Juneau, Alaska (KINY) – On Friday, Governor Mike Dunleavy introduced legislation to benefit electricity ratepayers by increasing the efficiency of transmission system charges, prioritizing the lowest-cost power, and encouraging the development of new power generation, including renewable energy.
“Currently, there are electrical tariffs on the Railbelt system that stand in the way of transmitting the lowest-cost power,” Governor Dunleavy said. “This legislation would eliminate these tariffs and transform the system into a public highway rather than a series of toll roads. This would lower costs for ratepayers and create new opportunities for independent power producers.”
HB307 (SB217) seeks to improve how electricity transmission costs are managed in Alaska.
The regulatory measures would eliminate the current method of charging per-unit wholesale transmission fees and instead would require the Regulatory Commission of Alaska (RCA) to create a system that will allow for the economic dispatch of the lowest-cost power at all times.
It will also provide cost recovery for the utility companies and clarify which electric utility transmission assets are subject to this system.
Additionally, HB307 (SB217) creates a level playing field for power generation by giving Independent Power Producers (IPP) the same exemption from local taxes that nonprofit electric cooperatives already receive.
As recommended by the Alaska Energy Security Task Force, the elimination of transmission-related wheeling rates (tariffs), and the provision of equal tax treatment for both IPPs and electric cooperatives, will incentivize private sector investment in energy development and provide greater opportunity for the integration of lower-cost power, to the benefit of IPPs, electric cooperatives, and ratepayers alike. The bills were referred to the Senate Resources, Labor and Commerce and Finance committees and the House Finance Committee.
