.16/5.0005
Noatak 14.49 15.31 6%8.10/10.75 7.24/10.96
Fuel prices (tax included on retail) April. 2023 & FY24
NAB Electric rates, Apr 6 2023
Community 1-750Kwh
$/Kwh
with
PCE
Ta x 1-750 Kwh
Actual
cost/Kwh
with tax
0-750 $/Kwh
No tax
750-up$/Kwh
No tax
Utility Non firm
power purchase
rate $/Kwh
1/30/2023
Kotzebue KEA 0.2275 6%0.24 0.3949 0.3918 N/A
Ambler AVEC 0.2651 3%0.2731 0.8621
0.7566 0.3949
Kobuk AVEC 0.3348 0.3348 1.0988 0.9933 N/A
Shungnak AVEC 0.3348 2%0.3414 1.0988
0.9933 0.6138
Kiana AVEC 0.2553 0.2647 0.6654 0.5599 0.2733
Noorvik AVEC 0.2545 4%0.2647 0.6490 0.5435 0.2507
Selawik AVEC 0.2521 7%0.2697 0.6027 0.4972 0.2053
Buckland BEC 0.2781 0.2781 0.4900 0.4900 0.2823
Deering IEC 0.4081 0.4081 0.6747 0.6747 0.3575
Kivalina AVEC 0.2535 2%0.2586 0.6295 0.5240 0.2442
Noatak AVEC 0.3724 6%0.3947 1.1364
1.0309 0.6682
NANA Regional
11 communities
Kotzebue
Noorvik
Selawik
Kiana
Deering
Buckland
Noatak
Kivalina
Ambler
Shungnak
Kobuk
Northwest Arctic Energy Steering Committee
Co-Hosted & Sponsored by:
Northwest Arctic Borough Energy Program
NANA Regional Corporation Alternative & Village Energy Program
2009-2023
The Artic Warming up faster than the rest of the world
NANA-NAB Energy planning
Started in 2008-2009
Current version 2020
Available @Nwabor.org
The progression is planned as follows:
10 percent decrease of imported diesel fuels by 2020
On track
25 percent decrease of imported diesel fuels by 2030
50 percent decrease of imported diesel fuels by 2050
The vision is for the Northwest
Arctic region to be 50 percent
reliant on regionally available
energy sources, both renewable
and non-renewable, for heating
and generation purposes by the
year 2050. And to combat rapid
climate change due to greenhouse
gas emissions like Co2, Methane
and other harmful effects of fossil
fuel usage.
Our Single Focus in 2008-2012
To try to stabilize the cost of electricity by developing
local energy resources as much as possible ( Wind-
Hydro ) and possibly bring down cost/Kwh
Projects were funded and then implemented by
Electric Utilities to offset the use of Diesel fuel.
However, the cost to the Households $/Kwh, did not
change in communities that receives PCE funding,
Instead, as more Alternate Energy projects were built
by grants, the allocation of PCE decreased to the
communities.
2007-2012 Wind diesel projects
Selawik AVEC 260Kw
Deering 100Kw
Buckland 200Kw
As a condition of
the grant,
Independent
Power Producers
will agree to sell
energy resources
for electricity and
heat at a cost-
based rate for the
economic life of
the project.
Wind projects and data
Kwh
3.4 Mil Gallons of
Diesel not needed
Independent Power producers shows
up in Alaska
Fire Island
September 2012
The project started production in September 2012 and
supplies approximately 2% of Chugach's retail load
under a 25-year power purchase agreement with Cook
Inlet Region Incorporated and its subsidiary Fire
Island Wind LLC, who owns and operates the facility.
2012 NAB Synergy project
over 10 Years has saved 50,000 Gallons
Powering water treatment
facilities with renewable
energy
Borough population: 7,810
Electricity for village water / sewer plants
Launched in Ambler, replicating across
borough
10,000 kWh/year from 10 kW array
Peak production April-July
Long sunlight hours in summer + 30%
reflection from snow-covered ground in
spring
Photos: Northwest Arctic Borough
Germa
ny
2022
Installed Kw Production
Kwh
Value/Kw
h
Value
Per year
Ambler 8.4 8400 0.2547 $2,139.48
Kobuk 7.38 7380 0.2505 $1,848.69
Shungnak 7.5 7500 0.2555 $1,916.25
Noorvik 12 12000 0.2422 $2,906.40
Noatak 11.27 11270 0.2669 $3,007.96
Deering 11.13 11130 0.3575 $3,978.98
Kotzebue-1 10.53 10530 0.2180 $2,295.54
Kotzebue-2 10.53 10530 0.2180 $2,295.54
Selawik 9.72 9720 0.2478 $2,408.62
Kivalina 10.53 10530 0.2363 $2,488.24
Kiana 10.53 10530 0.2318 $2,440.85
Buckland 10.53 10530 0.2823 $2,972.62
Total 120.05 120,050 $30,699.17
Total Estimated
savings per
year
$30,699.17
Approximate minimum value per year of behind the
meter Solar projects at NAB Water plants due to PCE.
Based on actual value for consumer.
However, the production is invisible to the
utility, and no PCE is collected for it from AEA.
Community Installed
Kw
Production
Kwh
Behind meter
PCE value /
Kwh
Avoided
Diesel rate
$/Kwh
Value under IPP
Management
$/Kwh
Shungnak Ut 233 200,000 $51,100.00 0.5600 $ 112,00.00
Noatak Ut 275 250,000 $66,725.00 0.4868 $ 121,700.00
Noorvik Ut 23.4 23,400 $5,667.48 0.1685 $ 3,942.90
DeeringUt 48.5 48,500 $17,338.75 0.3500 $ 17,338.75
Buckland Ut 45.99 45,000 $12,703.50 0.2823 $ 12,703.50
Kotzebue Ut 966 920,000 $ 220,800.00 0.18 $ 165,600.00
Value of utility size Solar arrays to the Households
Courtesy
NANA
Nov 2018
Buckland & Deering Electric
Utility Arrays 48.5 & 46 Kw
169 Mwh produced to date,
saving 12,500 Gallons of
Diesel so far
July 2017
Noorvik 23 Kw Utility array
80 Mwh produced so far
Saving 5,700 Gallons of
Diesel so far
9/26/2021
Shungnak-Kobuk IPP
233Kw/350Kwh Community
Solar/Battery
273 Mwh produced to date,
Saving 19,500 Gallons of
Diesel to date
And 818 Hours of Diesel off
operation
Courtesy
ANRI
Courtesy
ANRI
6/15/2020
Kotzebue Electric
Utility Array 576 Kw
Building out an additional
631Kw in 2023
822.47 Mwh produced to
date,
saving 58,800 Gallons of
Diesel
Transition to Village Independent
Courtesy NANA
So why develop Independent power
producers
The Communities taking control of their Energy
future, developing their local resources. This
creates buy in and good relationships with the
utility.
Being able to sustain PCE support to the
communities and stabilize energy cost.
Better economics, Circular economy
Funding collected pays for further development
and local workforce expertise. The money stays
in the community instead of sending the money
to far off countries for oil.
Regional support to apply for and manage
Energy grants, including access to Dept. of
Energy and other funding.
Economy of Scale and Increasing
Efficiency
(Small, single projects are too expensive).
Develop Regional Energy infrastructure:
Wind, Solar, Hydro, Interties, bulk fuel
storage & direct Household involvement.
Reasons for Regional approach
to Alternate Energy Development Admin help for Independent power
producers for PCE calculations, utility
rates & billing.
Job Creation - Workforce Development and
Training/Capacity building.
The Region speaking with one voice. Can
advocate on behalf of PCE and State wide
Energy Policy.
This creates Energy Security and is needed to
stop the increasing cost of Energy and hedge
against fuel increases and supply disruptions.
Shungnak-Kobuk 223.5 DC/200 AC Kw Solar/battery
PV array.
Using 550pc Bifacial 405W panels
Blue Planet environmentally friendly LFP Battery.
Capable of holding the two communities
for 2 Hours without Generators or Solar power.
Capacity 250Kw/352Kwh
Start of construction April 2021 completed Sep 2021.
Total project cost $ 2,363,215.11
Funded by USDA HECG @ $ 1,291,675.00
In-kind VIF and NAB funds $ 1,071,540.11
The Shungnak Solar IPP Project Shungnak-Kobuk Solar IPP example
A Grant opportunity from USDA HECG was secured by the 2
Tribes by allowing NAB to apply on behalf of the Communities.
The communities are interconnected with a power line so the
proposed Solar project benefits both.
Through an MOA a working agreement is executed between the
2 tribes to become an IPP (independent power producer)
A power purchase agreement is executed with the utility AVEC.
AVEC pays for the Solar power and recover the cost partly from
the PCE fund.
Another MOA is executed with NAB for help with admin and
investment of funds.
An Energy fund is established for the communities.
Funds dispersed for insurance and maintenance and eventual
further build-out of the Solar array.
Alaska Tribes Recognized with Sunny Award for Equitable
Community Solar
Congratulations!The DOE Solar Energy Technologies Office awarded a Sunny Awards
Grand Prize to the Shungnak-Kobuk Community Solar Battery Independent Power
Producer project, in Shungnak, Alaska.
This solar and battery project led by the Shungnak and Kobuk tribes in the Northwest
Arctic Borough region aims to stabilize the cost of electricity and allow the communities to
take charge of their energy future. The Shungnak project also received the 2022 Microgrid
Project of the Year from Solar Builder magazine.
Following suit:Among current Office of Indian Energy projects, the Northwest Arctic
Burrough 2021 Project with the Native Village of Noatak is emulating the Shungnak project
and is making progress on a high-penetration distributed solar-battery hybrid system.
A Loud Shout-out to all Partners; USDA, Shungnak IRA, Kobuk IRA, NAB,
NANA, AVEC, TECK, ANRI, AGETO, Blue Planet, Deerstone, Daylight services,
Launch Alaska & others that contributed to the success of the project
Shungnak-Kobuk IPP Yearly financials FY22
Estimated Gross Annual Revenue $120,000.00
Insurance $3,771.32
Electric $1,958.05
Ageto service fee $3,242.28
Tribe Employee $8,683.44
Fuel $3,150.00
Total Estimated Expenses $20,805.09
Estimated Net Income $99,194.91
Estimated Administrative Fee (10% Annual
Net)$9,919.49
Annual Income Less Admin Fee $89,275.51
Noatak 280.6 DC/250Kw AC Kw Solar/battery PV array phase 1.
Using 432 pc Canadian solar Bifacial 650 W panels
Expansion to 380.6 Kw available for phase 2.
Kronus/Pylontech LFP Battery 438.5 Kwh
Capable of holding the to communities for 2 Hours
without Generators or Solar power.
Construction Sep 2022 to July 2023.
Total project cost $ 2,946,886.00
Funded by DOE Tribal grant @ $ 2,008,765.00
Denali Commission $ 134,079.00
Teck (Red Dog) $ 100,000.00
NANA VEI and inkind $ 309,998.00
In-kind VIF and NAB funds $ 394,123.00
The Noatak Solar IPP Project 2023
Selawik 130kw DC/100Kw AC Kw Solar/battery PV array phase 1.
Using 200 pc Canadian solar Bifacial 650 W panels
Expansion to 500 Kw available for phase 2.
Blue Planet LFP Battery, 1 Mw
Capable of holding the to community for 4 Hours
without Generators or Solar power.
Start of construction Sep 2023 completion by July 2024.
Total project cost $3,611,190.00
Funded by USDA REPP @ $1,998,820.00
AEA REF 14 $ 250,000.00
AVEC $ 100,000.00
Teck (Red Dog) $ 100,000.00
NANA VEI and inkind $ 130,000.00
In-kind VIF and other NAB funds $ 1,032,370
The Selawik Solar IPP and REPOP
5 Year plan
Community
Total Total
Solar PV BESS Combined Diesel offset
kW MW MWh/year Gallons/year
Ambler 400 1 360 25,714
Buckland 450 1 405 28,929
Deering 250 0.5 225 16,071
Kiana 400 1 360 25,714
Kivalina 450 1 405 28,929
Noatak 550 1 495 35,357
Noorvik 550 1 495 35,357
Selawik 500 1 450 32,143
Shungnak-Kobuk 500 1 450 32,143
TOTALS 4,050 8.5 3,645 260,357
Regional IPP Organizational Structure
Services: Training; Repair & Maintain
Equipment; Local Job Creation; Grant
Writing & Administration; Financial
Management; Project Development
(identify opportunities, conduct
studies, etc); Public Education &
Outreach; Matching Funding;
Technical Assistance
Heat
Pumps
Solar Battery Energy
Storage Systems
NAB
NWAIPP
Noatak
IPP
Selawik
IPP
Wind
Energy
Efficiency
NANA
Revenues: USDA REPP;
NAB VIF; NANA VEI; IPP
Dues
Overseen by ESC.
Shungnak-Kobuk
IPP
Buckland
IPP
Deering
IPP
Hydro
Power
Purchase
Agreements
Biomass
Additional
kWh, Btu, &
Fuel Savings
Energy
investment
Fund
IPP revenues
From utilities
REPOP
2016-17 Harvest season for Solar PV
Is the same as for Heat pumps
Heat-pump COP level for Diesel
displacement
if cost of Electric-Diesel and cost
of Heating fuel is the same
36
Map showing 17,500
ductless heat pump
installations in the first
3.5 years.
Installation density
correlates directly with
population.
Very popular in far
northern areas where
systems are reported to
continue to provide heat
even at -27F.
Courtesy Efficiency
Maine
Heat pump advantages
-cost heat The cost of heating with a heat pump is similar toheating with natural gas or wood. This is typically half the cost of heating with oil, kerosene, electric baseboard or propane to compare heating costs of different heating systems.
Low-cost air conditioning efficient as typical air conditioners.
Comfort With advances in controls, heat pumps can maintain very constant temperatures.
Safety Because heat pumps are electrically powered, there is no risk of combustion gas leaks.
Air quality Heat pumps filter air as they heat/cool/dehumidify it.
No CO2 emissions Cleaner environment and resilience to Global Warming.
13 Air to Air Heat-pump installations
Pilot Project- CIAP Funded 2017-18.
Panasonic MHP MXZ4C36NA2-U1
Cooling tent for Meat
COP curve and cost savings
According to Heat-pump Calc.
All Alaska Online
Calculator
The Calculator has been updated with the latest Fuel and electric rates
and additional new Heat-pump models
Here are some results from Ambler average size
House
Heat-pump; Low temp. Mitzubishi HI-Heat single zone
38,000 BTU
Annual Heating Fuel Savings: 463 gallon of #1 Oil
Annual saving: $ 2,500/year @ $ 12.36/G Fuel cost
Savings over 14 Year life: $ 35,065
Web access @ https://heatpump.cf/
Ambler VPSO Building & House installations.
The Energy Steering Committee
15 Years and Going 2009-2023
Goals and lessons learned
Make a sustained effort, realize that changes comes slowly
with understanding of new ways and operation.
Continue to work with the Regional Energy Plan
Make sure the document gets updated periodically as it is a
changes when new thinking and resources comes along.
Hopefully it will never be completed.
Energy Policy
Do we develop Energy resources for short time profits ?
Or do we develop Local Energy resources that can
sustain the Region for the foreseeable future and
create a cleaner environment for our Children ?
Intelligent Energy Systems:
Anchorage, Alaska Things can’t stay the same
Must invest to
maintain quality of life
Hypothesis
•Renewable based microgrids
Common
•Deployments will accelerate,
number, scope, size
•Progress here has impacts
Intelligent Energy Systems, LLC
Hallucination
2003 =Reduce Diesel
•Control/integration?
•Wind turbines?
•Wind Heat?
•Distribution ?
•Capacity?
•Funding?
2023 (100% Clean,
secure, resilient, cross
sector)
•Internet
•Energy Storage
•Heat
•Solar PV
•EV’s
•Biz models
•Water
•Hydrogen
Markets:
Why Wind
What have we learned?
Coherent Technology
IES
•A family of appliances
working together
Meaningful Projects/Jobs
Not just install a few solar panels
Lower Costs
•Increase deployment
•Expand Scope
•Grow Scale
Progress:
•Define state of the art
•Invest in reducing risk
•Generate a history of investment
performance
Learn by doing
And innovating
Lessons:
Don’t always assume, Remove roadblocks, Pull goalie
Insights into the Icelandic
Energy Market
Gwen Holdmann & Erlingur Gudleifsson
Alaska Center for Energy and Power
Installed Capacity by Source (2020)
Space Heating by Energy Source
Iceland 1952-2020
Iceland Electricity Sales/Production
Alaska Statewide 6.5 GWh
Population = 732,000
Iceland Total Production 19.8 GWh
Population = 372,000
Iceland C&I Loads
Ring Grid/Railbelt Grid Comparison
Installed
capacity Annual sales Length Per capita sales
[MW] [GWh] miles [MWh/capita]
Railbelt Grid 2,000 4,400 ~650 845 MWh/capita
Ring Grid 2,900 19,100 ~2000 51.6 MWh/capita
Ring Grid/Railbelt Grid Comparison
Installed
capacity Annual sales Length Per capita
sales
[MW] [GWh] miles [kWh/year]
Railbelt Grid 2,000 4,400 650 845 kWh/yr
Ring Grid 2,900 19,100 2000 51,620 kWh/yr
On a per capita basis, Iceland
produces and sells 6 times more
electricity than the Railbelt grid
Iceland circa 1975 had
4 independent non-
interconnected Transmission
interconnections
completed in 1984
TSO Grid and Generation Stations (2023 )Unbundling G&T Assets
Required by EU Policy 3 stages over a decade
65%
22%
6%
7%
Landsnet shareholders 2007
Landsvirkjun RARIK Orkubu Vestfjarda Orkuveita Reykjavíkur
Transmission assets primarilyowned by
Icelandic state(through Landsnet);
maintains generation and distribution
ownership diversity
Consumer Energy Price Structure (Iceland)Consumer Pricing
bottom line
Example 1 =
rural area;
Example 2 =
urban area
Electrical prices: Industrial Customer
Small commercial example: Constructioncompany;
150-200 MWh annual sales
Large commercial:
Located in Reykjavik
Steel Fabrication and Construction
~1200 MWh annual sales
Railbelt Utilities Cost per kWh (2021)
Economies of scale
20 cents/kWh
Double sales New generation
No fuel
15 cents/kWh 14 cents/kWh
Many caveats here!!!!
- https://www.uaf.edu/acep-blog/cheaper-by-the-dozen-reducing-
alaskas-electricity-costs.php
Iceland's Policies (high level)
Commitment to energy independence
Industry partnerships to build up infrastructure
Investment in transmission
Subsidies for high-cost regions (heat and power)
Iceland drilling fund loan fund to reduce risk
Iceland energy plan selecting projects
Hesitancy to develop intertie
Investment in knowledge economy
Overseas Activities of Geothermal Companies
Thank you!
Gwen Holdmann
University of Alaska Fairbanks
Gwen.holdmann@alaska.edu
Small Hydropower in Southcentral Alaska
polarconsult alaska, inc.
Bradley Lake
Operations and
Governance
The Bradley Lake
Hydroelectric
Project
Net 120 MVA hydroelectric project
Limited to 90MW during normal operation due to transmission
constraints
Vertical shaft high-head Pelton Turbine
1100 feet of head pressure
Lake and Penstock
125-foot dam
3.5 Mile tunnel mostly rock and in some cases steel lined
11 feet in diameter
~ 400 GWH annual energy
Transmission assets
Static VAR Compensators- Soldotna and Cooper Landing
Transmission lines -Bradley to Bradley Junction and Soldotna to
Quartz Creek,
Batteries- Southern, Central, and Northern Regions
Due to tunnel pressure constraints, the project exhibits a very slow
response rate to underfrequency events
Zero to full output; theoretical response is 90 sec, but is more
typically measured in minutes
However, when considering divider performance (excluding batteries), it
is the fastest responding machine in the Railbelt to overfrequency events
Full out put to zero in ~2 seconds
Contractual Framework
The Agreement for the Sale and Purchase of Electric Power (Power Sales Agreement (PSA))
Includes Power revenue bond resolutions
The Project was 50% State funded and 50 % Bond funded, with a mechanism to pay the State back for its
funding after paying off the Projects bonds at zero interest
The Bradley Lake Hydroelectric
Project (the Project) is organized
through a single primary agreement
The Amendment to Agreement for Sale of Transmission Capability (the Capability Agreement)
Terms and conditions for the pledge of the Homer transmission system for Project use
The Agreement for the Wheeling of Electric Power and for Related Services (the Services Agreement)
Terms and conditions for the pledge of the Chugach transmission system for Project use
Two secondary agreements forming
And several sub-agreements
governing system operations, field
operations, maintenance, and control
The Project and the related transmission agreements are exempt from RCA regulation under AS 42.05.431
(c) (1)
Key stakeholders include utilities, and
the State via AEA (Alaska Energy
Authority)
creating rules of procedure (bylaws)
And, subject to AEA approval, delegates operations and maintenance responsibility to the BPMC
The PSA requires the creation of the
Project Management Committee
(BPMC) and tasks the committee with
Roles and Responsibilities
Utilities: known as the
contract (the PSA) and are
members of the BPMC
State via AEA: As owner of the
Project provides oversight and
support for the Project's
operations and is a member of the
BPMC
The BPMC is made up of the
participants and AEA
Responsible for Improvement, Operations
and Maintenance of the Project
Decisions are made based on majority plus
50% of load voting mechanism
AEA has a unique role, most topics require
the affirmative vote of AEA
Public: Project meetings are open
to the public and subject to AS
44.62.310 - AS 44.62.312.meetings
act.
Power Delivery and
Transmission
deliver Project power to the participants
It became apparent that lack of funding for interties might delay or kill the
project
The Capability Agreement outlines the performance and operational aspects of the
Project's utilization of the HEA system to transmit Project power from Bradley
Junction to Quartz Creek (formerly Soldotna).
This includes the capacity purchase terms for the Bradley Junction to Soldotna
115 Line, which was constructed and is owned by HEA. The participants
contributed funds based on their Project shares, and in return, they obtained
proportional capability rights.
The Services Agreement outlines the performance and operational aspects of the
Project's utilization of the HEA system to transmit Project power from Quartz Creek
(formerly Soldotna) to various delivery points north of Quartz creek.
Includes calculation of firm and non firm wheeling with a 15 year phase in,
capped at 90% of the Chugach fully allocated rate less the Beluga Point
Mackenzie costs
Names Chugach as the Project dispatcher subject to review of performance by
the BPMC
AEA is not signatory to either of these agreements
Energy Pricing
The Project's energy is priced based on
cost and energy generated during the year
Budgeted in advance with a true-up
mechanism
RAILBELT HYDROPOWER: CURRENT & UPCOMING PROJECTS
ALASKA ENERGY AUTHORITY
Bryan Carey, PE
Director, Owned Assets
Alaska Energy Task Force
Energy Symposium
August 3, 2023
largest source of renewable energy, the
120-megawatt facility generates about 10% of the total
annual power used by Railbelt electric utilities at some
of the lowest-cost to more than 550,000 Alaskans.
Bradley Lake Hydroelectric Project
Funding by State of Alaska and Railbelt utilities
Owned by AEA and managed to maximum extent by
Railbelt utilities
Largest hydroelectric Project in Alaska
Annual average energy 400,000 MWh and increasing
Railbelt Hydropower: Current and Upcoming Projects | Alaska Energy Security Task Force | August 3, 2023 02
Located 2 miles southwest of Bradley
Lake and serves Railbelt
Completed in 2020
Funding by State of Alaska and
Railbelt utilities
Diversion of upper Battle Creek to
Bradley Lake by two-mile pipe
Annual energy ~37,000 MWh
Low-cost energy
Battle Creek Project
03
2010-2013: Studies
2015: Submit license amendment
to Federal Energy Regulatory
Commission (FERC)
2016: Environmental Assessment
2016: Receive license amendment
2017: Financing and bid project
2018-2020: Construction
Battle Creek
Project Schedule
04
Dixon
Glacier
05
AEA is investigating generating
energy from the outflow of
Dixon Glacier five miles
southwest of the Bradley Lake
Hydroelectric Project.
The Dixon Diversion Project
would be largest renewable
energy project in Alaska since
Bradley Lake was
completed in 1991.
Dixon Diversion Project
06
Drainage area is ~20 square
miles.
Watershed receives more than
100 inches precipitation per
year (106,000 ac-ft/yr).
Ice melt average 94,500 ac-ft/yr.
~200,000 ac-ft/yr.
Dixon Diversion
Project
07
4.7 mile tunnel from intake
to Bradley Lake
Water goes through
Bradley Lake powerhouse
Raise Bradley spillway/dam
to capture seasonal flow
and allow for additional
water storage for winter
Entire project on State land
Diversion to Bradley Lake
Railbelt Hydropower: Current and Upcoming Projects | Alaska Energy Security Task Force | August 3, 2023 08
Energy Generation Comparison
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Modeled Dixon Diversion Annual Water FlowsProjectMWh/yr
Bradley Lake Hydro ~400,000 MWh/yr
Dixon Diversion ~160,000 MWh/yr
Fire Island Wind ~49,000 MWh/yr
Battle Creek Diversion ~37,000 MWh/yr
Net Metered Solar ~3,500 MWh/yr
Source: This comparison slide is courtesy of Chugach Electric Association.
Railbelt Hydropower: Current and Upcoming Projects | Alaska Energy Security Task Force | August 3, 2023 09
Installed Capacity 180 MW
Annual Energy 100,000-
500,000 MWh
Cost ~$160-500 Million
Dixon Diversion Value
10
Dixon Diversion provides:
-Energy (more water)
-Higher capacity factor (from 37% to 53%), but
no increase of maximum capacity (no new
turbine)
-Increased long-duration energy storage
(higher dam)
-Low-cost, long-duration energy storage
A new turbine/generator could be added at
Bradley Lake power plant in the future
Verify energy (2023)
-Discharge measurements
-Water Quality measures
Optimism facilities and revise cost
(2023)
-Need for road
-Geologic Site Review
Consultation (2024)
Studies (2024)
Railbelt Hydropower: Current and Upcoming Projects | Alaska Energy Security Task Force | August 3, 2023 11
Dixon Diversion Next Steps
2022
April
File Amendment
June
Agency/Public
Meeting Homer
Fall
Agency Study Requests
2023-2025
Studies
2026-2027
Federal Energy
Regulatory Commission
Amendment
2028
Bid
2028-2032
Construction
Dixon Diversion Schedule
Railbelt Hydropower: Current and Upcoming Projects | Alaska Energy Security Task Force | August 3, 2023 12
If average ice melt 10 feet/year
then an additional 77,000 ac-ft
above annual precipitation for
coming decades
Power plant less than 2 miles
from roads and 115 kVA lines
Port to bring in equipment and
materials
Godwin Hydropower Project
AEA Hydro Overview | August 31, 2022
013
13
Godwin Hydropower Project
River drop ~920 feet over
1.5 miles.
Intake downstream of lake has
entire project on State land
(likely non-FERC). Intake at lake
provides regulating ability.
Chugach Electric Association
performing feasibility work.
Could be online ~ 10 years.
14
813 W Northern Lights Blvd.
Anchorage, AK 99503
Main: (907) 771-3000
Fax: (907) 771-3044
akenergyauthority.org
@alaskaenergyauthority
@alaskaenergyauthority
Alaska Energy Authority
AEA provides
energy solutions
to meet the
unique needs of
rural
and urban
communities.
15
8/3/2023 1
August 3, 2023
2019
Abeyance Rescinded
2017
Licensing Abeyance
Susitna Hydro: History
8/3/2023 2
Why Susitna-Watana Hydro
8/3/2023 3
1,000 jobs during peak construction
Stable electricity rates for 100+ years
Long-term diversification
Clean, reliable energy source
Promotes integration of variable power sources
Reduce CO2 emissions by more than 100 million
tons annually (equivalent to 250,000 cars)
Project Highlights
8/3/2023 4
Susitna-River Mile 184
87 River Miles from
Talkeetna
22-32 River Miles
upstream from Devils
Canyon
Energy Demand
($2014)
Next Steps
Governor and legislature would need to
re-initiate FERC licensing process, restart process
with FERC
Collaborate with Alaska Native land owners and
utilities
Update construction cost and financing approach
Conduct public engagement
File license application
51/10/2013
61/10/2013
$-
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
$0.40
Susitna-Watana vs. Natural Gas Power Costs
Range of Natural Gas Power Costs
Base Case Natural Gas Power Cost
Susitna-Watana Power Cost
Key Takeaways
Susitna-Watana Hydroelectric Project can
significantly reduce future power cost uncertainty
Potential to be competitive with natural gas in the
early years, lower cost over long term
Enhances Alaska energy security
Allows for other renewables generation sources
1/10/2013 7
Exceptional service in the national interest
Sandia National Laboratories is a multimission laboratory managed and operated by National Technology and Engineering Solutions of Sandia LLC, a wholly
under contract DE-NA0003525.
Energy Storage Options
& Selection Considerations
AESTF Energy Symposium
Presenter: Luke McLaughlin, Ph.D.
1
Sandia National Laboratories
OUTLINE
Energy Storage
Importance
Promising Technologies
Modeling
Influence of Key System Parameters
Summary
Energy Storage
Importance
Promising Technologies
Modeling
Energy Storage (LDES) needed to
achieve full decarbonization
Jeremy Twitchell of PPNL
Long Duration Energy Storage (LDES)
8+ hrs (approximate duration)
Dispatchable at maximum deficit
85-140 TWh LDES needed by 2040 to enable
global net zero goals
LDES Council Report: A path towards full
grid decarbonization with 24/7 clean Power
Purchase Agreements
Cost Reduction of LDES systems necessary
Hot
Storage
Energy Storage
Courtesy of PNNL
Courtesy of DOE
Importance
Commercially Available Technologies
Lithium-ion (Li-ion) Iron Phosphate (LFP)
Lithium-ion Nickel Manganese Cobalt (NMC)
Lead Acid
Vanadium Redox Flow (VRF)
Zinc-based
Compressed Air Energy Storage (CAES)
Pumped Storage Hydropower (PSH)
Thermal Energy Storage (TES)
Gravity Energy Storage
Hydrogen
Technology solutions are scenario
specific
Hot
Storage
Energy Storage Promising Technologies
https://electrek.co
https://www.advisian.com
https://www.renewablethermal.org
8760 Modeling
Models energy storage system (ESS) using
hourly data over a year
Utilizes hourly grid demand and energy
availability data
Assesses system performance in dynamic
environment
SNL 8760 Modeling
Compare ESS within the same setting
Assesses Impacts of:
Power purchase agreement
Energy available for charging
System efficiency
Energy Storage Modeling
Fixed Parameter Value Units
Peak grid demand/discharge 100 MW
Operational life 30 Years
Loan percentage 50 %
Interest rate 8 %
Base Electricity Price 0.05 $/kWh
Model assesses standalone ESS
Excess PV energy for charging
Varied Model Parameters
Electricity Pricing
Flat
Power available for charging
100 MW max charge
200 MW max charge
System Efficiency
TES system RTE
35-60 %
Energy Storage Modeling
Systems Analyzed
Li-ion LFP
Vanadium Redox Flow (VRF)
Pumped Storage Hydropower (PSH)
Compressed Air Energy Storage Caverns
(CAES)
Thermal Energy Storage (TES)
ESGC Cost & Performance 2022 Report
used as basis for analysis
Installed Cost
RTE
Lifespan
O&M Cost
Energy Storage Modeling
ESS Life Time [years] RTE [%] O&M [$/kW-yr ]
PSH 59.9 79.9 28.19
Vanadium Redox
Flow 11.9 65.5 12.08
Li-ion LFP 16.0 82.5 9.87
CAES 59.9 51.9 16.11
Thermal 33.9 51.7 32.31
200 MW Charge General Trends
CAES & PSH lowest LCOS
TES lowest LCOS 8+ hours without
geographical constraint
Li-ion LFP lowest LCOS 4 hours without
geographical constraint
Influence of Electricity Pricing
cost via increased Net Profit of electricity sold
Enables return on investment (ROI)
Energy Storage
Flat Pricing Curve
Dynamic Pricing Curve
Influence of Available Charging
Energy
Increased storage duration
requires sufficient power to
charge
Increased charging power
increases % demand met by
system
Energy Storage
4 hrs 6 hrs 8 hrs 10 hrs 24 hrs 100 hrs50 hrs
200 MW
Charge
100 MW
Charge
Influence of Available Charging
Energy
Increased battery utilization
decreases system cost
Lowest cost solution may not meet %
met demand requirement
Energy Storage
100 MW
Charge
200 MW
Charge
Energy Storage
Influence of Round Trip Efficiency
Increased ESS RTE reduces LCOS
Increased ESS RTE increases %
demand met for specific scenario
Higher % demand met for same LCOS
Summary
Summary
ESS selection is scenario specific
Key ESS selection considerations:
Power purchase agreement
Grid demand
Available energy for charging
System RTE
% demand met requirement
LCOS requirement/ROI
requirement
Questions?
Alaska Marine Energy Overview
Cook Inlet Tidal Focus
Tidal technology overview
NREL and PNNL Work
ACEP/UAF Work (PMEC)
Cook Inlet Tidal Energy Working Group
Activities/opportunities
Tidal Space DOE Research Efforts Intro
3 Kilcher, Fogarty, Lawson. 2021. Marine Energy in the United States: An Overview of Opportunities. NREL/TP-5700/78773.
NREL | 5 NREL | 6
18 GW Resource: ~30x Railbelt load
Infrastructure platforms, shoreside
$3T by 2030
Cook Inlet Tidal Energy
Photo by Bureau of Safety and Environmental Enforcement
NREL | 7
Tidal Energy is
Predictable Current Energy Converter Types
(Tidal or Riverine)
8
NREL | 9NREL | 9
Tidal Energy
Technology
Utility MW-scale technology
convergence on axial flow
MW-scale demonstration
projects in EU: e.g. Meygen -
Scotland, 8 MW in 2017
Many kW-scale demonstration
projects in the US and around
the world
Commercial pilot projects
needed to prove viability of
technologies
National Labs and
Universities
Partners in Research,
Development, and
Testing
12
Homer to Fairbanks
70% of AK population
~600MW average load
42% natural gas
28% hydro
27% coal & petroleum
3% renewables
Space heating
Fuel Oil
Wood
Natural Gas
ASHP (coastal)
https://alaskarenewableenergy.org/initiatives/renewable-energy-atlas/
Cook Inlet Tidal Energy - Context
Motivations
Declining gas reserves
Immense and predictable
tidal resource
Tech reaching MW scale
FERC permits being issued
RPS scenarios
where we want to be 20 years
Global interest in Hydrogen,
carbon-free fuels
13
Cook Inlet Tidal Energy - Context
Alternatives
North Slope Gas Pipeline
LNG import terminal
Traditional Hydroelectric
Advanced Nuclear
Factors
Economics
Integration and Storage
Environmental Impact
14
NREL | 15
Renewable Portfolio Standard
Multiple pathways to
achieving an 80% RPS
Balancing supply and
demand under major outage
conditions with appropriate
system engineering
UAF working with OSU on
Grid Integration Modeling
https://www.nrel.gov/docs/fy22osti/81698.pdf
Tidal Energy Progression
1. Tidal R&D, platform power
2. Tidal to electric utilities (RPS)
3. Tidal to synthetic fuels (export market)
1.
2. Ammonia, Methanol, etc to export
markets and rural Alaska
3. AK heating and transportation
4. Tidal, synthetic fuels and carbon
sequestration
1. Natural gas export, CO2 import
2. Synthetic fuel decarb and sequester
16
Cook Inlet Tidal - Roadmap Development
17
Topic Area Date Presenters Participants
Working Group Intro December 5 Levi Kilcher, NREL 30
Data Needs & Gaps January 23 Katie Petersen, NREL 31
Permitting & Regulatory February 13
Julianna Potter, Aleut
Jonathan Colby, Streamwise 45
Global Tidal Energy
Projects March 27 Jonathan Colby, Streamwise 29
Tidal Array Modeling April 12 Zhaoqing Yang, PNNL 18
Project Costs &
Economics May 18 Elena Baca, NREL 28
Participants include tidal tech developers, tidal project developers, electric utilities, user groups, state and
federal regulatory agencies, university researchers, national lab researchers
Data Needs & Gaps - Feedback
Multiple development phases require different kinds
of data and level of resolution. Key data needs now
are for pre-demonstration phase
Resource data:
-Still need to validate data
-Have most of the resource data for pre-demo phase
Site data:
-Data gaps are bathy/sediment/ice/seafloor
-Private data on bathy, seafloor comp may exist
Environmental data:
-Salmon & belugas major concerns; check with
recreational & subsistence fishers too
-Review FERC dockets for enviro assessments
Socioeconomic data:
-Social license data thru lit review
-Funding for sustained stakeholder engagement?
Workforce development & engagement:
-NREL workforce dev program, engage with SeaGrant
fellows
-Classroom outreach w/ STEM educators
Device design & performance:
-Would it be possible to have a generic testing facility?
Single site presents some challenges wrt timing &
suitability to different types of tech.
Economics:
-Cost of integration should be included.
-2nd Phase Renewable Portfolio Standard for the
Railbelt is underway.
WORKING GROUP HIGHLIGHT
FEDERAL
FERC USACE
USFWSUSCGUSCBP
BOEM
STATE
ADNR, DMLW/DOG
ADNR, SHPO
ADEC, DOW
ADFG
LOCAL
KPB/KRCNative Corp.
NMFSEPAFAA
Federal Power
Act
Energy Policy
Act
OCS Lands Act
Energy Policy
Act
Rivers and
Harbors Act
Section 10
Clean Water Act
Section 404
Endangered
Species Act
Marine Mammal
Protection Act
Magnuson-
Stevens Act
National Historic
Preservation Act
Section 106
Clean Water Act
Section 401 Cert.
APDES/NPDES
Domestic
wastewater /
Drinking water
ESA
MMPA
Fish and Wildlife
Coordination Act
Migratory Bird
Treaty Act
Notice to
Mariners
Movement
Regulations
Private Aids to
Navigation
Clean Water Act
APDES/NPDES
Jones Act
(Merchant
Marine Act of
1920)
Title 16, Fish
Habitat
Public Safety
Title 5, Special
Area Permit
Land Use
Authorization
Right of
Way/Easement
Tidelands Lease
Determination of
No Hazard to Air
Navigation
Land Use
Authorization
Letter of Non-
Objection
Key Regulatory Agencies
Multi-Agency
Permit
Floodplain
Permit
Vegetation
Management
**Lead Agency dependent on scope and location**Pre-Application Meetings are critical
Engage with agencies early and
often
Group Discussion:
1) What other Agencies should be included?
PLEASE PROVIDE THESE IN THE CHAT.
2) What strategies have been successful in your experience?
Overview Stakeholders & Impacts Potential Stressors NEPA Overview Approval Process CI Projects Tools & Solutions Path Forward
19
WORKING GROUP HIGHLIGHT Considerations
20OverviewStakeholders & Impacts Potential Stressors NEPA Overview Approval Process CI Projects Tools & Solutions Path Forward
20
Cape International, 2012Boats on Cook Inlet, 1898 Alaska Digital Archives
Global Fishing Watch
WORKING GROUP HIGHLIGHT
Marine Mammals
21OverviewStakeholders & Impacts Potential Stressors NEPA Overview Approval Process CI Projects Tools & Solutions Path Forward
21
Marine Mammal Protection
Act (MMPA)
13 species in middle Cook
Inlet
Endangered Species Act
(ESA)
5 species in Cook Inlet
Cook Inlet DPS Beluga
Whales are the most
endangered population in
the U.S.
Population estimates of
Beluga Whales in Cook
Inlet have declined since
the 1970s
NOAA Technical Guidance, 2018 NOAA Fisheries Website
WORKING GROUP HIGHLIGHT
NREL | 22
Commercial
Projects
Cook Inlet Tidal Energy Roadmap
100MW by 2035
203520302025Now
Demo
Permits Demo Projects
Commercial Permitting
Data
Gathering
Stakeholder Engagement
Demonstration projects are critical to
proving technology, reducing cost,
environmental monitoring, scaling up, and
technology down-select.
Research & development is critical to
meeting these objectives and making
informed decisions.
Potential Demo
Project Sites
Scaling up!
Phased Environmental Monitoring
Policy & Permitting Recommendations
Identify and Fill Regulatory Data Gaps
Support Adaptive Management Approaches
R&D Investment
Direct technology development
Skilled workforce development
23
- $35M funding from the Bipartisan Infrastructure
Law
FOA Objectives and Goals
Goal 1-5MW pre-commercial tidal demonstration site
Build upon state clean energy strategies with local partners.
Attract competitive tidal and current energy developers for technology site
integration.
Improve tidal and current energy research and development.
Build site infrastructure and supply chains with increased participation at
the state level, including local agency, tribal, and university research
involvement.
Establish a working business model covering site development to
commercial scale.
Multiple proposals included Cook Inlet
Award decisions expected this November
$35M for Tidal and Current Energy Systems
Summary
Resource is immense and predictable (storage
requirements reduced)
Alaska waters are challenging
Technology is pre-commercial
Environmental impacts not fully understood
Variety of potential offtakes (electricity, hydrogen,
ammonia, etc)
25
Alaska MHK History
26
Debris accumulation on surface turbine. Ruby, AK 2013
ORPC RivGen, prior to submersion. Igiugig, AK 2020
Tanana River Test Site
27
Data Collection
Simrad EK60 Split Beam Sonar
Reson 7125 Multibeam Sonar
Trimble GPS
ADCP and ADV 3D velocity
Campbell Scientific Dataloggers
CR1000
CR6
DC voltage and current
transducers
Load Cells
Hydrokinetic Experience
29
Hydrokinetic Experience
30
Alaska Energy Leadership
State Level
Office of Energy Innovation
Alaska Energy Security Task Force
Alaska Energy Independence Fund (proposed)
Alaska Sustainable Energy Conference
Federal Level
DOE Arctic Energy Office
National Lab Research Programs focused on Arctic
DOE Water Power Technologies Office
R&D in Alaska
National Marine Energy Centers
31 32
Alaska Energy
Infrastructure
33
www.alaska.org https://alaskarenewableenergy.org/initiatives/renewable-energy-atlas/
730,000 residents
Railbelt Grid
Remote Microgrids
Small Scale Nuclear Power
an option for Alaska?
Gwen Holdmann,
Alaska Center for Energy and Power, University of Alaska Fairbanks
Presentation Agenda
PART 1: Context/intro
PART 2: Alaska Perceptions
energy
Reports Outreach
Research Connecting
S360 Poll (Perception on Nuclear)
Multi-modal survey 700 registered voters,
oversample Fairbanks (172)
electorate
Completed by phone May 23-June 4th
Margin of error 4% (7.5% for Fairbanks)
more information is provided, support grows considerably
more information is provided, support grows considerably**A nuclear microreactor is a small nuclear reactor that is
much smaller than conventional nuclear technology.
Microreactors are essentially a small nuclear-powered
battery. They vary in size based on the manufacturer, but
in general would be small enough to fit inside a shipping
container and produce around 10megawatts, which could
power around 7,000 homes and also provide heat.
Because of their small size, microreactors use much less
nuclear fuel and cannot melt down. They also do not
require water for cooling. After learning more, do you
support or oppose the idea of Alaska exploring the use of
microreactors to supply energy to Alaskans?
Information changes perceptions
Voter concerns center on environmental
contaminants and waste disposal
Messaging
Perceptions are largely non-partisan Alaska Strategy: factors to consider
SB 194 local control of siting authority for small
reactors (<50 MW)
Alaska is a near-ideal early adopter market (high
cost of energy, heat + power)
Interest from vendors
Risk associated with being an early adopter
(economic, technological, public perception, etc)
Opportunity for state/federal partnership
Passive or active decision making
Weighing Risk versus Reward
for Pilot Projects
GVEA BESS (above);
Healy Clean Coal Project (right)
Proof of Concept
Prototype
Full commercialization of
product
Translational
research
(basic applied)
Time
Valley of Death Bridge to Financeability
Present 2040
Individual Projects
(no coordinated strategy)
Alaska Pathways Issues/considerations
Public is not well informed
Utilities (most) are taking a passive approach
Traditional approaches to procurement and
project development may not be optimal for early
projects (RFS versus RFP)
Announcement TODAY! Re: Eielson AFB reactor
Lack of coordination opportunity for Task Force
Why I am interested in small reactors:
Baseload heat and power
Compliment to variable renewables
Carbon free
Safer, Reduced risk of environmental contamination
Competitive Pricing?
Better long-term certainty of energy costs
Possible complement to existing AK resource mix Thank you!
Gwen Holdmann
Alaska Center for Energy and Power
University of Alaska Fairbanks
Gwen.Holdmann@alaska.edu
Page 1 of 22
Alaska Energy Security Task ForceMEETING MINUTES
Tuesday, October 3, 2023
Anchorage, Alaska
1.Welcome and Introductions
Chair Lieutenant Governor Nancy Dahlstrom called the meeting of the Alaska Energy Security Task Force (AESTF) to order on October 3, 2023,at 1:32 p.m.
2.Roll Call
Members present: Chair Lieutenant Governor Nancy Dahlstrom; Vice-Chair Curtis Thayer;Clay Koplin; Nils Andreassen; Andrew Guy; Karl Hanneman; Tony Izzo; Jenn Miller; Duff Mitchell;John Sims; Isaac Vanderburg;Robert Venables; Brittney Smart on behalf of Dr. Daniel White; Anne Rittgers for Senator Bishop; Garrett Boyle (Ex Officio); Crag for Representative Rauscher.Also present were Andrew Jensen, Policy Advisor to Governor Dunleavy; Michael Yaffee and Marc Luken, Michael Baker International (consultant); and Jennifer Bertolini, AEA.A quorum was present to conduct business.3.Prior Meeting Minutes –September 19, 2023
MOTION: Vice-Chair Thayer made a motion to approve the Minutes of September 19,
2023, as presented. Motion seconded by John Sims Task Force Member.There were no
objections. Motion passed unanimously.
4. Survey Results
Chair Lieutenant Governor Nancy Dahlstrom asked Vice-Chair Thayer to introduce the survey
results and then we will start our reviews from the different groups. Vice-Chair Thayer reminded
task force members that before the last meeting Michael Baker had sent out a survey to task
force members with questions designed to help members determine prioritization for their
committee. After conversations with the task force, Michael Baker staff redefined the survey to
help narrow down what the task force was looking for. Therefore, everyone got a new survey. It
has now been concluded,and Vice-Chair Thayer turned the meeting over to Michael Yaffee with Michael Baker to walk through the revised survey results.
Mr. Yaffee stated that they intend to incorporate the survey results into the plan as a section called Next Steps. We want to identify five to seven high level, high priority actions for immediate implementation. And this survey is a tool that looks across all actions, all subcommittees to understand how we are evaluating the actions to reach those five to seven high-level priorities. Ultimately, though, task force members will decide what is listed in the planand what will be identified as the next steps.
There are several different ways we can use the survey results as a tool to help us set prioritization. Some of these methods have been discussed at the subcommittee level, but notnecessarily at the task force level. Mr. Yaffee went over the methods that can be used to weight
Page 2 of 22
the criteria. There is a simple method and a more complex method. Mr. Yaffee gave an example to illustrate the difference between the two methods.
We don’t necessarily have to have an answer at the end of this meeting. This is all easily done in
a spreadsheet,and we could do a sensitivity analysis, if the task force wishes, to use the results
of the survey to start coding values. This is just meant to be a helpful tool that’s quick and easy. The survey question that was posed was select evaluation, prioritization criteria below that should be considered for inclusion. And we noted affordability, reliability and resilience will be automatically included. So we withheld them from the survey.
Mr. Yaffee presented a PowerPoint slide with the survey results. He stated that overall,we had 12 responses, and, as can be seen, there was some natural grouping. Fifty percent of respondents agreed with these top criteria: related to other actions; legislative and regulatory--that’s if an action is suggested for implementation within the first year after the plan is adopted; and then alignment across the different regions; funding mechanism; and cost effectiveness.
Then once you get below 50% response rate, we have the second grouping of technical feasibility; advance other state and local objectives; supported by best available energy data; legal authority to implement; and agency championing identified. Then the last grouping of if there is political support; environmental constraints and then administrative capability to
implement.
We did capture a few open responses and questions:
•I think these criteria can factor into investment infrastructure development decisions.
•These criteria comport with the subcommittee focuses.
•Is there a way to capture the relative impact when comparing. Some actions might be easy
and will make a helpful tweak, but others may be harder and have a large impact. Maybe
effort level, low, medium, high impact level. If we use the more complex method, that
may address this comment.
•Priority should be given to those actions that impact the greatest number of Alaskans.
That could be looking at the regional analysis, there is greater weighting towards those.
That is something we can test if there is a desire.
•Why wasn't this survey offered “rank choice”since all should be considered. While some are more import,and none should be omitted. That gets back to if we want to assign weights to some criteria versus others.
•There are too many screening criteria for the survey to be used in screening or developing priorities. The Governor provided one decisively clear criterion...lower the energy cost for Alaskans, which should be the sole prioritization screening criteria. Should it not be up to the Governor and administration to decide the prioritization using the criteria factors mentioned. Just to speak to that, I think it's meant to just inform the recommendations at the end of the report. It's up to the task force members on what those recommendations say.
Page 3 of 22
There was no response to the question, “are there other criteria that should be considered?” So we feel comfortable that we have captured all the criteria that we could possibly use to analyze
this.
a. Discuss Prioritization Exercise
Mr. Yaffee asked if there were any questions from the task force members.
Mr. Izzo stated looking at the regional areas, they all stop at 60%. Is it just relevant that they all were above 50%? It's hard to imagine that they were all exactly the same or maybe they were. Mr. Yaffee responded that in terms of the responses, the coastal region actually received a little less. And that's just an indication of there may not have been full participation. The intent of this question,alignment with regions,was so that you could quickly scan and see actions that may have a greater impact across multiple regions versus ones that are just focused on a particular region. Those might be considered a higher priority. But again, the intent is,this is a tool to help task force members arrive at a final decision.Mr. Izzo stated that context helps. Thank you.
Mr. Yaffee asked task force members if they had a preference between the two different methods.
So having said that, is there a preference towards between the two different methods as we use
these criteria and start working with the subcommittee to populate what the values would be to
determine what actions should be prioritized.
Vice-Chair Thayer stated that prioritizing at least the first few is important. Not necessarily all of
them, because we'll be here all day. But I think there are clearly within the subcommittees some
that really stand out. And so I don't want to say that we want to do the top three. It could be
the top two, it could be the top four. But I think giving flexibility and working with the
subcommittee members would be helpful in understanding where they can move the needle.
Mr. Hanneman supports what Curt was saying.I believe that we need to ask each subcommittee
to give us an elevator pitch, which is the two points, maybe three, that is the highest priority from their perspective. I think that'll be more useful because of their knowledge of the subject than trying to categorize it by this numeric method. Because I don't think we know enough about how to apply the criteria under the numeric method to each of the different proposed actions. I'm not against trying and see what we get out of it. I think we should spend more time trying to align our objectives and our recommendations between the subcommittees and working on the duplication that exists and spend more time in the text of the recommendations, which I think is really important. And then asking each subcommittee to prioritize in some way.
Mr. Yaffee responded that Mr. Hanneman’s comments make sense. If it’s okay with the task force, one of the takeaways from this is we can ask each subcommittee what their top prioritiesare, then code them with this very basic,simple method just to go through that exercise. And
Page 4 of 22
then from a big picture level,the task force can look at the top priorities across the subcommittees to determine what priorities align with these criteria and to answer the question
of what has highest priority for the task force?
Task Force member stated he is looking beyond the work product. I'm thinking without specifics
on how it's structured will we have a tool afterwards that we can apply. If we have three or four high level criteria, how does a new project or an opportunity line up with that? And it kind of gets back to setting a strategic vision that as we make investments and work to modernize and secure a grid, that it's affordable, reliable, sustainable and that we try to serve all the citizens of the state.
Mr. Thayer responded that however we do the ranking,there are going to be things that are going to occur in the near future and long-term future that will change the dynamics of it. I'll just say that AEA and others have participated in several grant opportunities. And, in some cases,we are an email away of finding out if it's a game changer.So even though it's a task force priority further down the list, but if money is associated with it and there’s a way to get it done, all of a sudden it might move up to the top of the list. So I think everyone needs tounderstand the need for flexibility.
Mr. Yaffee added that’s where the importance of innovation and emerging technologies comes
in because these opportunities can pop up along the way and having a way to fit those into a
plan or rationalize those is going to be important.
Mr. Mitchell stated that he agrees with Curtis’ wisdom and comments. I mean we're looking at
things in three dimension of time. What is good today is going to change a little bit in a year
from now with dynamics of funding, federal actions, other things and there's a lot of levers with
a lot of these actions that we're planning that could materially impact the prioritization.
And so an exercise of here and now, while important, I think is really critical that we also have
the flexibility, the opportunity. We didn't get to this energy state in 30 days and we're not going
to fix the energy state in 30 days. But I think the vision was that we have an energy plan, which
imbibes a longer view. So I'm just tail hooking on your comment that I think that's wise, that regardless of the prioritization exercise that we use now, we need to reserve the ability to be able to pull things up or down as the situation changes. Thanks.
Mr. Yaffee thanked members for their discussion, as that helps us move forward.
5. Review Draft Report
Vice-Chair Thayer introduced this item. The draft report has been emailed to task force members and is available on the Task Force website and other venues. We are up to approximately 60 recommendations. He asked Michael Yaffee to walk task force members through the draft report.
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Mr. Yaffee directed task force members’attention to the PowerPoint presentation. Vice-ChairThayer reminded task force members that any pictures used in this initial draft report are
placeholders. There may be some that are out of place or in a wrong region. That will be
revised as we fine tune the report.
Mr. Yaff ee added that this is a working draft. We do have a preliminary table of contents. This is a familiar slide with the design vignettes. What you have before you today is Section 4 -Energy Priorities with priorities listed by subcommittee and contains their strategies and actions.
With the next iteration of this draft report, we hope to populate the other sections. So the Introduction will help go over the goals of the plan. The Planning Process is going to be an overview of all the public meetings and the documentation related to that. Energy in Alaska is a snapshot of the current state of energy in Alaska, largely informed by the energy symposiums that occurred. And then Next Steps is going to be focused on the prioritization and high level recommendations for next steps from the Task Force. And a more detailed Table of Contents.
At the end of the report, we will have appendices. There will be an appendix for definitions and then we also included two appendices in this kind of deliverable. They're still draft, but Appendix 2 is the action tracking sheet that you're used to seeing in terms of what we've presented in the past. That tracking sheet has been updated and now aligns with the kind of the
new nomenclature numbers that have been presented in the report.
And then Appendix 3 is the additional action detail summary. So some committees have
advanced the write-ups for many of these actions, where some of these actions have a lot of
details in terms of next steps implementation and full background. It's almost implementation
level details. Any actions that might be high priority that identify the next steps, we might take
that level of detail for the next steps description. But beyond that, I think it's information that's
useful but still needs be in the appendix. And we'll go through that when we get to the report
itself.
Mr. Ya ffee referred task force members to the meeting handout, which is Section 4 Energy
Priorities. This should look familiar from what we’ve discussed in the past. He will do a quick
overview of each priority and will invite the co-chairs of each priority subcommittee to highlight anything for each focus. As a reminder, there has been a lot of activity on the part of the subcommittees to rework their information and strategies since the task force last met.
So, the draft in front of you is more of a snapshot in time of where the actions currently stand. It's going to be a living document and there's going to be edits as we go forward, even during public comment period. So there may be placeholders on pages as we wait for additional information or input. We invite feedback--especially on photos. If you have photos, pleaseforward those to us.
Mr. Yaffee then directed members to the PDF of the report and proceeded to walk them through the priority sections. This is how the report will appear online. The table of contents will have links to the title page for quick navigation through the report. Each section will have an area
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highlighting the public process and subcommittee meetings that occurred. There will be an appendix dedicated to the public meeting material and public comments. The layout is priority
area/subcommittee. Then subcommittees organize the action items into strategies. One thing
we are considering for the final plan layout is if there is additional summar y for an action, we
can actively link that here. So, you can jump to the appendix for the one page write up or
additional write up related to that action. Just to make the plan fully interactive.
We are keeping a consistent layout for each strategy to make is easy to scan through. For each strategy,we have purpose, background, benefits, implementation,timeline, and expected results. And for the tracking sheet we’re developing, each action will have high-level details related to timeline and potential partners. That’s also included in the appendix.
Mr. Yaffee continued to scroll through the draft plan with task force members. He did commentthat the Statutes and Regulations Subcommittee met that morning. One of their strategies is to look at other subcommittees actions to see what might need assistance in terms of updates to statutes and regulations. To help advance this discussion, Michael Baker staff created, along with Duff Mitchell from Coastal Subcommittee, a matrix, which may be helpful across all subcommittees. This matrix helps answer the question of actions identified in other subcommittees or priority areas that may relate to multiple subcommittees. Through this exercise, we found a lot of overlap between Coastal and Statutes and Regulations. The matrix
presented in the draft report is a snapshot of today. This matrix should definitely be an agenda
item in future subcommittee meetings,and we can be populating the matrix with further
information identified in these meetings.
Mr. Yaffee directed task force members’ attention to Appendix 2 -Acton Tracking Sheet. This
should look familiar to task force members although we referred to them as worksheets in the
subcommittee meetings. The tracking sheet includes actions, priority updates and has similar
numbering as the rest of the report for ease in navigation. Mr. Yaffee pointed out some high
level gaps, because new actions have been added and some restructuring at subcommittee level
is needed. This is something to go back in to backfill and identify some of this information
before the final plan.
He then moved on to Appendix 3 -Additional Action Detail Summary. This appendix is an action by action summary from some of the committees. Actions are listed along the side of the page in the body of the report. If someone is interested in more detailed information,they click the link and they’ll be taken to the appropriate page in Appendix 3. The summary will provide more information on the background,benefits, how did we get there, implementation steps, implementation timeline and expected results. Not all subcommittees developed this level of detail, and that’s okay. We want the task force and subcommittees’ energy to focus on the high priority actions.
Having said that, Mr. Yaffee views this as more optional because it speaks more to the implementation at the end. But kudos to all the subcommittees that have prepared this because I think it sets you up for success for the next stage of this process.
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His question for task force members is where to put this information about implementation. We
put it in an appendix of the plan for now. But is it more appropriate to include these detailed
summaries in the Next Steps section, as they speak more to implementation of the action.
Mr. Yaffee scanned through the rest of the detailed summaries from the subcommittees. He then paused and asked if members had any high-level questions on the organization, framework, layout about the draft work plan or any feedback or questions.
And if not, I was going to go through the plan from the beginning and ask co-chairs of the committees highlight anything that they wish to concerning the work and actions that they've done with their subcommittee. In addition, we would open the floor for any discussions that need to occur across multiple subcommittees or the task force on any one action that they want to highlight.
Mr. Hanneman commented that he wasn’t able to make the Statutes and Regulations Subcommittee meeting this morning because he was on an airplane. But he was able to read the full PDF version of the draft plan. May takeaway is that we have a big job ahead of us to figure out how to structure this. I don't see that structure yet in the table contents. We thought it was going to be maybe in the energy priorities, but that's ballooned to where it's unreadable.
It's great work by the subcommittees and Michael Baker's staff have done a great job of pulling
all this together in a form and trying to propose a structure. And I think all the subcommittees
have done incredible amount of work of writing up and pulling this together, putting the details
together, but it's much too much.
Not that we can't include it in some way,like you're talking about. But we have to figure out
how to present the key findings to move Alaska forward.
As co-chair of the Statutes and Regulations, I wrestle with this. I had thought that we were
going to extract from the other sections what statute and reg actions we needed to take. But
I'm also concerned about duplication. At this point, I'm not even sure that the statute and regs grouping is even a necessary element. Maybe it needs to be left within the subcommitteesections.
There are some things that we did come up with that are not part of the different subcommittees and they need to be brought forward. So, leave statutes and regs within individual subcommittee sections, then our section is about here are some statutes and regulations in addition to what’s in each subcommittee section. Rather than trying to duplicate it.
Maybe we need a Section 4.5 or something of the real priorities, an executive summary or the actionable items that the task force as a whole has endorsed to present. Something that’s a
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quick read for somebody. It’s incumbent upon us to make a structure that does that and we’renot there yet.
Vice-Chair Thayer commented that we have to consolidate everything before you come up with
the executive summary. So I think everything's being put in and then we need to determine
what stays in the body of the plan and what goes, whether in an appendix and deleted altogether. That's what the goal is in the upcoming meetings. To help us figure out what is included in the executive summary. What is the takeaway that's at the front of this plan.
We have two meetings with public comments that's going to help craft this and then we'll have another all-day meeting on October 31 to help us finalize this plan. Then we have two draft version review meetings with Michael Baker and then we'll meet before we finalize the plan for the Governor. So I think the executive summary is probably about two or three weeks away once we get everything consolidated to where we can extract the high-level recommendations.
Unidentified member commented that Section 4 shouldn't be called Energy Priorities because we have 60 priorities. That seems high. Vice-Chair Thayer responded that's why we’re in draft mode. The subcommittees have done the yeoman’s work. Michael Baker is trying to capture everything we’ve done on paper. Now we just need to make it into the reader ’s digest version for a good part of this report.
Mr. Mitchell stated that he was going to follow-up Karl’s comment,because he, too, was looking
for an executive summary. B ut Cur tis addressed it very well. In his experience, if a document
doesn't have a bottom line up front, it usually gets put onto the shelf. In the first four pages, if
you see that there's action items or something, you're intrigued enough to continue reading it.
As Curtis has encapsulated, the executive summary is coming later,and this is a work in
progress.
Mr. Mitchell then suggested moving the Energy in Alaska section,which is the symposium series,
later in the document only because it's not the bottom line up front. This section is education
discussion, it's situation awareness and it’s ideas. While that’s all really good, but if I'm a mayor
in a community, I'm going to look at the introduction, I'm going to look at the executive summary and then I'm going to want to see the priorities. And I'm less concerned on the planning process,how we created the report, and less concerned on the energy in Alaska.
From the reader’s point of view, I'm just offering we make the report have some more snap and more energy as we try to do something with taking it from this level into the implementation stage.
Mr. Yaffee responded that I think we're all in alignment in terms of the report itself, as we intend for it to be an executive level report. You're just not seeing the areas where we have that executive summary. And maybe we just need to breathe words into these titles to clarify. For example, the introduction could be the executive summary. And we certainly can move around
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these sections. That's very easy to do. And to Karl's point, if calling this Energy Priorities is confusing in terms of what really has high priority, we can certainly word smith that.
In terms of next steps, I think that's where we want to detail what has high priority and then that
would be mirrored in the executive summary and then everything else. All those details are
going to be appendices to this plan.
Unidentified member stated that I don't want to repeat what's already been said because I kind of did the same thing. I took all those priorities and just kind of pulled them all together, pointing to an executive summary. And I think, Michael Baker, you started to do that when you had that one sheet where you took similar initiatives across all the subcommittees and started building onto one sheet that starts to look like one of those handful of things.
One thing I don't think we'v e discussed a lot is what is the role of policy in our energy future? And this is something I've seen grappled with in other arenas where, for example, the power policy to me is an overarching roadmap and it works well when you have kind of stable conditions and markets and everything. But it doesn't work so well sometimes for emerging technologies or innovations where you start layering policies on new technologies or opportunities that haven't even had a chance to really develop use cases or to fully mature.
And so, as an example, to kind of illustrate that,power cost equalization program isn't a policy.
It's a tactical approach. And it implies a policy that we want to have all Alaskans have access to
affordable energy. So I think I've heard legislators say over and over and over, well, we're not
subject matter experts. You and the utility industry are, or you and the gas and oil industry are,
or you over here are. So if policy tries to reach too far down and maybe starts picking winners
and losers, I think that can be counterproductive.
And I'm just thinking in terms of where we've been as a state and what we can do differently
going forward. And to me, a policy looks like we want to provide affordable, accessible and
reliable energy to Alaskans,and it can stop there.
Then that takes some of the politics out of, well, this region's initiative or this particular pet project or this particular pet technology. We're just going to pour our horses into that. So I hope I'm articulating this well. But I think one of the things that we could communicate forward to the legislature and governor's office even, is policies should provide a guidance and a roadmap, like a strategic vision. And then I'm hoping that the executive summary is going tosay,here's some overarching tactical and strategic approaches that can help us get there. And then we have a roadmap and a toolkit that we know,and we can start getting infrastructure built.
Ms.Miller stated hearing Karl’s , Clay's and others comments, I agree. When we first started meeting as a task force, we talked about are we going to have an overarching goal? What are we heading towards? And it certainly helped within our rail belt subcommittee to set what our mid-and long-term goals were so we can structure actions around them.
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I think for me, I'm looking forward to reading the whole report and seeing where there's a lot of
common themes. Because at the end of the day, I think what we really coalesced around was
having a future that's a diverse, affordable and reliable local energy source. And so I want to
look for these common themes from the subcommittees as I read the report. But I think it could
be we come back to that question of do we have an overarching statement or goal for the state on what we want the future to look like.
And once we've had a chance to read this, it'll become obvious to us what those themes are--whether it's one or two goals. That would be helpful because I think if we don't have something, a vision statement or something to summarize where we're heading, we won’t be as effective. Iremember we had a goal of 50% renewable energy by 2025. Now I think we have a more informed view of what that could look like. We include clean energy, but having some sort of summary statement that people will remember and use as a North Star. So I look forward to reading the report. I know it takes a lot just to get to this step. Hopefully we can roll it up into something punchy and actionable. Thanks.
Seeing no further comments in the room, Vice-Chair Thayer asked if anyone online wanted to make any comments. Seeing and hearing none, he moved on to the next agenda item,which is subcommittee report outs.
a. Review Subcommittee Strategies and supporting Actions
Mr. Yaffee stated that if there’s a preference for the order of the subcommittees, to let him know.
Otherwise, he will follow the list in the plan.
Railbelt Transmission, Generation, and Storage -Co-Chairs Tony Izzo &
Jenn Miller
Ms. Miller started by saying first off, I just want to recognize the Rail Belt Subcommittee. There
have been tens, if not hundred emails back and forth over the last couple of weeks. And again, I
say that in a really positive light. We are lucky to have our subcommittee with that level of engagement and expertise. And so the team has just been in a ton of work to develop the action summaries and then the roll up summaries and put a lot of thought and effort and so just want to recognize the subcommittee for all their work.
We are meeting this Friday from noon to four here at the Alaska Energy Authority. And so the intent is we've been working really heavy on our action summaries,and we wanted to meet again this Friday to read this report today, tomorrow, Thursday, and then come together on Friday and say, okay, what are our high level comments so that we can get our section how we would like it to be presented, and then we can kind of focus on the crossover and those overarching goals. The committee has put in a ton of work and thank you everyone very much.
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Mr. Izzo added that he completely agrees with Jenn’s comments. Additional thanks to AEA and Michael Baker for all the support and the tolerance for the fact that my Word app just ceased
working. So I was sending back drafts with more cutting and pasting than I've probably done in
ten years combined. But I think it speaks to the enthusiasm and the engagement of the group.
For information's sake to the group. Early on we had a presentation, I think it was maybe to the entire task force,from Brian Hickey on the various efforts undergone and underway by the railbelt utilities.
As a result of that, in August, Brian convened a group of technical people, representatives from the four co-ops Homer Electric, Chugach Electric, MEA,and Golden Valley, AEA representative or representatives and others. I think there were like 18 people. They engaged a facilitator and came up with their own recommended work product. So that's being sent out. It's late in ourprocess. I intentionally did not participate, as I wanted to keep my task force perspective.
As I’ve had a chance to glance through our draft report, I see a lot of redundant things in here and maybe some additional items that we'll consider on Friday. Luckily, it’s our last meeting.That's it.Thank you.
Coastal Generation, Distribution, and Storage -Co-Chairs Clay Kaplin and Andrew Guy
Mr. Mitchell stated that for the coastal generation,distribution and I think there's some
transmission stuff spiced in there because there is transmission needs in southeast Alaska and
coastal regions--we've ta ken in a lot of input.
We had John Binkley with Ward Cove. We had Renewable Juneau,a renewable energy NGO,
which introduced Heat Smart, an air source heat pump. And we had the Juneau Commission on
Sustainability. Representatives participated in some of our earlier meetings to include good
input with Keith Kurber and we also took input from Michael Baker and AEA observers because
there's no wrong answers and all input is good input. So we tried to be inclusive.
Then we focused on a Russian nested doll concept of action items that could be rolled up into strategy. So you can go up and down in that Russian nested doll, whether it's strategic to tactical to action items or action items up to tactics and then strategy.
So we've tried to not only come up with really good suggestions and recommendations that apply to our coastal region, but to also look at where the applicability is statewide or in other specific areas. Initially, we wanted to at least identify where those overlaps were. Because I don't think anyone has a lock on a good idea. If it's a really great action or strategy coming out of rail belt, for example,and it has applicability in coastal, then I think we need to add that on. We’ve developed these silos in each of the subcommittees and now we’re rolling them up, so to say.
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I want to say thanks to Michael Baker staff. I mean, herding cats and dealing with this and all the paperwork back and forth and the editing. I really have two co-chairs. I have Robert as a
technical co-chair, but I also have Clay as a member and both of them actively participated, were
very involved and helped develop our section. So I think there was a good team effort to get us
to where we are at this point.
I also recognize we that we’ve got a lot of work to do as far as polishing. I think we have good foundations. Now it's time to polish it up. Appreciate the time and effort everyone's put intoour subcommittee. Thank you.
Mr. Venables added that Duff did a good recap. Duff mentioned the word polishing. I agree that there’s some word smithing that still needs to be done. But I think the task force can help weigh in on that,when we are at that point. I think that's a good overview. Thanks.
Rural Generation, Distribution, and Storage -Co-Chairs Clay Koplin and Andrew Guy
Mr. Yaffee asked Clay or Andrew for an update from the Rural Subcommittee.
Mr. Koplin stated that I feel like we captured what we wanted to,and this is a fairly finished work
product. So, maybe I'll jump ahead to some ways that this might feed up into the whole task
force. So, for example, this is just from the summary sheets, increased capital availability. That's
something that certainly cuts across the whole task force is funding mechanisms. And there
again, one of a handful of approaches might be the state of Alaska or the task force
recommends that we encourage funding mechanisms that include public/private par tnerships,
collaborating with federal government and so on. But basically an overall statement that says
seek multiple sources of funding for projects to spread the cost and the benefits of them.
So,looking ahead, I think most of these improve economy of scale. The fourth one,in particular,
that maps to every region in the state. And there's the sales side or the revenue side of
expanding sales to better cover the cost of fixed infrastructure. But then there's also an
innovation piece of it. To drive smaller economies of scale through developing small scale wind turbines that can get down to 10 cents a kilowatt hour or small scale localized gas production to feed into markets and so forth.
So I just thought I'd make a couple of comments about how some of these might start mapping up into overall executive summary. And then also just recognize and appreciate the participation from folks from Alaska Municipal League, certainly the Denali Commission, Andrew Jensen from the Governor's office, and Alaska Native Corporations in the rural subcommittee meetings. They helped feed into the discussions and the goals.
Mr. Guy added that with situation being what it is in rural Alaska, anything that we do will be an improvement. If we can mirror in rural Alaska what you have in the rail belt and other urban
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areas, they're proven technologies, they're proven innovation, they're proven economy of scale, they're proven lower cost, everything like that. All of those.
If we can replicate that in rural Alaska, everything will help. But we need to have fortitude to
start the process. And that's where I think the main question will be whether or not this
committee will have the fortitude to begin with a pilot project, say, that can be proved in one area of rural Alaska and could be used as a template to replicate in other areas of the state. That's what I wanted to add. Thank you.
Mr. Koplin added that Andrew reminded him of another point about economic impacts. From his experience, a development can have impacts outside of the project area. For example, aregional hydro project in Alaska. There's going to be a lot of support in construction economy that happens in Anchorage and the rail belt that is an example of an adjacent economic impact.
Another example is if you're de veloping resources that are being shipped or value added processing or something on the rail belt back to local economy and around the marine highway system, around the seafood industry in Cordova that the economic impacts are many times. You have outside corporations that are making profits. They have a value stream that's outside the state. But then that fish gets shipped through Anchorage, a lot of it gets shipped on marine highway system. That creates economies in Anchorage for the marine highway system and so
forth.
So that kind of holistic look about taking the bigger view of what are the broader impacts for the
whole state on regional investments is important.
Mr. Ya ffee shared an observation on what Mr. Koplin said earlier related to the discussion on the
overall organizational framework of the report and the Executive Summary. If we start looking
at these strategy statements, in a way, they become your policy goals. So in the Executive
Summary, we can present each of these sections, whether we call them priority areas or not, but
under them we'll present the strategies. And then have a couple of sentences or a paragraph
describing the policy direction of that strategy, and then these would be the actions to help
implement that. And that could be one way to present that in the Executive Summary. As Duff says, have everything kind of roll up like the nested Russian doll approach.
Mr. Koplin responded that he agrees with Michael’s comment. Those strategies help advise the policy. And it doesn't have to just be one policy. There can be different policies. And I was just reminding myself that we're talking about generation and distribution and storage.
For storage, specifically, a policy might say we want to promote long duration storage. There's all kinds of storage and benefits, and rather than drilling down to a level, just a policy that we want to have adequate storage to make sure that we're being economic and keeping the lights on. But that was my thoughts.
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Mr. Yaffee wanted to follow-up on a comment made by Duff earlier about the names of the different sections. We are looking to the subcommittees to provided that feedback. For
example, Duff mentioned that transmission wasn’t mentioned in their section name, when there
is some transmission involved. So, we want to be sensitive to that and make sure everyone
knows we are open to make those changes.
State Energy Data -Chair Dan White
Mr. Yaffee asked Brittney Smart for an update on behalf of Dan White from University of Alaska, Fairbanks.
Ms. Smart stated that one of the first approaches that we took with the Sta te Energy Data and the Technical Advisory Committee (TAC) that supported that effort is that you can't measure what you don't track. With that said, tracking is just the first step.
We have a lot of data out there, and one of the challenges is making sure that it's accessible and it's in a usable format. And that serves as the primary basis on the recommendations that you see before you. You've previously seen a couple of iterations of these recommendations. So I will focus on the key highlights.
I do want to note in regards to the prioritization in the TAC report that was submitted to the
State Energy Data Subcommittee, which was accepted, there is a full suite of additional
recommendations. I notice that while this report is included in the appendices, it is not included
in your draft today. So the work of prioritization in terms of recommendations was done, at
least in that subcommittee. It has not necessarily been through the rubric that was discussed
today. So I just want to make sure that that aspect is clear.
But the four key recommendations you see before you, the strategies have been prioritized by
the committee. So there's two key changes that I wanted to highlight as part of this. The first
one is adding in specific language as it regards to statutes. So there's just a couple of points.
Number one was just with the establishment of a Data Energy Department within AEA. There
was just a recommendation that should statutes need to be amended in order to ensure that activity gets done, that that recommendation gets moved forward. That doesn't necessarily mean that statute changes have to occur, but if that is necessary in order to ensure that action gets taken and gets funded, then we would recommend doing that.
Half of this next comment is to you, Michael. The other big edit that was provided between previous drafts and this one was ensuring that energy data was very clearly expanded to include thermal and transportation. And Michael, just one thing that I noted that did not translate from the TAC and State Energy Data Report to this new format is that we actually spent specific time and effort into coming up with a definition of what energy data is. And I think it would be important to include that as part of this plan.
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Whether it's this chapter, whether it's a summary, but the definition is information about how electricity, heat and transportation fuels are sourced, generated, stored, distributed, used and
governed, and the impact on the built,natural,and socioeconomic environments.
So, just a general recommendation from the committee. That's just one thing that I noticed that
got lost in translation. However, the edits throughout this chapter did specifically expand energy data to include very explicitly thermal and transportation. And with that, I'm happy to answer any questions you may have.
Mr. Yaffee responded that we're happy to make that change. We'll put it in the introduction here. And obviously, if there's any other edits to the introduction, we can do that. But then also, I just want to note that we will also include it in Appendix One. We're creating an appendix of just definitions related to this. So we'll try and capture that in multiple areas so it's clear.
Mr. H anneman asked did the Data Subcommittee get your specific statute recommendation into this draft, or is it not yet incorporated. Ms. Smart responded that we didn't specifically say what or where. So,no. But we did specifically add language to say that should statute changes be required to do so. We recommend that that take place. Vice-Chair Thayer added that AEA statutes are all in one location. So, it's really easy to identify them because we have a list.
Vice-Chair Thayer asked if there were any questions or comments from folks online. Hearing
none, he asked Michael to move one.
Incentives and subsidies -Co-chairs Nils Andreassen and Isaac Vanderburg
Mr. Yaffee asked the co-chairs for an update.
Mr. Andreassen stated that we've had some productive discussions with our Incentives and
Subsidies Subcommittee members. And great to see more recent participation across the
group. I think the main takeaway right now is we've still got some work to do. What you're
looking at is kind of a first draft, but we've had some good input just in the last 24 hours on
ways to improve this.
I'm really excited to look back at what everybody else has done and to see how these match up. So we'll take some next steps to inform our work based on what everybody else has done. We've ta lked about an upcoming meeting this Friday to continue revisions. But overall, we've taken a strategy and actions report,still haven't done our approach and haven't done further action development. But I think we're looking good for what we're doing. Isaac, is there anything you would add? Mr. Vanderburg stated he had nothing to add.
Mr. Yaffee commented that this current version of the plan doesn't include the newest revisions that the subcommittee was considering just because they missed the pencils down window. So there is active discussion going on at that subcommittee, and there are changes in progress.
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Vice-Chair Thayer asked if there were any questions or comments from task force members in the room. Seeing none, he asked if any task force members online had any questions. Seeing
and hearing none, he moved on to the next item.
Statutes and Regulations Reform -Co-chairs Robert Venables and Karl Hanneman
Mr. Yaffee stated that this subcommittee met this morning. He asked Mr. Venables for an update.
Mr. Venables stated our subcommittee has met. We're really in a mode of collecting from a number of sources, primarily from the other subcommittees. And we're going to ask for those subcommittees in their transmittal to add a little more information or maybe join us at our meetings the next two Tuesdays on the 10th and 17th at 10:30 a.m..
We want to flesh out those recommendations just a little bit more and with an eye to just having enough framework to develop a path forward. Whether it's a legislative path that a statutory change with the legislature, or whether it's regulatory, administrative that the RCA would entertain, or perhaps it's a twofold designation. So understanding that path forward, that input that comes from the other subcommittees and then best attempt to prioritize. If we don't get enough subcommittee experts participating, we will kick the prioritization up to the task force
because they'll need some good input from those that are grappling with those issues and have
that expertise. As we try to boil this down to four or five key recommendations or at least
prioritize the list.
We've also captured input from the Alaska Power Association and gleaned from the
comprehensive economic development strategy of some of the tasks that they had identified
that were applicable to statutory/regulatory reform. So we've got that included. And you'll see
that we're still waiting on an overview of what some of the other states best practices or lessons
learned are.
Michael Baker's building that car while they're driving it to the meeting on the 10th or the 17th.
You'll see a couple of examples in the spreadsheet where they've already placed similar applicable tasks that have been adopted or steps that have been taken by other statess. We're going to get a little more information in the next couple of meetings.
And Karl might want to speak. He and I talked about some of the redundancy. I think it's just a function of the process, but I think there's still some instances where some of the subcommittee documents still have the statutes and regulatory reform items in there. It's probably cleaner to pull those out of those subcommittees and just put it all into this framework here. But we're still working at it. We’ve got a couple more meetings to go, and we invite any of you that are interested to join us on the 10th or the 17th at 10:30 A.m.
Mr. Yaffee added that the next meeting of the Task Force is October 10 at 2:00 p.m.and is currently posted on the AEA web site. At the subcommittee meeting there was the discussion to
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hold a meeting tentatively scheduled for October 10 at 10:30 a.m.. I'm not sure if that's been publicly posted yet. Mr. Venables asked to post both meetings, the 10th and the 17th, at 10:30
a.m. on the web site.
Mr. Yaffee stated that there is a lot happening with the subcommittees meeting on 5th and 6th.
So, we're encouraging some cross pollination on this if committee members are available. We will have the dates posted for upcoming meetings on a later presentation slide. The other thing I just wanted to circle back to was, Karl, you mentioned for this particular section, almost the need to have kind of a section after that. I just wanted to see if you have any additional thoughts.
One of the things you brought up is when we transition from this section, it goes to the next steps section of the report. And a lot of those next steps might be statutory and regulatory in nature. So there is overlap between this section and the next steps section that we can think through. But I just wanted to give you the floor in case there was anything else you wanted to speak to.
Mr. Hanneman commented that he has been reflecting on this matrix that you prepared and wondering if, for simplicity, we could accept the fact that there's duplication and applicability in many of these topics across the different subcommittees and just identify that by the check
marks in the matrix and not try to extract out of the different subcommittee sections everything
related to statute and regulations but leave it as it is. Then we focus on the prioritization effort
that we need to do anyway. Because a list of all the statute and regulation recommendations
that come out of this is going to just get round filed. It is good to have a list and the
background is good to have and necessary. So we'll discuss that at our subcommittee meeting
next week. But I think maybe we can work with this matrix approach that you presented.
Mr. Yaffee opened to floor for any comments or questions from members concerning what Karl
just said.
Mr. Koplin commented that he has been thinking along the same lines as Karl. I think we had
talked earlier about subcommittees trying to bring up one or two things and yet they've done comprehensive work that's going to be captured in the appendices. So just looking ahead over the next few weeks, I'm wondering how we structure and develop that executive summary. Whether with Michael Baker kind of lists where we builds a straw dog that the subcommittee can start with. It pulls those cross cutting themes into some overarching themes. And then my other thought is specific to policy and statutes and whatnot. It sounds like what we talked about earlier is maybe pushing some kind of high level policy guidance forward as a whole subcommittee and then maybe keep the detailed work that the subcommittee did there as anappendix. But I guess my overarching thought is I'm just trying to mentally structure how we're going to actually develop that executive summary over the next few weeks.
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Mr. Izzo supports Karl's comments and observations. I think we've heard this come up a few times during the meeting today and I think it's a good sign because it means we've all gone
through this and we're starting to think about, well, how does this align.
I know one particular case where you've got different subcommittees that are trying to address
the same thing but taking different approaches. I'm aware this report is going out for public comment. And I think that's fine. But we are going to have to rationalize those things as a group and come up with a final recommendation. Is it this one or that one? And then secondly, and more importantly, would be rather than four pages in, as Duff mentioned, on the first or second page I would look for here’s what we want to be and here's what we need to triage and some priorities. That would be my hope for what comes out in an executive summary.
Vice-Chair Thayer asked if any members online had any questions or comments. Hearing none, we’ll go back to Karl.
Mr. Hanneman stated that with that goal of executive summary in mind, I think, well, policy is important, and we want to set some high level policy. We've got to go farther than that. We've got to present some actionable items that we can help communicate and get traction on.
Mr. Mitchell stated that he is reiterating and preaching to the choir. I think, bottom line, up
front, priorities and or what is our big item that's going to get the most rate out of legislators.
It's going to help us get our actions and help us transition from all this planning, great work
we've done into actual implementation and getting momentum and gravity behind where the
Governor wants to take this. So I think that's just echoing those useful comments. Thank you.
Vice-Chair Thayer asked if there were any other questions or comments from task force
members. Hearing none, he moved on to the next agenda item. Task Force members decided
to keep going through the agenda.
b. Break -no break was taken.
6. Draft Report Editing
Vice-Chair Thayer asked if the editing needs to be discussed here or will take place through the scheduled subcommittee meetings. Mr. Luken responded that we have subcommittee meetings scheduled to start the editing process after members have had a chance to review the draft plan.
a. Subcommittee calendar dates for report edits.
Task Force Proposed Work Schedule
Vice-Chair Thayer added for the group, the next two full task force meetings will be by Teams and it's for public testimony. We will do public testimony from 2:00 to 4:00 p.m. on October 10th and October 24th here in this room.
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Everybody is invited to call in. The Lieutenant Governor, possibly Clay, and I will conduct that
meeting. Oral public comment on our work product will be limited to three minutes per person
or organization and will be transcribed. We are also accepting written comments. So, both the
oral and written comments will be combined and sent out to task force members to review.
And keep in mind that public comment might influence some of our tasks because the task force, the subcommittees are still finalizing and making recommendations. So this is a work in process to meet our deadline. We can't just stop, wait and then restart. We want to work it together.
And then the goal is on October 31st, we have an all-day meeting here in this room starting at 9:00 a.m. to 4:00 p.m. The goal of that meeting is to review and vote on the recommendations by the subcommittees. So we have everything approved and move forward. Then we would turn it over to Michael Baker, who will send the report back to us via email on November 10th. It will also be publicly available. Then, a week later on Friday, November 17th, we will have one final look at the report. It could be a Teams meeting.
We will look at the executive summary along with everything there. And then the plan goes back to Michael Baker for any editing or formatting fixes.The final plan would be due on
December 1 to the Governor.
So it kind of gives us time to walk through the public process, walk through the voting, and then
have an opportunity to look at the product when completed, just to make sure it is the product
in the formatting that we discussed on the 31st.
Mr. Luken added that as the subcommittees meet to put the final words to paper in their
portions of the report, that there would be time set aside to actually come up with what are our
priorities. So whether we use prioritization tool or some other means, but that our
encouragement to each Subcommittee is that you find those actions that you want to put
forward as recommendations for the task force to consider as the actions that you're going to
send forward to the Governor.
Ms. Miller asked if for the October 31st meeting, can we set aside time to have a focused conversation on the executive summary? Vice-Chair Thayer responded yes.
Mr. Hanneman asked Curtis if we might ask each of the six subcommittees to present a list of four or five of their top priorities so we can start circulating and discussing those so that it doesn't all come down to the crunch at the end. Because if we want for the executive summary to come up with the top five or seven or something, we're going to have to pick from that. And not all of subcommittee's recommendations will make the cut. But we have to start discussing which ones we think as a group should. But the best way to start is to have the subcommittees bring that forward and earlier, I think the better.
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Vice-Chair Thayer responded that he doesn’t disagree with the suggestion. As the subcommittees wrap up their work and recommendations, we will make sure that gets out to
everybody on the task force and make it publicly available as well.
Mr. Koplin commented about the overall report. So, I know we're on subcommittees, but in the
structure we have an introduction to the report planning process and then energy in Alaska. One of the things I've really liked about this process is capturing a lot of the historical energy and regional studies that have been done and populating those onto the task force website where they're accessible.
And as I look at data or repository going forward, that's a great thing to have access to. But just from past experience, a lot of times this process is a snapshot and what you really lose from those past reports is the context. And it can be really hard to pull those out,if you don't actually talk to some of the people that are involved with writing them. So I think back to 2007 and 2008, the context was exploding energy costs, especially in rural Alaska, as diesel fuel prices spiked,and the economy collapsed. And you saw things like the state writing energy assistant checks and things that you might look at out of context and say, what the heck was the state doing?
But that's one of the things that we have a context for where we're at right now in terms of we're
facing looming natural gas supply shortages, where we have unprecedented federal funding
available. There's are these things that provide the context for what we're doing. I think that
would be great to somehow capture that kind of energy in Alaska. The background, which is
actual context of this report. So when you kind of refer back to it, it just creates that context.
Mr. Mitchell had a question about the schedule. I'm looking to see on this work schedule here is
if there's any feedback loop and calibration from either the governor's office or from the chair,
because we could be coming up with all kinds of recommendations and maybe the 10th in
priority recommendation from the task force may be actually a much higher priority from those
that have appointed us to serve on the task force. I know our job is to make recommendations,
but I just offer that if there's a feedback loop because I would appreciate that guidance in the
prioritization of where we're at and maybe I'd just like to have some color on that.
Chair Lieutenant Governor Nancy Dahlstrom responded that there is a feedback loop. When we are completed, I think that we'll be looking good all around. So don't worry about that when we’ve got it covered.
Vice-Chair Thayer added that it’s safe to say that the Governor is informed of what we're doing. He is keeping tabs. I've gotten a text or two that he might even be at one of our phone calls. So, yeah, definitely there is a feedback loop that I think Nancy, our lieutenant governor, will be our official conduit for that.
7. Next Meeting Date/Closing Remarks
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a. Tuesday, October 10, 2023, 2:00 p.m. via Teams.
Vice-Chair Thayer went around the room and online for closing remarks from task force
members.
Mr. Sims had no comments today.
Ms. Miller had no additional comments. Thanks.Unidentified Member 1 stated because someone asked me earlier today what do they feel about this overall process, and I would still say that I feel like the work product in progress to date has actually exceeded my expectations for a list this big on such a short timeline. And I think that's a reflection on the people. Everything from the energy symposium series to the work that the subcommittees and committees have done is commendable.
Chair Lieutenant Governor Nancy Dahlstrom thanked everyone for the time and effort that's been put in. And it's nice when you have an end date of a project that's this size, isn't it? Because psychologically, it helps us to get there. But I do understand, and I respect that you all spent a lot of time and effort to do this correctly. So thank you.
Vice-Chair Thayer stated that on my behalf, I would like to thank everybody and the time and
effort. Because when we started this and looked at the task before us,and some of the road
bumps we had,to where we landed today, we are in a great place. And it couldn't have been
done without everybody. Especially when we committed early to doing these half day and full
day meetings. And the subcommittees have now taken on full and half day meetings. And so
with that, I just can't thank everybody enough for the work that they put in. And I think at one
point I asked Michael Baker, how many hours have we put into this based on just the noticed
meetings? I think it's safe to say right now, we're over 170 hours when you look at collectively all
the meetings we've had, and a few people have been at almost all of them, because I recognize
names. Karl's been on calls after calls and from different subcommittees, and it's all been great
work. So I want to thank everybody for that.
Mr. Izzo stated that he echoes those comments and sincere thanks to the Governor and the task force leadership. Lieutenant Governor Nancy Dahlstrom, co-chairs Clay and Curtis. I’ve been involved with these kinds of efforts--although nothing at this level--for over 20 years in Alaska. And I'm feeling very optimistic about where this is going.
Unidentified member 2 had no further comments.
Mr. Mitchell stated just remember, everybody, that all plans work until the bullets fly. So we got a little bit of work to do, and I think we're on a really good pathway. And I think the commentsfrom the chair and the co-chairs speak to where we're at. Thank you.
Vice-Chair Thayer asked if anyone else online wanted to make a comment. Hearing none, task force remarks was closed.
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8. Adjourn
There being no further business of the Task Force, the Alaska Energy Security Task Force
meeting adjourned at 3:12 pm.
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Alaska Energy Security Task Force
DRAFT MEETING MINUTES
Tuesday, October 10, 2023
Anchorage, Alaska
1.Welcome and Introductions
Chair Lieutenant Governor Nancy Dahlstrom called the meeting of the Alaska Energy Security
Task Force (AESTF) to order on October 10, 2023, at 2:00 p.m.
2.Roll Call
Members present: Chair Lieutenant Governor Nancy Dahlstrom; Vice-Chair Curtis Thayer; Clay
Koplin; Joe Byrnes for Commissioner John Boyle; Karl Hanneman; Jenn Miller; Duff Mitchell;
John Sims; Robert Venables; UAF Chancellor Daniel White; Ex Officio: Anne Rittgers for
Senator Click Bishop; Commissioner Keith Kurber; Representative George Rauscher; Erin
Whitney.
Also present were Andrew Jensen, Policy Advisor to Governor Dunleavy; Michael Yaffee and Marc
Luken, Michael Baker International (consultant); and Jennifer Bertolini, AEA. (Jennifer to confirm)
A quorum was present to conduct business.
3.Public Comments
Chair Lieutenant Governor Nancy Dahlstrom stated that the purpose of today’s meeting is to
accept public comments on the draft Alaska Statewide Energy Master Plan. In the interest of
time, we are limiting comments today from each person to three minutes. In addition, we are
accepting written comments until 4:00 p.m. on Tuesday, October 24th. Please send your written
comments to:
info@akenergysecuritytaskforce.com
The floor was opened for comments from attendees in the room. Instructions were given to
online folks to raise their hand in the Teams app to be recognized. Chair Lieutenant Governor
Nancy Dahlstrom also asked Task Force members if they had any questions or comments to
share.
June Okada (ph) - My name is June Okada, and I am commenting today on the draft Alaska
Energy Security Task Force report. Specifically on Priority A-2.3 in the Railbelt Transmission
Generation and Storage section. I speak on behalf of the Susitna River Coalition. And our more
than 14,000 individuals and businesses who support our work.
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Diversifying our local energy generation to conserve the diminishing Cook Inlet gas supply is a
necessity at this point. However, we believe the proposed Susitna-Watana Hydroelectric project
clearly warrants a no-go decision without moving forward with further feasibility assessments.
The Mat-Su dam is estimated to cost $7 billion in 2023 value, according to a recent presentation
by the Alaska Energy Authority. This is a gross underestimation, and it does not consider the
new, costly transmission lines that would have to be built. Nor does it include the costs
associated with purchasing or leasing native corporation lands that the dam would exist on. In
addition, state funds would also be required to mitigate damages to the Susitna’s salmon
fisheries. These would all add a significant amount to the already hefty price tag.
Taking meaningful action to create economically responsible and clean energy systems for
Alaskans means deciphering what projects will create the least harmful impacts for decades to
come. Mega dams are not carbon neutral and therefore cannot be considered clean energy.
Reservoirs release methane, and the EPA now includes dams in their greenhouse gas reports--
disparaging claims that large hydro projects reduce carbon emissions.
With our rapidly changing climate, Alaska's glaciers are melting at an alarming rate and causing
river flow pattern changes. Extreme floods and droughts are more frequent, and water
availability fluctuates unpredictably. Without accurate understanding of the timing and
magnitude of deglaciation, a dam's size and scale has uncalculated risks and is inadequately
reliable, and unsafe. Above all, the Su Dam would embody the collapse of south central Alaska's
river life, its economy and ecology. The eradication of its unique ecosystems, the destruction of
one of Alaska's most valued salmon spawning and rearing habitats, and the flooding of 40,000
acres teeming with wildlife. The Su Dam is not a silver bullet for clean energy, carbon reduction
and lower energy rates, and remains costly with (indiscernible--cough). Thank you for your
consideration today and for the opportunity to make a public comment.
Chair Lieutenant Governor Nancy Dahlstrom thanked June for her comments. And recognized
Gretchen Keiser.
Gretchen Keiser - My name is Gretchen Kaiser (ph). I'm a board member for the Alaska Heat
Smart. Annie Romanoff, the executive director of Alaska Heat Smart, testified earlier this
summer, but is unavailable now. Alaska Heat Smart is a nonprofit organization that provides
education and in home space heating technical assessments to Juneau homeowners on
converting their homes to heat pumps.
Alaska Heat Smart works communitywide and also operates programs focused on lower income
households. In 2023, Alaska Heat Smart initiated a pilot project in Sitka, our neighboring
community. Our results since beginning operation in 2020 indicate Alaska Heat Smart technical
assistant yields about 75% conversion by participating homeowners to heat pumps. Home
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energy cost savings average over 50%, or $1200 to $1,800 a year, depending on the previous
heating system. And significantly, Alaska Heat Smart educated homeowners means streamlined
upfront work required of local installers. These small businesses can complete more projects,
hire additional technicians, and improve their bottom line.
With that background on Alaska Heat Smart, I support the following strategies and actions in
the Draft Energy Plan. And I'll just enumerate them as they're identified.
Action B-1.6, which is Enhance Alaska Workforce for Beneficial Electrification. Alaska Heat
Smarts experience has been that we have had to grow our own workforce over the past five
years.
Action B 4.1 Promote Heat Pumps in Coastal Alaska. Alaska Heat Smart fields many calls if there
is growing interest from Ketchikan to Kodiak. Heat punts are highly efficient and proven
technology, and the cheapest energy source is energy efficiency.
Priority D - State Energy Data. We wholeheartedly endorse this priority. Alaska Heat Smart has
been able to use its data mentioned above to justify successful local and federal grant funding.
Priority E Incentives and Subsidies, Strategy E-4.3 Alaska Heat Smart supports a state green bank
for financing community energy efficiency projects. It's a question of scale. With more money,
we could do more houses.
Strategy E-6.3 Increase State Resources for Community Energy Efficiency Programs. We would
suggest that the state use established local organizations such as Alaska Heat Smart for cost
effective delivery to Alaskan households, especially as substantial federal clean energy funding is
now coming to state agencies. That concludes my comments. Thank you very much for your
hard work on this draft plan and we're all go for it.
Chair Lieutenant Governor Nancy Dahlstrom thanked Gretchen for her comments. She
recognized Steve Behnke for his comments.
Steve Behnke - Hi, I'm Steve Benke and I'm with the nonprofit Renewable Juneau. We're a
501(c)(3) that provides information and advocacy for renewable energy in the state capital.
Projects that we work on include public support for benefits, electrification in Juneau, energy
efficiency, and renewable energy, including heat pumps, electric vehicles, energy efficiency,
cruise ship dock, shore power, all things that reduce energy costs, keep money circulating in the
local economy, and reduce the price shocks of oil.
We've supported and advocated for the City and Borough of Juneau's (CBJ) renewable Energy
Strategy. We've been partners in creating Alaska Heat Smart, who just presented. We've also
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raised money for the installation of heat pumps to replace oil heat and reduce heating costs in
lower income homes. In Juneau have done about 40 installations of heat pumps and we're
expanding our program to Sitka and Ketchikan. We've been following the development of the
State Energy Master Plan. Appreciate the chance to testify. We see some big opportunities for
the state to improve Alaskans' access to lower costs and cleaner energy.
I'm just going to tell you briefly a little bit about Juneau's experience to make some points about
the kinds of things that the state could really help more on. In 2019, the City and Borough of
Juneau adopted the Juneau Renewable Energy Strategy, which calls for shifting total energy use
in the community from about what was about 20% of the community's total energy use in 2019
to about 80% by mid-century. We just completed an update of the goals of the General Climate
Action Plan and Renewable Energy Strategy, and we're actually now at about 25% renewable
energy for the total energy use in the community.
There's been a significant shift in heating, which has been one of the major changes over the
past decade, with heat pumps increasing from a couple of hundred heat pumps, five-six years
ago, to approximately 2,000 now, which is almost 20% of the community heating with heat
pumps. As Gretchen mentioned earlier, that has a big impact because every time somebody
shifts from an electric resistance or oil heat in Juneau to a heat pump, they can save about 50%
on their heating bill. So Juneau intends to make this shift by supporting Alaska Hear Smart’s
budget. It also is working on supporting electric vehicle adoption, supporting energy efficiency
and increased electrification of local, state and federal government operations and by
supporting electrification of industrial energy use, including local mining operations and
connecting cruise ships to shore power while docked in Juneau.
Obviously the CBJ can't do all of this alone. And it could do it a lot more effectively, I think, like
almost all the communities, certainly all the rural communities and most of the smaller
communities in the state, it really could be a lot more effective if it can join forces, if it can get
broader support from the state, and a number of the items in the master plan head in that
direction. So I'm just going to mention a couple of those things.
Certainly, the strategies that deal with providing better information on energy supplies and uses
is a major element of that. We found we have to spend quite a bit of money on pulling that
kind of data together. It's one thing for Juneau with our 30,000 people to do it, it's another
thing for communities of 500 or 22,000 or 10,000 to do it. So that's somewhere the state could
really help out and help everybody in the state.
The other thing is support for financing. Again, we've worked on financing programs within
Juneau and have made some headway there with local community financial institutions
supporting heat pump adoption loans for those. But again, it would be a lot more effective if
there were the Green Bank, State Green Bank, for financing community scale energy efficiency
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and beneficial electrification programs. So we think that the state could contribute a lot to those
things.
The other big area the state could do is reduce some of its own institutional barriers to
programs. Renewable energy projects are complicated. They often involve big upfront costs,
but they also can get bogged down in the minutiae of utility regulation that really wasn't
designed to deal with renewable energy development. I think looking back, we can see a
number of cases where there have been useful projects that got delayed because the regulatory
commission doesn't have a mandate to look at those elements of the public interest. So we
support a number of the actions, particularly actions listed under the Strategy B dealing with
coastal areas, a lot of which specifically target the kinds of areas that we care about. Thanks for
the chance to testify.
Chair Lieutenant Governor Nancy Dahlstrom thanked Steve for his comment. She asked if
anyone else wanted to share their comments. Hearing none, we will mute the microphone until
someone joins us and wants to speak.
Mr. Huckabee (ph) - (indiscernible--poor audio) Friday and the notice was for today. When
people say the cheapest cost of energy available, is that as a cost analysis overall, as an energy
supply, or to other people having that request? (indiscernible--poor audio)
Chair Lieutenant Governor Nancy Dahlstrom advised Mr. Huckabee that his phone is cutting in
and out and the team is not able to hear him. She also advised Mr. Huckabee that we are not
answering questions today, we’re taking public comment. And so we would be happy to take
that for the record.
Mr. Huckabee (ph) - his public comment is that this is awfully short notice on an important
topic. We saw the notice on Friday for the meeting today, and that's why I don't think you're
having anybody call into this thing. It's middle of the workday when other people have to do
their doesn't seem like an appropriate time. And my comment would be that it seems like
people are talking about costs at the cost of others, whether it be the State of Alaska taxpayers,
and I think if we were talking about energy costs in our homes, that the cost analysis without
(indiscernible--poor audio) that's my comment.
Chair Lieutenant Governor Nancy Dahlstrom thanked Mr. Huckabee for his comments. She
wanted him to know that we did advertise this meeting on social media starting last Friday.
However, the meeting followed all the notification regulations, and it has been publicly noticed
for the last 21 days.
She asked if anyone else wanted to share their comments. Hearing none, we will mute the
microphone until someone joins us and wants to speak.
Page 6 of 14
Chair Lieutenant Governor Nancy Dahlstrom recognized Mr. Ken Griffin for his comments.
Ken Griffin - My name is Ken Griffin and I have no affiliation. I'm just an Alaska citizen. When
will we be able to testify? I mean, listen, I'll be honest. I agree that the notice is very short. I
paid into stuff like this, and I just found it out. Of course, I don't use social media, so I don't
think that's necessarily an appropriate way to get a hold of people. But maybe you could
mention where I could find the future dates. Because listen, I'm interested in reading this
document you guys put out, but it's quite a large document in draft format, and I need days to
go over something so important. But I definitely want to be able to testify. I definitely want to
be able to make public comment.
I see there's another meeting coming up, looks like on the 24th. Obviously, I work a job during
the day. I'm an everyday citizen, so I have to stop my job if my employer allows me to, to give
public comment on such things. But I try to make time for it. But if you guys could find other
ways to really get this out. I'm not sure if it's on the dot.gov or maybe I'm looking at the wrong
place for it, but it was really short notice, and this is an extremely important topic since Alaska is
super energy dependent. It's extremely important the cost of energy out here. And the choice
of fuels that we all want to use. Obviously, this energy board is going to be a big deal,
especially as I read some of the writings. So could you address a couple of those things?
Vice Chair Curtis Thayer responded that yes, we did publicly notice this meeting through the
normal State of Alaska in the proper notification time. These dates were also on our website
and referred to the website for the last several weeks, if not months. And what we did is we also
did social media posts and those were put up last week.
And sometimes if you look at those, it depends how they've been pushed or how people share
social media posts when they do it. So the social media posts were within the last week.
However, the actual notification of this meeting, and that was done in several weeks ago. And
this report, in its entirety, was just available at our last meeting. And so we apologize if the
social media posts were late, but we did go through the state system and through the proper
notification with all the documents. The social media was just to add to encourage public just in
case we miss people through the notification process. Apparently social media is a better hit.
But we also allow written comments through the 24th at close of business. And then also we'll
have more public comments on the 24th. So that would give you time to look and read the
document for your next testimony. But thank you very much.
Mr. Griffin asked if the Task Force will take actual public testimony, where you guys will answer
questions? I'm a little confused as to whether or not we're going to read this document, have
questions of the validity of it or the content in it, and then be able to come to you guys for
clarification of questions. Forgive me, it was a little harsh here. We're not answering questions,
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you're just going to comment and that's what you get. I was a little astonished at that
considering that somehow I feel like this is a state thing. So when will you guys let us testify to
what we've read and ask questions and get questions answered about the material that you
guys put out?
Vice Chair Thayer responded that we appreciate his comments. Just in context, we have met
publicly since April, and we have met for over 200 hours in both full committee and
subcommittee. Those meetings have all been publicly noticed and on social media and been
available for the public to attend as we've gone through this process.
And the purpose for today's meeting was with the report in the draft format and that was to
take public comment based on the draft format that is here to see if there's things that we
might have missed or things that we need to hear from the public on particular questions on the
task force. And our next meeting is October 24th.
For example, one of the subcommittees met today and another one met yesterday. They're all
publicly noticed, and some subcommittees have been meeting for 7-8 hours. So we've had over
200 hours of public meetings thus far on this document, where we started with a clean slate to
where we are today with a document before you.
Mr. Griffin asked if he will be able to ask questions on the 24th and have those answered if the
answers can be provided. It just sounded like the last person that spoke was asking question,
and I'm not sure I didn't catch because I don't see everybody's video. Sounded like someone
said, we're not answering questions today. So on the 24th, as I go through this document, will
you be answering questions then?
If you have questions of the document, I would appreciate if you could do that in writing so we
can consolidate and provide answers.
Mr. Griffin stated you will not provide answers in audio format. I don't know. Listen, no offense,
but I'm a father, I'm a husband. I have two jobs. It's very difficult for me to sit down, write a
letter, send it off to you, and get it answered in time before or even hear time. I barely heard
about this notice, and as I said, I pay attention to these things. So I'm kind of surprised you
don't answer questions in the Zoom meetings. I mean, I've stopped my whole workday just to
get to this Zoom meeting.
Vice Chair Thayer responded, again, we've had over 200 hours of public meetings and have
dressed comments there. Plus we have a symposium series that took questions for 16 hours on
various topics throughout this process. But I understand your concern. If you would email your
concerns or email your questions, then we can attempt to answer the questions. And keep in
mind, everybody on the task force is a volunteer in a similar situation. And so we want to be
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sensitive of their time to make sure we do answer the public's questions, but also have time to
respond too. To make sure you have the most accurate information.
Mr. Griffin responded, I thank you for your time. But as I sit here and this meeting is completely
silent, maybe one or two people spoke, I would think there'd be plenty of time for citizens to ask
questions. And it sounds like you guys are unwilling to do that in an audio format where it's the
most convenient for citizens to do.
Vice Chair Thayer asked Mr. Griffin if he has a particular reference or section on one of the
strategies or numbers that you would like to have addressed?
Mr. Griffin responded that he will on the 24th. I printed out this huge document, and I've been
going through it all night. So, yeah, on the 24th, I will have some serious questions. I already
found a bunch, but I'd like to have them all coordinated and ask the most important ones, since
even in public testimony as important as this one, it sounds like we're only going to get roughly
three or four minutes to ask these questions. So I wanted to make sure I asked the most
important ones, the most highlighted ones, if you will.
And I haven't completely gone through the document. So, some questions that I have may be
answered in that document, I don't know, because I just got my hands on it. So I will love to
hear that in audio format. We could ask them on the 24th, because for me, that's the most
convenient way, being that I have to stop my work to do everything to get into these meetings.
That's very crucial for me. I appreciate that.
Vice Chair Thayer responded that he understands the situation and thanked Mr. Griffin for his
comments. Again, if you wish to email anything so we can respond to you directly, we can do
that too.
Chair Lieutenant Governor Nancy Dahlstrom asked if anyone else wanted to share their
comments. Hearing none, we will mute the microphone until someone joins us and wants to
speak.
Vice Chair Thayer asked Mr. Griffin if he had another comment. Mr. Griffin asked when the 130-
page document was released to the public. He found it on Friday. Vice Chair Thayer responded
you found it on social media as an attachment. It was released through the State of Alaska
Public Notice System earlier in that week with proper notice. And then also, as previously
stated, it's been an ever evolving document throughout the course of the summer and the fall.
Mr. Griffin responded that somebody sent it to me. I don't do social media. I just don't. I don't
have a Facebook or whatever. But somebody did send it to me. They texted it to me as it's an
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area I like to read about. But the final draft, the draft, I'll call it the final draft, which is the last
draft I received that was released when? You said earlier this last week?
Vice Chair Thayer responded yes. It was done through the public notification system, and then
we augmented it through social media. And it sounds like you received it through social media.
Mr. Griffin stated he received it through a third party. Actually, I got it through text message.
Again, I don't have social media, but I just received it recently. And I'm just trying to figure out
how much actual time was given to the public to review 130 pages. That's all. Just curious. Vice
Chair Thayer stated that the report has been available in different formats for the last several
weeks. But I don't know the version that you have in hand that was provided through text.
Chair Lieutenant Governor Nancy Dahlstrom asked if anyone else wanted to share their
comments. Hearing none, we will mute the microphone until someone joins us and wants to
speak.
Ken Huckaba (ph) - Ms. Bertolini stated that Mr. Ken Huckaba (ph) has submitted some
comments online, and I'm going to read them into the record.
1. There is a statement repeatedly made as an assumption that electrification lowers costs.
Probe that supposition or remove it from the plan.
2. Why push to develop renewables on federal land and develop and not develop and
produce oil and gas?
3. Why should the state be in the business of workforce training. If it's truly competitive
and cheaper, wouldn't generating companies do this themselves?
4. There is an inaction item to identify burdensome regulation. Isn't this more burdensome
regulation?
5. Is there a program to pay for the 70% of the generation that renewables can never
make? Why should we adopt net metering to pay for renewable when they often make
power when it's not needed?
6. Lastly, he states, does this establish authority over utilities and co-ops?
Chair Lieutenant Governor Nancy Dahlstrom stated that it’s 3:30 p.m., and we don’t have any
hands raised. She asked the Subcommittee chairs if there's anything that you would like to
report out. And if those of you who are online could also state the time and location of your
next meeting.
State Energy Data - Chancellor White stated that he’s happy to bring up that the subcommittee
on data produced a report. We had a very broad group of stakeholders that was called the
Technical Advisory Committee, which was led by Brittany Smart at the Alaska Center for Energy
and Power. We came up with a SWOT analysis and a number of goals that we thought would
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help the state in analyzing energy needs and the energy position of all of our locations. So I
think there's a lot there and there's a lot of opportunity.
We don't currently have a next meeting scheduled. We'll respond as needed from the Energy
Task Force overall. But I think a lot of very good work was done and a lot of stakeholders were
involved in producing the SWOT analysis and the recommendations. And we appreciate the
work of the task force and look forward to modifying or adjusting as appropriate. Thank you
very much.
Chair Lieutenant Governor Nancy Dahlstrom thanked Chancellor White for his update. She
asked Mr. Duff Mitchell for an update.
Coastal Generation, Distribution, and Storage - This is Duff Mitchell. I'm the co-chair of the
Coastal Subcommittee. And I would just like to point out that the Coastal Subcommittee met
numerous hours, took public testimony, listened, and listened well, incorporated public
comments in our meetings into our recommendations, and feel like we've come together with
some good recommendations for the coastal sections of our Alaska and our economies. Like
Chancellor White said, we have October 20 scheduled as the next date. However, it's to
primarily listen and take incorporation of the public comments forward and discuss those as
they need to be discussed in relation to the Coastal Committee. So that's my report, Madam
Chair. Thank you.
Chair Lieutenant Governor Nancy Dahlstrom thanked Mr. Mitchell and asked Karl Hanneman for
an update.
Statutes and Regulations Reform - Karl Hanneman here for Statutes and Reg Subcommittee
with Robert Venables. And we had a meeting today where we haven't taken public testimony in
our work because we've primarily been looking at the recommendations of the other
subcommittees. But we did seek input from Alaska Power Association, and we participated in
several of the symposiums that gave different perspectives on a number of issues. So we have
another meeting next Tuesday, October 17th, and look forward to wrapping up our work on
schedule.
Chair Lieutenant Governor Nancy Dahlstrom thanked Mr. Hanneman for his update. And asked
Tony Izzo for an update.
Railbelt Transmission, Generation, and Storage - Good afternoon, Lieutenant Governor. As
co-chair of the Railbelt Subcommittee, pleased to report that we are in the process of fine-
tuning our recommendations primarily in the areas of infrastructure meaning transmission
generation and the diversification of fuel supply as well as economic development options to
grow load, which will help spread costs and as a result reduce the cost of power.
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We do not have meetings scheduled. As mentioned by Mr. Thayer, our meetings have been
attended by a wide variety of people. All of them have been subject to the Open Meetings Act.
We've received public input from a variety of stakeholders, including railbelt utilities, the Susitna
River Coalition and others. Greatly appreciate that input. We're looking forward to this and the
next scheduled public comment session, which will inform us in how we finalize those
recommendations for our full Task Force meeting, I believe, on October 31.
Chair Lieutenant Governor Nancy Dahlstrom thanked Mr. Izzo and asked Clay Koplin for his
update.
Rural Generation, Distribution, and Storage - This is Clay Koplin for the Rural Generation,
Transmission, Distribution and Storage subcommittee with Co-chair Andrew Guy. We also had
fairly good public participation and comments, and we did incorporate those into our strategies.
I think some of the positive comments in today's public testimony reflected some of those
items.
We do have one more Rural Subcommittee meeting this Thursday at 1:00 p.m. Primarily, there
were a few expected outcomes that we hadn't populated in the matrix. So we're just putting
some placeholders in there for discussion. And that should be our final meeting before the
meetings of the Task Force as a whole in the next public testimony on October 24th. Thank you.
Chair Lieutenant Governor Nancy Dahlstrom thanked Mr. Koplin for his update. She stated that
we have about 25 more minutes of time available for public testimony. But I'll go ahead and
announce that our next meeting is going to be Tuesday, October the 24th, and we did hear the
request that was made earlier by a few about the time of the meetings. And so we are going to
adjust our time. And the meeting will be held Tuesday, October 24th from 5:00 to 06:00 p.m. for
public testimony.
Some of us will be here in this room and anyone is welcome to come here, or you will be able to
join the meeting by Teams and that dial in information will also be online.
Ken Huckaba (ph) - Ms. Bertolini stated that Mr. Ken Huckaba (ph) has submitted additional
comments online, and I'm going to read them into the record.
1. How does hydrogen lower cost? It is eight times less efficient than just burning natural
gas.
2. Who pays for distribution and infrastructure that does not exist?
3. What happens when the IIJA and IRA money runs out?
4. And lastly, everywhere renewable portfolios have been adopted, costs have gone up
drastically. Will benchmarking on other programs be conducted?
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Chair Lieutenant Governor Nancy Dahlstrom asked Clay Koplin if he had any additional
questions or comments? He responded no additional questions or comments at this time. I was
glad to see fairly good public participation and glad that there's a second opportunity on
October 24th for people to review materials and as Curtis pointed out, opportunities to post
testimony online through the email address, their written comments, and to prepare for that
second bite at the apple on the 24th. Thank you to all the committees for their many, many
volunteer hours of work on this project.
Vice Chair Thayer commented that he was looking at his notes and realized that the Rail Belt
does have a subcommittee meeting scheduled for Tuesday, October 17th from 1:00 to 3:00 p.m.,
which is publicly noticed. And it will be available through Teams. So we do have that one
coming up.
Chair Lieutenant Governor Nancy Dahlstrom asked if anyone else wanted to share their
comments. Hearing none, we will mute the microphone until someone joins us and wants to
speak.
Chair Lieutenant Governor Nancy Dahlstrom recognized Mr. Matt Jackson.
Matt Jackson - My name is Matt Jackson of Sitka, Alaska. I'm here to comment mostly on
Action B 2.1 about the Alaska/Federal Energy Renewable Policy Task Force to coordinate plans
between the state and the federal government. I think this is a noteworthy goal to try and
coordinate between the state and the federal for the purposes of developing renewable energy.
I think that's a very worthwhile goal.
There are two points that I wanted to make, though. In the background opening paragraph, it
states that some of America's highest cost energy communities are in the Tongass and Chugach
national forests. I feel that's a little bit of a disingenuous statement because some of the United
States's cheapest energy also comes from communities within the Tongass National Forest, for
example, in Sitka, where I live, or in Juneau or elsewhere. And there's even more expensive
energy coming in other parts of the state in western and northern Alaska. So it's clearly not the
Tongass that is the problem. It's just simply the geography of remote villages, and that extreme
circumstances, even more extreme in other regions that are not surrounded by national forests.
So that background, I just simply don't think that's an accurate or useful statement.
As far as how we get there, there was an action item. I'm scrolling through the plan now
regarding a federal seek and negotiate obtained through agreement or federal legislation a
renewable energy land use designation and transmission line land use designation or what
overlay on the Tongass and National Forest Land Use Management plan. If I didn't mention it in
my introduction. I work for the Southeast Alaska Conservation Council, and we've done a lot, a
lot, a lot of work on national forest plans. And to propose a new renewable energy land use
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designation (LUD) for the National Forest is, in my mind, a little redundant with the municipal
watershed LUD that already exists. So I don't see a strong need to create a whole new type of
LUD when municipal watershed LUDs already exist.
If there's a project that a community or utility wants to develop, there's an existing mechanism
for doing so. The Tongass National Forest, also in their current LUD map, already has existing
and proposed transmission lines shown on their west, including even pretty intensive, I might
say almost radical ideas like a proposed transmission line going from Sitka to Angoon, which is
almost certainly not going to happen for economic reasons.
So again, creating a new transmission line LUD is unnecessary. It would also have the effect of
fracturing other LUDs because transmission lines are narrow, linear things. They don't have the
same shape as other land use designations. So it would kind of just throw a wrench in the
whole LUD map making process to have these narrow, skinny LUDS dividing up all the other
LUDs. It's kind of impractical.
And the final comment I had was just on the idea that these two proposed LUDs would have
priority over all other LUDs. That's just unworkable. Even if these two types of LUDs were good
ideas, the idea that they would have priority over all other land uses is just not a reasonable,
balanced approach to land management or land use planning. That being said, I don't
particularly think those two LUDs are even good ideas to begin with. But even if we did get that
far, to propose that they have priority over all other land uses does not seem wise to me.
I guess a final procedural point would be that I actually didn't know that this meeting was
happening until about 15 minutes ago. And I intend to provide some more detailed comments
on the rest of the plan at your October 24th meeting. But I would love to see better notice,
more public notice, more lead time and more opportunity for public comment on such an
important document as this energy plan, which, in the short time I've been able to skim the plan
looks mostly fantastic. I'm very excited, I'm very grateful that you all are working on this. The
state obviously needs a lot of investment in planning it's renewable energy and energy security.
So thank you for all that work. I just want to make sure the public has time to digest it and
make it as good as it can be. So thank you for this opportunity.
Chair Lieutenant Governor Nancy Dahlstrom thanked Mr. Jackson for his comments. We
appreciate them. She announced that we have seven minutes remaining, if there are any other
public comments. Hearing none, we will mute the microphone until someone joins us and
wants to speak.
Chair Lieutenant Governor Nancy Dahlstrom stated that it is 4:00 p.m. We are going to end this
session of the Energy Task Force public comment. We appreciate all those who called in and
gave their testimony today.
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4. Next Meeting Date - Tuesday, October 24, 2023, 5:00 p.m. via Teams
Chair Lieutenant Governor Nancy Dahlstrom announced again that our next meeting is going to
be Tuesday, October 24, from 5:00 until 06:00 p.m. for public comment on the draft energy plan.
Please look on the website for the mailing address if you wish to send written comments and for
the address of our meeting location if you would like to attend in person on the 24th. Also on
the website is the Teams link, if you would like to call in. We look forward to hearing from folks.
5. Adjourn
There being no further business of the Task Force, the Alaska Energy Security Task Force
meeting adjourned at 4:00 p.m.
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Alaska Energy Security Task ForceDRAFT MEETING MINUTES
Tuesday, October 31, 2023
Anchorage, Alaska
1.Welcome and Introductions
Chair Lieutenant Governor Nancy Dahlstrom called the meeting of the Alaska Energy Security Task Force (AESTF) to order on October 31, 2023,at 9:00 a.m.
She thanked Task Force members for their participation and time commitment throughout this whole process. Because she is participating remotely via Teams, she asked Vice Chair Thayer to facilitate the meeting today.
2.Roll Call
Members present: Chair Lieutenant Governor Nancy Dahlstrom;Vice Chair Curtis Thayer;Clay Koplin;Joe Burns for Commissioner John Boyle; Jason Olds for Acting Commissioner Emma Pokon; Nils Andreassen; Andrew Guy; Karl Hanneman; Tony Izzo; Jenn Miller;Duff Mitchell;John Sims; Isaac Vanderburg; Robert Venables; Daniel White; Ex Officio: Senator Click Bishop;
Garrett Boyle; Commissioner Keith Kurber; Erin Whitney.
A quorum was present to conduct business.
3.Prior Meeting Minutes -10/3/23; Public Comment Meetings on 10/10/23 and
10/24/23
Vice-Chair Thayer asked Task Force members to review the minutes in the packet and if there
are no changes, he will entertain a motion to approve the minutes.
MOTION: Robert Venables moved to approve the Minutes from October 3rd, October
10th, and October 24th, 2023, as presented to the Task Force. Jenn Miller seconded the
motion.
Discussion:Vice Chair Thayer opened the floor for discussion. Hearing none. He asked for a roll call vote.The motion passed (yes-13; no-0)
Page 2 of 72
4. Public Comment
Vice Chair Thayer stated that we had two public comment meetings, one during business hours
and one in the evening. We extended the deadline to receive written comments as well. The
Task Force received over 40 written comments and 20 comments through public testimony.
Public comments received before the deadline have been sorted by subcommittee topic to
assist Task Force Members in making their decisions. Comments received after the deadline
were not sorted, but they are included with the packet.
Vice Chair Thayer opened the floor for any additional testimony from the public. There were no
additional public comments from the room, from Teams, or from the telephone. Vice Chair
Thayer closed the public comments. Vice Chair Thayer mentioned the following numbers, which
are highlighted throughout the report.
By the numbers -71 -number of times the Task Force has met since April.156 -number of meeting hours by Task Force Members.20 -number of comments received from the public either in person or by calling in.40+ -number of written comments received from the public (including 8:35 a.m. today)Priceless -the time commitment from Task Force members to attend meetings, research their topics, reading, doing their homework, asking questions, and listening to each other and the public with courtesy and respect.
5. Review Draft Report Action Items by Subcommittee (vote yes/no to forward the
action)
Vice Chair Thayer explained that the Co-Chairs for each subcommittee will present for their committee. Questions and round table discussion will follow. Then Task Force members will vote to move the action forward as written, amend it, reject it, or table it for further discussionbefore voting. Vice Chair Thayer also mentioned that the Task Force can meet next Tuesday, November 7th, if they don’t finish up today.
There was discussion among Task Force members about the process and clarification that most subcommittee co-chairs did receive public testimony either in real-time, after the public testimony closed, and even up until this morning. With this input, they made amendments to their actions as they and their subcommittee felt appropriate.
They also discussed the fact that this Alaska Statewide Energy Plan is the first version of a living document. It is anticipated that there will be annual reviews to update the plan according to new information, technology, and actions taken by the Governor and/or the State Legislature.
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a. Railbelt Action -Tony Izzo and Jen Miller, Co-Chairs
Ms. Miller stated that the Railbelt Subcommittee had three high level strategies. The first is to
unify and upgrade transmission and storage assets. The second is to significantly diversify
generation. And the third is to strategically increase load to drive down energy costs.
She wanted to address the public comments received concerning one of their action items. Unfortunately, there was an error in the report that was issued on October 24 where one of our action items related to looking at Alaska LNG bullet line and other ways to diversify our heat sources. Unfortunately, that was issued as the strategy for diversified generation. So, we received a lot of comments in that space because they thought, yeah, this is it, this is your recommendation. That was not our intent. We have several action items under diversified generation. The report is now updated to correctly reflect all the action items within that strategy. There was just a miscommunication and some of the public comments reflect that.
STRATEGY A-1:Unify & Upgrade Transmission & Storage
ACTION A-1.1Ms. Miller stated that for background, if we want to diversify our generation and suppress energy prices, we really need base infrastructure,similar to highways and roads, to do that. This is our top priority action item where we think it's critical that by unifying that transmission
system, we can have a single postage stamp rate to transmit electricity across the transmission
system. That's currently a hurdle right now for tying in new generation. If it is unified, it can
operate more efficiently where dispatch decisions can be made. Also by unifying, we can apply
for federal or state grant programs as one unified body and go after as many federal dollars as
we possibly can so we can split the bill and look at upgrading our transmission assets and our
storage assets so we can integrate new generation sources.
Mr. Izzo stated that based on public comments, he wanted to clarify that unify,and the ultimate
goal of transferring ownership,does not mean that it occurs overnight. It does not mean a
taking, it does not mean violation or putting a utility in a situation where they're violating their
debt covenants. The ultimate goal would be to transfer ownership of transmission over some
appropriate period of time, whether that be by lease or by sale, such that we had an electron highway from one end of the rail belt to the other, serving some 70% of the state's population.
This would eliminate the security constraints on the system--the limitations from the Kenai Peninsula to the Anchorage and MatSu Valley, as well as the constraint from MatSu Valley to Fairbanks. This would facilitate merit order dispatch or economic dispatch, which would allow the lowest cost generator to be online serving that large population in order of lowest cost. Also, as you mentioned, facilitates the ability to bring on renewables or clean energy projects anywhere along the grid. I would recommend, subject to questions, that this be approved and adopted by the task force as a whole.
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MOTION: Tony Izzo moved that the Task Force approve Railbelt Transmission, Generation and Storage Action:
A-1.1 -unify and convey all existing transmission assets along the Railbelt and Bradley Lake to AEA or a new non-for-profit regulated utility for the net book value. John Sims seconded the motion.
Discussion:Vice Chair Thayer asked if there were any questions or comments from Task Force Members.
Mr. Honeman stated that he appreciates Mr. Izzo’s response to Chugach’s comments and other public comments on the long-term goal to integrate with increasing opportunity for competitive generation to come online. This is supported by many public comments we received. So, thank you.
Ms. Whitney asked if any of the language or terminology needed to be changed to address Chugach’s comments. Ms. Miller responded that the subcommittee did discuss the verbiageand were careful to use the word unify rather than more financial terms to convey ownership to a new entity because we wanted to leave it as open as possible to work contractually. In his comments earlier, it was good that Tony clarified our intent, and so I don’t think we need to make any changes.
The question was called A roll call vote was taken.
The motion passed (yes-13; no-0)
REVISED ACTION A-1.1
Mr.Izzo asked the Task Force members to revisit Action A-1.1 and revise the language to
eliminate the phrase “for the net book value” and the word “convey”. Making these changes will
provide clarity as to the intent and will not result in a taking or causing a utility to violate its
debt covenants. Further, it does not in any way diminish the priority of the fact that the
unification of transmission across the railbelt would facilitate all the benefits that we discussed
earlier. Vice Chair Thayer asked for a motion to make these changes to Action A-1.1.
MOTION: Clay Koplin moved that the Task Force reconsider and approve the new language in Railbelt Transmission, Generation and Storage ActionA-1.1 as follows:
A-1.1 -Unify all existing transmission assets along the railbelt and Bradley Lake under AEA or a
new not-for-profit regulated utility.Karl Hanneman seconded the motion.
Discussion:
Vice Chair Thayer opened the floor for discussion. There were no questions or comments. Jen
Miller called the question. Robert Venables second. No objection. Roll call vote was taken.
The motion passed (yes-13; no-0)
STRATEGY A-2: Diversify Generation
ACTION A-2.1
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Ms. Miller stated that we’re now in the diversify generation strategy and this is our second highest priority recommendation. The first action under this strategy is to adopt a clean energy
standard and incentives to diversify generation. First I'll say,the subcommittee fully supports
setting diversification targets because in 20 years we don't want to be in the same position
we're in now with all our eggs in one basket. So, the subcommittee is fully aligned in that we
need to significantly diversify generation, and we should set target goals for the state to drive that. For additional context, the subcommittee spent quite a bit of time just discussing the pros and cons of a clean energy standard versus a renewable portfolio standard.
First, we preferred a clean energy standard as opposed to a renewable portfolio standard (RPS)because it allows for more technologies. We said, let's not limit what technologies can play, and let's let them all compete to, again meet the ultimate goal of driving the cost of energy down. Second, with the renewable portfolio standard, as currently proposed, it includes penalties for not meeting diversification targets. Given Alaska's co-op structure across the railbelt, if there's a penalty imposed, it will be passed on to rate payers, which drives up rates--the opposite of our objective. So we discussed a carrot versus stick approach and what's the right one.
We decided to recommended incentives to drive that diversification for positive reinforcement. We are recommending three incentives for the legislature to consider.
1.Direct payment to utilities for achieving diversification targets, which would pass on to
co-op members and lower rates. A reward payment.
2.Augment renewable energy fund to get more companies proposing new generation
projects, which is a high risk for them. The Renewable Energy Fund is important to help
share that risk and incentivize more companies to get more projects moving forward.
3.Augment power project loan funds because loan interest rates really drive what that
energy price is. If you can get more attractive debt terms, in both an interest rate and
longer time to pay back the loan, that will also drive down energy costs.
Mr. Izzo added that he thought it was important to us, as a subcommittee, to look at
transitioning away from natural gas while recognizing that natural gas is baseload power and
that the utilities are looking at alternatives such as large scale wind projects and solar projects--with two recently brought online that I know you're familiar with. In addition, we're implementing battery storage in different regions, that availability, supply chain, logistics and costs associated with firming up the non-dispatchable renewable power was going to represent a significant negative impact on reliability. And that reliability was a key along with affordability.
So as we looked at a clean energy standard versus a renewable portfolio standard, we askeddoes an RPS apply to all utilities in lower-48. The answer was with investor owned utilities;the penalties can drive shareholder behavior. However, with cooperative utilities, penalties can increase rates. The other distinction I would draw is that we have seen discussion around renewable portfolio standards in Alaska that sometimes exclude hydro and nuclear. We believethat those baseload power sources represent a significant potential to match the reliability that we have with natural gas.
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MOTION: Tony Izzo moved that the Task Force approve Railbelt Transmission, Generation
and Storage Action:
A-2.1 -Adopt Clean Energy Standard and Incentives to Diversify Generation. Karl Hannemanseconded the motion.
Discussion:Mr. Vanderburg appreciates the subcommittee’s work on this item and as a member of the Incentives and Subsidies Subcommittee, he is interested in hearing about incentives from other subcommittees. While he is familiar with the renewable energy fund and the power project loan fund, he asked Ms. Miller or Mr. Izzo for a deeper diver in the direct payment to utilities and how that would function, e.g., where the payments would come from, the mechanics of this item, etc..
Ms. Miller responded that the subcommittee doesn’t have a detailed bill with the details of how that would work. Basically there would be a fund or state dollars set aside that as utilities reach a certain diversification target, that incentive dollars would be passed on to that utility. And then what gets a little bit tricky is how those dollars are used. Will they be used to pay down a debt or passed through to their members. We didn’t want to specify that at this stage.
As a pass through to members, it could show as a fund with a credit on their monthly bill There
are a lot of different mechanisms,and it would depend on how the utility is structured or what
their current financial status is. The utility would make the decision. We did leave it open as far
as the mechanics with the intent is that this money would pass through directly to members to
reduce monthly bills. Mr. Izzo confirmed that the intent of this incentive is to be a direct pass
through, that there would be no overhead or payment of utility costs with whatever incentives
were to come back, that it was to be 100% passed through in whatever form it actually takes.
Mr. Vanderberg asked how the fund will be capitalized. Is it by the state through some sort of
revenues that have yet to be identified. Any thoughts there? Ms. Miller responded that the
subcommittee did not specify the funding source details. It may be similar to the power project
fund or the renewable energy fund or other incentives that are listed in the Subsidies and
Incentives section. We didn't work the details to that level, as our primary intent was to get the concept out there.
Mr. Izzo stated that from a high level point of view, we have the strong belief that we're headed into some difficult times, which is driven primarily by the uncertainty around local gas supply and the reasonable certainty that prices will go up in the near term. And so,as we make the transition, we're looking at any possible means we can to alleviate the pain that will be experienced by ratepayers involved at every level.
Mr. Hanneman stated that, in light of the numerous public comments received about RPS, it’s really important that this task force speaks out and supports the clean energy standard with incentives, realizing that all the details aren't worked out. That's the responsibility of the
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legislative body. But we can help guide the policy. We think it's very important that the policy be standards with incentives, not criteria with penalties. And that is a very different shift in our
current thinking and attitudes.
It's important that we identify and encourage people to make that shift so that we don't
penalize and be punitive with respect to this changing environment or changing the situation in our generation assets on the railbelt. I think this recommended action is important and goes far enough in that regard of establishing what our overall policy should be, realizing that the details need to be built out by the legislative body. Thank you.
Mr.Koplin stated that he strongly supports a clean energy standard over a renewable portfolio standard. I think Jenn and Tony did a good job of articulating some of the reasons. Another nuance is the advent of next generation nuclear and where that lands. While it's not specifically a renewable energy, it is a carbon free and considered a clean energy resource. So that gets pulled into the fold.
Also to help you out a little bit, Isaac, recently in hydropower incentives, for example, at the federal level, because the municipals and co-ops are not taxable entities, they were excluded from tax incentives. But the federal government did structure a direct payment in lieu of those tax credits that would allow them to invest in renewable projects. So that was a model that was
very welcome by tax free organizations and helps manage the costs for customers.
Another nuance is the deployment of hydro or community solar, for example,by municipals,
who are better positioned to aggregate local demands for solar even if the price point is a little
higher. Those participants can direct purchase share of a solar farm and they are making the
investment in reaping the renewable benefits, without passing those costs on to customers that
may be more cost focused or not have the internal business drivers behind their move to
renewable. I recognize the public comment received on this subject, but I think the clean energy
standard is more flexible and inclusive and is a better model for managing the cost of making
investments.
Mr. Andreassen stated that he wanted to chime in on this item because we did receive a lot of public comment on the topic of RPS, and this parallels a recommendation out of the Incentives and Subsidies Subcommittee. My takeaway from the public comment is a preference for an RPS. But I didn't see anything bad noted about a clean energy standard. And it sounds like there's lots of good things that come with a clean energy standard. So I can be really supportive of this recommendation, even as I acknowledge the public perception that an RPS has different benefits, that somewhere down the line might also be worth considering. So I can be supportive of this for now.
Mr. Vanderburg just wanted to add on that my questions for clarifying are just to really understand how this would work because I really want it to work. So just trying to get a little bit detail on the mechanics. But I agree. When I read some of the public comments in support of the RPS, I think I take those as also supporting a clean energy standard (CES). I wasn't seeing a
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lot of comments against the CES. Maybe folks don't understand that the CES is really just about being more inclusive of other technologies, but the structure of the RPS, with its timelines and
emissions targets and move towards zero carbon sources of energy really remain the same. So
I'm supportive of either an RPS or a similarly aggressive CES.
To go back to the direct pay to utilities, so I can understand a little bit better. My understanding of the way an RPS or a CES would work is that essentially by encouraging or requiring that we move towards more low cost renewables, we save money because we're not buying what will become more and more expensive natural gas. So that savings will be passed on to ratepayers because we're using lower cost of generation. And that works. That model makes sense to me.
I'm still trying to understand where this other bucket of money, or if there even is another bucket of money, comes from for additional payments to utilities above and beyond what they will be saving,if we move aggressively towards large scale renewables. I'm still trying to understand where this other bucket of money might come from to make those additional payments. Are the savings somehow capitalizing a fund that turns into a pass through payment to the ratepayer.
Mr.Sims responded because he assisted in developing the language. It's a challenge and you want to be very prescriptive on how that revenue is going to be coming to the utilities. But at
the same time, if you suggest, for example, well, we should implement an income tax to pay for
this, right then it's dead on arrival. So I think it's important for the legislature to have some
flexibility on how they might do that.
The rationale on why there needs to be an incentive is I challenge the statement that switching
to renewable powers is going to be cheaper. There's no question that natural gas costs in the
near term are going to increase. But over the long term we're not sure. And so implementing
new power generation, as we know is expensive,and how expensive that's going to be in the
future, especially for base power, I think is a really big question. So I think there needs to be
some incentive for electric utilities beyond what their board has identified as a 2050 goal, for
example, or a 2040 goal. Throw that incentive in there so that there's a benefit to ratepayers
from moving in that direction, beyond the diversification which we as a subcommittee thought was incredibly important and worth the incentivization.
Commissioner Kurber stating that he is a non-voting, ex-officio member of this body. But as a potential implementer of policy here, I just wanted to weigh in on this. At this time in my commission, there is no, for lack of better term, enforcement ethos. And I think that's important to note. Things that require us to inspect, analyze, et cetera. That's going to be a corporate culture change. If that's the will of the legislature and the government for us to do, we'll salute and move out smartly. But I am very grateful for the work done on the incentive side because it reminds me of something I heard often as a young kid, and that is you get more bees with honey than vinegar. And so I just wanted to say thank you to the subcommittee for going in that direction. Because I also noted coincidentally, with having to go into enforcement, we would need to add personnel in an area where we've already looked at the reality of in the short
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term where costs are going to go--to government, more staff or however you want to look at it. I just wanted to say thank you for adding that as an incentive. I really appreciate it.
Mr. Izzo responded that he wanted to add on to the thought, provide some input regarding
cost. As we look at, certainly reasonably, that natural gas is going to go up substantially in the
near term. I would point out a couple of things from Matanuska Electric, for example, uses 6 billion cubic feet of gas per year. If current RPS legislation around the House and Senate were to be passed as they are, and we were able to accomplish 80% renewable as defined in the bill, by 2040, we would need 3 billion cubic feet of gas. That's from six down to three in 2040. And that's to regulate the non-dispatchable renewables like wind and solar.
We have seen significant cost increases in the industry. Availability is backed up. The Tesla battery that Homer Electric installed, 40 megawatts,approximately 40 ton million. The combination two deck MEA battery, around 40 plus megawatts, 70 million. So it's gone up almost 100%. The other data point we looked at was the long duration energy Storage project that US Department of Energy (DOE)is working with Golden Valley. That's approximately ten-hour battery. DOE determined that to be a non-commercially viable technology. And so the idea here is to invest in projects anticipated to cost well over $300 million and that represents some uncertainty. And in the electric business, there can't be any uncertainty, or you have rolling blackouts.
So the idea that we can replace natural gas baseload power with something that has a capacity
factor, much less we think is going to be challenging. Now, that said, we are absolutely
committed to diversifying the fuel supply portfolio, and we'll get on to the next goal here, or the
other goals around diversification of fuel supply and wanting to get to a clean energy eventually
net zero at a lower cost. But it is going to be a much longer term and more expensive effort to
set the foundation today so that we can get to that future down the road.
Ms. Miller wanted to clarify something for Isaac. Because the RPS, as previously proposed, came
with penalties, and that was seen as, okay, here's the accountability mechanism that forces us to
diversify. We said, okay, we don't think penalties make sense, but we need something else that
actually will drive it. And that's where we made the recommendation for this incentive program, that as the utilities diversify, there's a reward. And so it is intended to be something separate from what the individual projects,as they're implemented,do to rates. This is intended to be a separate fund to again incentivize that behavior and drive taking on more projects.
And in response to Commissioner Kurber's comments, we talked a lot about how penalties would distract both the utilities and the commission from actually working on new generation projects. We have limited resources in those spaces. And rather than debating penalties or talking about deadlines, we would have staff spend time on doing projects because those are going to be challenging in themselves. So just wanted to provide that additional context. That specific subsidy is intended to be the opposite of the penalty and it is intended to drive behavior.
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Mr. Venables stated that he supports the motion. You'll notice in the Southeast Integrated Resource Plan, we have references. There's no silver bullet. We seek the diversification, the
silver buckshot. However, there's a couple of clarifications worth noting because we're
adopting also what goes along with the verbiage. In the benefits section, I believe that “will”is
supposed to be a “may”. Because diversification does not guarantee low cost energy. It may,
but it also may not. So I would ask that that clarification be made because my question goes to the bottom of the first page here. If you thought that it would always lower the cost, you wouldn't be asking the Regulatory Commission to be empowered to value generation diversification in addition to price.
And I was curious, should this go forward,and legislature do what they're supposed to do, what does that equation really look like? Because while those good folks at the railbelt may be able to take a few pennies to the rate here or there for the value proposition, the ripple effects of rural Alaska with the floor of the power cost equalization (PCE), that's an impact that I think we should at least articulate and be aware of as we make the choices. I was curious if Chair Kurber could speak to what that consideration looks like.
Commissioner Kurber commented that’s a great observation, Robert. I think your comment about “will”versus “may”is appropriate because what we just heard literally moments ago from Tony, in the way that the cost has changed literally overnight, I think that we have to be careful
that as we go about it, that there's a firm guarantee that this is going to happen. Even in terms
of the aspirational aspects of the task force itself in endeavoring to get all Alaskans into a more
affordable electric regime or energy regime. I think that when I read statute, statutes are done
by the legislature--by the gentleman sitting to your left and his colleagues.
We would be standing by to respond. And of course, we would probably be asked to do a bill
analysis, a fiscal one at that. And that's where I think it would get into the bigger detail.
Because at this point, the only thing I can think of, is it's a subjective valuing as opposed to an
objective one. And maybe it's not. But we're pretty much focused on cost when we look at the
matters that come before us. We economically regulate. We don't go and visit and say, hey,
shut that down, whatever. So to the extent that I can see it in here, that's my understanding of
it. And I think that, as was already said earlier, there was a caution of being super precise and just sort of noting a potential policy direction, but allowing the actual policymakers to have their leeway as they work through it. And John,you want to speak to that?
Mr. Sims commented that I think that's a great change. And one of the reasons for this, we had a lot of discussions at our subcommittee about the impact, for example, of an AKLNG project. What if AKLNG came down and it was $4 gas as it's been kind of forecasted? Well, the motivation to change and diversify would be pretty slim because now we're receiving gas for cheaper than that. But there's still a desire and long term goal of wanting to diversify power generation. And so I think that's an appropriate change because it could be, as I was making the point earlier, it could be more expensive. And so there does need to be that incentive to encourage that kind of diversification.
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Mr. Izzo stated that, for the record, I will accept Robert's recommendation that under benefits to change the word “will”to “may”as a friendly amendment. Karl, as the second of the motion, do
you have any objections to that friendly amendment. Mr. Hanneman had no objection.
Mr. Mitchell stated that, for the record, he wanted to point out for the public comments that
came on this, this has been good deliberation. This has been outstanding wisdom and explaining what was the background, what was the discussions and what was the give and take of where this evolved within the Railbelt Committee. And if there is no further comments, I would call for the question. A roll call vote was taken. The motion passed (yes-13; no-0)
ACTION A-2.2Mr. Sims stated going back to our discussions on diversity, we had a lot of discussions about the Commission's role in this. Obviously, they play a major part in what gets approved by individual utilities. And so I was reminded of some past legislation, the Cook Inlet Recovery Act, which was enacted to ensure that the Commission understood or considered the ramifications of rejecting a gas supply contract. This is similar in that this gives flexibility to the Commission to consider the long term ramifications of new power generation along the railbelt. And to address one of Andrew's comments, I think this is something that could easily be applicable statewide. As these types of projects come on board, should the Commission be approving if, for example, in 20
years MEA is proposing a brand new natural gas power generation, is that in line with our long
term goals of diversification for power generation?
So this would give the flexibility, even though it may be at a cheaper cost, to understand the
ramifications of locking in that investment over the long term. So we made some specific
changes to statute. This actually was very prescriptive and was proposed language that we
reviewed.
Mr. Izzo stated that we are in an unusual time where some of us in the business have foresight
to what costs might look like in the future. And as you mentioned, I believe it was back in 2009,
legislature gave direction to the Regulatory Commission that not only price was to be a
consideration in fuel supply contracts, but the reliability of the supply was a priority. And I think we're doing something similar here in that with diversifying fuel supply for a clean energy standard, for example, that might initially look to be more expensive than current generation, that the Commission has the latitude to approve such a thing based on those diversification or clean energy standard goals.
MOTION: Tony Izzo moved that the Task Force approve Railbelt Transmission, Generation and Storage Action:
A-2.2 -Modify existing statute(s) requiring the Commission to consider long term diversification
goals when approving additional/new Railbelt power generation. Jenn Miller seconded the
motion.
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Discussion:Vice Chair Thayer asked if there was any discussion on this motion.
Mr. Guy stated that he supports this, especially considering the recent news that I read about
the $200 million redundancy project. If there's going to be a major expenditure, there's going
to be a condition that new energy be produced, too. And I didn't see any new energy being produced by this redundancy project. In that respect, I think this call is really good. Thank you.
Vice Chair Thayer thanked Andrew for his comment and wanted to clarify that the line youreferred to is the grip application for $206,000,000, which is total project of $413,000,000. We have a lot of line loss off the last two lines off the Kenai Peninsula, and so we're unable to move additional power out of Bradley or do an expansion for any type of renewables off the Kenai without having,what we assumed at the time,was an upgrade to the existing line with a secondary line. And then with the grip application, the feds decided to fund the undersea cable as opposed to upgrading the lines. But that is to move more power and to have projects, like the Dixon diversion project,be more seriously looked at, now that we have a line that can handle the capacity. We were very limited before on the railbelt in general.
Commissioner Kurber stated that,for the record, he wants the public to understand that Keith Kurber doesn’t speak for the Regulatory Commission of Alaska (RCA). Keith Kurber is one of five
commissioners. Being the chairman doesn't mean I have a superpower to make unilateral
decisions for the organization. That being said, one of the things that I was brought up to
speed on by a colleague was that he came aboard during the times when the gas contracts were
at a challenging point and was, I think, at the risk of overstating that point. I think he was a very
helpful person in getting that off. And so we stand ready. The specificity in the language is
great. And that allows the policymakers, I believe, to have a start. But we will wait and see, of
course, what really comes out. Anytime there's a bill that implicates the RCA, we're required to
provide analysis and input.
I was in the room last week with Curtis and Clay Koplin during the public testimony. I saw with
my own eyes that there was an intensity of emotion like we had never seen in some of the other
public comment meetings I’ve attended. Sometimes it's hard to convey emotion with a written comment. But,in a way, you give a better comment because you're doing it dispassionately. You're trying to be more reasonable in the situation. But that being said, I think that our task force has elicited a lot of public interest and public comment and the fact that we're trying to be very careful and not step on people's toes,who are the policymakers, but to offer policy prescriptions that can either be gaveled down positively or negatively. But in the case of when we get to the implementing actions, there's specificity, which is good because it gives people a better place to start. I've never crafted a bill, but I've commented on them. And I'll tell you what, as hard as it must be to write them, because they have to pass constitutional muster, they're not that easy to comment on either. And you want to be very careful how you do it. So I just want to say, as a recipient of those, I'll anticipate looking at something about this in the future, if that's a fair statement. So anyway, thank you.
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Mr. Mitchell stated that I think this is wise to have this plan for a couple of reasons.The state is ripe for natural disasters--earthquakes, landslides, floods and diversification of supply helps on
the natural aspects that we deal with. We don't think about it, but they come up more often
than we would like. Secondly, I was reading the public comments for Snettisham when Senator
Gruening held public testimony in Juneau. There was an argument that investing in Snettisham
would be ludicrous because oil was so low and only a fool would go forward with Snettishambecause it would raise costs. And the wisdom of that, that now we have less than four cent kilowatt hour puts things, allows the RCA to look at things on a different horizon than just the here and now. And I think this speaks to that. The question was called. Roll call vote was taken. The motion passed (yes-13; no-0)
ACTION A-2.3.1Progress Known Near Term Energy Diversification Projects to a Go/No-Go Decision: 2.3.1: Dixon Diversion
Ms. Miller stated that the next three recommendations out of the railbelt subcommittee are all related to progressing known energy diversification projects to a Go/No Go decision. And that last part is incredibly important. And so the railbelt subcommittee considered projects that have been debated, discussed, and studied for long periods of time. We decided that we don't want to be two years from now and we’re still debating these projects. We’re not saying, go, do this
project. We want to complete their studies, understand what the costs and benefits are, and
make a Go/No Go decision so that we're actually in a position of action that is in the best long-
term interest of the state. Or if we find out that it's not a good project or not competitive, we
can pursue other alternatives. We don't want to wait to make the decision any longer.
The first project is the Dixon Diversion project. The second is Susitna-Watana. And then the last
one is looking at our gas source,heat source and baseload power. And it's considering multiple
options for the AKLNG the bullet line and alternatives. She asked Vice Chair Thayer to provide
information on the Dixon Diversion project.
Vice Chair Thayer stated that Dixon Diversion is a project that is on the Bradley Lake footprint.
Bradley Lake is the state's largest hydro project of 120 megawatts. It's owned by the Alaska Energy Authority (AEA). It's located about 28 miles from Homer and provides about 10% of the power on the railbelt. Bradley Lake is a glacier, a lake, and a river. About five miles from Bradley Lake in a very similar geographical area, is the Dixon Glacier that feeds into a lake and the Martin River. The Dixon Diversion project is to do a directional drill 5 miles, eleven foot borehole over to Bradley and putting the water into Bradley. There's not a need for an additional powerhouse nor for any upgrades to it. We do need to raise the dam level at Bradley, probably about 14ft.
This project is one of the most economical ways that we could increase a hydro project. Our analysis shows it could increase by 50%. Where Bradley currently electrifies 54,000 homes. The Dixon Diversion project would add an additional 28,000 homes to it. Right now, AEA has received $5 million from the legislature. There is a second request for another $7 million. For
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the last two years we have studied the project, and to figure out the economics. Right now, the early phase, it has proven up that there's more water coming out of Martin river that could be
diverted. And actually there's some cost savings by eliminating a road and also, the bore tunnel
looks to be cheaper than previously anticipated, and one might say a five mile bore over to
Bradley.
Thirty-two years ago, that's what we did for the powerhouse to take it from the lake down to the powerhouse. A similar borehole, except it was actually about a mile and a half. And so the technology is there. This is something short term. And also it needs a modification to a perf license. You don't need a perf license. So it's kind of in our backyard, and it's something that would potentially lower the cost and provide more renewables to the railbelt. Vice Chair Thayerstated that Matanuska Electric Association (MEA) is a participant in the Bradley Lake Project and the Dixon Diversion. He asked Mr. Izzo if he had anything to add.
Mr. Izzo responded that Curtis didn’t miss anything. I would just point out that this is a renewable baseload power source. Fifty percent increase to Bradley Lake. That is relatively short-term in the scheme of the utility business that is long lead time and capital intensive. Thegripfunding will facilitate the efficient ability to move this power north into the railbelt without the cost of that transmission impacting or having an increase in rate. Overall, I would comment on these near term energy diversification projects, as well as long term energy diversification
projects. And maybe on a personal note, it would be nice to make a decision and move on.
Many of us in the task force expressed concern that over decades sometimes having a looming
megaproject like this can influence decision makers to think that the solution or silver bullet
solution is right there. From the utility manager's perspective, sometimes that represents
frustration, because we've seen decades of these projects basically stalling. So there is a
sentiment about let's update it, let's make a decision, and let's move on one way or another. I
would add another aspect of this, that as we looked at the governor's goal of 10 cent energy,
that large scale and economies of scale was going to be critical to achieving that goal. And that
applies not only to the railbelt, but statewide. A robust transmission system in the railbelt.
Larger scale projects would facilitate, for example, connection of rural communities with
transmission. Today's transmission system and generation is too limited. It would represent a decline in reliability if we were trying to expand beyond what we have today.
MOTION: Tony Izzo moved that the Task Force approve Railbelt Transmission, Generation and Storage Actions:
A-2.3.1 -to progress known near-term energy diversification project, Dixon Diversion,to a
Go/No-Go Decision; and approve to progress known long-term energy diversification projects.
A-2.4.1 -Susitna-Watana Project and Action 2.4.2 Alaska LNG, Bullet Line and Alternatives to a Go/No-Go Decision. John Sims seconded the motion.
Discussion:
Vice Chair Thayer opened the floor for discussion, questions,comments.
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Mr. Venables clarified that the motion is to get to a decision on these projects. It’s not to
endorsement any or all three of them. Mr. Izzo responded that Robert is correct. The
subcommittee looked at, for example, is there a desire to move Susitna-Watana Project forward.
The sentiment I thought was unanimous, including myself, was that prior to authorizing state
expenditure on license, that we should update the project cost and make a decision one way or another and move on. So it was in that order. I hope that clarifies.
Mr. Venables thanked Tony for his clarification. He stated that he supports the motion because as one that was appointed by two different governors to be on committees for the stranded gas or the pipeline project, we get it so far and then we don't get to decision. I watched the same thing happen to the Susitna Project. So I don't want to prolong this. And I have no further comment.
Mr. Guy stated that Action A.2.4 Alaska LNG Project is going to be a major, major expenditure. And considering that, is there a plan to not just be railbelt? That's my question.
Senator Bishop responded to Andrew by stating I just looked at Susitna-Watana for 618 megawatts. I looked at excess capacity and I know there's a project in your region, Andrew. And I look at a map and I don't know if you were in my office, but I think you were. And I got a
topo map out and I drew a line from the Parks Highway to Dalton Highway. It's maybe 140
miles. That could be excess power that could be done to create more economic development.
And then you look down the river system. How much more does it take to get a line down
there? That's how I roll at 50,000 foot level view, and it's renewable power.
I want to add one other thing. You guys have done a fantastic job. I have a quote on, then it
was a big project,that I would like to read into the record. And this project was first perceived
in 1930 and it goes along with the Ernest Gruening comment made earlier. And I think it's very
relevant. And the conversation was about piping geothermal water to the city of Reykjavik to
heat a school. One of the council members said, I don't think I've ever approved such a
completely ludicrous idea as to think that water can be brought all the way to town (We're
talking, I think it was like 30 miles), and it'll still be hot enough when it arrives to heat entire buildings. You will never get me to believe that this is feasible, no matter what you can calculate. So anybody has any knowledge of Iceland, you can see this guy was completely wet.
Mr. Guy commented considering that information, should we just go for Action 2.4.1 or 2.4.2? I think that would be a fair direction for the committee to provide. If that's the case, then I would move to amend the motion and remove Action 2.4.1 Susitna-Watana from the original motion. This amendment died due to lack of a second. Mr. Guy asked if the Task Force is recommending that we pursue both the Susitna-Watana and the gas line projects? Vice Chair Thayer stated that the motion is not to pursue them, but to recommend that we get to a Go/No-Go decisionto proceed with the projects.
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Mr. Guy commented that's we should make a definite recommendation considering the senator's response. Vice Chair Thayer commented that Senator Bishop stated the Susitna-
Watana Project benefits Donlon. Mr. Guy responded that it would not just benefit Donlon but
would also benefit the rest of Alaska.
Senator Bishop stated that was my point. In theory, down the line it could be expansion of clean energy to the lower Kuskokwim, to Donlon down to Bethel. But that's miles down the road. I've been 35 years waiting for Susitna.
Vice Chair Thayer asked if we have more discussion on the original motion that included Actions 2.3.1 Dixon Diversion,2.4.1 Susitna-Watana,and 2.4.2 AKLNG bullet line and alternatives.
Mr. Izzo wanted to acknowledge there was a lot of public comment related to really both Susitna-Watana and Alaska LNG. Specifically, I'll speak to Susitna-Watana. If a decision is made to update the cost analysis, it’s going to be critical for the state to engage the community councils and to speak to Alaskans in that region. While I want to acknowledge the public comments that are not in favor of this, I've seen presentations at the regulatory commission that talked about how dams can facilitate or avoid things like flooding.
I don't have a personal stake in this project. MEA is going to provide power either way. But we
wanted to acknowledge the fact that these have been on the table a long time. I would
distinguish that the AKLNG bullet line is really a statewide export project that we might benefit
from and the Susitna-Watana would be renewable large scale base power that would eventually
deliver lower cost rates. Thanks.
Mr. Hanneman wanted to get clarification from Andrew Guy when he was suggesting that we
bifurcate 2.4.1 and 2.4.2 as to which one that he was recommending would survive. I
understand that there was no support. But I think there was confusion on which one he was
recommending survive consideration, at least within the report, and whether it was going to be
2.4.1 Susitna-Watana that remained in the report or whether he wanted 2.4.2 Alaska LNG and
the bullet line to remain in the report. Because I was confused on that point.
Mr. Guy responded that I didn't do anything regarding the main motion to adopt A.2.3.1 and A.2.4. I was only addressing to amend the motion regarding 2.4.1 and 2.4.2 to delete 2.4.1 as an option and keep 2.4.2. Mr. Hanneman responded that is understandable. So your recommendation, although I realized that we voted on it, but your recommendation was to keep Alaska LNG bullet line. Mr. Guy responded, yes. Thank you.
Mr. Hanneman stated that, as a follow up to that, I'm not sure in the final drafting that resulted in the text that's in the appendices to the report, if the discussion that the committee had with regard to the bullet line came through and that the recommendation is not to pursue specifically the bullet line, rather it's to pursue Alaska LNG as aggressively as is reasonable for a recommended period of time of about two years. And then if that does not proceed, make sure that in the meantime we've studied the bullet line and have the cost updated appropriately and
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the execution plan updated appropriately so that in approximately two years’ time, while we've studied other alternatives to make sure that we're not moving ahead foolishly or moving ahead
contrary to what current available other alternative technology might indicate.
If we've done all that study and review and the bullet line seems appropriate, seems it's currently
permitted and executable, then we make a decision in about two years’ time to make sure that Alaska does not run out of natural gas for either the necessary baseload generation or the space heating that we assuredly will need for the period of time while we're furthering diversification of our energy supply. And so that's what the recommendation is, is actually to ensure that we are prepared to make a go or no go decision on the bullet line in approximately two years.
Ms. Miller wanted to respond to Karl and clarify that for Action A.2.4.2 we don’t have the latest version of this action item in the report. But it’s mostly there,Karl. The intent of this is to pursue three options in parallel. And the title reflects that. And so,first and foremost is Alaska LNG, which would provide significant economic development, gas export and also a cost competitive local source for Alaska. So that is the primary option. But because we don't know if that project will go or not and we don't want to, like we said earlier on, we don't want to be two years from now and say, okay, now what? We want to say, now what, now.
So in parallel with that, we want to further analyze and complete project development for the
bullet line so that we can understand what the cost of that project is. A key component of that
analysis is to understand what the financing structure is. And so we want to do that in parallel.
And then third, we want to pursue, looking into what are our alternatives are for heat and
baseload power. That could be something like geothermal. It could be looking at converting
homes from natural gas heat to electric heat, such as a heat pump. So we're looking at different
state support for different projects, we want to understand what our costs are, we want to do a
broad look at what our options are so we're making the best choice for Alaska long term. To
clarify for the public, it should be those three paths in parallel. And we do have an updated
version of this that will get included in the final report. Thank you.
Vice Chair Thayer asked Task Force members if it would be easier to break up these three action
items into separate motions and we would have three separate votes. Mr. Izzo, as the maker of the motion, supported that idea. Mr. Sims as the second also supported the suggestion.
MOTION: Karl Hanneman moved that the Task Force approve Railbelt Transmission, Generation and Storage Action:
A-2.3.1 -to progress known near-term energy diversification project, Dixon Diversion,to a
Go/No-Go Decision. John Sims seconded the motion.
Discussion:Vice Chair Thayer asked if there was any discussion on this motion.
The question was called. Roll call vote was taken. The motion passed (yes-13; no-0)
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MOTION: Jenn Miller moved that the Task Force approve Railbelt Transmission,
Generation and Storage Action:
A2.4.1 -to progress known long-term energy diversification project Susitna-Watana, to a Go/No-Go Decision. John Sims seconded the motion.
Discussion:Vice Chair Thayer asked if there was any discussion on this motion.
Mr. Koplin stated that he supports this project and will vote in favor of the motion. We did receive substantial public testimony. A lot of it was project specific. And I just want to point out first to Duff’s points that my organization has been developed with community, has been involved with hydro developments, where there were arguments that would be cheaper to just use diesel fuel for power needs. We had opposition from local stakeholders, environmental groups.
Most of them, especially all of them at the organizational level, ultimately supported the project after it was built, and they recognized the benefits. The benefits to rural Alaska and reducing railbelt costs and the positive impact that has on the PCE contribution. Again, the opportunities, all of the suite of services that a hydro can provide in terms of long duration energy storage that
other renewables rely on for efficiency and affordability, the ability to mitigate flooding and
drought cycles that could have impact on downstream aquatic resources, fisheries, so forth, and
the long term levelized cost of energy once the debt is paid off. And my community, for
example, enjoying the benefits of less than eight cents a kilowatt hour power, despite our tiny
economy of scale and the ability to extend transmission loops, whether it's the railbelt or
electrify other portions of the state, are very compelling. And I definitely support moving this
forward to Go/No-Go and ultimately look towards developing this project. Thank you.
Mr. Hanneman wanted to follow up and support the previous comment that the
recommendation here from the group, from the committee was actually to update the cost
estimates for Susitna-Watana first, because now they're a fair bit stale, and this could be done at
a relatively low cost. And then check back in to assess whether the then protected cost structure still meets the objectives of the collective Alaskans. So that's the first step.
And I don't want the public or others to misconstrue that this is a recommendation to proceed with FERC licensing, which is a major hurdle. So we should update the cost structure first.
And also, I think I appreciate splitting these into buckets because we know from the public comments that a project like Susitna-Watana would be challenging, and we may not have the collective will to execute it, and we don't want it continuing circling the drain. So let's do the low cost step first and then reassess. So, thank you.
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Vice Chair Thayer stated that he agrees with Karl. An important component is knowing the cost but also checking with FERC, so we know what studies are so good and which ones are not good
and how stale they are, which has to be part of that cost estimate. Because cost is one thing,
but obviously we need to make sure that what work is still to be done through FERC. And so I
agree 100% with your comments.
Mr. Guy added that if the project clearly meets the goal to diversify,be reliable, cheap and everything. But when you look at the costs associated with this and look at the history, and the reality is that project like this would only be local, it would not extend to benefit other parts of Alaska. And that's where I'm coming from. If we're going to spend a lot of money on a project, it has to benefit every part of the state. And this does not meet that standard in my mind, just because we have history to look at when the major projects occurred in the Southeast. And here we got PCE, yeah, but with a promise that we'd get the later development. But the way thelegislature is structured, how the state is structured, they're able to decide, hey, we're not boundby that past legislature, we're not bound by that past administration. Easy to say that what we're doing is right, even though it's not right. So that's where I'm coming from. Thank you, Mr. Chairman.
Mr. Mitchell stated that as someone who's been heavily involved with hydropower development, I want the public to understand that this is to get to a Go/No-Go. The public input will be long,
and it will be considerable on all the benefits that go through the environmental impact
statement (EIS)process.So, you know, what we are right now is in purgatory. Are we going to
heaven or are we going to go the other direction? And I think we need to make a stop on
whether we keep spending money or we update. We make a decision. And that's what I'm
voting on, is to decide.
So we could wisely put this completely on the table or we completely put in the fourth gear and
move it forward. And I think that's what we're voting on. So I really appreciate all the
comments that have come in on this issue. I'm a person that you shouldn't build hydropower
unless it can be fish friendly. So I'm not at that decision point here. I'm just trying to get to a
decision point whether this is a go or no go.
And I think that Alaskans can make fish friendly hydropower. People say dams are unnatural, and I would just say, look at a beaver. That's how man learned how to build a dam. So I don't want to get into the debate on whether this is a good or how it can be done. I think that's in the engineering and in the design. I'm going to vote in favor just to move this project forward to a go and no go decision. To Andrew's point, this thing would produce so much power that you could electrify the railroad. If you got a gift from the federal government to run to Donlin or you got a gift to 80% match to run power like other states have. And I've looked at what other states have. We are so poor in transmission. North Dakota,Wyoming, and Puerto Rico--well John Sims said that Puerto Rico has much more population, which is why they get more. So I looked at population based states. North Dakota and Wyoming have twice the load of transmission line than we do, and yet we're one-sixth of America.
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And to your point, I think in 1936 they should have been running lines to all over rural Alaska we wouldn't be having these debates anymore. But I think that is a point in time where we go
forward and say, yes, we need to have low cost power, where it can be moved from if we have a
big project or even a small project, energy diversity, to move power to things. That's not going
to happen overnight, but I think we have to make a step. I'm going to support the motion.
Ms. Miller stated that she wanted to reemphasize what others have already said. But the context from the subcommittee, we talked a lot about this recommendation and really what we wanted to do is say, okay, what's the smallest amount of spend we could do to get to a decision point before taking on just another option was, okay, let's go straight to FERC licensing and pursue that. That was a price tag of maybe $100 million. We said, well, that doesn't make sense. We first need to go back to feasibility and say, is this project cost competitive? What does the permitting process look like? And then make a Go/No-Go decision before taking in that bigger spend. So I just want to clarify, especially given the public comments on this, is that this is a understand the cost, understand the permitting, and understand also the feedback from the public, and then make a Go/No-Go decision. I would like to call the question.
Vice Chair Thayer recognized Mr. Guy. Mr. Guy stated that he appreciates Duff's comments and I do now realize that it can be brought to many areas. But when I consider economic development, business development, that would start to happen with lower cost energy. That
means other factors have to be considered. Consider just the Donlon project machinery, field
machinery. Although they can be run by electricity, many will not be able to be totally run by
electricity. So that means an energy source that can be a lot more reliable like LNG. So looking
far ahead and looking at the challenges that would be there, I still have to say the dam project
would still be more local in terms of its impact. So thank you. The question was called. Roll call
vote was taken.
The motion passed (yes-13; no-0)
MOTION: Jenn Miller moved that the Task Force approve Railbelt Transmission,
Generation and Storage Action:
A-2.4.2 -to progress known long-term energy diversification project Alaska LNG, Bullet Line and Alternatives to a Go/No-Go Decision. Karl Hanneman seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Clay Koplin had a point of order and asked about how the task force was voting on these three action items. Vice Chair Thayer explained that task force members decided to break up the three action items in the original motion. So instead of one motion, we now have three motions to vote on.
Ms. Miller stated that for clarification,we do have an updated version of this action item for the report. This current draft report indicates that the Alaska LNG and bullet line are in parallel.
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There's actually three parallel paths where the recommendation is to look at Alaska LNG, the bullet line and alternatives for baseload, power and heat to reach a Go/No-Go decision.
The question was called Roll call vote was taken. The motion passed (yes-13; no-0)
BREAK (10 minutes)
STRATEGY A-3: Increase Demand
ACTIONS A-3.1.1; A-3.1.2; A-3.1.3Vice Chair Thayer called the Task Force back to order. John Sims has stepped out of the room,but he will be back. We still maintain a quorum. Our next item is the last action item under Railbelt Transmission Generation and Storage, Action 3.1 significantly increased load to drive down energy rates. I will look for a motion. Ms. Miller stated the Erin Whitney did the legwork on this action item. So, I will turn it over to her to introduce it, and we can make a motion from there.
Ms. Whitney from the Arctic Energy Office stated that this action is based on results that we saw out of Iceland. And this was a presentation given by Glen Holdman in one of the many public meetings that were held as part of this process. Essentially what Iceland did 20 years ago is strategically increase their load alongside their generation as a way to lower their costs. And
that's a very sort of simplified explanation of it. The intent of this action is to encourage further
evaluation of that path for the Alaska railbelt. Because the railbelt followed a very similar
pathway to Iceland's electric system in size and capacity generation up until the time that
Iceland made this decision to increase its load. And then you see sort of a bifurcation behavior.
So what I do want to say with regard to this action is that the intent is to reduce the cost of
energy for all customers. To issue an RFP or something similar for a large enough industrial load
so that you would bring down the cost for all customers. I also have to acknowledge there
would have to be sufficient generation for this and that it still needs further evaluation and
study. This is not saying go out and do this tomorrow. This is saying, consider this alternative
with sufficient analysis and evaluation to do this in a way that's prudent and responsible and
doesn't endanger anyone's electrical service or rates.
But it is a very intriguing action and result that has been undertaken by Iceland. I think it's worth consideration by the railbelt. We had considerable discussion among the committeeabout this step. And I would invite my fellow subcommittee members to add their thoughts as well.
Mr. Izzo thanked Erin and wanted to add some emphasis to the sufficient analysis of rates and acknowledge that we did receive significant comments in this area regarding concern that somehow there would be rates going up and that it would be subsidized by residential ratepayers. And that's not the case at all today.
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The way the current rate structure is set up, if a large enough load were to come in, it actually would result in potentially lower rates for that commercial entity without a cross subsidy from
other rate classes such as residential and commercial. That principle is in place today and we
anticipate that it's the basis of this goal. So simply put, by expanding the number of kilowatt
hour sales, it would help spread costs across a larger demographic and reduce rates for all.
MOTION: Jenn Miller moved that the Task Force approve Railbelt Transmission, Generation and Storage Actions:
A-3.1 -Significantly increase load to drive down energy rates to include Action 3.1.1 -RFP for
Industrial Customers.
A-3.1.2 -Energy Tax Credit for New Industrial Customers; and Action 3.1.3 -Identify “LoadFriendly” Areas Already In-Place.Tony Izzo seconded the motion.
Discussion:
Vice Chair Thayer opened the floor for discussion. He wanted to clarify that the motion does
include all three action items listed under 3.1. Ms. Miller replied that is correct. Similar to the
clean energy standard and diversification incentives. We had multiple incentive programs within
that one recommendation, and this one is similar to that where the broad recommendation is to
significantly increase load to drive down rates.
And then we have three bullets within that action areas. One is RFP for industrial customers to try and drive up interest and say, hey, Alaska is open for business. We want to increase both our economy and our electricity demand. And again, this is all driving towards increase in the denominator to spread out fixed costs. Secondly, 3.1.2 is an energy tax credit for new industrial customers. And then 3.1.3 is to identify load friendly areas that are already in place that we could take advantage of today that don't need additional generation or infrastructure, and we could start increasing this denominator now. And so it's all rolled up into A-3.1. And I would propose that we vote on these as a collective.
Mr. Venables asked Ms. Miller to elaborate a little bit more on 3.1.3 already in place consumers, how that's going to lower the rate, which is our primary charge. Mr. Izzo responded that although we talk about the fragile transmission system that doesn't meet the lower 48 standards, there are places where we don't have constraints on the system today. And so rather
than waiting, for example, until those constraints are gone, you have a robust system from
Homer to Fairbanks to elicit potential economic development. And the subcommittee believes
that there are zones today that would be easier to access for, say, large renewable generation or
wind projects that would not require the kind of inner tie and potentially maybe less regulation
if they were located in certain places along the transmission system. And so the suggestion here
is let's identify where those are and provide those as marketing opportunities for potential
development.
Mr. Venables stated that, for clarification, you’re talking about future loads. You're not talking
about lowering your revenue from current loads. Mr. Izzo responded that's correct.
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Mr. Hanneman stated that he was a member of the Railbelt Subcommittee and wanted to share
my perspective for the other members of the task force. I was a bit of a skeptic on this approach
because I really feel that until we get our whole generation house in order and provide some
certainty as to some ability to provide baseload power, that our ability to attract new customers
to Alaska will be very difficult. But yet through the discussion, I was led to believe that a couple of things.
One is that getting the debate out there that says increased load will help all of us in the long run is very important and will improve our understanding. I also think we need to provide an opportunity to see the art of the possible. If there's a belief that we could execute some of these projects that might help incentivize economic development in exchange for lower rates or defined rates for a period of time, which then ultimately helps the whole rate base,I'm willing to take that chance. Also understand that there's not a lot of risk here for identifying this as an opportunity. So for that reason, I vote to support it.
Mr. Vanderburg stated that I support this. And just adding on an interesting data point from Iceland where I think their total load, the percentage of it is industrial, is around 78% of their entire load in the country. And another 10 or 12% area, you might have the exact numbers, commercial or other commercial uses, and the residential is the last 5%to 7% total load for the
country. So really a remarkable achievement where the industrial load in that country is really
driving their sub-ten cent power as the main kind of demand. I also think this action reinforces
some of the other actions the railbelt came up with around transmission. You've got to do both
things. If you want to support increasing industrial load, you need time to build out
transmission. So it's additive and complementary of other actions we’ve already approved. I’m
giving my approval for this one.
Mr. Guy stated that I do support this by any other name. It goes well with the rural anchor
tenant goal. I guess my only kind of comment or concern is that the kind of industrial customer
that we'd be wanting to attract because a lot of, well, a major factor in those kind of customers
is distance, the placement, and where we are. Alaska is a big place,and a lot of the resources
are out of the railbelt. But there are other industries that can be easily accommodated in therailbelt. But in that respect, it'll be very good for us.
Ms. Miller expressed her support for this recommendation. Through Gwen Holdman's presentation on Iceland and seeing what their journey was. I think a lot of times it's really easy to get stuck in the chicken or the egg type conversation. Okay, well, do we add more generation to prepare for industrial customers or do we let them come? But maybe we won't be able to attract them if our rates are too high. And so you just kind of get stuck. And I think something that was really inspiring about Iceland is they said, let's go big and let's go for both at once. Economic development, increased load and what that resulted in. And so I think a body like this task force, it is our job to look strategically and think big. And I really appreciate Erin and Gwen Holdman for bringing this idea forward. And I think we don't have the answers, but I think looking at an example of Iceland and memorializing that recommendation is really
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important for Alaska to both increase our economic development and have the potential to lower rates. So I support this.
Mr. Koplin stated that he wanted to share a little bit closer to home. When Cordova overbuilt
our hydroelectric plant and worked with our seafood industry, the industrial load that was added
generated substantial additional tax revenues for the state. And it's allowed us to keep theresidential and large power rate classes, community facilities, so forth, flat for 20 years. So this can work. And so specifically, item 3.1.2. When you're generating new business, there is an opportunity to not cannibalize either your electric rates or your tax base. You can take a little bit longer view and ultimately generate more taxes and reduce energy rates. So I'm strongly in favor of this action and all the sub actions.
Mr. Mitchell stated that a lot of hydropower built in the state was with mines and fish plants. And they continue to operate today. And now they're fueling other purposes rather than the original mines and the original fish plants. And it's dotted all over the state where that exists. And so if there's not any further discussion, I'd like to call for the question. The question was called roll call vote was taken. The motion passed (yes-12; no-0)
c. Coastal Actions -Duff Mitchell and Robert Venables, Co-Chairs
Vice Chair Thayer stated that this subcommittee met 13 times, which is the record so far. Total
hours meeting was over 14.5 hours, but the Railbelt Subcommittee beat them with 22 meeting
hours.
STRATEGY B-1: Alaska Market Initiatives
ACTIONS B-1.1; B-1.2; B-1.3; B-1.4; B-1.5
Mr. Mitchell stated that we had a robust Coastal Generation,Distribution and Storage
subcommittee. We did have public input at our meetings. We had NGOs that supported air
source heat pumps, a commercial dock developer support dock electrification, we had written
comments. I reached out to President Richard Peterson of Tlingit and Haida Central Council on
one of our recommendations to seek his input. So we tried to reach out and get as much input as we could as we were forming our strategies and action initiatives. We broke it down to four Alaska marketing
As we were forming our strategies and our action initiatives. We broke it down into fourstrategies: 1) Alaska Market Initiatives, which is similar in some respects to what we just passed with the railbelt, with increased demand; 2)Alaska Policy Recommendations, which is more internal, reflective of what the state could do better with streamlining; 3)State of Alaska coordination with federal agencies and federally and state recognized tribes’recommendations: and 4) Alaska Hyder Power Generation Recommendations. I've read all the public comments that have come in. We have integrated some of those comments and I can
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speak to them when we come to an exact case where we may have modified some of our action items.
In Alaska Market Initiatives, we had integrate and promote heat pump technology and systems.
This includes air source heat pump, seawater heat pump, ground source heat pump as
alternative energy source in coastal Alaska. B-1.2, plan finance and support the execution of shore power at public and private cruise docks to sell excess energy to cruise ships. This not only reduces emissions, but it also provides, like that market initiatives that industrial customer that can help take care of excess electricity when communities might have excess in the summer. Beneficially electrify the Alaska Ferry fleet to lower the cost of transportation,emissions and assist in reducing the cost of power in coastal communities. This is to supplement what is already coming from the federal government. I think there's like $250,000,000 coming to our DOT to start the process of electrification of the ferry systems. You obviously need to shore power them.
B-1.3, identify and support co-location of industrial load data servers with Alaska hydropower facilities for synergies and cost energy costs. B-1.5, identify assist battery energy storage systems and other energy storage systems for successful integration into coastal communities to increase energy security, grid resilience and to lower energy costs. Because I believe that the public comments were generally supportive and these are what I would call non-controversial,I
would ask for a motion to approve the market initiatives in a block, B1.1 through B-1.5, if that is
the will of the task force.
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MOTION: Duff Mitchell moved that the Task Force approve Coastal Generation, Distribution and Storage Actions:
B-1.1 -Integrate and Promote Heat Pump technology and systems (ASHP, SWHP, GSHP) as an
Alternative Energy Resource in Coastal Alaska.
B-1.2 -Plan, finance, and support the execution of Shore power at Public and Private Cruise Docks
to Sell Excess Energy to Cruise.B-1.3 -Beneficially electrify the Alaska Ferry Fleet to lower the cost of transportation, emissions, and assist in reducing the cost of power in coastal communities.B-1.4 -Identify and support the colocation of industrial load (e.g. data servers) with Alaska hydropower facilities for synergies to lower energy costs.B-1.5 -Identify, assist, and fund Battery Energy Storage Systems (BESS) and other Energy Storage Systems (ESS) for successful integration into Coastal communities to increase energy security,grid resilience and to lower energy costs as a block. Robert Venables seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Mr. Venables stated that we had public input. But appreciate my co chair's move on effectiveness and efficiency. And he represents the Southeast Conference, which covers everything from Metlakatla to Skagway. And people have remarked, well, Southeast Alaska,
you're one unified block. Well, someone who grew up there, we're like Greek city states. We
don't agree. We play basketball against each other, baseball and football. We don't ever agree
together unless the Persians are coming over the Hill. So I think that we have good support on
our recommendations.
Ms. Whitney asked if the subcommittee saw any significant objections to any of these particular
market incentives? Mr. Mitchell replied not in B1, Alaska Market Initiatives. In fact, the seafood
industry supported it and said, hey, we're already doing this. There were a lot of comments in
favor of this action.
Mr. Venables added what this is looking at is what resources do you have right around you. We
have air, water, and ground. Beneficial electrification is one of the key things that we're looking to champion. So we're putting it into our marine transportation, putting into our homes and our businesses, et cetera. We're using storage techniques to support that dispatch. So these were very non-controversial. No brainers.
Mr. Hanneman asked about 1.3. I was looking in your fact feed or in the action items, for more validation of the costs and economic benefits or feasibility, really, of conversion of the Ferry fleetto electric. Can you share some of the information specifically about the British Columbia (BC)fleet and what their experience is and what the cost of power that they're using is to operate? Because I also know that the Seattle area has looked at electrifying their ferry fleet and have found it to be something that they're not able to pursue because of technical issues. So can you just elaborate a little bit?
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Mr. Mitchell stated that it’s a great question, and it happens to be one of my favorites. So, yes, Washington state set aside a billion dollars to initiate their modernized electric fleet, and they're
working through those issues. The electrified marine transportation has fewer moving parts
because of no combustion. And so the costs, even with battery banks, are lower to operate.
And one of the things that we're seeing is that the relationship between the Marine
transportation and the terrestrial side has very interesting synergies. And there's actually a report that Southeast Conference did on our website for what we call the low No E for low noemissions ferry. One of the really exciting things to me is to see where the whole number of initiatives that are happening, the green corridor, the cruise ships are pursuing, what DOT is pursuing,what communities are doing, what National Electric Vehicle Infrastructure (NEVI) Formula Program is doing across the state and eventually down to the Southeast. We can't have redundant systems, so we have to have similar technologies that work well together. So what we do for the ferry system needs to be something source side. Those battery banks, in my mind, need to be compatible with being the cornerstone for terrestrial EV distribution, especially in our rural communities. We, of course, hope that's always dispatched renewable energy. But even in communities that are still reliant on diesel, most of that spending reserve is just half aisle during the night, so you can do time of day charging, which helps to lower the entire community's electrical rate because of the additional sales.
There's a lot of different things that converge as these strategies come together to modernize
the fleet. And so while you're going to have to have some serious propulsion with the
mainliners, what we're seeing for a lot of the point to point day boats or commuter ferries is
something that can be more of what I call the Prius style. So routes less than 25 miles, they can
be all electric. The ones that extend have a number of roads that are 90 miles or thereabouts.
Those can be electric while they're in force, leaving, approaching, and then go into, hopefully
something with a greener diesel or LNG or some other type of cleaner fuel that would then
propel during their journey. So we see a lot of really cool things coming together that we have
to recreate the marine highway system, because we can't create what worked in the 60’s and the
70’s,was breaking down in the 80’s, fell apart in the 90’s, and the last 20 years has been painful.
So having an opportunity with these federal funds to modernize the fleet, take advantage of the
renewable energy that we have in coastal Alaska is a good thing. I go back to my no brainer, but there's still a lot of good questions to be asked and answered in this process that we're just getting into. But we've been able to take a look at where it's working. There's a number of us that went to Norway last summer. These are things that they are doing left, right, and center. And so there's a lot of knowledge transfer that can happen and lessons that we can learn that we don't have to recreate for ourselves painfully and constantly. So we're excited about what we see on the near term horizon.
Mr. Venables added that British Columbia is one model of many around the world. They're on diesel hybrid ferry systems, and I think they dropped their operating cost of fuel downsomething like 80%. I'd like to see the numbers to really reflect that, but it's coming. Like my co-chair stated, Norway, Sweden, Finland, they've all gone to battery electric hybrid or battery electric pure technologies. We forget that our submarines in World War II were diesel electric
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propulsion. They had batteries, but they were generated with diesel electricity. So all we're doing is taking American technology and putting it in Alaska, where the world is kind of like
eclipsed us a little bit. We're going back to our roots here.
The benefits of growing our electric fleet, or beneficially electrifying the fleet with the federal
dollars helps us reduce the risk out of state budgets. And I want to key in on a point. We have had ferries down because that particular engine was built in Germany and they didn't have the parts for it, and then they had to go make the parts. And so a diesel electric hybrid ferry system might have 400 parts, where an internal combustion engine diesel ferry may have 2,200. So you also simplify the maintenance aspects dramatically with the move. This isn't a silver bullet, Carl. I think that this gives DOT an option, and they have smart people working on this. I think Robert's worked on the Marine advisory committees. They know what the problems are. We have a ferry fleet that was built over several generations with different parts and models. If you were a military, you'd say, this doesn't work. I think we've concluded what our ferry system needs, and this is the step in the right direction for the future.
So I support this, and I think we've done some homework on it, and we're going to be able to move forward with this in lowering the cost, not only providing more affordable transportation, but as the shore power systems come into these smaller communities, you're going to have to naturally accrue a battery energy storage system that can help with electric vehicles and other
things. So there's a lot of ancillary benefits that will probably grow from this matter.
Commissioner Kurber stated I look at this section and appreciate your detail. I see RCA
implicated in B-1.1, B-1.2, B-1.4 and B-1.5. I just want to briefly go through those. Just again,
I'm not speaking on behalf of the RCA, but just as a member of the RCA. What I see on B-1.1,
the utility building integration on the heat pump loans, some of this stuff doesn't look
controversial to me. On B-1.2,encouraging communities, I'm going to speak to something that
was very recent history for me. In January, when I think one of our first public meetings, Brian
Hickey came and talked about the grip funding proposals that we're going through. And
essentially we did a sense of the RCA motion. It was nothing super amazing. And to the extent
that it helped in securing that grid funding, great, but encouraging. That doesn't seem
particularly controversial.
Then we go to B-1.4, again, it's more encouraging. Not quite sure exactly how that may manifest in your life, but things like we did, where people come and present, we're like, we're supportive. We'll look at this as they come up and we'll be open minded to helping these things go forward. And then when it comes to the B-1.5, the Battery Energy Storage System (BESS)and the regulatory structures in place. BESS are not new to Alaska. They're getting improved. We also understand they're getting more expensive. So to the extent that we can do this, it seems very reasonable. So again, not speaking for the whole team, but I'm saying that my initial review of these are very supportive. So I'm not a voter, but I just think offering that as support and encouragement.
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Mr. Venables responded that to speak to Chairman Kurber's point. We put the RCA in there because we know that you can't just arbitrarily do something and that may impact the rate. So
if you do shore power in one community, maybe it's going to create a new rate class. Maybe it's
means we have to do something,so we don't negatively impact the residents. We're adding
new generation and maybe guiding at a higher rate or a different rate class. And so that's one
of the reasons why RCA is included because as these things go forward,and we do these great things, RCA is going to have to be involved to make sure that the rate issues are resolved. The question was called Roll call vote was taken.The motion passed (yes-11; no-0)
d. Lunch (20 minutes)
Vice Chair Thayer called the meeting to order. We’re going to pick up where we left off.
STRATEGY B-2: Alaska Policy Recommendations
ACTIONS B-2.1, B-2.2, B-2.3, B-2.4,B-2.5 and B-2.6
Mr. Mitchell stated that this is Alaska Policy Recommendations. For the Task Force situational
awareness, it's real easy to throw a rock at the federal government. The federal government's in
our way toward developing resources and other things. And sometimes that's true. Sometimes
it's just the way the process and the laws are. But this is a recommendation for internal
reflections. What can we do better, smarter, within our own control, with our own state
government, with our own regulatory regimes. And so let me go through these, and then we can decide whether we bunch it all together or we break them out. Mr. Mitchel read the strategies and recommended that task force members vote them in as a block, but he was open to the will of the task force. Task Force Members briefly discussed voting this as a block or individually.
MOTION: Robert Venables moved that the Task Force approve Coastal Generation, Distribution and Storage Actions:
B-2.1 -Establish, require, assist and implement a community integrated resource plan (light)to
forecast energy demand and generation for community and regional future energy needs to lower
energy costs.
B-2.2 -Strengthen Alaska's net metering energy framework, tariffs and regulations for Alaska's diverse stakeholders to promote net metering renewable energy investments.
B-2.3 -Strengthen and streamline the state of Alaska's internal state regulatory and land use administrative processes to accelerate approval to advance strategic energy projects and transmission for regional energy security and to lower energy costs.
B-2.4 -Strategize and prioritize state of Alaska funding to match federal funding and federal
financing to build and expand transmission and distribution lines in Alaska to bring Alaska on par
with US transmission systems for Alaska energy security and lower energy costs.
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B-2.5 -Establish and provide valuable energy planning and modeling metrics from state data sources where available and requested, such as DMV electric vehicle registrations and air source
heat pump installations by individual communities.
B-2.6 -Recruit, train and enhance Alaska workforce with technical skills and training for advancing beneficial electrification to lower Alaska energy costs and to sustain Alaska's growing energy infrastructure. John Sims seconded the motion.
Discussion:
Vice Chair Thayer opened the floor for discussion.
Robert Venables stated that most of these action items are things that we already do or do to
some extent. The intent is to spotlight and focus on actions we can do at an accelerated rate or
are more streamlined. The data supports the idea that you need to have a plan. Again, going
back to the silver buckshot analogy, the diversity and the objective, but it's with a target. That's
what the intent of the integrated resource plan (IRP)is. We don't just do diversity for diversity
sake, renewable for renewable sake. We do it with purpose and with strategy. Action 2.1 is IRP
light,so we have a plan with community solutions, regional solutions that help lower the cost of
energy to Alaskans.
Mr. Sims had a question on Action B-2.4 where we're talking about building and expanding transmission and distribution lines. One of my challenges that I have, looking back historically on the investments that the state has made, we do a lot of fantastic investments in the infrastructure, but often we don't consider the operating and maintenance expense of the new infrastructure. Is there language we could add about operating and maintenance. Would that upset anyone? Because I think it's really important to consider the ongoing maintenance and operating costs of those assets. I don't know if these specific assets would be in sort of utility cost of service or exactly how that would work. So I just like to address that somehow, and maybe it's unnecessary. Mr. Venables responded that he is open to highlighting operating and maintaining this infrastructure. And I'm open to highlighting that. Action 2.4 speaks to the lowering of energy costs. Transmission lines are not assets, they're liabilities. So unless you're moving energy across those, they shouldn't be built. You're not moving energy across there for an incremental thing, you have to have scale, which that's where you lower the energy cost. So it's inherent in there. Mr. Venables responded I'm open to wordsmithing that if that adds
awareness and definition. But I'm sure my Co-Chair will add to that because he spent a lot of
time thinking about this particular topic. But I agree.
Mr. Mitchell added that John, you make a good point. You do not build transmission lines, and
they will come. You build transmission lines knowing that you have an anchor tenant,or you
have a minimally viable transmission project that now has capacity to grow. If you don't have
that capacity to grow, you don't add on future projects,or they're tapped out. And it's like, hey,
you got a great wind project, you got a great solar project, but there's no room for you, even
though that there's a demand at the end of the pipe or the transmission line. So that is baked in
with this idea. We're not trying to say, hey, let's go fund something and then have a white
elephant.
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In our region, there is a southeast inner tide plan with a $384,000,000 authorization. It actually
had partial appropriation, which actually built a Ketchikan-Wrangell-Petersburg transmission
line. CIPA pays through that transmission wheeling rates. They cover the operational costs, the
upkeep, the maintenance. So we're not trying to BOLO or go off of that model where if you
build it, you have to incorporate that in there. However, there is opportunities for transmission and distribution over time. This isn't like a big bang theory where you're going to build everything. But as it can be incrementally brought forward in an economic fashion, I don't think we're trying to propose anything that would be business wise.
Mr. Sims stated just to be clear, I'm not opposed to this initiative. I would like to go a little bit farther and consider the operating costs. How are those are going to be paid for. Who’spurview are those are going to be under, whether it's AEA or the local utility. Because when you're talking about transmission and distribution lines, there's a lot there. So I just want to have some thought around that.
Mr. Mitchell stated that I think that goes to whoever the owner of the line is, whether it's AEA or it's a utility or it's another agency. That implies no difference in pipelines. It implies that operational cost and that maintenance upkeep that's necessary into baking into the tariff rate that eventually goes to the RCA for that transmission. They're going to look at making sure that
you're getting enough for that transmission expense for upkeep and maintenance.
Task Force member added ack to your original question. I might be totally wrong, so I'll ask it
back to you. I thought where you were going with your original question is, is this going to
have like a sinking fund component or a capex replacement fund component in it? So 30 years
from now you're not back looking for more money. Mr. Sims responded that's kind of how I'm
reading this. I think we need to consider what those costs are going to be and make sure we're
including that part of the strategy and analysis. I think it's well worthwhile, but I'd like to
consider a full package on this.
Mr. Mitchell stated I think the word sustainability implies all of the above of what you're saying.
Where you say to build and expand sustainable transmission and distribution lines in Alaska is going to imply that replacement, avalanche, anything else, the contingencies that are necessary. But I do agree with you that operational expenses need to be included. You can't just build it. You can't buy a car and then not change the oil.
Mr. Izzo asked for clarification on B-2.2. You talk about the expected results at the bottom and just part of a sentence that reads, “while ensuring net metering advances are addressed collaboratively, openly, transparently, sustainably and economically.” My own utility does not put a cap on the percentage of net metering. There's a 1.5% of your annual load that you're required to do by statute. We're well over double that. But at some point net metering results in people leaving the system. They save money, which is why we support it. But they're not contributing a fair share to base rates. If you were to speculate the proliferation or increase of net metering, one could easily speculate that you would end up with the poorest or low income
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remaining on the system without net metering but having to bear a much larger percentage of the baseload cost through the energy charge. When I read economically, I want to confirm that,
for example, my utility will likely look to a rate design change where there is a demand charge
for those that are leaving the system so that those that remain on the system are not subsidizing
unfairly.
Mr. Mitchell responded that's where the economically comes in. If we're going to do a net metering in any way, shape or form, it's going to go through the RCA. Hopefully it's going to ensure those considerations that you're raising are protected. And it's just maybe looking at that net metering. We haven't done it for many years. It's a retooling, looking at it, what's the best of breed in other states. This is not trying to say here's a lightning bolt. This is how it's going to be.
But I think you're wise and astute to the issues that you raise so that it stays economically not just for the person that's investing in the net metering, but for the whole system. Net metering does increase reliability and diversification and some other benefits as well. But your point is well taken, Tony. And that's where that economically is. You're not going to do any net metering unless you get it approved with the RCA's concurrence at any rate, unless you're a Muni utility, that's completely exempt. And then you've got your city council to take up with.
Mr.Hanneman stated that overall I'm in favor of voting for these action items as a block. But I
would have to say that this begins a discussion where we've all addressed similar topics in
different ways. And I don't really find that's a bad thing overall from the perspective of the
report. I'm talking about streamlining regulations and improving transmission and things like
that that we see in various other sections of the report. So I as long as they don't conflict with
other recommendations, we don't need to scrub these duplicative topic.
I don't find that any of yours directly conflict. But when we get into the details of B-2.5 and the
data collection required, I would have a hard time voting to approve all those specific data
points just because of the burden that's placed on the agency to do that. But yet, the idea of
collecting data and having better data available is obviously a good thing. So, with that caveat, I
would vote in favor of this block. I would also like to see some sort of operating cost issue identified in B-2.4 so that as we talk about doing these things, we talk about doing them in a cost effective and sustainable manner. Thank you.
Mr. Koplin stated that to help flesh out B-2.4 record, sometimes examples can help. As a committee, we talked a lot about holistic thinking and energy development and so forth, But developing transmission lines to some extent, and distribution lines in state right-of-ways, if that's done strategically and carefully, you can actually reduce the operations and maintenance costs not only of the power lines, but also the state highways. For example, siting underground lines and future conduit corridors and stuff, highways being paved and resurfaced. So it's hard to capture all the details in these high level bullet points.
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And then back to net metering, that was one that I struggled with a little bit as well. But I think a lot of these action items are not so much about going out and aggressively gathering all this
but developing templates and so forth. So I know my community struggled with net metering
because we didn't have any requests for several years. So to the extent that other utilities, other
communities, have good templates and develop good ways to provide that balance between
not stranding investments to existing ratepayers, while still providing a path for net metering are all productive. So I support all of these in block, and I just wanted to find out a little bit more detail behind the action items.
Commissioner Kurber stated I'm just checking with the committee co-chairs, because when I went through this and specifically saw RCA implicated in B-2.1, B-2.2, and B-2.5,I want to make sure I didn’t miss anything. Even though I won't be voting, I don't see any issue with doing it in a block. And we'll stand by to see what the details are, should they actually go into implementation. But they all seem very reasonable,and I'll leave it at that.
Ms. Miller stated for Action B-2.1 related to the Integrated Resource Plan (light), one thing I have concern about IRPs on the railbelt is just having another stage gate for a project to go through. Could that slow down projects from happening? So, I was just kind of curious if you guys talked about that at all. With this IRP light concept, what does project approval look like and how do we make sure that we're not implementing another work process that slows things down. So,
curious to hear your thoughts.
Mr. Venables stated that the devil's always in the details, right? At the very minimum, there are
economic development strategies that cover the state, cover the nine Alaska Regional
Development Organizations (ARDORS), the four economic development districts. There's a level
of planning, and so the bar is fairly low, but it exists. And so we just have to meet some
threshold of planning that shows that the impacts are, again, it's community solutions, regional
solutions, and part of an economic development plan that makes sense.
Mr. Mitchell added that, as someone who wants to see projects go forward, we're not trying to
add another rock in the wheelbarrow. This is certain utilities in the state either have to do an IRP
or the railbelt's looking at an IRP at the RSV. This is not complete. This is going back to communities that wouldn't fall into that network where they have the public meetings utility generators,tribal folks,and the city in the room to talk about the forecast and the demand and the generation. This public conversation also helps when you apply for federal grants. One of the checkoff box, I always ask is, did you have any public discussion on your grant application for a generation project or a transmission project or whatever. It's a nicety to have.
We're not intending this to be a requirement. This is a nice to have. It helps move things forward. When we bring a project to the RCA, the RCA is going to want to know if you had some kind of community involvement and backing. Does the public support this project? So,it's not a hurdle. And it's not to be confused with a full IRP, which is in itself an onerous process. We definitely made this an IRP light, meant to be an easy to implement model. It's like a template that can be initiated and supervised by Alaska Energy Authority. Regulatory Affairs
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and Public Advocacy (RAPA) section can be involved. We're trying to make it easy. That's the concept here.
Ms. Miller thanked committee chairs for that context. I like the idea of having a vision, an
energy plan for a community. It’s really helpful to know where we're heading. My concern was
around, is there going to be an exhaustive individual project approval process. But it doesn't sound like that's the intent. So just wanted to clarify that. Thanks. Mr. Venables stated that for the most part, many of these projects go after public funds many, many times. Policymakers at the local, state, or federal levels are going to know that it fits into a plan. That is really what the assurance is here.
Hearing no further discussion,Vice Chair Thayer moved to call the previous question. John Sims seconded.There were no objections. Roll call vote was taken. The motion passed (yes-11; no-0)
STRATEGY B-3: State of Alaska Coordination with Federal Agencies and FederallyRecognized Tribes Recommendations
ACTIONS B-3.1 and B-3.2Committee Co-Chair Duff Mitchell pointed out that we did have input from the largest tribe in the coastal area, the Tlingit-Haida Central Council. They asked that the Strategy title be shown
as Federal Agencies and Federally/State or Federally and State Recognized Tribes because our
State of Alaska has recognized the 229 tribal entities in Alaska. We'll change the title there, but I
want to reflect the input that we received from tribes.
MOTION: Robert Venables moved that the Task Force approve Coastal Generation,
Distribution and Storage Actions:
B-3.1 -Establish an Alaska/federal Renewable Energy Policy Force to develop, collaborate,and
prioritize State energy, plan,goals, and rights to optimally advance renewable energy and
transmission on federal lands.
B-3.2 -State of Alaska partners and collaborates with Federally and State recognized Alaska
Tribes and federal agencies to develop mutually beneficial Energy Development and
Transmission/Distribution to advance the State Energy Plan to lower the cost of energy.John
Sims seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Mr. Sims asked how the subcommittee defined renewable. This seems like it's statewide and not just focused on coastal. We had this discussion a lot in our subcommittee about how you define that. And I'm wondering if we want to restrict the options to the State of Alaska and the rural communities along with coastal areas as well to what some people define as renewable. And
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getting into that whole discussion. So is there an opportunity to expand that so that we have more flexibility, or what was the subcommittee's thought there?
Mr. Venables responded that from my perspective, that's what exudes around us in Southeast.
So that's what comes to mind as I reflected on what the task force in general was doing across
the state. I've already written down here the word clean. And in my mind we could add it or replace renewable with clean if we want to be consistent with our verbiage throughout. So I'm open either way on that. But just that we have water coming at us from all four directions in Southeast 364 days a years and it's all renewable. Mr. Mitchell added that I'm in agreement with my co-chair here. I would like word use to be consistent. And so if we want to supplement clean or just transfer renewable to clean, I'm good with that. But as someone in Southeast Alaska, you won't find a person in Southeast Alaska that doesn't think hydropower is not renewable.
Mr. Venables accepted the friendly amendment to change the word renewable to clean for consistency throughout the report. Mr. Sims concurred. Co-Chair Thayer asked if there was any further discussion.
Mr. Guy commented regarding the federal aspect of this, they can be very good partners because they recognize the need for affordable energy often everywhere. When we were
progressing with the Supplemental Hydropower Project from a region that would initially
intertie 14 villages on the Kuskokwim, we had to deal with the BLM and the Fish and Wildlife
Service. And through discussions with them, they became supporters of that project because
we'd have to go through their lands in order to complete the project. But through that
particular exercise, I learned that federal government agencies can be real good partners for
development. Thank you.
Mr. Hanneman asked if the co-chairs considered adding the ANCSA corporations regional
village to this collaboration. It seems with their large land base, that they might be a critical
piece in discussing the integrated transmission. Task Force members discussed adding ANCSA
corporations to the strategy as well, since they own and control surface areas.
Mr. Venables stated that in our discussions, it didn't come up because if you sit in southeast Alaska and you look around you, I think 95% of the land is tied up in Tongass National Forest or the federal government. So we weren’t even looking that direction. So,the major focus of B-3.1is the Forest Service and other federal agencies, such as the Department of Interior. And I fully support and welcome ANCSA corporations’perspective in this. Under Forest Service rules, they carve out input for the federally and state recognized tribes. But I believe that we should have all public input.
Co-Chair Thayer asked if Mr. Venables wanted to amend his motion, which he did.
Mr. Venables moved to amend his motion for Task Force Members to approve:
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B-3.2 - State of Alaska partners and collaborates with Federally and State recognized Alaska Tribes, Alaska Native Corporations and federal agencies to develop mutually beneficial Energy
Development and Transmission/Distribution to advance the State Energy Plan to lower the cost ofenergy. John Sims, as second, agreed with the amendment.
Senator Bishop added I think Carl's comments are timely, and the two co-chairs can correct him, because I think there could be two more ANCSA corporations come out of Southeast Alaska here if things prevail in the right direction. Mr. Venables added, just for everyone's gratification, when ANCSA came about, there were certain villages in Alaska that were called left outs. They received nothing. That has been a long fight for justice, land justice. It's not a question of if, it's a matter of when and hopefully sooner than later, because some of these people who initiated it are getting pretty old. So I just want to defer to your wisdom on that. We could have some other village ANCs.
Co-Chair Thayer asked if there are any other comments or questions from the group?
Ms. Whitney had a general observation on this section, and I don't even know if it's important, but I noticed that all the other strategies are worded as action statements, and this group, theaction statements are worded more as a recommendation. Is that a concern to the group for consistency sake. Mr. Hanneman agreed with Erin’s observation.
Mr. Venables responded that I see establish and also partner and collaborate as reasonable
actions. Since the strategies are overarching, and the action items have a task and purpose,
particularly in 3.1 and 3.2. it involves lots of parties. It's a collaborative effort and you need to
get everyone around the table to get the discussion going to resolve issues. That's the thought
pattern behind that wording.
Co-Chair Thayer asked if there any other comments or questions? Ms. Miller moved to call the
question. Tony Izzo seconded. There were no objections.
Roll call vote was taken. The motion passed (yes-12; no-0)
STRATEGY B-4: Alaska Hydropower Generation Recommendations
ACTION B-4.1Mr. Mitchell stated, for hydropower, as Don Young once said, southeast Alaska is the Saudi Arabia hydropower. I can't remember the exact statistic, but it's a profound amount of our renewable energy portfolio in Alaska is hydropower. So Coastal B-4.1 is toAs background, there is no cheaper energy form in Alaska than old hydropower. And Alaska cannot achieve old hydropower without proactively supporting and investing in new hydropower. Hydropower is a tried and proven Alaska energy resource. With proper maintenance, these hydropower systems have a life expectancy of over 100 years. Once financing debt is paid, the hydropower project yields consistent, sustainable, renewable and
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lowest cost power. And I would also add firm benefiting multiple generations of Alaskans and economic prosperity well into the future.
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MOTION: Duff Mitchell moved that the Task Force approve Coastal Generation,
Distribution and Storage Action:
B-4.1 -Foster, Support, and Assist Hydropower development and their transmission in Alaska to
lower energy costs,provide energy security,and spur economic growth, job creation,and
prosperity for Alaska. John Sims seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Mr. Sims stated that he wants to be cognizant of the comments that we received from the public on their concern for Susitna-Watana and how this is worded. This is specifically for the subcommittee of Coastal Regions. And do we need to add language along those lines? Right now it's saying fast track Alaska hydropower. I’m asking the task force, are we going to have a messaging challenge there? Or have a separate one for the railbelt. I’m just raising the question.
Mr. Venables responded that we don't want to overthink it or be dismissive, but at the same time, just to clarify what Duff said, there is no energy cheaper than hydro where the debts been retired. The lowest cost of energy we have in the state is where we've got the legacy hydropower projects that have been paid for. We've already addressed the Susitna-Watanasaying we don't know what those costs are, we don't know what the final anything is. So we're going to get to a decision on that. If that decision were to go forward, it would be because if it was paid for, it would also produce the lowest cost. So I think the verbiage is consistent. You have to make sure that you don't get emotional and go off on a tangent by picking just a thread
out the sweater. So I’m open to suggestions. But I think what's stated is true as long as you
understand the context of what we're doing as a group and as the state works towards
developing renewable energy that is paid for and very inexpensive.
Mr. Guy stated that he reads this strategy as for all of Alaska. We have hope to restructure the
projects.. (inaudible--audio cut out)
Ms. Miller stated that she supports this being a statewide initiative. I think it's important what
John pointed out about Susitna-Watana that it has a lot of history at a different decision point
or stage gate. And I think we've clarified that with its own standalone recommendation. But I'm
fine with this being a statewide initiative to advance clean energy that is cost effective. Thanks.
Mr. Koplin stated that this is a statewide initiative and I think it’s important to fosterhydropower as a really important piece of this report--particularly looking very closely at all the public comments. One good action I'd like to see come out of this is on the foster a project side to pull together stakeholder groups and have a very candid discussion about the current state of technology of hydro,Alaska's deep past experiences with Hydro, and all the value streams and benefits of hydro. In addition, discuss the risks and how to offset potential or real negative impacts of hydro. I think that would do a lot. I think there's a lot of misconceptions and a lot of
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gaps in knowledge concerning the state of fishery passages. The benefits and safety of hydro development are many. But I see this as a statewide initiative.
Mr. Vanderburg was looking to see if the definition section was included in this document. It
may be and I just haven't found it. I just wanted to confirm the group's understanding that
hydropower includes tidal under river as well. Then, does development include redevelopmentor upgrades of existing infrastructure. Mr. Venables responded that it is all of the above. So, yes, hydropower is hydrokinetic. It's rivers, it's in stream. It's the way of the tidal. Traditionally, we know where that is. And my analogy is Alaska is an Arctic state. Sometimes Ketchikan has a hard time understanding that. But Alaska is also a hydro-state, so all forms of hydro is available to us. Co-Chair Thayer added, as an interesting data point, there are over 60 active hydro sites in Alaska. Some are just the small ones. And the oldest one is 1905 and it’s still in operation.
Mr. Hanneman wanted to follow up on Clay's encouragement that we follow this action to foster and support the proved awareness of the importance of hydropower in Alaska and its potential. I'd have to say that one of my disappointments from reading the public comments was one recognized mention from a utility, but not much encouragement for any specific projects. A lot of angst against a certain hydro project, but no recommendation. For example, these are the ones we would support, that want to support, need to support. So that's really the first element of this action. Is to try to improve awareness about the benefit that hydro has brought us and
can bring us in the future.
Mr. Mitchell stated I would just like to close. I was a commercial fisherman for 25 years. And
Alaska has a love for our seafood and for our fish. And we're fish friendly, or we're fish first.
And I believe the EIS process resolves any particular one project’s issues. That doesn't mean we
don't support hydropower, like what this is trying to do. If you have a bad project, trust me,
you're not going to get through the EIS, through the public process. And so there's that
safeguard that I want to mention to the public and the public comments that you have to look
at each case, any hydropower, and each aspect of a hydropower project individually. So I just
want to throw that out there for the public's understanding.
Commissioner Kurber shared an observation about the volume of public comments with respect to a certain hydro power project. And it strikes me as very similar to an advanced nuclearproject with some of the strongest views and positive views I've heard. So, however this goes, however any of these things tumble past our sending the report forward, it's just a clear indicator to me that public information programs are going to need to accompany this so that people understand all sides of the story.
Ms. Miller moved to call the question and unidentified Task Force member seconded. There were no objections. Roll call vote was taken. The motion passed (yes-12; no-0)
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e. Rural Actions -Andrew Guy and Clay Koplin, Co-Chairs
STRATEGY C-1: Increase Capital Availability
ACTIONS C-1.1, C-1.2 and C-1.3Committee Co-Chair Andrew Guy stated, as background, rural Alaska is in a different place. Itstill operates with last century technology, very old technology, basically. And , as a child, I watched the electrification of rural Alaska when ANCSA was enacted. ANCSA forced our communities and our people to electrify because ANCSA mandated the creation of the corporations that had to do business. And to do business, they had to have electricity to run the stores, to power the refrigerators, everything. So it was actually the village corporations that began that process. But it was with the understanding that in order for assets to be fully
implemented, we would need the basic infrastructure in place, and that would entail the feds
and the state to do their part. Well, 50 years later, we're still waiting for the state and feds to do
their part. And in order for us to fully realize the governor's goal of ten cents, plus or minus,per
kilowatt hour, we need action from the state and feds. The recommendations that we have are
aimed at getting that promise fulfilled so that opportunity will be fully realized through the
enactment of ANCSA for us, as native shareholders, tribal citizens and Alaska citizens. Thank
you.
Mr. Koplin followed up by providing additional background. Rural Alaska,and its energy needs,
have been studied and a lot more invested in over the last few decades because of the high
costs and remoteness and so forth. And to agree with my co-chair, Andrew, I think our focus in
these recommendations are how do we gather what we know and fill the gaps and actually start making some progress. And it's a big elephant and we may just have to bite it off one piece at a time for the communities that have resources available and have capacity. Some of these recommendations will speak to ways to get the energy systems upgraded in some of these areas. Just like the other subcommittees, we also received some rural public comments late this morning. They were very good comments. So, on a break, I touched base with Andrew, as co-chair, about these comments. Based on our discussion, I’m going to propose a couple of smalledits to our section. In general, strategies in C are access to capital. It’s very challenging forvery small communities where you don't have the economy of scale to come up with funding.
C-1.1 - Identify a Funding or Financing Mechanism for Rural Communities including a “Local Match” for Federal Grants.
This speaks to leveraging the infrastructure funding that's available now and driving in state and
other partners. I will say I've noticed in the last few months a real rising interests from philanthropies who are very interested in various investments in Alaska and remote regions for different reasons, whether it's combating climate change or promoting new and available and commercial grade technologies. So that might be an opportunity there.
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C-1.2 - Identify opportunities for Public Private Partnerships to finance/fund energyinfrastructure projects in rural Alaska.
This is holistic thinking, that when we do any kind of a project in a remote community, to look for opportunities to partner and share the cost and the benefits of projects, whether it's a DOTproject or others. That also speaks a little bit to the integrated resource planning light that the coastal community mentioned.
C-1.3 -State of Alaska commit to sufficient capital budget funding for energy projects in
rural Alaska.
We've had the renewable Energy Fund program. It's been highly successful. And just that signal to rural communities helps them in the early planning stages and so forth, knowing that there's dedicated funding mechanisms to pursue these projects when they get through the concept andearly phases of project development. As co-chairs, we recommend that the task force accept these actions and vote on them as a block.
MOTION: Clay Koplin moved that the Task Force approve Rural Generation, Distributionand Storage Actions:
C-1.1 -identify a Funding or Financing Mechanism for Rural Communities including a “LocalMatch” for Federal Grants.
C-1.2 -Identify opportunities for Public Private Partnerships to finance/fund energy infrastructure projects in rural Alaska.
C-1.3 -State of Alaska commit to sufficient capital budget funding for energy projects in rural
Alaska. Andrew Guy seconded the motion.
Discussion:
Vice Chair Thayer opened the floor for discussion.
Mr. Sims proposed a friendly amendment to separate and vote on Action C-1.3. Without any details in the strategy,I'm struggling with this action. Both Mr. Koplin and Mr. Guy agreed to this request.
AMENDED MOTION: Clay Koplin moved that the Task Force approve Rural Generation, Distribution and Storage Actions:
C-1.1 -identify a Funding or Financing Mechanism for Rural Communities including a “LocalMatch” for Federal Grants.
C-1.2 -Identify opportunities for Public Private Partnerships to finance/fund energy infrastructure
projects in rural Alaska.Andrew Guy seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
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Mr. Hanneman, asked about the organization of the actions. He saw action papers in the back of the report. Is something missing that might help answer questions for John. Mr. Koplin
responded that the committee selected the two highest priorities and focused on those. Mr.
Hanneman stated his committee did that too, so he understands the approach.
Mr. Venables called the question on the motion. John Sims seconded. There were no objections. Roll call vote was taken. The motion passed (yes-12; no-0)
MOTION: John Sims moved that the Task Force approve Rural Generation, Distributionand Storage Actions:
C-1.3 - State of Alaska commit to sufficient capital budget funding for energy projects in ruralAlaska. Andrew Guy seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Mr. Sims stated that there is wording in this action that concerns him. While he supports
additional capital funding for energy projects in rural Alaska. Words matter to me. What is the
definition of sufficient capital--$10 billion, $200 million? Just looking for a definition with some
meat on it that we can all agree on. So, can the co-chairs elaborate on this action item C-1.3.
Mr. Guy responded that my late uncle was part of the legislature during the time some of these
discussions, so I've had an opportunity to talk to him and other legislators of that time.During
those legislative sessions there were major railbelt energy projects being discussed and
approved.One of the items that rural legislators back then were fighting for was for the state to
commit to projects for their areas as well. That's how the PCE program came about. To
basically make it also equal for rural areas to benefit from the projects that the railbelt was
benefiting from. But like I said, the structures of the government is that you're not bound by
previous legislatures, and that was,I guess, used as an excuse for not meeting the legislative
agreements. But totally disregarded the main agreement. And that's what's been the situationfrom 1980s to today. And Senator Bishop can add more to this because he's had discussions with current legislative folks, representatives that hail from rural Alaska and that know history, too. Thank you,
Senator Bishop stated that State of Alaska commits sufficient capital. And I spoke to this in the June when we discussed AKLNG. The senate passed an amendment that 20% off the top of the AKLNG project would go into the Alaska Energy Fund for rural Alaska. Now, my numbers are dated, but off of those cost estimates and returns that would have generated about $200 million a year would go into a capital working fund, per se. So that's one revenue stream that's potentially still out there. It's in statute, Just a little background there.
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Mr. Koplin stated that he hears where John is coming from. Back in June, we were given a list of projects, and the only thing stopping us from doing those projects is cash flow rate. As an
example, we’ve got almost a billion dollars just in deferred maintenance on fuel tank
replacements in villages. That's just one area. But when you look at that capital budget list from
AEA, those projects are there. It's just we can't get to them. The list is a footnote in the report.
Mr. Sims suggested adding “State of Alaska, commit to sufficient capital budget funding for AEA projects in rural Alaska.” That gives more definition rather than an open book.
Vice Chair Thayer added as far as AEA is concerned, we're required by statute to come up with a list of powerhouses and bulk fuel, top 25. But when you actually look at it, there's $800 billion in deferred maintenance in fuel tanks and $300 million in deferred maintenance in powerhouses. And the interesting thing is all the IIAJ dollars and all the IRA money and all the sub dollars, zero qualifies in rural Alaska to help them with their powerhouses and in their bulk fuel. AEA has done an inventory and assessment of all the powerhouses needs. And we're working with the Coast Guard to do that in rural Alaska. And the fact we have to work with the Coast Guard in rural Alaska should make us really nervous because that means these fuel tanks are built next to a river where there are erosion problems. It takes just one tank going into the river and we’vegot a problem.
Mr. Sims stated that was his point about what is a sufficient amount. Vice Chair Thayer
responded that these projects total $1.1 billion as of today. We can augment for the committee
a list of the communities in ranking order. The top 25 are identified and given to the legislature.
But we do have the ranking of 400 bulk fuel tanks and 197 powerhouses.
Mr. Venables stated that he understands John’s concerns. But at the same time, having worked
in and around and through legislative processes, I have a lot of confidence in the public process.
Those things do sort themselves out. Senator Bishop mentioned the 20% fund that was put
there. Senator Stedman set up a Southeast fund at one point. I haven't got a dollar on that yet.
There are mechanisms in places. I've seen millions of dollars go out when there's a time of
plenty, and I've seen a dollar go when they said that's sufficient. So I think it's clearly vague or
vaguely clear, but I'm comfortable with this, even though I agree with you 100%.
Mr. Mitchell commented that he’d like to help move this question forward. We have AEA with approved lists of whether it's in rural Alaska, whether it's any kind of Fund X through Z. Is there anything wrong with state of Alaska commit to sufficient capital budget funding for any projects in rural Alaska as determined or as approved by AEA?
Task Force members further discussed making a friendly amendment to the action item to address concerns raised about it being too broad by including AEA and the legislature in the action item.
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AMENDED MOTION: John Sims moved that the Task Force approve Rural Generation, Distribution and Storage Action:
C-1.3 -State of Alaska commit to sufficient capital budget funding for energy projects in ruralAlaskaas identified by AEA communities or the legislature. Andrew Guy seconded the motion.
Mr. Venables called the question on the amended motion. Ms. Miller seconded. There were no objections. Roll call vote was taken. The motion passed (yes-12; no-0)
STRATEGY C-2 Infrastructure Investment
Actions C-2.1, C-2.2, C-2.3, C-2.4, C-2.5, C-2.6, C-2.7, C-2.8
Vice Co-Chair Thayer asked the committee co-chairs to introduce these action items and decide
if they will be voted as a block or separated out.
Mr. Guy stated that these recommendations mostly go toward forming grids because that's
proven technology. In rural Alaska, we have so many communities that are 1 mile to 20 miles
apart. They're not even interconnected. And many of the factors for the high cost of energy are
because of the lack of grids.
Mr. Koplin stated that he was scanning through the actions to see if there was any reason not to vote them as a block.
Vice-Chair Thayer commented that C-2.8 evaluate micronuclear and other emerging underutilized technologies throughout the state of Alaska. That one does seem more of a statewide perspective as opposed to rural. We would like to use that technology outside of rural Alaska if it proves up.
Mr. Koplin stated that based upon public comments received, he wants to amend C-2.8 to include “evaluate micronuclear, natural gas, hydrogen, and other emerging underutilized technologies.” As an example, while a large scale nuclear power plant site would be objectionable or wouldn’t work in a rural setting, a siting in a remote area is an opportunity to both expand the grid and extend power regionally and potentially tie into the grid. So, in that sense, it would be statewide and would underscore that rural investments can have statewide
impact and even ultimately tighter grid.
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MOTION: Clay Koplin moved that the Task Force approve Rural Generation Distribution and Storage Action as amended:
C-2.1 - Promote a regional planning approach to connected energy, transportation, and broadband infrastructure.
C-2.2 - Identify gaps by leveraging studies done by regional ANC corporations, Economic Development Districts, Denal Commission, and other organizations as well as state and federal agencies.
C-2.3 - Replace or appropriately displace community-focused aging infrastructure in rural communities of Alaska.
C-2.4 - Invest in pilot projects using appropriate technologies that demonstrate a regional approach to supplying affordable and reliable power to multiple communities.
C-2.5 - Fund and construct opportunities to connect rural communities through transmission lines and other shared energy projects.
C-2.6 - Invest in critical repairs and resilient infrastructure that may be at high risk to current and future natural hazards (wildfire, extreme cold, storms, etc.) to avoid energy disruption and preserve continuity of operations.
C-2.7 - Invest in expanding the railbelt grid to rural areas.
Invest in expanding the rail belt grid to rural areas.
C-2.8 - Evaluate micronuclear, natural gas, hydrogen,and other emerging/underutilized technologies throughout the State of Alaska.Andrew Guy seconded the motion.
Discussion:
Vice Chair Thayer opened the floor for discussion.
Ms. Miller had a question about C-2.5, which is fund and construct opportunities to connect
rural communities through transmission lines and other shared energy projects. And then
there's C 2.7, which is invest in expanding the grid in rural areas. And so just wondered if those
are redundant or if they have a unique intent. Both read as creating more of a grid or
transmission lines. So just want a little context there. Thanks.
Mr. Koplin responded that C-2.5 does have more information in the appendix data sheet. For C-
2.5 through transmission lines or other shared energy projects. We were really thinking in terms
of intra-community, which is connecting between communities and not only transmission lines, but maybe centrally or regionally located energy projects. Where C-2.7 we were looking at actual transmission ties, expanding the existing railbelt grid to rural areas where new transmission line sightings or existing ones make sense to expand the grid. So 2.5 is inter-grids between communities. While 2.7 is expanding the railbelt grid into rural areas where it makes sense.
Ms. Miller thanked Clay for that clarification. Would the co-chairs be open to clarifying that in the action title? Mr. Guy responded that's how I remember too, and that's a really good way to clarify. So I'm open to that clarification language.
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Mr. Koplin stated how about for C-2.7,Invest in expanding the rail belt grid to rural areas. Mr. Izzo stated that he supports all of these actions, and I like the improvement with the added
language in C-2.7.
Mr. Hanneman asked if there was any further detail in 2.7 with respect to evaluating the
feasibility for extending the railbelt grid out into rural areas. Is this referenced somewhere in the report that Clay was reading from. Mr. Koplin responded that he was reading C-2.5, which was referenced at the bottom. For context, and to help share some of the discussion and thinking, we were thinking of extending the railbelt grid to anchor tenants who can also connect rural communities along the way or near the site for remote site developments. And also if there's new transmission line extensions that are adjacent to small communities or disconnected remote communities, that would be an opportunity to tie those. But really it's about great expansion to connect those rural communities to economies of scale.
Mr. Vanderburg had a general question across subcommittees. I'm seeing a lot of invest and fund things, but I'm operating from a context where we're running a huge state deficit, $900 million over the next two years. And I'm just wondering, are we saying the state is going to invest in this? How are we thinking about that issue? What pot of money are these investments coming from.
Mr. Koplin responded not at all. And Andrew may want to weigh in on this as well. But that's a
great question. In invest, words do matter. Invest implies that there's a return on investment.
So the funding sources can be different. The return on investments can be different. But the
idea is if you have anchor tenant that's developing a mine, and instead of developing an onsite
energy project, can collaborate with the state, for example, or the state and federal government
to build a transmission line to that site, and maybe they still invest in energy generation that can
feed back onto the larger grid. But the biggest parts of the state budget are health and human
services and education. Opportunities to reduce costs in their own areas are huge returns on
investment, and energy is core infrastructure, particularly in rural communities, and investing in
electrifying or improving the platform can take many forms.
So I think from our discussions, we're really looking at private sector investments and state investments. But a lot of the discussions really revolved around building rural economies. I mean, once you have a local economy and have abundant, reliable, affordable energy, that is the biggest barrier to rural development. And so it isn't about building, I would say, and I'd really like Andrew to weigh in on this, because it's what I heard from him throughout, is that we don't want to build energy projects. We want to build rural economies. And I can say for my community, once you get the energy problem solved and you attract businesses and industry, you start having programs where you can start investing in your own local infrastructure, your health care, your schools. So that was a lot of the thinking and discussions.
And because you asked the question, we also talked a lot about the evolution of technology. So on C-2.8, we mentioned natural gas. But part of the discussion around that is there are technological advancements that are starting to make smaller scale, localized natural gas
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production more feasible. And that was some of the comments that I received this morning as well around natural gas.
Mr. Guy added that we had a missed opportunity for low cost energy with one of our biggest
projects 20 years ago. Then when you look at all of the smaller potentials that we know about,
that can never become feasible just because low cost energy is not available. We need something big to happen in energy, not just for that major anchor tenant, but for all of the other smaller projects that can start coming online with that opportunity to connect and take advantage of low cost energy. Thank you.
Commissioner Kurber stated I really appreciate C-8.1 because it expands the options that we need. I think that while public comment maybe against this project or for that one, we want to make sure that we have every possible tool available in our toolbox for energy. And members like Clay and Duff bring a lot of knowledge about hydropower to the table. But I was at a nuclear conference not too long ago, and Clay was there as well. And he brought up something that really got my attention. In Alaska, we know we have natural gas, we know we have oil, we know we have rare earth minerals up around the road area, but we also apparently have radium. And that's an issue that's going to be required if there's going to be an advanced nuclear renaissance surge. Andrew commented that we need to build economies, not energy. But you need energy to have economies. So the fact that they're thinking along these lines, I just
applaud it, and especially the way it's been expanded already with the edit.
Mr. Izzo went back to Isaac’s question, which he appreciated. I don't view this as excess funds
that we're limited to, I view this as investing in a future. Identifying or investing in the time and
capital, human capital, and understanding what it takes to get some of these things done. Then
prioritizing them and finding a way. If the money were sitting around, they'd already be done.
So it's a matter of just doing the work to figure out a way to make them happen. That's how I
view it.
Vice Chair Thayer wanted to comment on Isaac's point, too. We are in a unique time with all
these federal dollars coming in. And granted, I already spoke to the fact that powerhouses and
bulk fuel do not qualify for these federal dollars, but there's a lot of opportunity and there's also matching opportunities. And the federal government is usually in the 80/20, 85/15 matching with the state, coming up with the smaller of the amounts. The time is now to invest in rural Alaska during these next five years, to help identify those opportunities with the federal government that we can partner together and where they're going to take the lion's share to dothis. One thing we're finding out here at AEA with the Renewable Energy Fund, the Power Project Fund is communities can borrow money at long-term capital rates. They leverage that for 80% more from the feds. There are programs where the communities are borrowing some money from the state. They're paying the state back at below market interest rates, but it's benefiting them because they're getting an 80% return on that dollar. There are federal dollars that are readily available that we need to apply for and work with, not just rural, but all Alaskacommunities to apply and maximize these funds. And thank you to Erin and Department of Energy for this assistance.
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Senator Bishop asked for clarification on the powerhouses, which don't qualify for IIJA and IRA
funds. What if it's a carbon neutral project powerhouse? Vice Chair Thayer responded repair,
maintenance and replacement of existing facilities doesn’t qualify. However, renewables do
qualify. Senator Biship stated that the amendment mentioned earlier for AKLNG, we applied the
same amendment to the carbon credit bill the Governor passed for above-ground trees. I’m going to apply the same amendment for below ground sequestration piece on the floor space. More to come on that. But I’m looking at all ways to raise money.
Ms. Miller called the question on the motion. Duff Mitchell seconded. There were no objections. Roll call vote was taken. The motion passed (yes-12; no-0)
BREAK (10 minutes)
STRATEGY C-3: Lower Operational Costs of electricity, heating and transportation in Rural Alaskan Villages
ACTION C-3.1, C-3.2, C-3.3, C-3.4
Vice Chair Thayer called the Task Force meeting back to order and he asked the co-chairs of the
rural committee to continue.
Mr. Guy stated that much of the high operational costs that face our communities in rural Alaska have to do with the fact that they have to operate individual systems on their own, and they have a lot of turnover in their employees, which means they’re having to hire and retrain new people all the time. These recommendations look to address that aspect of operating in rural Alaska.
Mr. Koplin added that he wanted to quickly go through the Actions to provide a little bit of
context. And thank you, Andrew. He encapsulated the high level thoughts there. So expand in
inventory technical assistance. The idea there is that there's a lot of great training and technical
assistance and workforce development going on with the trade unions, the AEA, the State of
Alaska. However, different utilities take different approaches. It's particularly tough with power
generation systems because each one is different,and they require different levels of expertise.
So it's hard to have one kind of overarching training program. But there are some great
accredited online programs. We can and probably should do more to get into our schools, even
at the elementary level, and to provide a little background of basic energy and some of the
opportunities in the industry. So that was the thinking behind C-3.1 is to not try to duplicate
any training that's been available, but try, as Andrew said, to assist with maybe institutionalizing
and creating better onboarding systems to manage turnover in workforce.
C-3.2 Identify innovation in logistics transportation to improve supply chain reliability. Many rural communities rely on a single or very limited number of fuel deliveries a year. That also speaks to why they have to carry such huge tank farms that require operations and
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maintenance. So the idea is that there's innovations happening. I'm hearing there's one firm saying they're going to have helium assisted airships. They're going to have amazing capacity
on the market here in the next few years. So we do look to innovation to create new
opportunities over the coming years, and we want to be sensitive to those and see how we can
apply them to rural energy challenges.
C 3.3. Create and implement a community outreach and education program to combat NIMBYism in energy projects in rural Alaska. Many times there's a lot of opposition to a project before it's fully explained,or the community has been engaged. And in my experience, at least, it's much more productive to have Alaskans working with Alaskans before you try to implement something community, maybe have another community share their experiences, and that can be expanded far beyond rural areas of the state.
C 3.4. I know the AEA has done a lot of work helping utilities automate their systems. You can dramatically improve the efficiency and the reliability and somewhat limit your exposure to your local human resources by using some of the new technologies that are available. And many of these can be remotely monitored and advised. And that's why you'll see other comments regarding broadband. This is one area where, under the purpose of this section, we recognize that many times, heat is actually a higher energy cost than electricity in rural areas. And based on some public feedback we had, we like to just revise this purpose from lower operational costs
of power electricity, we would add, heating and transportation in rural Alaskan villages. Those
are all high costs, and some new technologies can actually develop economies to scale around
electricity and transportation and heating.
MOTION: Clay Koplin moved that the Task Force approve Rural Generation, Distribution
and Storage Actions:
C-3.1 -Expand and Inventory technical assistance,training and workforce development to identify gaps, increase capability & capacity building activities for Training a Rural Energy Workforce.i.e. apprenticeship programs for energy production.
C-3.2 -Identify Innovation in Logistics Transportation to Improve Supply Chain Reliability.
C-3.3 -Create and implement a community outreach and education program to combatNIMBYism in energy projects in rural areas.
C-3.4 -Grid modernization and automation. Andrew Guy seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Vice Chair Thayer asked about the term NIMBYism in C-3.3. I know what it means, but in the context of the report, we might want to find a different word to use. Mr. Koplin responded that, yeah, we struggled with that word. Mark Lucan with Michael Baker mentioned that, if you will recall, the committee did come up with different language if you will recall. C-3.3 Create and implement a community outreach and education program to encourage stakeholder adoption of energy projects in rural areas.”
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Mr. Koplin stated you're refreshing my memory. Vice Chair Thayer asked if Clay, as the maker of
the motion, and Andrew, who seconded the motion, agree with this friendly amendment. They
both agreed.
Mr. Sims had a comment on C-3.1. We're seeing this type of language for workforce development in a number of different subcommittees. And just thinking back to the concept of having sort of a recommendation that's in the executive summary, I would just make the comment that I think this is also included in another one that we're going to be discussing here in the future. So would just be supportive of moving that in the executive summary as one of the main focuses and initiatives through this recommendation.
Mr. Mitchell stated that for C-3.4, I don't like the broad grid modernization and automation. And after reading the fact sheet, I can understand how you're trying to condense it into something shorter. So I would just offer as a friendly amendment something like procure, install and improve grid modernization and automation. So it's just not a blanket statement.
AMENDED MOTION: Clay Koplin moved that the Task Force approve Rural Generation, Distribution and Storage Actions:
C-3.1 - Expand and Inventory technical assistance,training and workforce development to identify gaps, increase capability & capacity building activities for Training a Rural Energy Workforce.i.e. apprenticeship programs for energy production.
C-3.2 - Identify Innovation in Logistics Transportation to Improve Supply Chain Reliability.
C-3.3 - Create and implement a community outreach and education program to encourage stakeholder adoption of energy projects in rural areas.
C-3.4 - Procure, install and improve grid modernization and automation. Andrew Guyseconded the motion.
Duff Mitchell called the question on the motion. Jenn Miller seconded. There were no objections. Roll call vote was taken. The motion passed (yes-12; no-0)
STRATEGY C-4: Improve Economies of Scale
ACTIONS: C-4.1, C-4.2, C-4.3, C-4.4,
Vice Chair Thayer asked Clay or Andrew to discuss improving economies of scale, which is a C
4.1 through 4.5. Mr. Guy stated that these recommendations are very basic and don’t requiremuch of an explanation.
MOTION: Andrew Guy moved that the Task Force approve Rural Generation Distribution and Storage Action:
C-4.1 -Identify Economies of Scope/Scale to Provide Multi-Benefit Utility Projects.
C-4.2 -Identify Energy Anchor Tenants to Provide Economy of Scale for Rural Communities.
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C-4.3 -Identify a Funding or Financing mechanisms for Rural Communities including a “Local Match” for Federal Grants.
C-4.4 -Identify and complete a regional pilot project to demonstrate economies of scale.
C-4.5 -Invest in rural beneficial electrification.Tony Izzo seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Unidentified Task Force member stated that he had a very minor edit to C-4.3 to strike the “a” and add an “s” to the end of mechanism. So we're not just looking for just one something,
we're looking for several funding mechanisms and financing mechanisms. Mr. Guy agreed with
the friendly amendment.
Mr. Izzo also had similar friendly amendment for C-4.5. I would like to add develop and invest in rural beneficial electrification. Vice Chair Thayer asked if there any objections to this friendly amendment from the maker of the motion or the second? There were no objections.
Mr. Koplin had no objections to these amendments. He did refer back to C-3.4 in the previous
section just to point out that this was one of two priorities that we had in the planning documents in the recommendation. So the committee might consider that. I think grid modernization has implications for all of Alaska. And I would just say most of the grid modernization efforts around automation, better sensors and deriving better grant efficiencies out of hydro, diesel and other technologies have a very short payback. So I just wanted to plant that seed. I don't have any other comments on this section. I think they are pretty self-explanatory.
AMENDED MOTION: Andrew Guy moved that the Task Force approve Rural Generation Distribution and Storage Action:
C-4.1 -Identify Economies of Scope/Scale to Provide Multi-Benefit Utility Projects.
C-4.2 -Identify Energy Anchor Tenants to Provide Economy of Scale for Rural Communities.
C-4.3 -Identify Funding or Financing mechanisms for Rural Communities including a “LocalMatch” for Federal Grants.
C-4.4 -Identify and complete a regional pilot project to demonstrate economies of scale.
C-4.5 -Develop and Invest in rural beneficial electrification.Tony Izzo seconded the motion.
Mr. Izzo called the question on the motion. Jenn Miller seconded. There were no objections.
Roll call vote was taken.
The motion passed (yes-12; no-0)
STRATEGY C-5: Improve Data-Driven Decision Making
ACTIONS: C-5.1, C-5.2, C-5.3
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Vice Chair Thayer stated that this is the last item under rural and will turn it over to Clay or Andrew, if they want to discuss. Mr. Guy stated that considering the scope of the area covered
by rural Alaska and different geographic conditions, we lack and need information that can help
us make very good decisions for successful energy projects.
All of these recommendations go toward that goal.
MOTION: Andrew Guy moved that the Task Force approve Rural Generation and Storage Action:C-5.1 -Locate and catalog existing energy studies, and update and collect data necessary to makeinformed value decisions related to energy generation,distribution,transmission, and storage in rural Alaskan villages.C-5.2 -Leverage critical local knowledge provided by residents in coordination with and complement ongoing and planned projectsC-5.3 -Explore and leverage existing and new data capture tools including artificial Intelligencetools to quickly analyze existing and new data collected in rural Alaska to provide potential energy solutions.John Sims seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion. He also added that as a point of information, AEA has been working in rural Alaska for 45 years and we are ready to go live in the fourth
quarter with the data library of all the reports that the legislature has paid for over the past
years.It's not to replace any of these recommendations, and as long as it’s not security related,
these reports will be available for public viewing and usage by the end of the year. We'll let
everybody on the task force know when that happens.
Mr. Venables commented that he knows AEA facilitated a regional energy plan which listed
hydro projects. But if there's one that may not be on there, this would be a great time to update
it so that it reflects both the prioritization of plans and moves your projects forward.
Mr. Mitchell stated that in reading C-5.1, C-5.2, and C-5.3 they dovetails nicely into some of the
recommendations we made in Southeast, but also on the energy data, where it says, establish a
data department with the Alaska Energy Authority using statute as necessary. Now, I like the C documents because they're really clear and they're really deliberate of what they're trying to aim for. And I like to aim so you can get a bullseye. I would like to know Chancellor White’sthoughts on how these tie in together, because these are very energy or data driven pieces and parts of moving forward.
Chancellor White responded that I appreciate each one of these, C-5.1, 5.2 and 5.3 because I think they dovetail nicely with the data group’s conclusions and strategies. I don't see anything that is contradictory or at cross-purposes. So I think approving this group of actions will support and be supported by the data actions that we will come to next. So I think it's all good stuff.
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Tony Izzo called the question on the motion. John Sims seconded. There were no objections. Roll call vote was taken.
The motion passed (yes-13; no-0)
f. Data Action -Dan White, Chair
STRATEGY D-1: Establish a Data Department within the Alaska Energy Authority (AEA),using statute as necessary
Vice Chair Thayer introduced this strategy and actions and asked Chair Dan White to discuss. Chancellor White first wanted to acknowledge and express his appreciation for his fellow committee members, Commissioner Boyle and Erin Whitney. Their insight and input were invaluable. He also wanted to acknowledge Connor Erickson (ph) who contributed a lot. We had a lot of work to do with a lot of stakeholders in data and understanding data and how data is used and the needs. Brittany Smart, who is the Energy Transitions Initiative coordinator for the Alaska Center for Energy and Policy, stood up as our technical advisory committee chair. So early on, we formed a technical advisory committee with broad stakeholder membership from business and industry, state,feds, NGOs. Brittany led that ably and we very much appreciate thework of that group. And I'll also like to acknowledge Maggie King for her help with that.
As was previously mentioned, in order to have good, informed decision making, you need good
data. Data that's well organized, that's up to date, also continuous records of data, data that's
curated and accessible and has what we call metadata associated with it, which is context. So
essentially, we came up with these four strategies. One, around where the data will be housed and how. Two, how data will be governed. That is, who decides what data and what data to collect it and how it should be collected. Three, what kind or how much capital is needed to actually collect the data. That is, who and what departments. Fourth, what data will be included and what's the gap analysis to figure out what we need.
So, in this first strategy, there was a discussion about whether any statute would be needed at all to establish a data department within the Alaska Energy Authority. But it was believed that AEA is the right place for a data department and if necessary, statute be used to create that. So this bundle of actions is to establish the Data Energy Department and then to fund and develop a technical and needs assessment;a capital asset plan, a continuous operating maintenance budget, particularly for the software, the platform in which the data is houses, and then staff the department based on technical needs and assessments.
MOTION: Daniel White moved that the Task Force approve State Energy Data Actions:
D-1.1 -Institute or update statutory requirements for AEA Data Department.
D-1.2 -Fund, develop, and implement a technical and needs assessment.
D-1.3 -Fund, develop, and implement a capital asset plan.
D-1.4 -Develop and fund an operating and maintenance budget, to include the identification of
potential funding sources and mechanisms.
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D-1.5 -Appropriately staff the department based on the technical and needs assessment.John Sims seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Ms. Miller had a friendly amendment to the motion. In reading through all four strategies, she
didn’t see anything controversial and would like to amend the motion that in addition to Actions
D-1.1 through D-1.5, include Actions D-2.1 through D-2.2 and D-3.1. So, it would be all the
actions presented within the State Energy Data strategies.
Vice Chair Thayer noted there were a couple of other questions, and then we’ll consider the
friendly amendment, as proposed.
Mr. Vanderburg was wondering if this proposal is specifically talking about bringing the Alaska
Energy Data Gateway into the Alaska Energy Authority and consolidating those two resources
under AEA or is that not contemplated here as an action? Chancellor White asked Brittan to
respond to that question. Ms.Smart stated that is a possibility, but not necessarily a
requirement. Let me start with D-1. (Ms. Smart had some technical difficulties. So, the motion was amended while she was troubleshooting)
Vice Chair Thayer asked for an amended motion from Chancelor White, per the friendly amendment.
AMENDED MOTION: Daniel White moved that the Task Force approve State Energy DataActions:
D-1.1 -Institute or update statutory requirements for AEA Data Department.
D-1.2 -Fund, develop, and implement a technical and needs assessment.
D-1.3 -Fund, develop, and implement a capital asset plan.
D-1.4 -Develop and fund an operating and maintenance budget, to include the identification ofpotential funding sources and mechanisms.
D-1.5 -Appropriately staff the department based on the technical and needs assessment.
D-2.1 -Form a technical advisory committee to draft recommendations on where the data
governance committee should be established, supported, staffed, membership composition, scope
of duties responsibilities, and other issues that may need to be addressed.
D-2.2 -Fund a long-term data governance strategy based on recommendations made by the Technical Advisory Committee.
D-3.1 -Establish dedicated data collection and analysis positions in state agencies that are
responsible for collecting, analyzing, hosting, distributing data in formats that are accessible, and
liaising with the AEA Data Department.
D-3.2 -Provide professional development and/or skills training opportunities for staff and other agency partners as it relates to data collection and analysis.
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D-4.1 -Fund a gap analysis of energy data,including existing data,accessibility, quality,age, and what is and would be needed for data-informed decision making.
D-4.2 -Revitalize, fund, and maintain energy data platforms and services so as to ensure the long-term availability and accessibility of data.
D-4.3 -Conduct a data audit of the Regulatory Commission of Alaska (RCA) to includerecommendations.
D-4.4 -Expand the Power Cost Equalization (PCE) report and the extent of such data reported.
D-4.5 -Expand the definition of “energy data” by adopting the TAC definition, ensuring thedefinition is inclusive of heat/thermal and transportation fuel data.
D-4.6 -Understand how heating and transportation fuel is delivered and used.
D-4.7 -Re-establish annual updates to the Alaska Energy Statistics report.John Sims seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion of this amended motion.
In response to Mr. Vanderburg’s question, Ms. Smart stated that while it's possible the Gateway could move to AEA, it was not necessarily the intent that it do so. The idea was that when people or investors look for energy data as it relates to the state, they first think of an energy authority as having that information. So really, the idea is that this department is responsible for helping find all of the energy data sources, find a way to house them, and help put them in formats that are accessible, with the idea that it's possible that the Gateway could be part of that task, but not necessarily clearly stating that. So it was contemplated, but not clearly defined.
Vice Chair Thayer stated that at this point, Chancellor White explained actions D-1.1 through D-
1.5. Would you go through the rest of your Actions through D-4.7. Chancelor White stated that
the first strategy is what is the body that will house the data and how do we fund that body.
The second strategy, Strategy B-2, what is the data governance. Who decides and how do they
decide what data goes in,what the form is, and what the composition is. So D-2.1 was to form a
technical advisory committee to make recommendations on this data governance. And then D-
2.2 is funding the long term data governance strategy based on recommendations made by the
Technical Advisory Committee (TAC).
Then Strategy D-3 is how do we support data collection, recognizing that individuals in other departments will have that responsibility. So there may be individuals in DNR, DGGS, for example, that may be collecting, have a responsibility for collecting some of the data. So these two actions, Action D-3.1 establish dedicated data collection and analysis positions in the state agencies that are responsible for collecting, analyzing, hosting and distributing data in formats accessible, liaising with the AEA Data Department; and then D-3.2 to provide professional development or skills training opportunities for staff in other agencies as it relates to this data collection and analysis.
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So we have where we're going to house it, how it's going to be governed, and then the D-3 was who's going to collect it, and then D-4 is about the data gap analysis, kind of what is
the data that is to be collected. So this was funding a gap analysis of energy data, including
existing data, accessibility, quality, et cetera. I'm reading D-4.2. Revitalize, fund and maintain
energy data platforms and services so as to ensure the long term availability,accessibility of
data. So these are other platforms that may be being maintained to make sure that that data that's feeding in is maintained. Conduct a data audit of the RCA. This is to learn about what data might be available through the RCA. And then D-4.4 expands PCE reporting because there's a lot of data there. Action D-4.5 we've talked about this in the task force a fair bit ofexpanding the definition of energy data to include heat, thermal and transportation fuel data. Action D-4.6 talks specifically to the heating and transportation fuel delivery and use. And then Action D-4.7 to reestablish annual updates to the Alaska Energy Statistics Report.
And I have gone through all of the comments that were submitted. There were a couple that supported the recommendations. I didn't specifically see any comments in the public comment that were not already addressed in the data report. So I'll conclude there and happy to entertain questions or pitch them to Brittany.
Vice Chair Thayer asked if there were any questions.
Mr. Venables knows that in AEA's practice whenever there's a publicly funded project to collect
data ongoing for a number of years, sometimes it's requirement, sometimes it's optional,
sometimes it's not. I was wondering if the subcommittee contemplated the policy of requiring
all publicly funded projects to provide data. How was that discussed or contemplated in your
data horizon?
Chancellor White stated that’s part of the data governance task, to figure out how to understand
what data is available. It's also captured a bit in D-3 and D-4 in elements, particularly D-4 what
data platforms are out there and what can be accessed. I'll ask Brittany if there was a specific
comment related to specific data sets. Publicly funded data sets. Ms. Smart stated that she
thinks Dan captured it well. It was discussed, and that is where the governance committee came
in, because we also recognize that how the information comes in, privacy concerns, security concerns, all of that, are issues that need to be considered. And so it didn't feel appropriate to just have a blanket requirement. And that is how we came up with the recommendation that it makes sense to have a governance committee to help set up industry standards on how some ofthat data is collected, managed, stored, shared, all those aspects related to energy data.
Mr. Mitchell stated in looking through the actions, and since we’re doing a blanket approval of D-1.1 through D-4.7, it kind of tailhooks onto my last question. We have C-5, which is the data for decision making in rural Alaska. We also have Coastal B-2.6, which is establish and provide valuable energy planning and modeling metrics. What I would like to do is add D-4.8, or wherever we end,that says incorporate data requests or data needs based on other task force committees.
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I may not have the wording right, but I'm trying to ensure that we’re not going in three directions. I think the last comment you had, Chancellor White, was that this is good,and we'll
integrate that. I'm just trying to look at it from the public’s view and how we're integrating it
within a recommendation. So I'm open to how it gets done.
Commissioner Kurber stated on D-4 section where the RCA is implicated and thank you,Chancellor White,for the clarification on what it means to audit the RCA for data. Speaking for myself, I don't think that's really an issue as far as creating or adding that to the mix. We do a lot of things--not just with the regular dockets, but also with iDockets where we gather information, and that is a valuable tool for assessing energy issues writ large. We have a ton of stuff that’s been gathered over the years. Lots of bytes of information and data. And to the extent that those things can be worked out for transfer and stuff, it seems reasonable to have everything housed under one place. And in general, I think this is a noble effort to capture in one space the information needed for future efforts of this nature. And to also update information we’ve gathered from the past, as appropriate. So that's what I wanted to offer.
Ms. Miller stated this is in reference to Duff's comment, which is similar to John’s comment about how we’ve had multiple subcommittee strategies related to workforce development, and John recommended that workforce development and training would be one of the top recommendations in the executive summary. And I think data is another similarly important
theme. I think to address Duff's comment, it would be helpful to roll that up in the executive
summary as a key recommendation around data. So food for thought.
Senator Bishop asked if the committee was talking about warehousing all the data in one central
location? Because I'm thinking of the DGGS and the core shack across town. Will there be a link
to where you can go to the core shack and look at geology, etcetera, et cetera? So somebody
help me understand that. Chancellor White responded that the intent is for AEA has a data
department that you can get to electronically for information. AEA maintains a platform and all
of that data would be accessible through this platform. We were talking about how data sits
with different agencies, like the RCA, and it would be accessed through the AEA data
department.
Mr. Koplin stated that it may be implied throughout the data section, but I really like the idea of having a data element in the executive summary. And I think it would be good to tie it to energy costs, kind of the overarching role of the task force. And again, it's implied that data driven decision making should result in, hopefully, lower development costs, better informed decisions, and ultimately projects that have better benefit, cost and performance. I think we should capture and highlight that.
Mr. Hanneman wanted to respond to Senator Bishop’s inquiry, he wanted to support Clay’s response as well. I think the data capturing and storage initiative we're talking about here is related to the energy and electrical consumption, production costs and wouldn't attempt to replicate, or in fact, probably reference at all things like the core storage or division, oil gases and all the other data needs and facilities that the state has.
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Vice Chair Thayer wanted to add that at AEA, when I first started here, we had a gentleman that
came and wanted to know about a project that we had invested in prior to 1985. However, in
1985 the decision was made that we weren't going to go forward with that project. He inquired
about it. We had the files downstairs, dusty, whatever. It had low RAM-C coordinates, which as
we know, there are no more low RAM-C coordinates. But we had all that information and we put it on a thumb drive and gave it to him. And now he's pursuing it in the Aleutian Islands as a viable project. He's having conversations with the Department of Energy.
That's where we came up with the concept of AEA at least doing a data library and making sure we take all those dusty old files that we spent tens of millions of dollars on 40 years ago and actually make them available to the public and not through a public records request or anything like that. It's public information, public dollars that were spent on them,and they should be available to the public. Right now we're up to 8,000 documents that must then scanned by the end of the year so we can make it go live. So at a point, if you want to know about the Susitna-Watana, it will all be there in its own data room, so to speak.
For this, AEA stayed out of the conversation even though Connor was involved in it. But this is something I think is a great idea because there's so much information out there. We need to have it in one location because an example of an idea of 1985, fast forward 38 years later, it
might be a reality, but we wouldn't have known unless we had that information and if it was
available to the public even sooner. Now, we at AEA also understand there's information that,
for security reasons,can’t be shared. But I think this is a great idea from AEA's perspective
because we have spent tens if not hundreds of millions of dollars and we should make this stuff
forward facing for people.
Jenn Miller called the question on the motion. Unidentified Task Force member seconded.
There were no objections. Roll call vote was taken.
The motion passed (yes-12; no-0)
g. Incentives and Subsidies Actions -Nils Andreassen and Isaac Vanderberg, Co-
Chairs
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STRATEGY E-1:Strengthen state-federal coordination and investment
ACTION E-1.1
Vice Chair Thayer introduced this item and asked either Nils or Isaac to discuss. Mr. Andreasson
, as background, I will go through each of these strategies. I do think there's additional detail
for each of these starting on page 47 of the plan. And a lot of the how do we get there items found in those pages describe what I would consider sub-actions for each of these strategies. Having listened to each of the other subcommittee reports, strategies and actions, there's a lot of overlap and cross-benefits that I've heard already today.
Action E-1.1 is focused on strengthening state/federal coordination investment. The action at the high level is working group or collaborative efforts that identify and work toward improved access on federal lands, funding that accelerates local, reliable, affordable energy, and the ability to leverage investment opportunities between state and federal programs. And some of the pathways to getting there that are referenced for this action starting on page 47 in Appendix 3 include having an implementation strategy for federal energy funding opportunities that align with state level investments. So that's really thinking about the competitive response that we have to federal grant opportunities and making sure that we've got available match for these projects. Other pathways include 2) establish a clean energy and transmission line land use designation on state and federal land to facilitate activity therein. 3) Establish a state and/or
federal Alaska Clean Energy and Transmission Line Fund or something like an Alaska Energy
Transition fund to help advance that transition. 4) ensure that criteria for state and federal
project investments include affordability consistent with this task force mission. 5) optimizing
utilization of the clean energy financing program at the federal level. 6)increasing the capacity
for streamlining regulatory and permitting actions within state agencies at the federal level.
So overall, the actions for this strategy, E-1, all kind of dedicated to facilitating engagement at
the federal level, with the state at the table, and fostering collaboration and leveraging,
especially federal funding opportunities.
MOTION: John Sims that the Task Force approve Incentives and Subsidies Action:
E-1.1 -Establish a state/federal working group that identifies and works toward 1) improvedaccess on federal lands,2)funding to accelerate a local, reliable, and affordable energy transition,
3) the ability to leverage investment opportunities between state and federal programs.
Chancellor Daniel White seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion. There were no questions or comments. The question was called. Jen Miller seconded. A roll call vote was taken.The motion passed (yes-11; no-0)
STRATEGY E-2:Reduce the barriers to private sector investments
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ACTION E-2.1Vice Chair Thayer asked if one of the co-chairs would like to provide background and discussion
on their action item.
Mr. Andreassen stated that Action E-2.1 is to establish a strategic approach to policy, tax and
program development that stimulates and incentivizes private sector activity that leads to lower cost, local and reliable energy. More information on sub-actions for this action are found on page 49 of Appendix 3. There's a lot that could be done in this space by the state, including improve and implement Commercial Property Assessed Clean Energy and Resilience (C-PACER)programs, and to evaluate or add the adoption of a residential R-PACER program. 2) is to establish an open access transmission, integration, tariff and reduction or elimination of internet connection and or wheeling tariffs. 3)is similar to other recommendations around a clean energy standard that helps to facilitate reaching diversification goals. 4)implementing a low interest loan program that includes concessionary capital similar to that offered by the Power Project Loan Fund to facilitate affordable energy development and infrastructure improvements. 5) conducting pre-development, permitting, surveying, engineering and or environmental within principal energy zones, which is really just doing some of the pre work necessary to make sure that projects don't have to incur those costs on our own. 6)to conduct an evaluation of the state government's capacity to increase incentive programs or make investments that lead to lower cost energy. 7)leveraging the state's tax system to implement a state corporate income
tax deduction or credit or reimbursement program based on the property tax expenses that are
incurred by clean energy generation transmission distribution projects.
So seven sub actions under that broad action of strategic approach to policy, tax and program
development at the state level.
MOTION: Nils Andreassen moved that the Task Force approve Incentives and Subsidies
Action:
E-2.1 -Establish a strategic approach to policy,tax, and program development that stimulates and
incentivizes private sector activity that leads to lower cost, local, and reliable energy. Duff
Mitchell seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Mr. Mitchell read Sub-action 7, “Implement a state corporate income tax deduction or credit...” I don’t believe this is strong enough. I ask that this sub-action in 2.1 be stricken and we can address it in a stronger action under a new Action E-6.1. That would be my recommendations.
I don't believe that there's one more single effort that can attract --we're not talking about reducing barriers, we're talking about incentivizing private investment to the state andeliminating property tax on any private investment that comes in for --eliminate property tax and exempt property for any new generation, transmission and distribution. Whether we call ourselves Second World, Third World, or the technically correct world underdeveloped, we need
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to track private capital in this state to help us help ourselves. The mill rate by moving from one borough or one Muni to another and the transmission lines and the generation and other
aspects is just too big of an issue to kind of bury in.
I believe that we need to draft and enact legislation to eliminate property tax and exempt
property taxes for new generation, transmission and distribution assets for the dual purpose of attracting private capital and energy development to deliver and lower the energy cost for Alaskans. What I do like in Seven is some of the explanation that this mechanism is in place to lower the cost for rate payers that are appropriately applied. I think that that's wise in some of the discussion points of the action.
But I think we need to be bold and as a background, 27 states recognizing the economic contribution of renewable energy, and I'm going to use the word clean energy investments have progressively exempted clean properties from property tax. Furthermore, nearly half of all these states, specifically 13,go the even extra mile of exempting any sales tax on solar generation. Significantly, taxation directly or inadvertently elevates the cost of energy to consumers. By exempting new energy infrastructure from property taxes, these states deliver lower cost energy, energy security and energy investments that pay long term economic job creation and emissions benefits, ensuring long term energy security and benefits for their citizens.
I think we should be a leading beacon in this approach. Alaska is committed to all forms of new
energy, diversifying its energy portfolio, and is invested in fostering all types of new electrical
energy ventures. I attended the governor's energy conference. There was $1.3 trillion that was
remarked at that conference, waiting to invest in our state. We need to open this state up for
business. And there is not one thing that we can do that will have a more immediate impact in
my mind of attracting that,because these investment funds could park their money in
Oklahoma, they could park it in Louisiana, or we can make it attractive in Alaska.
So with that, I'd like to strike Sub-action 7, make it its own action item “E-6.1 draft and enact
legislation to help eliminate property tax and zone property taxes for new generation transmission
and distributions for the dual purpose of attracting private investment in energy development to
deliver a lower energy cost for Alaskans.”
Ms. Miller had a comment to add to Duff’’s motion. As an independent connection provider (ICP)building generation projects, currently, the way we structure our projects is we need to come in more competitive than the utility's current cost of generation, which is a good model because it's driving prices down. One thing that I will say we struggle with is utilities do not pay property taxes on their generation projects or transmission distribution assets. And so by exempting ICPs from property taxes, and that creates a level playing field and allows us to compete. Mr. Sims stated most utilities, as we're one of the largest taxpayers.
Mr. Venables stated that as it's drafted currently, it's income tax deduction or credit, sole proprietors, partnerships and LLCs do not pay an income tax, and the credit that would be
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derived is infinitesimal to the amount of property tax that would be paid if you prorated out that credit.
Vice Chair Thayer asked if the maker of the motion agrees with the friendly amendment to
eliminate sub-section 7 from E-2.1 and make it a new Action E-6.1. Mr. Andreassen responded
that he does not. Vice Chair Thayer asked Mr. Andreassen if he could provide more background on this.
Mr. Andreassen stated that for the task force this has been discussed many times over the last few months. And I think from how we've talked about it in the past, I can appreciate the maker of the amendment's position on this and the way that I have approached it and thought about it more broadly is that one, I think, just about all of the other work that we've done. We focus on actions at the state level. What can the state take responsibility for, and what are the impacts to the state, including to the state's budget? And this is one of the few that I can see where actually we're taking away a tool at a different level of government. And, yes, the state can change its statutes to do that, but it will leave less of a partnership at the local level to actually be able to deliver other types of benefits into a community. And for a state that's one of the lowest tax in the nation or has the lowest taxes in the nation. And even as I think was commented, for an industry that doesn't pay corporate income taxes, asking for more deductions didn't make sense to me.
I think the other way I would approach this is that when I'm looking at everything that's in the
incentives and subsidies, recommendations and action items, I'm thinking about it very broadly
about the types of investments that we're already recommending, the types of other types of
exemptions and grants and subsidies and so on that we're offering, and this one very specific
one that would reduce the capacity and ability for local governments to be good partners with
the state, with utilities and with ICPs is a step in the wrong direction.
Vice Chair Thayer asked for Mr. Vanderburg’s thoughts as co-chair.
Mr. Vanderburg stated, as Nils said, we discussed this back and forth and I think it's still
something that we continue discussing as it isn't necessarily a settled issue. I appreciate Nils'perspective on it. I supported this as something that I thought was an effective action that we should take. But I do appreciate my co chair's perspective on it. Watching the experience of Jenn and also looking at other ICPs in the state who are trying to develop projects. The property tax exemption can be a fraction of a penny, or a penny and a half per kilowatt hour. And that can make all the difference for a project to get it financed and get it approved by the RCA. And so it seems like a small thing, but if our goal is to see more utility scale generation in the state and more ICPs are producing projects, it's going to have a major impact. So an issue that our group has discussed,gone back and forth on, and there's some disagreement, but it is what it is.
Task Force members discussed their next steps with a motion on the floor and a proposed amendment. It was decided to move forward with an amended motion reflecting the proposedchanges.
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AMENDED MOTION #1: Duff Mitchell moved that the Task Force approve Incentives and
Subsidies Action:
E-2.1 -Establish a strategic approach to policy,tax, and program development that stimulates andincentivizes private sector activity that leads to lower cost, local, and reliable energy with paragraph Sub-section 7 on page 50 of Appendix III removed. Jenn Miller seconded the motion.
Discussion:Vice Chair Thayer asked if there was discussion on striking paragraph Sub-Section 7 from Action E-2.1.
Mr. Venables asked for more clarity on why we’re throwing out the subcommittee’s work on this Action. Mr. Mitchell responded that this issue has been discussed going back to the first meetings, so there has been input put forward. We also had an incentive committee meeting with the Rail Belt Committee, where this issue was taken up and addressed. So it's already been outside the committee, and it's an issue where it's becoming more black and white. It's either you're for it or you're against.
So, you know, the discussion points are, the governor, not only is Alaska open for business,
which is one of his mottos, he's trying to track private capital. We're underdeveloped, and we're
trying to bring this in. One of the catalysts is to exempt property tax. The state has the
authority to exempt property tax. And this takes out where, if you have a transmission project
or you have a generation project located in Kenai, but it's trying to reduce the cost of power in
Golden Valley, that it has a lower cost that isn't taxed in one borough, where it may be
delivering property in the other, or maybe it's being delivered in Kenai, but now it's competing
on a minimally economically viable project with a nonprofit or a tax exempt entity. And this is
nothing more than a level playing field action.
Mr. Andreassen stated we have talked about this ad nauseum at the subcommittee level.I can
appreciate that this could help lower costs of energy for ratepayers. I also have an obligation to
other components of the state's obligations, like public safety and public education. I think it's important for us all to recognize what property tax funds is, all those other pieces. And I think for a lot of these things, we should be thinking about, what are we giving up achieving this goal. And I don't want to give up my kids’education. I don't want to give up my community's public safety. I don't want to give up all the other facilities that local governments deliver. I don't want to have to make choices between very real and hard priorities that communities and residents face across Alaska. So I think it's just worth recognizing that there are tradeoffs to this discussion, that if we're attempting to mandate a property tax exemption for a small group of communities who have it in a state that's one of the lowest tax in the nation, what we're giving up is investment into those other obligations of the state.
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Mr. Koplin stated first point is ANCs are federally recognized tribes, and they are taxable corporate entities. And I think they're one of the biggest opportunities for partnering with ICPs
and other land developers. I mean, the big landowners in the state of Alaska are the state and
the federal government and ANCs, of which only the ANCs and their land is taxable. So I think it
does matter to them if they can have a tax break to develop local resources. So I would be
opposed to removing item seven. However, I'm more strongly opposed adding a property tax exemption. The state does have property tax exemptions for senior citizens, for veterans. Those used to be funded by the state. Now they're funded by local communities. And that property tax and sales tax are really the only revenue streams that local government staff have to fund their communities. So I'm not in favor of a blanket property tax exemption that then puts that whole property tax burden on the year round businesses and citizens who invest in property in those communities. And I'll leave it at that.
Chancellor While asked if the co-chairs or Mr. Koplin wanted to discuss any public comment that came in on this particular topic. Mr. Vanderburg responded that I read all the public commentswe received due to the kind of quirky financial nature of our group, I really didn't see any, especially on this topic, maybe Nils saw some comments, but I really didn't. And I think these are all really good comments everyone is making. If I can just add another point to consider. The Center for Economic Development did some great analysis several years ago, just talking about how energy is the base of economic development anywhere, but in particular in rural
Alaska. And I'm generally against property tax exemptions for most sectors. But I just think
energy is special. If you have a low cost of energy, that that can lead to all sorts of other
economic development communities that then can be taxed. And that's what we're trying to do.
We're trying to kind of get out of the gate by having low energy that then leads to businesses
and economically viable investments. If you have high energy costs, it's really hard to get
anything else going. And so I think that's why generally in property tax debate, I'm aligned with
Nils and just kind of view that we need to fund local government. We need to find ways to do
that in this specific area. Energy just feels like we need to make some sacrifices to bring other
types of energy.
John Sims stated that he is on the Incentives and Subsidies Subcommittee. I think it's important
for the Task Force to understand that this came to this body without unanimous agreement. So it was important to us because of the discussion that we have it here amongst everyone. And that was kind of our approach to this one is let's have this conversation with the group because we couldn't come to an agreement. So to address your point there, this was not a unanimous recommendation from the subcommittee. I think it's important to understand we're talking about projects that do not exist today and we're hoping they do tomorrow. And so we're already funding the schools, we're already funding health care with existing measures there. We're trying to make the costs in those communities lower by passing and getting this type of infrastructure in those communities. So that's why this type of exemption, to Isaac's point, just these energy projects is so critical. We can reduce the costs of those communities. Everyone's admitted it, right. This is a cost reduction,and all those costs will flow through to the community. It's a benefit to the community to do this kind of measure. And so I'm definitely supportive of it, and hopefully we can get there.
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Ms. Miller wanted to follow on a similar point to what John pointed out. We have our existing
generation systems in place, and those were done by not for profit co-op utilities. But I just
wanted to point out that we didn't have a tax base off of those projects. And then as we're
looking to build new projects, this is income that the boroughs are not currently getting. And so
it's not that we would be taking something away, but it's a way of incentivizing new projects. And I can say that when we worked on a property tax exemption here at Kenai PeninsulaBorough, we ran the numbers for our solar project, what would the power purchase price be with and without a property tax exemption? And we were able to lower our PPA price. And then when you look at that passing, the lower electricity costs passed on to all the members, it more than paid for that exemption. So it was a net positive to the community. And then, especially once you add in the jobs and local spend to do the project, it more than paid for itself. And so overall, it was a net positive.
And one thing I'd like to offer up, we're having a lot of discussion about this, and I would propose that we settle what recommendation seven is now, rather than bringing this back up and revisiting it again, just because we're having all the discussion right now and we have some momentum with context. And so my proposal would be to amend recommendation seven and get either passer or fail that, and then go back to the full 2.1. So for consideration.
Vice Chair Thayer stated what you're recommending is amending Seven to include language
that has a property tax exemption in it? Ms. Miller stated yes.
Ms. Milled added that way people would know what we're voting before we just remove
something. Maybe it's saying, well, what would we want instead? So that people know what
they're voting on. And so my proposal specifically would be to amend seven, the language of
seven, to implement a statewide property tax exemption for new generations.
Vice Chair Thayer stated we do have a motion on the floor, and we have a second. So we need
to deal with that one.
Mr. Venables stated he would like to hear from Nils. I'm kind of agnostic. What I don't want to do is not have this corrected. And so one way is to clean it up and just take it all out. But I'm amenable to Jen's suggestion, if we can go that route. Like John said, this has been discussed. I want to emphasize the point that attacks on something that doesn't exist is zero. This is not for old generation, not for existing transmission that's been here for 100 years. That may be in a tax base that someone is counting on. This is new. And new brings jobs. We talked earlier about attracting industry. We heard the stories of Iceland.
This is the catalyst. In fairness, we have entrepreneurs in this state that put hundreds of thousands of dollars into developing a solar or wind or hydropower project. And they get no income tax benefit the way this is drafted because they're a sole proprietorship. And so I'm trying to also be fair to all Alaskans so that we rise up from our bootstraps and invigorate Alaskans, Alaskan Native corporations, villages, other people to put down their rift money to
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develop energy projects. And they are struggling with every fraction of the cent to sell to the utilities, which also want lower cost power. So we're all cutting and rowing the canoe together.
So I will rest there. I would like to hear from Nils.
Mr. Andreassen stated I think if we look at Sub-action 6 and 7 under Action E2.1, item six is
saying the state is going to look at its tax system and see what it can do to make incentives and investments that lead to lower cost energy. Seven is again up to the state to figure out how it wants to adjust. If there were a property tax exemption to occur at the local level, could the state pick up some of the burden of that? I think those stand on their own. It sounds like what the interest is, is adding something either under this section, under incentives and subsidies, or under statutes and regulations to mandate a property tax exemption at the state level or have the state mandate that.
And I would offer that we had an earlier recommendation that said, keep that exemption local. That, if Jen, you're right, that economics bear out. And there's a benefit to the region and community. Local governments are going to make decisions about exemptions that are benefiting their region and community. The earlier recommendation had been to encourage local governments to add an exemption where it makes sense to achieve these goals. But having that local control, having that local decision making around budgets that in the future they're going to be depending on, I think there's a lot of merit to that. I do think six and seven
stand on their own or get rid of them. And separately, if there's going to be a recommendation
for a property tax exemption, and I think the way to craft that is around encouraging that to
occur at the local level as decided upon by local government officials.
Mr. Vanderburg stated the only comment I would provide is having local decisions. Again, I find
myself, usually I'm in favor of that. And with these projects, just watching Jen's teamwork or just
watching some of the work that the entrepreneurs are doing, you end up having to visit
communities, go to several hearings, which adds cost to the project, and also just kind of
disincentivizes those project developers from even pursuing these things in the first place. So if
we're trying to send a signal like, hey, ICPs, come hither, because we have a great environment
for you, this isn't it. It’s saying, hey, ICPs, come to Alaska, and you'll have 20 projects of 20 local
presentations on your hand. It just adds cost. But interesting conversation.
Chancellor White stated that this is the report that the public had to comment on that I had asked earlier about public comment on this, if there's a substantive change. I mean, if we're talking about a blanket exemption that has not been commented on by the public. Just a note. Thank you.
Mr. Koplin added one little extra piece. A not for profit cooperative pays the dividends, the margins back to their customers. It's $1.8 million over the last five years at Cordova. So it's not a level playing field. My concern is that you provide an incentive, but what's to say that that incentive shows up in the profit margin instead of on the ratepayers meter? So I'm prepared to vote for these the way they're presented, but I just can't get my head around changes at this point.
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Ms. Miller stated Duff and I have discussed this, and we're both okay with moving forward with a
motion to amend Sub-section 7.
AMENDED MOTION #2: Jenn Miller moved that the Task Force approve Incentives and
Subsidies Action:
E-2.1 -Establish a strategic approach to policy,tax, and program development that stimulates and
incentivizes private sector activity that leads to lower cost, local, and reliable energy with
paragraph Sub-section 7 on page 50 of Appendix III amended. Remove Sub-section 7,which
reads “Implement a State corporate income tax deduction or credit, or reimbursement program,
based on the property tax expenses incurred during development of clean energy generation,
transmission, and distribution projects that result in lower-cost energy in the near or long term”.
Insert as new language,“Draft and enact legislation to eliminate property tax and exempt
property taxes for new generation, transmission and distribution assets for the dual purpose of
attracting private investment and energy development to deliver and lower the energy cost for
Alaskans.” Duff Mitchell seconded the motion.
Discussion:Vice Chair Thayer opened the floor for discussion.
Mr. Mitchell wanted to state for the record that there was public comment on this and there
were remarks made and it came from the independent power producers who are most impacted
by this. So thank you. Vice Chair Thayer added that those comments were received yesterday.
Mr. Guy stated that currently, once ANCs start to be built, we’re taxable and we pay the taxes.
So with this amendment, we wouldn't. Mr. Mitchell responded that with this amendment, you
would be tax exempt for your generation transmission lines.
Mr. Venables confirmed that state corporate income tax is no longer an issue of you striking,
that there's no value in that. Ms. Miller responded that because ICPs are organized differently as
whether they're an LLC or a C Corp, they have different tax structures. So we think we
recommend that just a property tax exemption based on the project rather than a state tax exemption.
Mr. Venables stated if the property tax exemption is good policy going forward, why wouldn't it be good policy going backwards for ratepayers? Mr. Mitchell stated out of respect for the committee chairman's point, that that is already in the tax base and it's already funding schools or funding programs. And so this is to attract new as opposed to go back. We could do that, but that's not with this motion. Mr. Venables stated that'd be for anything that's not even got feasibility. So it's just new calls, new projects going forward. Mr. Mitchell responded well, if it gets to commercial operation date, it doesn't have a taxable event until it becomes an asset that's taxable.
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Mr. Mitchell called for the question. Ms. Miller seconded. No objections were made. Roll call vote was taken.
The motion passed (yes-10; no-3)
Vice Chair Thayer stated we are back to the original motion, per below.
MOTION: Nils Andreassen moved that the Task Force approve Incentives and SubsidiesAction:E-2.1 -Establish a strategic approach to policy,tax, and program development that stimulates and
incentivizes private sector activity that leads to lower cost, local, and reliable energy. Duff
Mitchell seconded the motion.
Discussion:
Vice Chair Thayer opened the floor for discussion.
The question was called and seconded. There was an objection to call the question. Roll call
vote was taken.
The motion failed (yes-0; no-13)
Discussion:
Vice Chair Thayer opened the floor for further discussion on Action E-2.1.
Ms. Miller thanked everyone for continued debate. I wanted to acknowledge that Action E-2.1, Sub-action 3 (Page 49, Appendix III) is adopting a clean energy standard. And Sub-action 4 talks about low interest loans through the power projects under something else. And I just wanted toelevate those for consideration for the executive summary. We've actually had quite a lot of discussion on the Clean Energy Standard, Power Project Fund and the Renewable Energy Fund and just how strategic those incentives are. And so I just wanted to share my support for those.
And then I did want to provide a comment or recommendation regarding Sub-action 5 where it talks about having the state conduct predevelopment, permitting and surveying, engineering and environmental work in the principal energy zones. And one thing I just wanted to bring up for debate is I think we talked about at the railbelt level for the renewable Energy Fund to use that to incentivize, to share the cost and the risk of developing new projects with private industry. And I think rather than the state going out and preemptively completing project development in these energy zones, I think private industry might be better suited to lead that
effort because they know their project, they know their finance hurdles. And I think rather than
us going and spending money on our ideas, I think we should let private industry lead that and
risk those dollars and we can match them through the renewal energy fund. But I wouldn't
recommend that we solely go out as a state and do that by ourselves. And so I just wanted to
bring that up for debate and discussion. So thank you.
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Mr. Vanderburg stated just to be clear, I think the concept here was to look at different regions in the state where we could look at the permitting requirements, look at the best places to
interconnect with the grid or the transmission line and do some kind of predevelopment. I
wouldn't call it development work, Jenn, I would say it's predevelopment. And just saying here
are zones known to have a favorable kind of setup and know have the lowest permitting
requirement where you're not going to run into a bunch of environmental issues. And as a state, maybe we even do a little bit of work looking at almost running like pilot projects or straw man projects to test how the permitting process, how burdensome it would be and to clear kind of regulatory pathways so that by the time an ICP comes in, they have confidence that if they actually perform due diligence on a project, that it's not going to be derailed by permitting or environmental or other issues. So it's a best practice I think we've found in other states are trying to do some of that early pre-community engagement and clearing of permitting to allow projects to move forward with greater likelihood of success.
Ms. Miller stated thanks for that clarification, Isaac. And is it really just kind of trying to screen different areas? It’s just that engineering is listed, surveying those are kind of starting to get further along in the development process. And so I would be supportive,and I appreciate the context from the screening level, identifying zones that could have potential, kind of like we talked about for the load growth, certain energy areas that would easily have load growth. I would support something where we think there could be new projects and highlighting those
areas and see if we can get developers to come in and look at them further. I just don't know
that it's appropriate for the state to fully take on engineering and serving and those kinds of
activities.
Vice Chair Thayer added that he can provide a little bit of context. I understand your point, and
I agree with your point. Because I would probably say, and Jennifer can confirm, I probably
meet no less than a dozen to 18 different individuals a month that have an idea about doing
business in Alaska. And then we complicate it or not. And you add on what people that do
business with the governor's office and reach out to them and out of those very few move
forward once we do it. So if we were prestaging some of these, we would have spent a lot of
time, money and resources that are a lot of tire kickers as opposed to real developers. I'm
saying we've had some of the $1.3 trillion, we've had some of those people, and we spent time with them,and I meet with everybody. But it does mean that there's just a lot of people from across the world that think about doing business in Alaska.
But once we have that, once they kick the tires a little bit and it might take two or three times, either there's a good project there or there's not. And the majority of the time they're looking for us to advance $3- $4-$5 million to test their project. So that is a concern that we have. I know from my experience, and I think that kind of gets multiplied around the state, that we want to be a good partner. We want to be open for business, but we can't be the one providing the project money to get them off the ground.
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Mr. Hanneman stated isn't that, in part, Jen's point, though, that the project money, the engineering, the surveying, the project details is what we should be cautious about the state?
Vice Chair Thayer stated I'm agreeing with her.
Mr. Hanneman stated I like the idea of pre-planning, and there's several recommendations from
different subcommittees about planning, identifying transportation transmission corridors and pre-planning. That is a necessary kind of element. But you can't permit a conceptual project.
Vice Chair Thayer state we have a lot of inventory on resources. We know where the wind is. We know where the better tidal is. Those things are information we can provide as a broad spectrum to anybody coming into the state. But we have people that are very specific that, oh, I'm going to build a solar farm in Wasilla and all I need is $5 million to do the feasibility study. But look how many jobs I'm going to employ. Those are some of the tire kickers that we get, as opposed to some of the larger ones going, okay, tell us about this area of Alaska in the sense of state property, mental health trust, and what is available for wind resources. And that's where we can help and say, this is the way to DNR, this is the permitting, this is the land that's identified. These are state resources. And we can have that conversation. But it's more of a broader to everybody than to each specific group.
Ms. Miller stated I'm open to suggestions. I just wanted to bring up the concern and what's the
right level of diligence that the state does to help. I think what Curtis is bringing up, having the
state have the energy data, really, or resource assessments and making those publicly available, I
think that's great. And I think I hear what you're saying. How do we grease the skids. I just
want to make sure that we put the risk on private industry. That they at least share the risk of
developing that project. But I would appreciate any, I guess Isaac and Nils, if there's any
openness to an amendment or modification, let me know what you think.
Mr. Andreassen stated that this is one of the purposes of the Power Project Loan Fund. And I
like the concept of a reimbursable or low interest path or forgivable loan, if the project's
developed, or maybe more productive paths. Make sure the developer keeps skin in the game
on the front end.
Mr. Mitchell stated principal energy zones is my community a principal energy zone? Is Anchorage a principal energy zone. And I'm trying to reach into the recesses of my mind as we discuss this and incentive subsidies, but I'd like to bring that term onto the table of what we mean by principal energy zones. My secondary comment to the chairs is that I could see adding in front of conduct on Sub-action 5, encourage public private developers to conduct private. In other words, we're assigning the responsibility. So we're not saying, hey State, hey governor, this is a good idea, but help me help myself because I'm going to encourage and I'm going to go out or public private partnership or a utility that's a private nonprofit or an ANC. So I like the words encourage public private developers to conduct predevelopment permitting. So I just throw that out as a possible additive. But I want to go back to the chairs where because it's when this was drafted. I want to get in your mind for the rest of the task force what principal energy zones are and whether that's all the state or just selected parts of the state.
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Mr. Vanderburg responded that the concept was certain regions of the state that had just the
right attributes for large scale development of energy projects that we need and primarily
generation but could also be off takers.Visiting Iceland recently, they have a certain part of the
country that has an excellent geothermal resource. And so what has happened there is they've
said basically any off taker, any kind of industry that would like to use some of this resource can be co located there with one of the large geothermal plants called on. And they've seen several other large industrial plants develop in this region because they've identified it as just a great region for generation and off take. And it's attracting more and more projects or more and more developers to come in because it's kind of said this is an area where this kind of an industrial park or a principal energy zone makes sense. That's the idea. I'm just trying to think of creative ways to get real project developers, as you say, Jen, greasing the skids to get them developing projects in parts of the state.
Mr. Mitchel stated I'd like to make a friendly amendment and ask for the motion maker and the chairs to agree. And under Action E-2.1, Sub-section 5, I would like to add the following words:
Encourage public private developers to conduct predevelopment, permitting, surveying engineer and or environmental within high resource energy zones. Strike the word principal from “principal energy zones”..
I want to pull on to what Isaac's saying. If we're in a resource rich or a high area, I want to clarify
the energy zones. High resource energy zones, period. That is the only change that I'm asking
for because I think it helps clarify our discussion in a consensus way of what we were discussing.
Thank you.
Vice Chair Thayer asked if Nils as the maker of the motion accepts that friendly amendment?
Mr. Andreassen stated I don't know that changes anything. I think it's about the same. Duff
you're the one who had proposed principal energy zones. We've talked about this before. I feel
like we're rehashing stuff that we went through quite a bit at the subcommittee level. It's a
national best practice. I can point to international examples where Sub-action 5 works,and it's
aligned with a public private partnership for delivery consistent with project. I don't know that we're getting anything new or different from this edit. Mr. Mitchell responded I'm ready to drop it. I'm just looking from the public's point of view and principal energy zones is not defined. I was just trying to help with Jenn’s thing to encourage private developers. So that's all I was trying to do, but I can move forward without it.
Vice Chair Thayer asked Jenn if she had any other comments on Sub-action 5 or Sub-Action 6, as they were raised? Ms. Miller responded and wanted to thank the task force for the discussion. Appreciate it. We can move on.
Robert Venables called the question. The motion was seconded. Are there any objections for calling for the question. Hearing none. We’ll do a roll call vote on the motion re-stated below.
Page 72 of 72
MOTION: Nils Andreassen moved that the Task Force approve Incentives and SubsidiesAction:
E-2.1 -Establish a strategic approach to policy,tax, and program development that stimulates and
incentivizes private sector activity that leads to lower cost, local, and reliable energy. Sub-section 7
was amended per the previous motion. Duff Mitchell seconded the motion.
The motion passed (yes-13; no-0)
The balance of the Strategy Action items were postponed to the next Task Force meeting.
i. Statutes and Regulations Actions -Karl Hanneman and Robert Venables, Co-
Chairs
This agenda item was not discussed.
7. Next Meeting Date -Tuesday, Friday, November 17, 2023, 2:00 p.m.via Teams or in
the conference room.
8. Adjourn
Robert Venables moved to adjourn the meeting. John Sims seconded.
Vice Chair Thayer adjourned Alaska Energy Security Task Force meeting at 4:10 p.m.