State of Alaska
Fiscal Note
Bill Version: SCS CSHB 307(FIN)
2024 Legislative Session
Fiscal Note Number: 5
(S) Publish Date: 5/15/2024
Identifier: HB307CS(FIN)-DCCED-RCA-05-10-24 Department: Department of Commerce, Community and
Title: INTEGRATED TRANSMISSION SYSTEMS Economic Development
Sponsor: RLS BY REQUEST OF THE GOVERNOR Appropriation: Regulatory Commission of Alaska
Requester: (H) Rules Allocation: Regulatory Commission of Alaska
OMB Component Number: 2417
Expenditures/Revenues
Note: Amounts do not include inflation unless otherwise noted below. (Thousands of Dollars)
Included in
FY2025 Governor's
Appropriation FY2025 Out-Year Cost Estimates
Requested Request
OPERATING EXPENDITURES FY 2025 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Personal Services 68.0 68.0 68.0 68.0 68.0 68.0
Travel
Services 250.0 50.0
Commodities
Capital Outlay
Grants & Benefits
Miscellaneous
Total Operating 318.0 0.0 118.0 68.0 68.0 68.0 68.0
Fund Source (Operating Only)
1141 RCA Rcpts (DGF) 318.0 118.0 68.0 68.0 68.0 68.0
Total 318.0 0.0 118.0 68.0 68.0 68.0 68.0
Positions
Full-time
Part-time
Temporary
Change in Revenues
1141 RCA Rcpts (DGF) 98.0 775.0 775.0 775.0 775.0 775.0
Total 98.0 0.0 775.0 775.0 775.0 775.0 775.0
Estimated SUPPLEMENTAL (FY2024) cost: 0.0 (separate supplemental appropriation required)
Estimated CAPITAL (FY2025) cost: 0.0 (separate capital appropriation required)
Does the bill create or modify a new fund or account? No
(Supplemental/Capital/New Fund - discuss reasons and fund source(s) in analysis section)
ASSOCIATED REGULATIONS
Does the bill direct, or will the bill result in, regulation changes adopted by your agency? Yes
If yes, by what date are the regulations to be adopted, amended or repealed? 10/01/26
Why this fiscal note differs from previous version/comments:
Updated to reflect changes in the committee substitute, including establishment of the Railbelt Transmission Organization (RTO) in the
Alaska Energy Authority (AEA); separation of the Alaska Energy Authority and Alaska Industrial Development and Export Authority
boards; update to the statutory cap for the Regulatory Cost Charge (RCC) calculation; and changing the salary range of the Regulatory
Commission of Alaska Commissioners.
Prepared By: Robert A. Doyle, Chair Phone: (907)276-6222
Division: Regulatory Commission of Alaska
REPORT Date: 05/08/2024 01:00 PM
ED
SFC 05/1 OUT OF
Approved By: Hannah Lager, Administrative Services Director Date: 05/08/24
Agency: Commerce, Community, and Economic Development
5/2024
Printed 5/15/2024 Page 1 of 3 Control Code: QQwDf
 SCS CSHB 307(FIN) - Fiscal Note 5
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. CSHB 307(FIN)
2024 LEGISLATIVE SESSION
Analysis
This bill creates a Railbelt Transmission Organization (RTO) within Alaska Energy Authority (AEA) to establish a transmission
cost recovery mechanism for, and to ensure nondiscriminatory open access to, the Railbelt backbone transmission system.
Statutory provisions specify a governance structure comprised of representatives of the Railbelt utilities and require the
RTO to maintain an open access transmission tariff and adopt a transmission cost recovery methodology, with both the
tariff and cost recovery mechanism subject to Regulatory Commission of Alaska (RCA) approval. The RTO is required to
submit for RCA approval a transmission cost recovery methodology, but if the organization fails to file the methodology by
July 1, 2025, the RCA must establish the transmission cost recovery methodology.
This bill also amends state tax statutes to provide that generation facilities that only provide power to public utilities are
not subject to state and local ad valorem, income, and excise taxes. The legislation also addresses AEA board composition,
transitioning from a board comprised of Alaska Industrial Development & Export Authority (AIDEA) board members to a
separate board with the required board composition specified in statute, along with additional details regarding board
members, voting rights, and board vacancies. The powers of the AEA are also expanded to include the acquisition of energy
storage facilities.
The RCA and the Department of Law’s Regulatory Affairs and Public Advocacy Section (RAPA) are funded by the Regulatory
Cost Charge (RCC), a statutorily capped assessment on utility revenues that covers the annual operational costs of the RCA
and RAPA. This bill increases the RCC statutory cap from 0.7 to 0.98 percent for the RCA and from 0.17 to 0.22 percent for
RAPA. This bill also increases the salaries of RCA Commissioners from range 27 to range 29.
RCA's enabling statutes are amended to (1) include refuse utilities among the entities for which the RCA must develop
regulations setting for the adjustment of rates under a simplified rate filing procedure, (2) provide that RCA rate
determinations may consider whether the purpose of the rate is to increase diversity of supply, promote load growth, or
enhance energy security or reliability, (3) require RCA approval of a wholesale power agreement between a public utility
and an independent power producer, with the RCA also required to ensure the agreement’s power rate reflect any tax
exemptions or government subsidies provided to the utility or independent power producer, and (4) require that costs
incurred by cooperative electric utilities served by electric reliability organizations be allowed in rates (if approved by the
utilities’ board) in connection with new or purchased power from a renewable generation facility with a nameplate
capacity of less than 15,000 kilowatts. Statutes governing electric reliability organizations (EROs) are amended to (1) add a
requirement that an ERO must prioritize the reliability and stability of the interconnected bulk-electric system it serves
while considering cost to the consumer, (2) eliminate requirements that RCA regulations governing EROs must require the
ERO's tariff include standards for open access transmission and transmission cost recovery, and (3) provide that the RCA
may not require an ERO for an interconnected bulk-electric system if total annual sales for load-serving entities operating
in the system are less than 1,500,000 megawatts.
(Revised 10/31/23 OMB/LFD) Page 2 of 3
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 SCS CSHB 307(FIN) - Fiscal Note 5
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. CSHB 307(FIN)
2024 LEGISLATIVE SESSION
Analysis
Upon passage of this bill, the RCA will need to consider developing a regulatory scheme to guide the filing and review of
Railbelt Transmission Organization (RTO) filings (i.e., a nondiscriminatory open access transmission tariff and a Railbelt
backbone transmission system cost recovery mechanism). The RCA will need to revise regulations governing RCA rate
determinations to (1) allow consideration of whether a rate is intended to increase supply diversity, promote load growth,
or enhance energy security or reliability, and (2) allow cost recovery through rates for new or purchased power from a
renewable generation facility with a capacity of under 15,000 kilowatts if incurred by a cooperative electric utility served by
an electric reliability organization and approved by the cooperative’s board. The RCA will also need to revise regulations
governing the review process for wholesale power agreements to ensure agreements between public utilities and
independent power producers are subject to RCA approval and priced in a way that ensures tax exemptions and
government subsidies are factored into the agreement’s power rates. The RCA will need to develop regulations setting out
filing requirements, notice, and limits for refuse utilities under the simplified rate filing process. The RCA will also need to
revise regulations governing electric reliability organizations to (1) ensure prioritization of the reliability and stability of the
interconnected system served by the organization, and (2) eliminate requirements that the organization’s tariff include
standards for open access transmission and transmission system cost recovery and retain requirements that the
organization’s tariff include standards for non-discriminatory interconnection. If the RTO fails to develop and file a Railbelt
backbone transmission cost recovery mechanism by July 1, 2025, the RCA will need to develop the cost recovery
mechanism after notice and a public input process.
Passage of this bill will also generate several filings from refuse utilities, Railbelt electric utilities, the electric reliability
organization, and the RTO. Railbelt electric utilities will need to file tariffed charges for backbone transmission services
based on the backbone transmission cost recovery mechanism developed by the RTO and approved by the RCA. The
electric reliability organization will be required to file nondiscriminatory standards for interconnection. The RTO will need
to obtain RCA approval of an open access transmission tariff and a backbone transmission cost recovery mechanism, as
well as periodic updates to the tariff or cost recovery mechanism. Refuse utilities may file changes to rates under a
simplified rate filing process.
If this legislation is adopted, the following expenses will be incurred:
Personal Services $68.0 Commissioners range increase from R27 to R29
Contractual Services $250.0 Professional services (FY2025 only)
$50.0 Professional services (FY2026 only)
The budgets of the Regulatory Commission of Alaska (RCA) and the Department of Law’s Regulatory Affairs and Public
Advocacy Section (RAPA) are funded by the Regulatory Cost Charge (RCC), a statutorily capped assessment on utility
revenues that covers the annual operational costs of the RCA and RAPA. This legislation increases the RCC statutory cap
from 0.7 to 0.98 percent for the RCA and from 0.17 to 0.22 percent for RAPA. In FY2025 and future years an additional
$98.0 in revenue collections is required to meet the projected baseline budget for RAPA with no change in operations. For
purposes of this fiscal note, $677.0 change in revenues is projected beginning in FY2026. This calculation is based on a five-
year average of benefit, health insurance, and salary changes for the Commission's staff and an average 2% growth in gross
operating revenues of Alaska utilities.
(Revised 10/31/23 OMB/LFD) Page 3 of 3
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Statutes affected:
HB0307A, AM HB 307, introduced 02/02/2024: 10.25.540
HB0307B, AM CSHB 307(FIN), introduced 05/07/2024: 39.25.110, 42.04.020, 39.27.011, 42.05.254, 42.04.070, 44.23.020, 42.05.381, 42.05.431, 42.45.310, 42.05.760, 42.05.711, 42.05.762, 42.05.780, 42.05.790, 42.05.770, 42.06.286, 42.05.990, 44.83.030, 44.83.040, 39.20.180, 44.83.080, 44.83.700, 44.83.720, 44.83.090, 44.83.710
HB0307C, AM CSHB 307(FIN) am, introduced 05/13/2024, passed House 05/14/2024: 39.25.110, 42.04.020, 39.27.011, 42.05.254, 42.04.070, 44.23.020, 42.05.381, 42.05.431, 42.45.310, 42.05.760, 42.05.711, 44.83.700, 42.05.221, 42.05.281, 42.05.385, 42.05.762, 42.05.780, 42.05.790, 42.05.770, 42.06.286, 42.05.990, 44.83.030, 44.83.040, 39.20.180, 44.83.080, 44.83.720, 44.83.090, 44.83.710
HB0307D, AM SCS CSHB 307(FIN), introduced 05/15/2024: 39.25.110, 42.04.020, 39.27.011, 42.05.141, 42.45.100, 42.45.190, 44.83.700, 44.83.720, 42.05.151, 42.05.321, 42.05.711, 42.05.254, 42.04.070, 44.23.020, 42.05.381, 42.05.431, 42.45.310, 42.05.221, 42.05.281, 42.05.385, 42.05.760, 42.05.762, 42.05.780, 42.05.790, 42.05.770, 42.06.286, 42.45.010, 42.45.045, 42.05.990, 44.83.030, 44.83.040, 39.20.180, 44.83.080, 44.83.090, 44.83.710
HB0307Z, AM Enrolled HB 307, introduced 05/15/2024: 39.25.110, 42.04.020, 39.27.011, 42.05.141, 42.45.100, 42.45.190, 44.83.700, 44.83.720, 42.05.151, 42.05.321, 42.05.711, 42.05.254, 42.04.070, 44.23.020, 42.05.381, 42.05.431, 42.45.310, 42.05.221, 42.05.281, 42.05.385, 42.05.760, 42.05.762, 42.05.780, 42.05.790, 42.05.770, 42.06.286, 42.45.010, 42.45.045, 42.05.990, 44.83.030, 44.83.040, 39.20.180, 44.83.080, 44.83.090, 44.83.710