It's Energy Committee meeting to order.
Today is Tuesday, February 3rd at 1.05 p.m.
Our members present are Representative Johnson,
Representative Costello, Co-Chair Holland,
and myself, co-chair mirrors.
We have a quorum to conduct business.
I'd like to remind members and staff,
if you're using electronic device, please be subtle.
and signs your cell phones as a reminder staff and members of the audience may not approach the
table. If you need to pass a note to committee members please get the attention of my committee aid
Griffin and he will take care of it. I'm going to apologize. We have a new technical support in
Thank you Jude for being here as well as our recording secretary Cheryl Cole. Thank You Cheryl on today's agendas
We have two bills and a resolution
First we will be hearing invited and public testimony on HB 259 large energy use facilities
Sponsored by myself, and this is the bills second hearing
Next we will be hearing public testimony and amendments on H.J.R. 27 supporting state
energy development sponsored by Representative Holland.
This is the resolution second hearing and we are planning on moving it out if it is
the will of the committee.
And last we'll be hear invited testimony on HB 252, electric utility fire prevention
plan sponsored again by representative Holland and this is Bill's second.
Co-chair Holland will chair the first portion of the committee as we will take
up HB 259. Chair Holland. Thank you Co chair mirrors today we'll be taking
invited testimony followed by public testimony on this bill. First we
will have a brief recap of The Bill from Representative Mears.
Do you have them muted now?
Briefed ease. There's somebody speaking over the phone
Back on the record beginning with a recap of house bill 2 29 by representative mirrors
Thank you to 59
It's about making Alaska open for business by providing clear and predictable rules for new large energy users looking to invest here
By outlining a transparent process for how large Energy loads enter an existing system
HP-259 helps speed negotiations and reduce delays before projects even break ground.
Uncertainty from undefined parameters and one-off negotiations slow projects down, and this bill
responds by setting consistent expectations up front.
At the same time, the bill ensures strong rate payer protections and meaningful community
engagement so growth does not come at the expense of Alaskans.
Great. Thank you, Representative Mears. Our first testifiers, Nils Andreasen, the Executive Director of the Alaska Municipal League, Mr. Andreason, please approach the table, put yourself on the record, and proceed with your testimony.
Great, thank you. For the Record, Niels Andreas, I'm the executive director of Alaska municipal league.
I really appreciate the opportunity to be before this committee.
I appreciate Bill's sponsors' introduction of this bill.
I'm not going to focus necessarily on the bill, but
I want to talk a little bit about one of its component pieces, the community benefits agreements.
I have been fortunate in my life to have visited all eight Arctic nations where a CBA is actually
very common.
I was first introduced to community benefits agreements.
In Greenland, visiting some of the mining development that occurred and is driven locally,
including some the workforce development activities,
a mine training that occurs in Greenland.
Further, spent a lot of time in Canada, where First Nations use
uh... community benefits agreements to make sure that uh
you know instead of utilizing taxing authority that they're seeing a public
and uh
uh community benefit so this is
a common mechanism uh elsewhere in the world uh common in
the nation
uncommon in alaska uh to a large extent so
i'm just going to walk through uh a framework for making sure
that as development occurs that communities have some level of assurance
to residents, to their workforce, and ultimately in the interests of the public.
Great, thank you. Just for a moment, I'd just like to recognize Representative
Ruffridge who joined us about one ten or so. Thank you,
and Representative Copp, who's just joining us now.
Thank, you and go ahead and continue. I wasn't stalling in
the interest of Representative Cop joining
us, but I'm glad that everybody's here.
Again, for the record, Neil Sandrassen, a move on and talk through what community benefits
agreements are and why this matters.
Ultimately, as we're thinking about large-scale commercial development in Alaska, that could
be data centers, it could be other types of high energy use development.
We have to put that development, in context of the unique energy constraints that Alaskans
face, the infrastructure that local governments and others are responsible for, and how to
manage and mitigate some of their impacts that come from that developing, making sure
Community benefits. A community benefits agreement is fairly straightforward. It's a structured framework
that a community, a local government, for instance, agrees to with a private developer
to ensure a public benefit occurs.
It clarifies the expectations of both parties and ultimately
That clarity results in social license,
it results on public benefit,
and makes sure that the two parties have what they need
to be able to move forward effectively,
and avoid things like litigation or project delays
or other types of activities that slow
and ultimately don't end up benefiting
either the project or the community.
CPAs are focused on long-term measurable community outcomes.
So communities are thinking not just about the tax that they have in place.
They're thinking about what housing do I need?
How do i make sure that bridges and my surface transportation is in
place and how is it impacted? They are
thinking of workforce. They think about impacts to their public education system.
So they're identifying a number of long-term
community outcomes that they want to account for and they
want commercial development to think about contributing to.
So, through a CBA, you've got a clear understanding of what impact and benefit looks like.
You've get defined roles for government, for the local government for state government
and others who can act as a convener, a facilitator and enforcer.
You also got defined role for a private developer so that they understand exactly what their
terms are for delivering benefits within the community.
measurable, right? They can point to here's the outcomes we want to achieve. Here's
the agreements that we have in place and here is the types of development that
we wanna see occur over time. And the public has some assurance that there's
transparency and accountability in a place to track that development.
A CBA is a policy tool.
It's different than a law, right?
You don't have to codify this.
It doesn't half to be in code.
You can set the rules of engagement in law.
You could think about what are the types of impacts
you want to see described in a CVA.
But this is an agreement between a private developer
a political subdivision of the state to identify what kind of negotiation and terms they can
agree to.
It's not adversarial, it can be a legal document, but again, doesn't have to be code or law,
it could be memorandum of understanding, a unique tool to develop specific to the project.
That's in place. It should be and will be most effective when it's guided by public policy when your local government where your elected officials have said
Here's what we want to achieve as an outcome from that commercial development
Not just that the development occur, but the communities that residents are benefiting in very clear ways
And again that predictability and transparency not just for all parties,
but for the public
make sure that the project isn't delayed upfront or challenged throughout its life,
that there are clear expectations that are met and that
the public can rely on as the Project moves forward.
In this context, we're talking about high energy use development.
So for a community benefits agreement, you really want to think through
how does this project contribute to the energy makeup within a Community?
demand load, types of generation and transmission systems.
And you want to think through, you think about GU's development.
Teams just dropped in and I knew it.
You want think though, what are the higher potential costs that come with that development?
What kinds of reliability issues?
Does the grid or the system experience?
and tie your CBA to that increased load.
You want to think about rate impacts and be able to manage those effectively which means
you'll need to know costs.
You'll have to have transparency around costs, you don't have
to transparency about total generation needed.
When it comes to cost there's the rate impact for the
rate payer.
There's also for many of these projects a required public investment to offset some
of the early capital requirements that that development might
might require. And so you want to build into the CBA the way to get a return on that investment.
I think one of the important principles when we're approaching Alaska development is that
there's a public benefit on the other side of that development. We're leaving something behind
in the form of revenues, infrastructure development, improving community conditions in some way.
We recognize that high energy use development often
includes results in a strain on transportation,
infrastructure, housing, public services.
So you want to think through, and especially
since that is coming on the front end with construction,
that's going to look different than the long term.
So, you wanna think though how do you scale up
to meet need for that development,
and then how you level off,
and how to avoid some negative consequences.
from that process. Finally, when we're thinking about long or high energy use development,
recognize that this is a long-term investment that's being made, that there's potentially limited
long-term local economic benefit, if there might be a bump during construction, but ultimately
its return on that investment at the developer level is going to be focused on limiting costs
within that community. So you want to make sure that, again, the benefit back to the
Not all projects are created equal, so you're not all CBAs are going to be created
equal. You have a long list of potential elements to include within a community
benefits agreement, but you want to scale that CBA.
to the project. So you're going to see some proportionality. I think for a high-energy
use commercial development, you are going be very focused on necessary infrastructure
and the utility impacts. And ultimately, having local governments and other types of governments
involved early in the process is going improve the outcomes. It's going get you to construction
then excluding them from that process.
And the CBA is a mechanism to make sure that that happens in a clear and consensus-based
approach. Again, it's not adversarial. It's
not trying to get private developers to do
something that they're not used to.
Developers are used doing this elsewhere
in the nation. They're used in doing
this else where in world and we're
developing, I think, here and through this
bill, too, a system for doing that within
Alaska that is well-defined and permissible.
So the examples that we can point to around the nation
show that the sooner we establish expectations
that have them first and what they are second,
that's beneficial.
And I think legislation like this and ultimately
what local governments choose to adopt on their side
can help with that.
That's where you get more consistent outcomes.
So if you have a standard for a CBA that can scale up or down,
going to become much easier for developers
to respond to and follow through with than if you have kind
of an ad hoc approach that doesn't allow for that.
CBA's again scaled obligations of the developer
to the size and impact of project.
One size fits all.
CVA isn't necessarily what you're looking for.
You're really thinking about size, and the impact overall.
And again, thinking of how they relate back to utility.
transportation and public services is a more durable approach than just focusing on jobs.
And sometimes jobs is an easy metric.
We will have 4,000 of these during construction, and we will
have 17 of them on the other side.
That's not what communities, that's all that communities are looking for, especially if
those jobs aren't local.
So we have to think about what are the
other impacts that a project might have on a community.
When we're looking, I mentioned Arctic and the use of these community benefits agreements
elsewhere, co-investment is a pretty well established standard.
that the state, local governments, others contribute
to this commercial development, either through tax
exemptions or deferring taxes.
Those are ways that co-investment can occur,
especially in capital poor jurisdictions.
So we recognize that.
We want to think about, as we are developing those projects,
the lifecycle of the project, not just that it is developed,
or that it runs over a certain amount of time, but on the other side of it, how it will be
decommissioned and turned into something that is beneficial to the community.
You want to make sure that you've got right-sized energy systems to that project and right
sized project to their current energy system and the ability to
those host communities.
Finally, elements related to local hire workforce development
are really pretty critical.
And it's not, again, just local hiring
or funding into workforce-development streams.
But that's also investments into the university,
investments, into an Alaska's case programs like at Avtech.
So what are the training systems that we've
projects could contribute to and see a steady pipeline of workers out of.
For Alaska's you're considering this legislation and the component that is focused on community
benefits agreements, think about what are the policy goals that you have at the state
community benefits agreements.
And get input along the way from local governments.
What are they trying to achieve at the same time
and provide flexibility for a local inclusion
of policy goals that aren't just the states,
but can stem from
what local governments are looking for.
Focus on the systems, not just the projects.
We're not developing policy.
We shouldn't be developing a policy at the state level
that's project focused, but is how do we approach
systemic development?
So we're thinking about all types of high energy use,
commercial development, and we are thinking
about how they intersect with community conditions
at lots of different levels and lots
And your policy then needs to be responsive to all of those
different scales.
Think about on the other side of a policy-led development
and policy goal setting, what are the metrics
that you're going to use as a state
and with local governments to know that
you've set the right policy, that
you have achieved the outcomes that
you meant to, how are you going
to track performance, and avoid kind of undue administrative
burden on a developer and on local
governments who put in place these CBAs,
that you're getting from it, that Alaskans are getting
from what you want when it comes to high energy use
commercial development.
Making sure that there's that flexibility at the local level is critical.
It's one thing I think to put in place a standard at
the state level and miss the fact that most local governments don't have the
capacity to do all the things that are required to implement that standard
effectively.
So you really want to make sure you've got an understanding.
Of what overextended capacity looks like and bring build that into the development of some of your goal setting
Finally governments a facilitator in this right so governor if if commercial development identifies where projects should occur and could occur
Government government is bringing them to the table and working through
Again those expectations that might be out there
those expectations are at the state level, and that things are scalable, that you recognize their trade-offs.
Especially when you don't, when the state doesn't have revenues or capital to contribute to a project directly where you're putting in place exemptions, deferred or preempted thinking through what types of taxes at the local level may be required to adjust that you are thinking
And that you've completed either on a project by project
and broadly some type of analysis of the ultimate benefits
of that project.
We've talked about some of these model benefit categories.
I think these are important to include in a state-led
or state framed CBA.
Within each CVA, you want to see addressed relative
to the impact analysis.
the types of energy infrastructure investment that's necessary to avoid unnecessary rate increases
or changes to rate payers' experience. You want to make sure that there is some
investment in grid resilience, that those things are tied together as high energy use development
occurs. Think through what the local government fiscal support needs to look like. In addition
that they see in place through a CBA.
So if tax isn't the first priority,
water fees or payment lieu of tax mechanisms
that could be offered.
what should that workforce development look like, local hire agreements and commitments
by that developer investments in either local, regional, or state level workforce
development programs, and then what kind of housing, transportation,
and other types of infrastructure is going to be necessary to make that project successful.
Finally, through your CBA and through the state and local cooperation, you want to make sure
there's integration between existing permitting and review processes so that you're not running
into conflict within current permitting processes and ultimately you are able to accelerate
some of the development that want you to see occur.
elsewhere in the nation and in world, when it comes to high energy use commercial development,
they're a way to translate that development into community benefits, like improving infrastructure
and seeing grid upgrades.
And that investment can tie to resilience,
can tied to affordability, it can be tied
to security, but it's a negotiated process
that is well understood.
You want that to lead to pricing stability
and reliability commitments on the energy side,
but also with revenues to local governments
or through jobs,
but that are well defined.
in that private investment with public benefits,
so that you can see those things occur and accrue
at the right level.
Community benefits agreements are a good process
for doing this, and I think this bill takes
significant steps toward outlining,
here's what this could look like in this context.
So I appreciate, again, the bill's sponsor
for bringing this forward and allowing me an opportunity
to speak.
Great. Thank you, Mr. Andresen.
Two quick items before we go to questions.
I just want to acknowledge Representative Edgman
who joined us at 112.
And he's rejoined us, thank you.
And also, I want acknowledge that on the phone,
we have Commissioner Springsteen from the RCA,
Chair Espindola from R CA as well as two other individuals.
related to RCA utility related work. So we have some resources there if needed for that.
I'd like to turn now to questions that the committee might have for Mr. Andreasen and his
work on the community benefit agreements. I have a question. Yes Representative Johnson.
Thank you Mr Chair and through the chair.
I guess my question is was, is this, are you the one that brought this legislation forward? I mean,
Or are you just speaking on behalf of the legislation in reference to it?
Yeah, Representative Johnson through the chair. We didn't have any role in this legislation.
I think the reason for us to be here is community benefits agreements or something that
you know we've looked at for a long time as a way to strengthen local governments which is the mission
The Alaska Municipal League, the fact that CBAs are included in this legislation didn't come from AML.
I'm glad to see them here.
I think it's been a goal for us to
see these more socialized and normalized within the state, but nothing specific about this bill.
Thank you, follow-up. Representative Cobb.
Thank You, Chair. I'll hand it out and thank you Mr. Anderson.
the city of Cordova and Greenspark had a community benefit agreement before they built a data
center there. Representative cop through the chair I don't know that's something that we could look
I will say, you know, I was just talking with a fire chief there in town earlier coming from the
lower 48 who said CBAs are very common there that fire departments actually depend on them to see
increased public safety investments. And it's not something I mentioned in this
in the presentation, but public Safety is a great topic to include within a CPA since they have to
Yes, follow-up at the AML. Have you heard from any communities that have said they wished they would have had a CBA in place before a large energy use project came in?
Through the chair, Representative Cop, I think what I've seen more of is
members looking for PILTS arrangements and good examples of payment lieu of taxes.
what most municipalities haven't seen are good examples of all the other components that could be
included within a negotiated agreement. That said, I think that within the Northwest Arctic
boroughs, Pilt Agreement, for instance, there is a conversation and investment into community
priorities. It's maybe not through a CBA, but it's through that broader Pills Agreement where you see
So the term community, let's just talk about that for a second, so the bill requires that
a municipality shall enter into a community-benefit agreement. Do you think maybe there's some need
for context so that local government and the large energy use facility know who's all included?
Like, are you just dealing with the City Council or does a community include maybe a significant advocacy group that could have a footprint in that community, but not be tied to local government, or they may be a non-profit, that non profit, maybe, you know, very much for very
What the term community means how all-inclusive is that or are you strictly talking about the local
City manager and council that you need to have that agreement with
Representative cop through the chair
a few things when I would place the onus on the developer to be required to
enter into a CBA.
I do, I mean I'm speaking on behalf of local governments,
so I wouldn't want to extend out my perspective too far,
but I would keep it with a governmental entity.
I include local government, tribal governments
within a definition of community.
What we've seen more and more successful in communities
for negotiating with external entities
is trilateral agreements, which municipal government,
tribal government and the Village Corporation
and those three kind of forming landowner
and then two governing bodies.
So I would keep it there.
I personally wouldn't extend it beyond that
because you're focused on public benefit
and municipal governments specifically responsible for
public benefits within that community, and they've got decision making authority, they
have got taxing authority and taxing authorities are a big part of what's being given up or
deferred right in relation to that project.
So keep linking it back to the resources that might be available and that may come from
a local government I think is important.
Thank you. Okay. Thank You represent a reference
Yeah, I'm sorry just one more represent reference
You wanted to thanks ahead through the chair. I've got a little extra context for representative cop. So in Cordova
Clay Copeland who's the utility manager for Cordoba is actually one of our speakers on Thursday
Learned a bit more about that project being in cordova last September. They certainly had conversations about you know
and a checklist.
I don't think they did a CBA formally,
but that negotiation between a community and the project.
And then in the bill on page six,
municipality has the meaning in statute,
which is local government.
The municipality hasn't been, but we're
talking about communities, and that
could bring in a much larger group.
that has to be in agreement with the municipality,
which is my point, is maybe we need to talk
about what context of a community means.
I mean, I would personally like to see local government
control city council, city managers, you know,
and mayors, but I could see a significant entity
with a very significant interest coming in.
that kind of co-ops something and say we're part of this community and we are not going
to sign on to that and the law says you have to have a community benefit agreement.
So I don't want to overstate the concern, but I just think it's something for us to
be aware of and possibly address.
Thank you through the chair to represent a cop.
for CBAs that has that definition of the municipality.
It's intent and letter that way.
Thank you.
Great.
And Mr. Andreas, sounds like it looks like you wanted
to chime in on that.
I always do.
Chair.
And with the apologies to represent a reference
that I cut off a moment ago,
we'll come back to you in just a second.
But I see somebody just ready to go over.
Yeah, for the record, Neil Sandracent.
I mean, I think that the importance of the municipal government
is the one responsible for negotiating this.
The community benefits agreement is
the tool that municipality uses, right?
It's the mechanism, but it doesn't define who all is involved.
Who's involved is municipality,
and they're the ones that are implementing this
legal instrument, this tool to encompass the benefits that should be accruing.
So it's more about community benefits than the community decision making.
It's not joint decision-making at the Community Level.
It is the local government identifying.
Here's the seven things that we want to come out of here that will come back
to the communities in some way.
I know there's, but it is like an MOU is a way to think about it and it
is just spelling out, here's components of the M O U that
we wanna see or the contract.
I guess just in response to that follow up. I did appreciate the thorough slide show.
I wanted to compliment you on that.
I also noticed that one of the slides said these are best not worked out through legislation
or through early discussions and policy guidance.
Yeah, I noted that so that's what we're here for. Yeah. Thank you. I just want to note I've got
Representative Ruffridge and Representative Costello in the queue, but I also want
to know that we have Mr. Duncan on the line waiting also to participate in an invited testimony,
so we'll continue on. Representative Ruffridge.
Thank You Chair Holland. Through the chair,
thank you for being here today.
On your slide show, I think it was slide six jurisdictions that establish clear expectations
early often through policy guidance rather than legislation achieve more consistent outcomes.
I know the work that you've in your organization do pretty well for my time in local government.
And I believe that policy position has historically been the more local the government, the better
The language is I think on page four line 28 that the municipality shall enter into an agreement
Your thoughts on us at the legislative level telling municipalities what to do if a large energy use facility wants to come in
Couldn't municipalities do this now and should they be doing it now?
Yeah
Representative Ruffridge through the chair.
There's lots to respond to within the question.
Generally, our position is don't tell local governments
what to do, so I concur on that point.
I think I'm happy to work with the bill's sponsor
too to make sure that that language doesn't overburden
overextended local government.
One of the reasons that we take that position I do like that it is that within this legislation,
the state is framing what could or should happen when when large-scale development occurs
and introduces as part of that toolbox that local governments have available to them
a CBA and at least for a second class for general law cities and boroughs they might require that
So this gives them some backup to say, we need to do this.
We have that choice.
I do think it's better to tell developers
that they need do it than local governments.
But I think having it in laws is important.
I mean, to the original part of your question,
I don't think what local government can do.
So what the state can now say CBAs are important,
this is a tool that is now available to local
governments,
Here's some of the aims that can be included within a CBA and I've mentioned some
of them within this presentation at the local government level.
The policy discussion would be here's what's important to us within our community.
Here is our priorities from that list and here is additional items that we might include.
And then ultimately it will be a more technical agreement that occurs between the
local Government and the developer that is not a policy and is something that
written out and agreed to between them.
So it'll be a different kind of instrument at that level.
Thank you.
And then follow-up on that same line.
And that might be for the bill sponsor as well.
Given that maybe some of the areas this bill talks
not specifically about data centers,
but I think that's some the intent for a large energy
use facility.
governance structure, what happens in the case of a large energy use facility being out in a
rural area with no, I think we technically classify as the municipal government in that case,
would you think that this bill would require us then to have a community benefit agreement on
Potentially, yes, the legislature would have to serve as the unorganized boroughs assembly in that case.
And could be utilizing a CBA as an instrument to affect a public benefit within a region that doesn't otherwise have local government.
I don't know, I can't answer that this bill requires that, but that could an inference.
Thank you.
Thank you. Representative Miriam, since you have a follow-up you wanted to get in there,
should I go to Representative Costello and continue to queue?
Yes, please. Thank You through the chair to representative Ruffridge. The bill does not
specify what a CBA includes. My desire there is to not be overburdensome. So I would suggest
that AML continue. It's advocacy work with communities on CBIs, what they recommendations
and what they should include for their communities
so that structure lies with them only requiring
that they happen on our point, on a part.
And as far as any unincorporated areas,
that is an area we're following up on.
Since it's a legal question, I'm not going to postulate.
I have an idea, but I don't want to put it on the record
since I am making some assumptions.
So that is a point of follow-up on my task list.
Okay, thank you.
Representative Costello, and then I
have Representative Copa and the queue after that.
Thank you,
and I also going go back to page four,
lines 28 through 31.
It seems to me, Mr. Andres,
and that you might be arguing for changing it
from a municipality shell.
to a municipality may and if you continue in this section essentially before a contract
can be approved this community benefit agreement has to be negotiated.
So it seems to me looking at this that there's a tremendous amount of power that's in
this Community Benefit Agreement and my concern is that it could possibly stall the project
Moving forward. Can you comment on that?
Yeah
Through the chair or some Costello and I do I think I need to follow up with the bill sponsor on on
that language
again, who the responsibility, which party the
responsibility lies with is important. And I mean, I think
to some of the presentation discussion of scalability,
I thinks that might be another area where we can dig into it.
Maybe there's some additional language for, you know,
tiering at what point CBA comes in. I am postulating on the
record co-chair mirrors and I shouldn't. But, those are the
working with and maybe that's some of the advocacy and education that we can
conduct within our and across our membership. I do think ultimately you
want to make sure there's time on the front end to have that negotiation that
conversation between a developer and a local government. You want
to be sure that there is a terms of agreement that come out of that. That a
but does it delay the project in such a way that it becomes infeasible or adds to cost or
kills a project? I think those would also be concerns that a local government would share
and they will act to remedy that as much as they can. So I
think we can work through a lot of that implementation once this is in place.
Thank you just one follow-up push in and this is for the RC a member who's online you had mentioned earlier
We have maybe one or two
Thank You, so it's it my understanding that these data centers mean we all know that they
take a tremendous amount of energy and power in that many of them actually have
their own dedicated fiber and energy. My question is if that is the case would
then the let's say the data center be beholden to having a community benefit
agreement. Great thank you. I don't know if Chair Espindola or Commissioner
Springsteen would you like either one if you'd like to address the question from
Yeah, through the chair for the record, this is John Espindola, Chair of the Regulatory
Commission.
When we evaluate filings, we look at them to the lens of 3AAC 485-10, 1A, and that's
title pricing objectives.
And in a sense, what this regulation speaks to is the cost, causes, the costs payer.
We understand that would be between the municipality and the large energy facility
user before it came to the commission and we would have no nexus with regard to
the negotiation of that agreement.
Thank you, Chair.
Thank.
Good.
Thank You.
And then representative come.
Thank, you.
This may be more toward the bill sponsor.
Thank
You, chair Holland.
Take on with I believe it was representative reference talking about a very rural project
Let's say it's in an unorganized rural area the state that has not yet adopted any of the title 29 powers
That a municipality has so it is not a first second or third-class city or first-second or 3rd- class borough
I would be concerned if it would have to come back to the legislature because we know our capacity to
way in on some things can be heavily politicized by different advocacy groups
coming in here saying please stop or please support either way. But I would
note that already in the unorganized areas there's no footprint of ground
where you don't have to consult with an ANSI or a tribe on any use of land
For a large energy use facility they would still have to get all the permits required by the state to build it
So I don't know that we really need a a CBA in those areas
Just because of the the process already that the law requires with our tribal and ANC partners and the permitting process required
by this state
I guess one other thing to think about
is in rural areas you have large energy use facilities like mines that may have
900, 1,100, 1200 people on the site but they're also independent power
producers. Do they need a CBA? They're a large-energy use facility. They are
producing their own power. Just asking the question do you do how do
through the chair to representative cop.
So I think there's two separate issues there,
one being behind the meter
and then the other one, being unincorporated.
We are going to have to do the research
on the un-incorporated question.
If it's an IPP, if it is behind
the metered, there is no RCA contract required.
But...
still requiring a CBA, although that is a little,
the point of enforcement is little different.
It's not the RCA at that point,
but if there's a project that's going forward
without the CVA, then there is
a civil path lined out in the bill.
I think, right.
I have
Representative Johnson the queue I just want to kind of steer if we have additional questions for mr
Andreas and to kinda focus in on that we still have mister Duncan on the line waiting to provide testimony also
So I'm just kind on to manage our time at this point
representative Johnson
Thank You mrs. Chair and through the chair this would be for the bill
Sponsor, I guess I may be coming in this late and maybe there's been a bill hearing that I am not up to speed on but I
My first question is, what problem are we anticipating?
Are we trying to solve with this legislation?
Is there something going on or is there, you know,
how is this bubbled up to come to your attention?
And then as far as the origin of this legislature,
I already see a couple of things and they don't necessarily look like they could
necessarily apply here quite so well.
is this from another state or where did the idea for this legislation come from?
Representative Johnson, I'll just address this really quickly now. We can follow up after
invited testimony and offline since this is the second hearing. But
numerous places that this has come up through.
Frankly, I took the Lehigh training
this past interim, the Legislative Energy Horizons
Institute training, and particularly spurred
by the development and data centers
and the desire to have additional energy development
in Alaska to help make things a little easier
on other consumers.
And.
It was a long process
We referred to contracts that are already existing
Between local utilities and mines for example as well as examples from the lower 48
Just sure I want to if we can't so we continue on well. Thank you. Mr. Chair
Well, I just want I put some I won't be labor
I will be labored the details, but I wanna put them concerns on the the record just knowing how
Just adding another layer in here can cause problem with timelines.
It can have a real impact on a community actually be self-determining in their own projects.
They may actually want to have some flexibility that is not allowed through this if this bill
I don't know, I think there's another pieces in here
that I would really have to spend a lot of more time
and detail on this to make it look like it makes sense
for the communities that i'm familiar with.
Thank you.
And then Representative Ruffridge,
follow up for our invited testimony.
Yeah,
I just wanted to be sure that
I understood sort of from your position.
the language in the bill specifically around benefit agreements.
If this was, I think to Representative Johnson's point, flexible enough,
because it is a little vague on what's required, or if this were to move forward.
Maybe with some of the changes Representative Costello mentioned, would there be anything else you added in here such as these are the items you should take into consideration?
It sort of hints at local hire and emergency response, but does that need work in your opinion?
Best if I followed up with the committee and kind of talk through for that section.
Here's some additional thoughts. Get into some of the specifics that have been raised by committee members.
I think ultimately I like the flexibility that's in there. The less defined.
the more flexibility that local governments have.
This doesn't have to be overly complicated, right?
It doesn' have slow down projects.
It can be as simple as Project X agrees to hire three people
from the community, it can't be
as much or as little a community wants to do.
you can mostly work through that with what the legislation has drafted, but I think you want to
make sure at the very least that local governments know how to do that, so make
sure you've got some of the capacity building that might go alongside this and
contribute to effective implementation so that it doesn't
slow projects down, look at technical assistance in ways
that AML and others can walk local governments
through that implementation.
And working through state agencies, right?
You've, as the state, subdivided some of your responsibilities
for the unorganized borough and other regions to DNR,
land management, to DCRA for supporting local government.
Make sure they've got the tools to support communities
process. So, but I ultimately let me follow up with more specifics related to that section.
Thank you. All right. Well, thank you for your presentation, Mr. Andreason, and for the extended
discussion that we've had. I appreciate your time here today. Next, we have Ron Duncan, CEO and
co-founder of GCI. He's online with us.
I just want to note, add living here for just a moment, that GCi and Mr Duncan
To me are one of the important examples
when you hear me talking about entrepreneurship,
innovation, and the work that we do
to create new emerging industries.
Mr. Duncan and his company started off in the 70s
as a small entrepreneurial effort at a time
when information technology and
the worked that now we take for granted was very new,
very emerging and has now turned into
one the major employers and an essential backbone
And I'm very honored that Mr. Duncan could join us
for a few minutes today.
So Mr Duncan, can you please put yourself on the record
and begin your testimony?
Thank you and thank you, Mr Allen,
for those kind words, co-chairs, mirrors in Holland,
Speaker Edgeman, members of the committee.
I am very happy to be here today, my name is Ron Duncan.
As the chair said on, the CEO of GCI also served
as the CDO of its publicly traded parent company,
I co-founded GCI 47 years ago and then as now, GCIA was an Alaska technology company.
We deliver wireless broadband and managed services throughout our great state.
We employ roughly 1100 Alaskans throughout Alaska from customer service representatives in one of
our 19 stores to rural support agents throughout Alaska to a robust staff of professionals.
We're very, very well aware that we're all in this together and that's largely the reason
I'm here today to talk about what I think is a great economic opportunity for Alaska.
This is an important year for our state, a difficult and challenging year I am sure for you in the
legislature. You have much on your plate from the gas line to education policy to a fiscal plan.
undertake that and I greatly appreciate the public service that you provide as you grapple
with these issues. I also appreciate your turning your attention to the potential of data centers
in the Alaska economy.
I've been on the economic development merry-round up here for close to 50 years and
I honestly believe that data centres are probably the best potential economic
It gives us a chance to move beyond the export of pure raw materials to become a service provider to an important piece of the global economy.
AI-focused data centers need, in the approximate order of priority, unlimited energy, copious amounts of water, large tracts of land, a cool climate, fiber optic connectivity,
With a gas line, Alaska would check every single one of those boxes better than anywhere else in the world.
In the absence of a Gas Line,
Alaska may still be able to meet the demand for data centers with well-head locations,
although those will have substantial additional economic complications in their development.
And I would note there are some entities working on that now,
and we certainly hope that they are successful as well.
But regardless of location, data centers have the potential to bring tens of billions
of dollars of non-resource-based investments and substantial economic value to Alaska.
I'm going to direct my comments today to the large-scale data center that would really
Large Alaska data centers are likely to be very different than the ones in the lower 48.
Lower 48 locations by necessity compete for scarce resources,
compete connecting to the grid for both energy and water.
Alaska Data Centers on the large scale side are
likely be on stand-alone campuses.
They'll have a dedicated connection to gas and fiber.
They will generate their own power and most likely use water for untapped sources.
As a result, the resource contention from data centers that have driven in the lower 48 communities is unlikely to happen at Alaska.
With regard to the telecommunication links, I'd offer several observations.
For a large subset of the AI-focused data center, latency is not an issue with respect to Alaska,
of 50 to 100 mega seconds is acceptable for large centers focused on training and influence.
In Alaska, latency from the west coast all the way to the north slope is less than 50 milliseconds,
so locations anywhere from south central to Prudow are feasible for a data center
from a telecommunications perspective. Alaska has multiple high capacity mainline fiber routes
and each of which has adequate capacity to meet the expected initial demand that would arise
from data centers. If data centres take off in a large way in Alaska, additional mainline capacity
could readily be built and would represent a very small portion of the total cost of data
centre investments. Data centres will have dedicated connections from the mainline fibres
to their campuses, so they won't be competing with the communities for capacity on the public
Alaska suffers today from being a subscale market relative to the minimum size capacities
available when we make fiber optic investments.
Anything that increases demand for communication connectivity is going to ultimately benefit
consumers throughout the state by leading to construction of more robust backbones.
I'd also note that any telecom services sold at data centers would almost certainly be
and thus beyond the reach of state regulation subject only to regulation by the FCC.
I'm not an energy expert but we've looked closely at the opportunity for data centers in Alaska
and I am confident that the same is true for gas use. Activities that increase the demand for
gas will lower the overall cost per unit for all Alaska energy consumers and be an important
I'm excited about the prospect of Alaska-based data centers and encourage you to find ways
to facilitate their development.
That starts with doing all we can to facilitates the construction of a gas line and would be
followed by creating structures that facilitate streamlined access to the other inputs that
Time to market is critical here and while for centers other than on the slope
We'll have to wait for reasonable certainty on a gas line
Once that occurs we'll want to see construction occur rapidly to be available with the first flow of gas
I encourage you to look at ways to accelerate that process and to because just about erecting regulatory
requirements that would increase uncertainty or facilitate additional delay
As I said, I've been playing in the economic development game up here for a long time,
and I have never seen anything like the opportunity that data centers present to us to transform
the underlying nature of the Alaska economy and help us escape that perpetual resource
dependence which has hamstrung us for so long.
I really appreciate your attention to this matter.
Thank you, Mr. Duncan. We've been very informative. Are there any questions for mr.
Duncan today? Representative Costello, thank you. Thank You, mister Duncan for appearing before the committee
You know what when I look at this bill
I think what it's trying to do is make sure that
Corporations or entities that come to Alaska are good community partners and I and so I wanted you to talk a little bit about your
corporate philanthropy and what your company has done as a community member.
Thank you, Representative Costello, through the chair.
We obviously are all about Alaska today, it's all we do, and as I said, in my comments,
we feel that economically we're all in this together, so we have made an effort to participate
In terms of public service and in terms
of our charitable operations, we spend a couple of million dollars a year
supporting a number of statewide initiatives.
We have our GCI Gives program, which, well, has a large focus on suicide prevention,
also funds, all sorts of other community endeavors.
We think it's important to give back to the communities that we serve
and to work to enhance their resilience.
and their stability so that there's a bigger market in the long run for all of us.
Great, thank you and then Mr. Representative Ruffridge.
Thank you Chair Holland. Through the chair thank
you Mr Duncan for being here today and I think your your experience would be really helpful for
this committee to ask a few questions for I thank my first one in regards to the bill
You know, it talks through having contracts that are regulated by the RCA potentially for data centers.
I'm just wondering if you could talk about what you thought R CA oversight and how that would affect potentially a timeline for a data center.
data centers if they're not connected to the grid.
And that's something that maybe the bill needs to address.
But my expectation is that large-scale AI data
centers in Alaska will be on substantially sized campuses,
quite possibly in unincorporated areas,
with primary access to gas generating their own power
that goes from the data center back to the mainline fiber network and would be
largely self-sufficient. I'm not aware of anything in existing state code that
would make that subject to RCA regulation. Okay, thank you. Representative Mears.
Thank you through the chair to representative Reffridge. A project
behind the grid would not be subject R CA contracts through this bill.
are there any additional questions for Mr. Duncan? Very good. Thank you for your
presentation and your time today Mr Duncan's been a pleasure to see you today
and to get your input on this bill.
Thank You for the opportunity. Next we'll move on to public testimony which will
limit to two minutes per testifier and I'll go ahead and open public
testimony. Is there anyone in the room wishing to testify on
All right, is there anyone online wishing to testify?
Seeing no one else in the room or online, I'm going to go ahead and close public testimony.
And with that, we'll set an amendment deadline for Wednesday, February 11th at 12 PM,
for House Bill 259, and set the bill aside.
Yeah, let me pause for a second representative cop. Thank you. So
because this
legislation
Directly addresses all of our utilities. Are we going to be hearing from them?
Representative mirrors
Thank You through the chair to representative copp
We've been speaking with utilities directly in the development of this bill. I think it's challenging to
get utilities to have a perspective on the record very quickly with all of their board members
everybody getting into agreement. We'll continue to continue have that conversation and see if
There's comfort in the utilities having a unified presence
in front of the committee.
There are certainly lots of conversations to be had
with many folks involved, both on management and on boards.
And I would encourage committee members to take advantage
of folks being in town for Alaska Power Association
and conference this week.
We'll continue to have conversations
and see if utilities would provide public testimony for it.
Thank you, thank you. So I'm gonna go ahead now and pass the gavel back to co-chair mirrors for hearing on house bill
Well
Just a brief at ease while I sort out the script
We're back on the record. I'm going to be handing the gavel back to co-chair mirrors and we're going
to begin a hearing on House Joint Resolution 27. Don't take brief at ease while we've flipped us around.
Back on the record in house energy on Tuesday February 3rd, we just took a moment to look at
folks online for public testimony and
Since we've got invited
testimony for a household 252 and nobody online at the moment for Public Testimony
We're gonna go ahead with house bill 252
So we have invited testimony from Joe Coleman
for the Council of State Governments who we
have online.
Mr. Coleman, thank you for joining us today
and your support of testimony for House Bill 252.
Please put yourself on the record
and begin your presentation.
Sure, Madam Chair, Mr Chairman, Joe Colman
from the council of state governments west.
appearing at the request of the chair to testify and give some information about wildfire and
utilities. Important to note out, I am not a proponent nor an opponent of legislation simply
testifying as an informational witness. As most of you know CSG West is a nonpartisan organization
So with that through the chair is the presentation up in your room?
It's not at the moment, but it will be shortly. Okay, okay
Okay, we are good to go.
Thank you, Mr. Coleman.
Please proceed with your presentation.
Okay. Thank You, Madam Chair.
Again, so this is a project
of the Council of State Government's West.
It's called Forging a Resilient West,
and this a special project of
the CSG West Disaster and Wildfire
and Disaster Preparedness Committee.
The next slide will show you the Alaska
legislators who are part of this committee. I'll put in a plug now though that anyone who's
interested in wildfire can join the committee or just tune in anytime. So part
of the reason this Committee was formed, you know, wildfire is a western problem that needs
western solutions. None of these states, the 13 western states are immune to wildfire.
So the idea being that together,
we can look at different kinds of solutions and issues.
So, the project is divvied up into a few different areas.
Clearly,
the built environment is one of
those areas that we are looking at.
That includes residences,
defensible space around structures,
and also critical infrastructure,
which is what we're going to talk about here in a minute.
your power lines, your waterways,
other types of things, and then insurance.
Insurance goes hand in hand with a lot of these issues.
Land management is also a big part of
whatever we're talking about fire,
whether it's federal land management,
private property land
management or management by the states.
We look at funding versus suppression.
Nationwide suppression costs a
but you've got to put the resources to get there and so we're looking at different ways
that states are doing that. Also looking knowledge and technology, that includes everything from
artificial intelligence and satellite monitoring to just something like we are
doing today, just sharing information among the states.
So part of the way we were doing this is what I'm going to
putting together and the legislative tracking.
So when you see when I asked,
when asked the Microsoft co-pilot to compare Alaska to
the rest of the Western States,
it gave me a very large outsized Alaska,
which I really think is as it should be, of course.
So what I'm going to show you today is
just how I've been tracking some of
those bills across the West.
This is a this is the dashboard that is available to the to
the public.
On the on the copy of the PowerPoint that I will get to you
after this, there is alive link on there that you can get
to it.
I won't do it now because I don't want to mess up the proceedings
but I go in and I check it every day.
So I've got a program that
I use.
Yeah,
there's legislation across those 13 western states.
anything that deals with wildfire,
and I put it into different categories,
you can click on that, see what's added,
and then as I go through it pretty regularly,
I'll take some of the bills,
like we're gonna get into the utility bills.
And I will compare some those utility bill,
both that are being proposed,
and some that have been done in recent history.
So with that we'll get on to utilities in the wildfire.
We all need electricity.
It's pretty obvious that when you spread electricity across the Western landscape, you're going to get fire risk.
But as fires have become more intense, and they've become
more frequent, there's a lot more,
and there've gotten a little more damage.
You all are aware of fires that have involved utilities, that are resulted in mass damages.
A lot of legislatures are talking about this. Alaska's certainly not.
The first door won't be the last.
Again, with utilities, looking at the whole picture is important.
So you not only look at a built environment, you look right of way across public land,
all of those kinds of things when you're looking
at utilities and fire.
The first thing that a lot of us look
at is vegetation management.
I think we all pretty much know that getting there is not always an easy thing when you have
different types of land ownership, different kinds of rights of way. So there are other ways
to try and do that. Of course, clearing vegetation out from under the line is the easiest. But when
people have limited resources and limited time, they're turning to other things.
encroaching vegetation in specific spots,
structural integrity issues of lines,
early detection of dying trees.
Folks are also using predictive analytics
to see when a storm might,
what risk maps there can be environmental trends in weather.
Grid hardening is just one moment, Joe.
If you don't mind, can we go to the previous slide
for just a second?
Thank you. I just I want to. Yes.
I want to make a point while this slide is up for everybody because we're going to come
back to this issue a little bit later about the issue of the utility right away and the
vegetation management versus the involvement outside of right-of-way and additional vegetation.
This picture is a really good place to take this point, which is that the utilities typically
And for the most part, you'll see that they are very active and very diligent in assessing
the vegetation around the power lines, but their responsibility is within the right
of way.
It may only be 30 feet wide.
It essentially forms a bit of a canyon with, in many cases, up on our hillside where I
live, very tall, spruce trees on either side of it.
But those tall trees are outside the Right of Way.
side they're right of way to address trees that are approximated to the lines but
by virtue of the narrowness of
the right-of-way or outside of it.
So the issue we're trying to clarify
with this bill is going to be this question of
the role of utilities in defining,
assessing, and treating the vegetation within
their right of way.
But then the question is what happens to the
knowledge that they may have gained about the
vegetation that's right outside the
in high wind conditions in particular could be a risk to the power lines to
the degree that there are hazard trees and that's a kind of a technical turn of
art here that are outside the right-of-way a damaged tree a dead spruce tree.
There are some protocols for them to talk to
the landowners and deal with those trees that
are right outside their right of way but to
the extent that like this picture where you've got
healthy vegetation on either side of the
right away the question is
You know, what do we do about the recognition that there is all this vegetation outside the
right of way that could impact the lines? So I just want you to keep this picture in mind,
this narrow canyon of a right-of-way. This is what we'll be talking about later when we get into
some of the concerns about what this bill is trying to do both and working with utilities and
giving them some protection for the work they're doing within the right way, but also the question
for the interruption on that, Mr. Coleman.
But if you could go ahead and continue now,
I just saw that picture and wanted to take advantage of it.
Thank you.
Of course, Representative, that's great.
That's a great context.
So the next slide, again, we're clearing trees out
from under power lines.
Bearing a line is a good example of grid hardening.
Pretty hard for trees to catch on fire if the line
is underground.
That is expensive.
especially up front. I mean, there's some information out there that over time, if you're factoring in
corridor management with vegetation, possibly bearing a line in some places might be cheaper
in the long run. There's other things out here like wrapping lines, steel posts, all those things
configure in to how you are lessening the risk of utilities and wildfire coming together. The other
a pretty obvious one. You shut the power off, you pull the plug. This might seem like an easy,
foolproof thing, also pretty hard for fire to start when there's no electricity, but I think,
especially in Alaska and some of our rural states, when you shut
the Power Off, there is a whole bunch of stuff that happens after that. People could be on
You know, the food in your fridge spoils. Lots of things can happen when you turn off the power.
And that is something that most utilities do as a very much a last resort.
But when fire danger is presenting itself, when there's high winds and dry fuels,
those public power safety shutoffs figure into the mix.
So, without overview, I'm going to get into some of the comparison of different mitigation
plans out there, different things.
What this illustration was trying to come up with is when you talk about mitigation plans,
when we talk of liability, insurance, and wildfire, pretty much everybody's finger is
pointing at somebody else there.
There are a lot of different moving parts in this.
So when you look at these bills,
and I don't expect you to read all of the bills
that I've got coming up here,
nor will I read them to you.
But just keep in mind there are just a lotta different
parts of each of these kinds of things.
So mitigation is certainly one of it.
If you stop the fire from starting,
you're way ahead in the road on not blaming someone.
Um, it's causing damage who's responsible for that damage.
Um.
How are they responsible?
For that damaged how does the work that they did before the fire started.
Figure into their responsibilities. So we talk about liability.
Um basically blame. Um insurance figures into that. Again, the mitigation.
Uh,
the hope is that
The more the mitigation that is done, the more preventive work that has done insurance rates will
at least stabilize if not go down but not stop going up so much. I think across the west it's
pretty well known that there are utilities that are having a hard time getting affordable insurance
and some can't get insurance and that trickles down then to the homeowners as well. So insurance
Once you go through these things and you find out
how the damage was caused, who was responsible
for the damaged, how does that get paid for?
You know, if the utility is found responsible,
you know their insurance may, may not pay.
There's a lot of questions out there.
How do you keep utilities financially viable
when you have giant fires that cause a lotta damage?
And is that the role of legislation to do that?
So there are a lot of different thoughts out there on that.
So with that, I will move to the next one
which there have been a number of bills enacted
really over the last six years
that have really gotten to look at this.
California, of course, has been one of the early ones
of that because California has really bad fires.
So 1054 is one of the first ones that came in to being, and it was the creation of a wildfire
fund. So that was a big one to pay damages. It also started the utilities down the line of
implementing these mitigation plans. Again, as we go through these bills,
you want to look at the liability and the cost recovery.
Strict liability is not an attorney in Norman and insurance experts,
so I won't go too deep into any of these.
But strict liability, is if a fire starts,
the company is responsible.
I mean, there isn't wiggle room there,
there is an investigation.
Fire starts.
Companies responsible, a lot of
these will limit that strict
liability and make an
investigation happen proving some sort of gross negligence.
Who approves these plans is also something that is is different amongst the states a lot of them go through the utilities Commission
Some don't some go to their Department of Natural Resources
other like for for local cooperatives that might go though their board so the local boards might be approving that
California 254 really just kind of expanded on that other one
They've got up to the issue of more than $10 billion in new bonds for that wildfire fund.
The next one, Idaho and Wyoming both did these last year. Again, filing plans.
Another thing to look at is how often these plans have to be filed and how
The company is going to have to come in and say, here's how conditions have changed.
Here's what we've done.
A couple of different things in here on liability for these two,
a rebuttable presumption of non-negligence for those that implement the plan.
Most of these somehow are trying to balance liability and blame with how well you've
implemented the planner if you have implemented a plan at all.
Again, both of those go to the Public Service Commission.
Idaho utilities can access private and public land
for mitigation if initially denied,
so essentially giving them permission to go on
for some of those things.
Statutes of limitations are also some things
that are looked at in these plans.
Montana did one last year.
Again, all utilities had to do this.
This is all co-ops and the investor owned.
This removed the strict liability.
So this required proof of failure to exercise reasonable care.
Three year statute of limitation. Again, for the investor own, these went to the utility commissions for
the co-ops. It went on the board, the Co-op board.
Utah was pretty extensive.
It included a fund.
liability to your statute of limitations and then the utilities may create a
fire fund through rates. So again another thing to look at is if you're
creating these funds where do the funds come from? Does it pass on to rate payers
or is that from somewhere else? I won't spend a lot of time on your Alaska
bill because I think the chair and the sponsor can do that and explain that to
Just the basic oversight of the Alaska bill, and I'll go into a few other ones that are being
proposed right now too. New Mexico's got a couple of them. Again, an approved plan,
a rebuttable presumption of utility compliance. The one new Mexico Senate bill 161, one of
the unique things in there is that it explicitly shields utilities for liability for public safety
shut offs if it approve if that follows a plan. So not only do some of these include mitigation
plans for vegetation management, they include plans, for those public safety power shutoffs.
Hawaii also has a couple different pairs. One of the things that's stuck out in Hawaii is
they will find you up to $10,000 per violation. It also mandates defensible space.
and clearance around structures and utility lives. New Mexico was establishing a wildfire fund.
The fund must grow by 10% of the risk annually.
And then lastly, Oregon also has a couple. It explicitly prohibits electric companies from
And then it also, it authorizes them to issue bombs for insurance costs.
I apologize if that was too fast, but I wanted to give you plenty of time and respectful
of your time.
I would just note, as I went through these, these summaries are prepared through that
program that I showed you, the program only looks at the bills that are in there.
and then I put them into a format and check them. So that's where they come from.
It's pretty nifty when you get down to comparing. I think the bill tracker right now has 350
bills in it, so I can't sit here and read every one of them every single night, but with help it
Thank you very much, Mr. Coleman, having contacts from what other states are looking at is very important as we do our work.
We don't live in isolation here, so I appreciate that context.
Do we have any questions from the committee?
Representative Costello.
Thank You.
And just looking the presentation that you gave, I noticed Hawaii has the fine
Do we find that states that rely heavily on tourism and
natural beauty to attract tourists that they have a fine system versus other states?
I mean, why does so why have the fine and is that something that is recommended?
Or do you have an opinion about that?
through the chair representative.
I don't have an opinion and I
don' t think I could quantify it.
I think all of those things as you go through those bills
and again, after the fact I can provide more information
on those and links to the specific bills.
So I do not know the reasoning behind Hawaii
but a lot of these have different enforcement mechanisms
and fines are clearly an enforcement mechanism.
So, I dont know.
what the impetus was, but there are funding and enforcement mechanisms in each of those pills.
Thank you.
One question.
Representative Holland.
Great, thank you, Mr. Coleman.
Just briefly, I'm curious from your vantage point of being able to look out across all of the legislation going on as it relates to utilities and a wildfire.
Has there been some central themes around creating some consistency in the legislation in order to protect the utilities from the threat of litigation from wildfires, or do you have some thoughts on how the
utilities are looking at this issue across multiple states in
order create a consistent framework?
I think so in general. I mean, I
think the proliferation of these things is clearly coming across as a need to
balance, you know, balance those wildfire risk versus the need for power and
electricity. You know and you can't, there is there's clearly a public
interest in continuing to be able to provide safe reliable power. But...
you know, where does that balance come in with preventing fire that can damage a lot of property
outside of just that one area. So I do think that's what states are working with. I would say,
you now, these themes are common across the states, but each state needs to work with its own
Case laws that are different in each state, all of those utilities are regulated a little bit differently, but
To your point, yes, I would agree
There is a there is at least a concern and attention across the West of how do you balance?
How do balance the need for mitigation and fire protection with the financial stability of?
The whether it's the co op or the investor owned utility that is providing power that your your residents need
All right, thank you.
Alrighty, Representative Cop, do you have a question?
Sure.
Thank you one or more.
I'm just teasing.
Mr. Coleman, Thank You for your testimony to the committee.
So right of ways and easements are a fascinating topic.
And balancing a property interest in all that.
highlighted for us in what is going on across the country in this area.
One of the things the state is rightfully concerned with is what
is the balance between allowing a landowners improved property so they have an insurance provider.
If something happens, that is negligence on the part of utility that causes damage to their improved structure land,
that insurance company who's going to pay a claim to make the landowner hold has some ability to subrogate what's the word there.
the entity that was demonstrating negligence in the right of way that caused the damage in
the first place. And then we have the interest of the utility company who wants to be able to
Doing their best to act responsibly so my question to you sir is in balancing that interest this bill has a gross
Negligence standard in other words if you're complying with the mitigation plan
you
You're covered very broadly unless
You are considered to be grossly negligent. Have you seen any and here?
I'm getting to the question have you see any bills?
or legislation enacted that separate that out so that the standard for economic and property
recovery is based on normal negligence, but punitive damages is reserved for gross negligence.
And the concern is is otherwise the homeowners property insurance rates will go up if you
If we if we limit the ability of an insurance
To not not only pay the claim but actually go after the entity to make themselves whole it so that they don't have to pass it on to
all the rateholders can
Do you see any states that separate out those two categories of insurance between?
punitive damages reserved
for only gross negligence and compensatory economic
and property damage available upon a claim,
which you'd have to prove of negligence.
Sorry for the long question, but I was trying to nuance that.
Not at all, through the chair representative.
Yeah, I have a hard time pronouncing subrogation, too.
And I didn't know what it meant until I started working on this.
Montana,
I do know that Montana specifically
calls that out. I think there was another state I don't have it off the top of my head but
I guess I would say you ask a really good question and I
think that's something that policy make yet another thing that policymakers are struggling with.
I do not think it is an answer that is a one size fits all. Again I
The liability laws in your state and the insurance laws
in their state will provide some background and context
for whatever decision you might reach on that.
Thank you.
If I could follow up.
Thank You.
Coach, your home.
Yeah, briefly through the chair to Representative Cobb,
there is some language in this bill in section B of section one
that is attempting to not
Gross and I go, John, says the exclusive criteria for liability and there are some sections in here
that do clarify that the utility when they're doing work is still
Subject in section BSS this section does not preclude civil liability for property damage death or personal energy resulting from the contact with the vegetation and the utilities facilities
So there is later the section you're referring to about gross negligence, but there that's not the exclusive section
There is intended to be some normal civil liabilities still available
For action within the work that the atones are doing but we can follow up with you further on that. Thank you representative
Thank you. Any further questions from the committee? All right. Thank
you very much, Mr. Coleman, for joining us today and getting deep into those
questions. We appreciate your expertise in your joining
us. Today.
Thank You very
much.
Coach Holland.
Thank you. We are back on the record in house energy
so
representative Holland would
has asked that we
Take a few moments with his staff to
Talk about some changes. They're working on to make some updates to the bill as they've had conversations
Mr. Nickel, please put your self on their record and
Explain what you got going on
Thank you, co-chair Mears for the record, a nickel staff to representative Holland.
Since the introduction of this bill, we've reached out to representatives from all five
railboat utilities, as well as community leaders in the wildfire mitigation space and
a prominent wildfire researcher in meeting with those experts. I've gotten some really excellent
towards some changes that we would like to make,
to smooth out the effectiveness of the spill.
So the first change that were hoping to
make is we need to clarify that utilities
do not have a responsibility to clear vegetation
growing outside of their right of way.
It was never our intention to confer that responsibility.
um but utilities have expressed some concern that the legislation might be
construed in that way um so we'll be adding language clarifying that
to the extent that a wildfire mitigation plan requires a utility to
Second, we are looking to limit the application of the bill to the five railbell utilities.
The goal of this limitation is primarily to lower the cost that this bill would impose
on the Department of Natural Resources.
As you likely know, there are over 100 utilities in Alaska, so as written, DNR would be required
are changed with lower DNR's workload to review just five plans each year.
Third, we hope to add language limiting the requirements that DnR can put on a wildfire
mitigation plan.
Our intent is generally to leave the language describing DNR's role broad and to let the
detailed policy requirements be managed by the subject matter experts at the department.
But we have heard concerns that if the requirements of a plan are too
extensive, they could burden utilities and raise costs.
So we plan to add a provision that puts some guardrails on what
DNR can require of utilities through this bill.
Fourth, with respect to language governing power shutoffs, we have received concern that
the bill could be interpreted as requiring utilities to shut off power in periods of
high wildfire risk.
Again, that was not our intention, but we do want to guard against the possibility of
that interpretation.
So our updated language will clarify that utilities need only consider shut-offs as
Finally, we hope to add new language facilitating utility collaboration with community wildfire
protection plans, including that utilities publish mapping data that describes their
mitigation work so that the data can be used by communities as well as emergency response
teams.
There are a few additional changes that we plan to make for clarity and consistently within
the bill.
Thank you representative cop that I think thank you. Thank
you for that. That was very helpful. I guess for the bill
sponsor represent Paul and I would be interested in you know we
could talk offline about how we address not gross negligence
but normal negligence if that caused damage to a home and
I don't think it would be the intent if there was a showing of negligence, which you would have to improve that a utility would completely shield from any responsibility for a house burning down because they didn't rise standard of gross negligence but the standard met was clearly negligence.
And I'm thinking there are situations when we're dealing with improved properties and structures that homeowners would better protected.
But if we recognize that there are structures that have such a devastating loss that maybe
having to prove gross negligence might be considered an imbalance there somehow.
So I just want to, we can talk more about that.
Yeah.
I'd look forward to doing that and you know the intent here is to move the bill forward.
in providing this information that Aidan's gone over today.
We just wanted some context for people
to know what we're working on already,
but I'll follow up with Representative Conop.
Thank you, Coach Herr Holland.
And I would suggest since there are multiple changes
that if you could share those amendments when they're ready
with the committee as soon as possible,
so folks have time to review.
Representative Ruffridge.
Thank You, coach Hermiers.
Couple questions.
Is it possible to have these? That's a lot of changes.
Can we do that as a CS that we can have ahead of time rather than as an amendment process?
And secondly, kind of actually on the same question as the previous bill,
all the utilities are in town today, and actually in general this week,
it would be great to conversations with them.
I don't know if they've been invited or not.
Thank you, Representative Ruffridge.
They are, and we do have some rural utilities
planned on our schedule for Thursday.
And I apologize, I was doing some hopefully
subtle electronic communication with some folks during that.
And we'll work with utilities to get feedback directly
not fully up on their abilities to communicate with us directly with or without their boards.
So we'll continue to work on that relationship. So Representative Holland, do you have a response
about CS versus amendments for representative reference? Sure. Well, through the chair, you know,
My hope had been to set an amendment deadline today for Monday in order to just simply keep this thing moving because we're going to start getting into budget
subcommittees and other efforts and would like to identify if there are other amendments that people knew that they wanted made so we could fold this all in together as opposed to going through a multi-step process.
don't have any other amendments that you're planning on,
then I'd rather move ahead with amendment deadline
so we can keep this thing moving.
To the degree that we feel like we really do need
to have a clean CS with the changes we're working on
then be happy to work on that.
I just was trying to understand kind of the support
that there was to keep us moving along at this point.
Well, discussion with committee.
Could we have collaborative
Process on amendments. I don't know what other folks are thinking with things and just pull back a CS that that folks have collaborated on
representative reference
Yeah, thank you in the past versions of
This language has percolated through this body
Most of the versions actually talked about a vegetation management plan
rather than a wildfire management plan.
And most utilities already have a vegetation management
plan, therefore it wouldn't require them to write a whole new
plan and that's the reason why I would like to hear from
utilities about all of their vegetation
management plans because I know they have them.
I think it would actually be a little bit easier to implement.
I also think that there would be less relationship with large-scale government structures like
DNR that has to approve a plan.
There's actually a lot in this bill that I I thinks needs to be addressed.
Mondays up fast turn around, given the changes, giving the people that we haven't heard from.
I mean, obviously, if you wish to move it quicker, that's sort of outside of my element.
I'm going to respond.
Could your hall?
Yeah.
Thank you.
Through the chair, represent a reference.
You're right.
You know, in the sense that the utilities in Alaska right now primarily have vegetation
management plans.
That's been kind of the standard in there.
What we have learned, though, looking at what's going on in Utah, Idaho, Montana, particularly
Those western states are all moving towards utilities having a wildfire or wild land management
plan and those plans do have vegetation management plans within them but it also provides a structure
for a broader set of criteria. So this would be bringing Alaska's approach into alignment
with what is done in the rest of the western United States with using those wild fire or
this strategy, and that's the question you heard me ask Mr. Coleman, is one of the strategies
in trying to manage litigation and insurance issues is to ensure that there's some common
framework that is being used across multiple jurisdictions, so this is an effort to align
Alaska with the other western states and their framing of that.
From what I'm hearing so far, it sounds like we probably should move ahead with generating
to provide you something to work with, because I don't see.
Representative Holland, why don�t we put a pin on that and we�ll
Instead of coming up with a plan on the fly
Email committee members with the plan of action and representative reference if there's things that you want to look into
we can
Have a conversation if things can get incorporated into a CS that there is unity on
And how much time we might need to make for some of those other changes representative cop. Yeah, thank you co-chair mayor
So and thank You representative Paul and for bringing this issue forward
Um, I think that one of the things I do like about a CS is we can also coming back for the the committee, we could have a comment from utilities as they're able to, you know, as you pointed out some may may not feel but some maybe fine with giving a
I think members would feel better about taking an action of moving until at that point.
Thank you, Representative Cop, and lots of folks in town these next two days, so I
think.
will better be able to coordinate with multiple folks
from utilities in person over the next couple of days.
So by Thursday, I think we'll be
able iron out some of our plans a little bit,
but I really appreciate that discussion
and a reminder from folks that we all need to be chatting
with them in multiple formats.
We had planned on taking up HCR 27 today and with five minutes left on the clock, I think
since we have two amendments, we've run out of time for that for today.
So we will get back to folks on when we'll take those amendments up.
We do have three rural utilities coming in front of us on Thursday, oh, four.
These we wanted to take advantage of folks that aren't coming from hubs
But from you know that I've got multiple hops coming in here that are in town for APA
And so we'll be hearing from four rural utilities CEOs about the challenges and opportunities that they are facing
That is it for the moment
Seeing no other business before us this meeting is adjourned at 2 55 p.m.