With the looming natural gas crisis in the rail right-of-way, the legislative session focused especially on energy bills

State lawmakers passed several energy bills this session aimed at modernizing the rail right-of-way electric grid and accelerating the transition to renewable energy. But at least one significant renewable energy bill has failed. Alaska Public Media state government reporter Eric Stone and climate change reporter Kavitha George tracked progress during the last legislative session, which ended May 16.

To listen: :

(Sign up for Alaska Public Media’s daily newsletter to get the top stories delivered to your inbox.)

This interview has been lightly edited for length and clarity.

Casey Grove: It looks like bills on utilities, electric grids, and clean energy have been introduced this session. Why is there so much emphasis on Alaska’s energy systems today?

Eric Stone: The most important factor is that the rail belt — that’s everyone from Homer and Seward to Fairbanks, about 70% of the state’s population — is facing an energy crisis. As many people know, Cook Inlet natural gas producer Hilcorp has told utilities that it expects production to decline – drilling there is no longer as economical as it once was. And that means Railbelt utilities are scrambling to find other energy sources to keep the lights on and heat homes in this large swath of Alaska. Energy companies are considering importing natural gas – that’s one option – but there are also many opportunities to increase the efficiency of our grid and invest in renewable energy sources.

More broadly, as people around the world seek to decarbonize, much in the energy world is changing. Governor Mike Dunleavy said today at the Alaska Sustainable Energy Conference that he wants to make sure Alaska is not left behind:

Governor Mike Dunleavy: “It is my hope and goal that Alaska will be an absolute leader around the world in everything from microgrids to carbon sequestration. How do we integrate things like coal, solar and wind to benefit everyone?”

And that’s what a lot of the bills this session have been focused on.

CG: What is an example of an adopted law aimed at developing renewable energy?

Kavitha George: One bill that almost everyone is excited about is the community solar bill. So one option for homeowners who want to lower their electricity bills is to install solar panels on their roof. This powers your home, and you can sell the excess energy back to the utility company. However, this is not an option for everyone, for example tenants or people with shaded roofs. Community solar is theoretically a way for anyone to benefit from solar energy on a small scale. By working with a utility company, a group of neighbors can collectively purchase a small solar project. To participate in the project, they pay a sort of subscription fee, and then when the project produces energy that is sold to the utility, they all share the profits, which essentially show up as a rebate on their electricity bills.

A bill to regulate and facilitate community solar projects passed the Senate unanimously and won by a wide margin in the House.

ES: I’ll jump in here with another example – the green bank. You may have heard of this idea. They appear all over the country. Essentially, this is a way for the state to help provide financing for renewable energy projects.

Alaska will soon join this group thanks to House Bill 273, which establishes a green bank within the Alaska Housing Finance Corporation. And it’s happening at a good time – the Biden administration just announced in April that AHFC and the Alaska Energy Authority would receive more than $60 million for community solar projects AND financial assistance for the installation of photovoltaics on roofs, targeted at low-income and disadvantaged households. Governor Dunleavy today called the Green Banking Act:

Governor Dunleavy: “This will unlock tens of millions of federal dollars from the Inflation Reduction Act. The creation of this fund will help Alaskans compete for historic federal funding opportunities to improve the energy profile of their homes and businesses.

Of course, building a new solar farm or wind turbine is one thing, but getting energy where it’s needed is another thing entirely. Casey, we talked about this about a week ago, but there’s another bill that basically makes it cheaper to send power on the Railbelt, from Homer to Fairbanks. It’s House Bill 307.

And speaking of energy transportation, it would be remiss not to mention the new high-voltage power line in Cook Inlet that the Alaska Energy Authority plans to build. This was announced last fall. Half of the $400 million project is being funded federally through the bipartisan infrastructure bill and the other half by the state over the next eight years. It will essentially be a 50-kilometer high-voltage submarine cable running under Cook Inlet from the Kenai Peninsula to Beluga. In addition to transferring power to the rail strip, it is also intended to be a kind of backup power line in the event that another power line needs to be shut down, as was the case during the Swan Lake fire in 2019. And if there was money left, it would be possible. they will also pay for battery energy storage in Anchorage and Fairbanks.

This year, about $66 million in state and federal funds were allocated for this purpose.

So yes, there’s a lot going on in the renewable energy space – as Anchorage Democratic Senator Bill Wielechowski put it, “the rail right-of-way is going green and it’s not necessary.”

CG: Let’s talk about something that didn’t pass – the revolving portfolio standard. Kavitha, what is the revolving portfolio standard and why has it been so controversial?

KG: A Renewable Portfolio Standard, also known as RPS, is a policy that tells utilities they must meet certain renewable energy goals within a specific time period. The bill passed this session states that Railbelt energy companies would have to source 25% of their energy from renewable sources by 2027, 55% by 2035 and 80% by 2040. Again, the idea is to reduce dependence on natural gas, which is becoming increasingly rare – and if utilities start importing it, it will become quite expensive. A federal study earlier this year actually found that meeting a renewable energy target of about 75% by 2040 would be the cheapest route.

This bill has received strong support from clean energy advocates, lawmakers on both sides of the aisle, and even Governor Dunleavy. However, this has definitely been met with opposition from major utilities who do not agree with the penalties they face for failing to meet these targets. In January, Republican Sen. Jesse Bjorkman of Nikiski stated very publicly that he intended to block the bill, preventing it from passing the Senate Labor and Commerce Committee, which he chairs. And that’s exactly what happened, it was deliberated in committee and never got much further, not even on the House side.

Clean energy advocates I spoke to said they were disappointed with RPS’s failure, but still hopeful that with more education and outreach, it will have another chance next year. Utilities still haven’t gotten to the point where they can contract to import natural gas, so there’s a little more runway to significantly increase the focus on renewables.