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Alaska Legislature moves forward on bills aiming to regulate ‘railbelt’ electric providers’ organization

A hearing held before the House Energy Committee and the Senate Railbelt Electric System...
A hearing held before the House Energy Committee and the Senate Railbelt Electric System Special Committee regarding electric reliability organizations. (360 North KTOO) (KTVF)
Published: Jan. 30, 2020 at 12:46 PM AKST
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The Alaska State Legislature is currently moving forward bills in the house and senate related to regulation of electric reliability organizations.

Residents in Fairbanks get their electricity from Golden Valley Electric Association, or GVEA, which is the utility for the interior of Alaska. In December, GVEA along with the five other utilities along the railbelt signed a Memorandum of Understanding (MOU) moving towards working together to manage their interconnected grid.

The six utilities include Chugach Electric Association, Homer Electric Association, Matanuska Electric Association, Municipal Light & Power, Seward Electric, Alaska Energy Authority, and Golden Valley Electric Association.

John Burns is Vice President and and General Counsel for GVEA. He said, “The whole intent of it is to start off, first, defining and enforcing railbelt reliability standards so that it’s consistent throughout the railbelt -- it’s very important that those standards be uniform. Also, developing interconnection protocols so that anybody who’s using any entity that’s using the railbelt to connect into the electric grid meets the same interconnection protocol.”

There have been similar bills brought forward before trying to encourage an organization of this kind.

“There has been some frustration expressed that the railbelt utilities have been reluctant to come together, because we have been talking about forming this Railbelt Reliability Council MOU and we couldn’t get everybody to the table. So the bill came along and it was spurred by the Regulatory Commission of Alaska (RCA) who really wanted to ensure that if the railbelt utilities were unable to come together in a format that expanded the role... allowed others to come into it... that the RCA through the legislature would be able to mandate it,” said Burns.

Senate Bill 123 and House Bill 151 would establish who would regulate electric reliability organizations, and give the Regulatory Commission of Alaska the authority to do so.

“The RCA needs to have the authority to regulate and oversee the RRC -- the Railbelt Reliability Commission -- because without it, the utilities and the stakeholders would not have any requirements to follow through with these plans,” said Fairbanks Democratic Representative Grier Hopkins.

The RCA currently regulates public utility and pipeline services such as Chugach Electric Association, Homer Electric Association, Matanuska Electric Association and Golden Valley Electric Association.

“They’re essentially monopolies and they need to ensure that the public good is followed, and the RCA is in charge of ensuring that the public good is the first and foremost interest when it comes to electricity rates,” said Hopkins.

Hopkins says the hope is that this organization would result in lower cost and more stable power in the future. “For Fairbanks it’s going to be critical to bring on more renewable energy, to stabilize our power cost and then lower our power costs as we are part of the overall railbelt that plans together for the first time ever, which would be required under this legislation,” said Hopkins.

Joint hearings between the Senate Railbelt Electric System Special Committee and the House Energy Committee heard from all six utilities, as well as stakeholders such as public interest groups, renewable energy groups, and independent power producers. Hopkins says now they need to move the bill forward, with more hearings over the next couple of weeks.

“There’s still a long way to go but because this process has been happening for the last 10 to 20 years in various forms. A lot of people understand the need for this issue, and so we do feel there is some good momentum to make sure that this happens... as well as the utilities finally coming together [and] signing that memorandum of understanding in December. So there’s momentum behind the bill but we have a short time to move a complex issue forward,” said Hopkins.

Julie Estey, director of external affairs for Matanuska Electric Association, says MEA is in full support of the two companion bills that are going through the house and senate regarding the electric reliability organization. “This alignment I think will only benefit our members. The legislation solidifies the work that we’re doing, and provides the RCA the authority to regulate it, which is what will really allow this to be successful in the future,” said Estey.

Burns, with GVEA, says the bill is very positive overall. “We will be working with the legislature to iron out some of the issues, but overall what the bill does is provide authority to the RCA to regulate, to have authority over this RRC -- because for the RRC to be effective, [it] has to be able to have standards that are enforced,” said Burns.

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