HB 151 — An Act relating to the regulation of electric utilities and electric reliability organizations; and providing for an effective date.

27or (ii)14 (D) additions or modifications to a balancedbulk-power stakeholdersystem board;facility 15 to the extent necessary to provide for reliable operation of the bulk-power 16 system;

or17 28(2) (iii)may not include a combinationrequirement independentto andenlarge balancedbulk-power 29system stakeholder18 board.facilities or to construct new transmission capacity or generation capacity.

3019 Sec.(e) The commission may approve, reject, or amend in whole or in part a 20 proposed reliability standard or modification submitted by an electric reliability 21 organization if the commission determines that the standard is just, reasonable, not 22 unduly discriminatory or preferential, and in the public interest.

42.05.765.A proposed standard 23 or modification takes effect upon approval by the commission.

ReliabilityA standards.standard approved 24 under this subsection satisfies the requirements of AS 42.05.291(c).

(a)25 An(f) The commission may, on its own motion or upon complaint, order an 26 electric reliability organization 31to shallsubmit fileto eachthe commission a proposed reliability 27 standard or modification to a reliability standard withthat theaddresses commission as a newspecific ormatter. revised tariff provision.

All28 users,(g) owners,Except andas operatorsprovided in (h) of anthis 02section, interconnectedan electric energyreliability transmissionorganization network29 servedmay byimpose ana electricpenalty reliabilityon 03 organization, including a user, owner, or operator thatof isan exemptinterconnected frombulk-power other30 regulationsystem 04for undera ASviolation 42.05.711of ora anotherreliability provisionstandard ofif, thisafter chapter,notice shalland complya withhearing, reliabilitythe 05electric standards31 containedreliability inorganization a(1) tarifffinds that isthe approveduser, byowner, theor commission.operator has violated a reliability 02 standard;

Theand commission03 06(2) mayfiles enforcenotice aof reliabilitythe standardproposed approvedpenalty underand thisthe section.record of the 04 proceeding with the commission at least 30 days before imposition of the penalty.

A05 reliability(h) standardThe 07commission approvedmay underset thisaside, sectionreinstate, 08or (1)modify shalla providepenalty forimposed the06 reliableunder operation(g) of thethis interconnectedsection. 09 electric energy transmission network or of an interconnected electric energy 10 transmission network facility;

07 (i) The commission may, on its own motion or upon complaint, order a user, 08 owner, or operator of a bulk-power system to comply with a reliability standard and 09 impose a penalty against the user, owner, or operator of a bulk-power system if the 10 commission finds, after notice and a hearing, that the user, owner, or operator of the 11 (2)bulk-power maysystem providehas forengaged 12or (A)is protectionabout fromto engage in an act or practice that violates 12 a cybersecurityreliability incident;standard.

13 (B)(j) facilityA security;penalty imposed under (g), (h), or (i) of this section must bear a 14 reasonable relation to the seriousness of the violation and take into consideration the 15 effort of a user, owner, or operator to remedy the violation in a timely manner.

1416 (C)(k) additionsThe orcommission modificationsmay todirect an interconnected bulk- 15 electric systemreliability facilityorganization to theconduct extent17 necessaryassessments toof providethe forreliability reliableand operationadequacy 16 of the interconnectedbulk-power electricsystem. energy transmission network;

17 (3) may result in, but may not be designed for the purpose of, requiring 18 enlargement(l) ofThe interconnectedcommission bulk-electricshall systemadopt facilitiesregulations orgoverning constructionan ofelectric newreliability 19 transmissionorganization capacityconsistent orwith generationthis capacity.section.

20Regulations (b)under Thethis commissionsection may,20 after(1) publicmay notice,include approve a proposedrequirement reliabilitythat 21an standardelectric orreliability modificationorganization to21 obtain a reliabilitycertificate standardof submittedpublic byconvenience anand electricnecessity; reliability 22 organization.

The22 commission(2) shallmust determineallow whether the proposedelectric standardreliability ororganization 23to modificationrecover isits just,costs reasonable,23 notthrough undulysurcharges discriminatoryadded orto preferential, and in the 24rate publicfor interesteach beforeparticipating approvingelectric theutility. standard or modification.

If,24 afterSec. public notice 25 and a hearing, the commission determines that a proposed reliability standard or 26 modification to a reliability standard submitted by an electric reliability organization 27 should be changed, the commission shall return the standard to the electric reliability 28 organization for timely modification and resubmission, consistent with the 29 commission's order.

The42.05.293. commission may modify a resubmitted standard if the 30 commission determines that the standard is inconsistent with the commission's order 31 or the public interest.

AIntegrated standardlowest approvedcost underplanning. this subsection satisfies the requirements of AS 42.05.291(c).

02(a) (c)An Theelectric commissionreliability may,25 onorganization itsshall ownprepare motionand orfile uponwith complaint,the ordercommission ana 03plan electricfor reliabilitymeeting organizationthe to26 submitreliability torequirements theof commissioncustomers awithin proposedits reliabilityinterconnected 04bulk-power standardsystem orin modification27 tothe amost reliabilitycost-effective standardmanner, thatconsistent addresseswith athe specificload-serving matter.entities' obligations.

0528 (d)A Ifplan amust reliabilitycontain standardan adoptedevaluation underof thisthe sectionfull conflictsrange withof acost-effective function,means 06for rule,load- tariff,29 rateserving schedule,entities orto agreementmeet that has also been accepted, approved, adopted, 07 or ordered by the commission,service arequirements user,of owner,customers, orincluding operatoradditional shall30 complygeneration, withtransmission, theand 08conservation function, rule, tariff, rate schedule, or agreementsimilar untilimprovements thein conflictefficiency. is resolved by the 09 commission.

10A (e)31 If,plan asmust ainclude conditionoptions of a contract with the United States Department of 11 Defense, a user, owner, or operator is subject to ameet federalcustomers' standard,collective rule,needs orat function 12 that conflicts with a reliability standard adopted under this section, the user,lowest owner,cost, orregardless 13of operator shall comply with the federallocation standard, rule, or functionownership untilof thenew conflictfacilities. is 14 resolved by the commission.

02 (b) The commission mayshall, notafter resolvenotice theand conflicta inhearing, aapprove, mannerreject, 15or that03 preventsmodify thea user,plan owner,submitted orunder operator(a) fromof fulfillingthis thesection, contractconsistent with the Unitedpublic 16interest. States Department of Defense.

1704 (f)(c) The commission may directinclude anin electrica reliabilitypublic organizationutility's torates conduct05 18(1) assessmentsthe cost of theresources reliabilityacquired andin adequacyaccordance ofwith thea interconnectedplan electricadopted energy06 19under transmissionthis network.section;

2007 Sec.(2) the cost-effective expenditures for improving the efficiency with 08 which the public utility provides and its customers use utility services;

42.05.767.

Electric reliability organization rules;

approval.

An electric 21 reliability organization shall file with the commission each proposed rule or proposed 22 rule change, along with an explanation of the basis and purpose of the proposed rule or 23 proposed rule change.

The commission may, on its own motion or upon complaint, 24 propose a change to the rules of an electric reliability organization.

A rule change 25 proposed by the commission takes effect upon a finding by the commission, after 26 notice and opportunity for public comment, that the rule change is just, reasonable, not 27 unduly discriminatory or preferential, and is in the public interest.

28 Sec.

42.05.770.

Regulations.

The commission shall adopt regulations 29 governing electric reliability organizations, reliability standards, and modifications to 30 reliability standards consistent with this section.

Regulations under AS 42.05.760 - 31 42.05.790 must (1) require that an electric reliability organization's tariff include 02 (A) standards for nondiscriminatory open access transmission 03 and interconnection;

04 (B) standards for transmission system cost recovery;

05 (2) provide a process to identify and resolve conflicts between a 06 reliability standard and a function, rule, tariff, rate schedule, or agreement that has 07 been accepted, approved, adopted, or ordered by the commission;

08 (3) allow an electric reliability organization to recover its costs through 09 surcharges added to the rate for each participating load-serving entity.

10 Sec.

42.05.772.

Duties of load-serving entities.

All load-serving entities, 11 including load-serving entities otherwise exempt from regulation under this chapter, in 12 an interconnected bulk-electric system served by an electric reliability organization are 13 subject to the electric reliability organization's tariff on file with the commission.

14 Sec.

42.05.775.

Penalties.

(a) An electric reliability organization may impose 15 a penalty on a user, owner, or operator of an interconnected electric energy 16 transmission network for a violation of a reliability standard if, after notice and a 17 hearing, the electric reliability organization 18 (1) finds that the user, owner, or operator has violated a reliability 19 standard;

and 20 (2) files notice of the proposed penalty and the record of the 21 proceeding with the commission at least 30 days before imposition of the penalty.

22 (b) The commission may, on its own motion or upon complaint, order a user, 23 owner, or operator of an interconnected electric energy transmission network to 24 comply with a reliability standard and impose a penalty against the user, owner, or 25 operator if the commission finds, after notice and a hearing, that the user, owner, or 26 operator has engaged or is about to engage in an act or practice that violates a 27 reliability standard.

28 (c) A user, owner, or operator may appeal to the commission a penalty 29 imposed under (a) of this section.

The commission may, on its own motion, review a 30 penalty imposed under (a) of this section.

The commission shall, after notice and a 31 hearing, issue an order affirming, modifying, reinstating, or revoking the penalty or remand the penalty to the electric reliability organization for further proceedings.

02 Unless otherwise ordered by the commission, a penalty shall remain in effect during 03 proceedings under this subsection.

The commission shall expedite proceedings under 04 this subsection.

05 (d) A penalty imposed under this section must bear a reasonable relation to the 06 seriousness of the violation and take into consideration the effort of a user, owner, or 07 operator to remedy the violation in a timely manner.

08 Sec.

42.05.780.

Integrated resource planning.

(a) An electric reliability 09 organization shall file with the commission in a petition for approval an integrated 10 resource plan for meeting the reliability requirements of all customers within its 11 interconnected electric energy transmission network in a manner that provides the 12 greatest value, consistent with the load-serving entities' obligations.

An integrated 13 resource plan must contain an evaluation of the full range of cost-effective means for 14 load-serving entities to meet the service requirements of all customers, including 15 additional generation, transmission, battery storage, and conservation or similar 16 improvements in efficiency.

An integrated resource plan must include options to meet 17 customers' collective needs in a manner that provides the greatest value, consistent 18 with the public interest, regardless of the location or ownership of new facilities or 19 conservation activities.

20 (b) The commission shall, after public notice and review of the process used to 21 develop an integrated resource plan, approve or modify an integrated resource plan 22 filed under (a) of this section, consistent with the public interest.

The commission shall 23 determine whether the petition is complete, has been publicly noticed, and is 24 consistent with the commission's regulations and orders.

The commission may reject 25 all or part of a petition that does not comply with the commission's form or filing 26 regulations.

Within 45 days after receipt, the commission shall approve the petition or 27 suspend the petition to an investigation docket.

If a petition is not suspended to an 28 investigation docket within 45 days, the petition is considered approved.

If, after 29 public notice and a hearing, the commission concludes that the plan requires 30 modification, the commission shall return the plan to the electric reliability 31 organization for timely modification and refiling, consistent with the commission's order.

The commission may modify a refiled integrated resource plan if the 02 commission determines that the plan is inconsistent with the commission's order or the 03 public interest.

04 (c) The commission may include in a public utility's rates 05 (1) the cost of resources acquired in accordance with an integrated 06 resource plan adopted under this section;

07 (2) cost-effective expenditures for improving the efficiency with which 08 a public utility provides and its customers use utility services;

11 (d) TheIn commissionthis shallsection, adopt regulations governing the filing of a plan 12 under(1) this"planning section,costs" includingmeans the contentcosts of aevaluating plan,the timefuture fordemand filing13 a plan, criteria for 13services determining cost-effectiveness and greatestalternative value,methods andof othersatisfying criteriafuture asdemand; determined by 14 the commission.

1514 (e)(2) In"portfolio thisdevelopment section, 16 (1) "planning costs" means the costs of evaluatingpreparing thea future15 demandresource 17in fora servicesportfolio andfor alternativeprompt methodsacquisition of satisfyingthe futureresource. demand;

1816 (2)Sec. "portfolio development costs" means the costs of preparing a 19 resource in a portfolio for timely acquisition of the resource.

2042.05.294. Sec.

42.05.785.Building permissions.

Project(a) preapprovalA forpublic utility may not construct a 17 large energy facilities.facility unless the commission makes a determination that 18 (1) the facility 19 (A) is necessary to the bulk-power system with which it would 20 be interconnected;

(a) A public 21 utility,(B) includingcomplies a public utility that is exempt from other regulation under 22 AS 42.05.711 or another provision of this chapter, that is interconnected with an 23 interconnected electric energy transmission network served by an electric reliability 24standards; organization certificated by the commission may not construct a large energy facility 25 unless the commission determines that the facility 26 (1) is necessary to the interconnected electric energy transmission 27 network with which it would be interconnected;

28and 22 (2) compliesa withload-serving reliabilityentity standards;that is substantially served by the project 23 would be more cost-effective.

and24 29(b) (3)A would,large inenergy afacility cost-effectivethat manner,was meetincluded in the needsmost ofrecent aintegrated load-serving25 30resources entityplan thatapproved under AS 42.05.293 is substantiallyconsidered servedto satisfy the requirements 26 of (a) of this section without a determination by the facility.commission.

3127 (b)(c) UnlessIn thethis commissionsection, finds"large otherwiseenergy byfacility" clearmeans and28 convincing(1) evidence,an aelectric largepower energygenerating facilityplant thator wascombination includedof inplants theat mosta recent29 integratedsingle resourcesite planwith 02a approvedcombined undercapacity ASof 42.05.78015,000 iskilowatts consideredor tomore satisfywith thetransmission requirements30 oflines (a)that ofdirectly thisinterconnect 03the section.plant with the transmission system;

04or (c)31 The(2) commissiona mayhigh-voltage nottransmission requireline preapprovalthat for(A) has a 05capacity (1)of project69 forkilovolts refurbishment or capitalizedmore; maintenance;

06and (2)02 hydropower(B) projectis licensedgreater bythan the5 Federalmiles Energyin Regulatorylength. 07 Commission before September 30, 2016.

08 (d) The commission shall adopt regulations 09 (1) governing project preapproval;

10 (2) defining refurbishment and capitalized maintenance;

11 (3) maintaining municipal jurisdiction over local planning decisions;

12 and 13 (4) addressing projects undertaken before integrated resource plan 14 approval for an interconnected electric energy transmission network.

15 (e) In this section, "large energy facility" means 16 (1) an electric power generating plant or combination of plants at a 17 single site with a combined capacity of 15,000 kilowatts or more with transmission 18 lines that directly interconnect the plant with the transmission system;

19 (2) a high-voltage, above-ground transmission line that 20 (A) has a capacity of 69 kilovolts or more;

and 21 (B) is longer than 10 miles;

22 (3) a high-voltage submarine or underground cable that 23 (A) has a capacity of 69 kilovolts or more;

and 24 (B) is longer than three miles;

25 (4) an energy storage device or combination of devices at a single site 26 with a combined capacity of 15,000 kilowatts and one hour or more of energy storage 27 that directly connects with the interconnected bulk-electric system;

and 28 (5) a reactive compensation device or combination of devices at a 29 single site with a combined reactive capability of 15,000 kilovars or more with a step- 30 up device to regulate interconnected bulk-electric system voltage.

31 Sec.

42.05.790.

Definitions.

In AS 42.05.760 - 42.05.790, (1) "cybersecurity incident" means a malicious act or suspicious event 02 that disrupts or attempts to disrupt the security of data or the operation of 03 programmable electronic devices and communication networks, including hardware 04 and software that are essential to the reliable operation of the interconnected electric 05 energy transmission network;

06 (2) "electric reliability organization" means an organization that is 07 certificated by the commission under AS 42.05.760;

08 (3) "electric utility" means a public utility that provides electricity 09 service;

10 (4) "interconnected bulk-electric system" means an interconnected 11 electric energy transmission network that includes two or more load-serving entities, 12 at least one of which is subject to the provisions of AS 42.05.291;

13 (5) "interconnected electric energy transmission network" means a 14 network of interconnected electrical generation resources, transmission lines, 15 interconnections, and associated equipment operated at voltages of 69 kilovolts or 16 more, operating in a geographic area that are synchronized so that the failure of one or 17 more of the components may adversely affect the ability of the operators of other 18 components within the system to maintain reliable operation of the facilities within the 19 control of the operators;

20 (6) "load-serving entity" means an electric utility that has a service 21 obligation to distribute power to more than 10 customers that receive invoices directly 22 from the entity;

23 (7) "reliable operation" means operating the elements of the 24 interconnected electric energy transmission network within equipment and electric 25 system thermal, voltage, and stability limits so that instability, uncontrolled separation, 26 or cascading failures of the system will not occur as a result of a sudden disturbance, 27 including a cybersecurity incident, or unanticipated failure of system elements.

28 * Sec.

2.

The uncodified law of the State of Alaska is amended by adding a new section to 29 read:

30 TRANSITION:

REGULATIONS.

On or before July 1, 2021, the Regulatory 31 Commission of Alaska shall adopt regulations necessary to implement the changes made by this Act.

The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 02 before the effective date of the law implemented by the regulation.

2.

AS 42.05.990 is amended by adding new paragraphs to read:

04 (14) "bulk-power system" means 05 (A) a facility or control system that 06 (i) is owned by more than one electric utility;

07 (ii) is necessary for operating an interconnected electric 08 energy transmission network or a portion of an interconnected electric 09 energy transmission network;

and 10 (iii) is not used in the local distribution of electric 11 energy;

or 12 (B) an electric energy generation facility that 13 (i) is owned by more than one electric utility;

14 (ii) is necessary to maintain the reliability of a 15 transmission system;

and 16 (iii) is not used in the local distribution of electric 17 energy;

18 (15) "cybersecurity incident" means a malicious act or suspicious 19 event that disrupts or attempts to disrupt the operation of programmable electronic 20 devices and communication networks, including hardware and software that are 21 essential to the reliable operation of the bulk-power system;

22 (16) "electric reliability organization" means an organization that is 23 certified by the commission under AS 42.05.292;

24 (17) "interconnected electric energy transmission network" means a 25 network of bulk-power system components operating in a geographic area that are 26 synchronized so that the failure of one or more of the components may adversely 27 affect the ability of the operators of other components within the system to maintain 28 reliable operation of the facilities within the control of the operators;

29 (18) "load-serving entity" means an electric utility that has a service 30 obligation to distribute power to end users;

31 (19) "reliable operation" means operating the elements of the bulk- power system within equipment and electric system thermal, voltage, and stability 02 limits so that instability, uncontrolled separation, or cascading failures of the system 03 will not occur as a result of a sudden disturbance, including a cybersecurity incident, 04 or unanticipated failure of system elements.

05 * Sec.

SectionThe 2uncodified law of thisthe ActState takesof effectAlaska immediatelyis underamended ASby 01.10.070(c).adding a new section to 06 read:

0407 *TRANSITION: Sec.

REGULATIONS.

The Regulatory Commission of Alaska may adopt 08 regulations necessary to implement the changes made by this Act.

The regulations take effect 09 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 10 implemented by the regulation.

11 * Sec.

Section 3 of this Act takes effect immediately under AS 01.10.070(c).

12 * Sec.

5.

34 of this Act, this Act takes effect July 1, 2021.2020.