March energy updates
Updates on Key Bills and Rapid Response Team
This session in the AK state legislature, there is a LOT happening with energy, both good and bad.
We’re following a number of bills and have put together a Rapid Response Team to make it super easy to take action on the bills you’re interested in.
Read on for a breakdown of some of the highest priority bills we’re following this session:
RPS vs. the bill formerly known as the CES
The Renewable Portfolio Standard bill would establish a renewable portfolio standard (RPS) that sets firm enforceable renewable energy targets (25% by 2027, 55% for 2035, and 80% by 2040) for the net electricity production of electric utilities in Alaska’s Railbelt region, spanning from Fairbanks and the Interior to the Kenai Peninsula. Meeting these targets would diversify how electricity is generated across the state and help Alaskans get ahead of looming gas supply scarcity pressures, forecasted fuel price increases, and volatility of world fossil fuel markets.
Unfortunately, the original RPS bills haven’t gained much traction. Meanwhile, another bill has been introduced that claims to achieve the same goals, but doesn’t actually provide for any real change. This alternate bill (HB 368) was formerly known as the Clean Energy Standard (CES) bill. Among other things that don’t make any sense about it, it includes coal as “clean energy.” The name has since been changed to avoid the term “clean energy.”
The formerly-CES bill, as it currently stands, is barely even worth the paper it’s written on. In addition to including coal as clean energy, it doesn’t include any enforcement mechanisms for renewable energy generation, and the incentives it offers are minuscule at 0.2 cents/kWh (=$2/MWh), and not tied very strongly to actual production of renewable energy – Alaska has had a nonbinding (i.e., unenforceable) target of 50% renewables by 2025 since 2010 but has only achieved 15% renewables in the populous Railbelt region and 33% for statewide, which factor in large hydro power in Southeast built by the state in the 1980s. Additionally, it oddly excludes all energy from independent power producers, which would exclude all the large scale renewable energy projects currently on the table.
It’s essentially an attempt to pacify those pushing for renewable energy legislation without real progress, and as it’s currently written, is clearly not a step forward for the energy transition we need. It is possible that, through the amendment process, a better bill may be produced, but it would need to radically change its definition of “clean energy,” provide some meaningful mechanisms for encouraging renewable energy production, and expand eligibility to include the large scale renewable projects currently on the table.
Last Thursday, a somewhat chaotic day at the legislature included a House Energy hearing on this non-CES bill HB 368, which was interrupted by a call to the full House floor. The committee eventually reconvened and heard from the Alaska Center for Energy and Power (ACEP) on tax credit estimates based on projected electricity generation from different sources.
Several amendments were also mentioned and will be voted on at the committee’s next meeting, including:
a new timeline of 30% renewable energy by 2030 and 55% by 2035
tying credits to compliance with energy targets
school district credit eligibility
increases to the credit amount under varying scenarios (ranging from $65 million to $1.3 billion statewide through 2051, starting from after 2026 or after transmission upgrades are completed, whichever is later).
Rep. McKay offered a single amendment to further weaken the already flimsy first draft of HB 368 and expressed concern that the legislation would incentivize too many windmills.
In a new cost analysis of energy on the Railbelt grid by the National Renewable Energy Laboratory (NREL), a renewable share of over 75% would pass $1.3 billion in savings to ratepayers from 2024 to 2040 by replacing costs currently related with volatile fuel costs, like natural gas.
We’re encouraging our legislators to either pass the RPS bill, OR radically amend the formerly-CES bill to make it actually mean something. HB 368 has a hearing on Tuesday at 10:15am with the opportunity for public testimony.
All the bad subsidy bills vs. SB 114
One great bill we’ve been pushing for since last year is SB 114, the Oil and Gas Production Tax bill. This bill would alter the current tax code to limit the subsidies (aka Alaskans’ money) currently being given away to massively wealthy outside oil companies. Unfortunately, this bill hasn’t seen much action either.
Meanwhile, many bills have been introduced that would instead increase the money currently being given away to oil companies. One of these bills will be up for public testimony in Senate Resources on Wednesday. These subsidy bills all essentially do the same thing in different ways: give away hard-earned Alaskan money to outside oil companies currently making billions of dollars off of our natural resources.
For every one of these subsidy bills, our answer is the same: stop giving money to a dying industry. Pass SB 114 instead, limiting oil and gas subsidies and providing for a massive influx of state resources to fund much-need public services and renewable energy development. Last year, the Department of Revenue estimated that the initial version of SB 114, closing the Hilcorp corporate income tax loophole and changing the oil and gas production tax calculation, would potentially generate over $1.3 billion in increased revenue for the state in 2024 alone, then range from $866 million to $579 million annually through 2033. If you want to learn more about SB 114, check out our info doc.
Other bills
One of the bills we support, the House Residential Building Code bill (HB 150) has a hearing scheduled for Monday afternoon.
Bonus bad bill: HB 386 and SB 255 were recently introduced Governor's bills to criminalize obstruction of public places (e.g., highways, waters, airport runways, other public spaces) and private trespassing to deter large-scale protests. It is not currently a crime to obstruct public roads, but there are penalties. Both bills have hearings next week with public testimony.
Learn more and get involved
To learn about the rest of the energy bills we’re following, click here. At the same link, you can also sign up for our rapid response team. The rapid response team is an easy way to stay engaged on the issues you care about. You let us know the bills you’re interested in, and we’ll let you know when it’s time to take action!
GVEA Rate Hike
In February, GVEA announced a rate hike that took effect on March 1st, amounting to an average $29 a month increase (for an average $250/month bill) for GVEA members. This comes after a 38 day period where the Healy 2 coal plant was offline, made worse by a decrease in natural gas energy coming up from Cook Inlet.
At the same meeting, the board voted to amend the Strategic Generation Plan they committed to in 2022, which would have closed the inconsistent Healy 2 coal plant by the end of this year, replacing it with more affordable and reliable forms of energy, including wind. Healy 2 will now be kept running “indefinitely,” until they’ve found the energy sources needed to replace it.
Meanwhile, GVEA still hasn’t signed a power purchase agreement with either of the two wind projects available, Shovel Creek and Delta Wind. Once online, the Shovel Creek Wind Project would produce 3 times the power of Healy 2, at a 30% reduced price. Meanwhile, Delta Wind could be online by 2025, and would also be some of the lowest cost power GVEA currently purchases.
We have known that time is of the essence to bring on new energy sources since Hilcorp warned in 2022 that it would not be able to renew long term energy contracts for Cook Inlet natural gas. This has already caused dire energy pressures in Anchorage, which means that GVEA can’t receive economy gas generated power from Southcentral and must instead fire up expensive oil fired generators.
The longer we stay dependent on fossil fuel energy sources, the more we’ll see our energy bills rise. Renewable energy is already cheaper, and will only continue to decrease in cost.
Take Action:
1. Email the board to voice your support for a swifter energy transition.
2. Vote in the upcoming GVEA election
3. Get involved with FCAC’s Renewable Energy Working Group.
For more information: fbxclimateaction.org/gvea
Upcoming GVEA elections
Another way to make your voice heard is to get involved in the upcoming GVEA elections! Districts 4 and 7 have elections this spring. You can find district maps on the bottom of the page here. Currently those seats are held by Gary Newman and Todd Adams, both of whom have supported renewable energy over the years. Gary Newman is running against Harmony Tomaszewski, who was involved in the decimation of the Borough Climate Action and Adaptation Plan last year.
Meanwhile, two other candidates are running for Todd Adams’ seat - Cyrus Cooper, and Krista Zappone. As far as we currently understand, Zappone is likely to be strongly pro-renewable, but we don’t know a lot about Cooper’s campaign. If you have any further information on the backgrounds or renewable energy stances of Zappone and/or Cooper, please contact us at connect@fbxclimateaction.org.
If you want to get involved in helping to get out the vote in these elections, contact us at connect@fbxclimateaction.org.
You can also pledge to vote (and sign up to get updates on elections) here.
