There is a thread in these facts. Joe Biden is arguably the most aggressive president on climate we have had, and this administration has shepherded through Congress the most significant investment in clean energy our country has ever seen. A national party has a majority in the U.S. Senate and will hopefully treat climate change as the dire threat it is. Alaska just elected the first Indigenous Alaskan woman to Congress who knows first-hand the impacts of climate change on northern lands, waters, and communities. The Governor, no great champion of Salmon or Democracy, has put forward bold renewable energy policies in the past and is compelled to diversify energy sources by a looming Southcentral natural gas shortage bearing down.
Similarly, major electric utilities are awakening to the fact that they must quickly diversify. The State Senate has organized a moderate bi-partisan majority with the goal of driving down energy costs as a key pillar of the coalition. While the State House has yet to organize, it will be hard for any majority to oppose further clean energy investment and legislation if it helps drive down costs for Alaskans. If we mind the connections, progress seems inevitable - but that is never the case. Progress will take a lot of work, a lot of voices, and a little time.
The Alaska Center understands that there are enormous resources now available to states, local governments, and utilities from the Inflation Reduction Act and that the political stars are fairly aligned. For our climate-oriented legislative priorities we will be working to pass a suite of state legislation that will move the needle on climate impacts. Our top priority is a bill that authorizes and provides clear guidelines for community solar projects. We will also be working with a coalition of organizations to pass legislation that sets a renewable portfolio standard for railbelt electric utilities, creates a clean energy investment bank, and extends the Renewable Energy Fund to facilitate utility-scale renewable energy projects.
All Alaskans should have access to the cost reductions and pollution reductions available to those with the financial means to take advantage of residential solar. Alongside individual and large-scale solar, Community Solar is a way for everyone to benefit from solar energy, even if they cannot afford or install a solar PV system. An array is built, and residents, from homeowners to business owners to organizations, can invest in the array. The production of that array will be reflected in our energy bills. This array can be managed by a utility or a community for off-grid regions and villages. Electric utilities like Chugach and Homer Electric Association have come close to adopting versions of community solar programs. We believe that providing a clear statutory framework for utilities and the Regulatory Commission of Alaska to follow will provide for community solar arrays in underserved communities.
Electric utilities in Alaska have been told by the sole provider of natural gas in Southcentral Alaska that long-term natural gas contracts will end after 2024. This injects instability into future budget forecasting for utilities, and monopolistic control of the gas supply generally guarantees utility customers will pay increased premiums for the cost of power from natural gas. A renewable portfolio standard bill must be re-introduced to push our utilities toward the inevitable and the cost-effective: more renewable energy, lots more, and fast. When Congress passed the Inflation Reduction Act this year, they authorized a provision that non-profit rural electric cooperatives across the nation have sought for years - direct payment equivalent to the federal tax credit that for-profit utilities and Independent Power Producers claim. This means that our utilities have significant federal backing for numerous shovel-ready renewable projects, which also deeply undercuts the utility manager’s argument that individual utilities cannot afford a massive transition to renewables and battery storage. As envisioned by the Governor last session, a renewable portfolio standard would have utilities reach 80% renewable generation by 2040. We will be working to see this framework pass the legislature.
Our other policy goals align with and will help our state achieve the 80% goal. Reauthorization of the Renewable Energy Fund (REF)-due to sunset this year, will maintain an essential space for new utility-scale renewable projects to be vetted and funded. Funding for the REF has lately been derived from the earnings of the Power Cost Equalization endowment. When the state was flush with oil money, the REF was capitalized by appropriations from the general fund. We must maintain a way to provide direct grants for large-scale renewable projects as we simultaneously mandate that utilities incorporate more renewable energy.
Alaska needs a clean energy investment organization to help coax the private lending industry into making low-interest loans for large-scale energy efficiency projects, clean transportation, and clean energy programs. The Inflation Reduction Act authorized the Greenhouse Gas Reduction Fund (GGRF), a $27 billion clean energy deployment bank housed at the Environmental Protection Agency. The GGRF is the largest single pot of funding enacted in the IRA. It gave EPA broad discretion to invest in clean energy technologies through Green Banks (entities that leverage public funding to attract private financing and advance green energy or energy efficiency projects). We will be working this session to ensure a state office is established to take advantage of federal GGRF funds, a significant portion of which is designated for investment in underserved communities.
The Biden climate investment, favorable political conditions in Alaska, decreasing natural gas supply and price certainty, and the upcoming legislative session are primed for clean energy progress.
2023 can be the year for clean energy progress in our state if we keep pushing our leadership to enact policy that works with and for all Alaskans.
To the future!
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