An Act exempting from regulation under the Alaska Public Utilities Regulatory Act wholesale agreements for the sale of power by joint action agencies and contracts related to those agreements, and joint action agencies composed of public utilities of political subdivisions and utilities organized under the Electric and Telephone Cooperative Act.

With transmission lines dating back to the 1950's and generation assets that are 20-30 years old Alaska's Energy infrastructure is in desperate need of an upgrade. According to the Railbelt Energy Study the cost of these upgrades would be at least $5 billion. The House and Senate recognized this when they passed House Concurrent Resolution 21 establishing the Joint Energy Policy Task Force. HCR 21 mandated the review and analysis of the state's long-term energy needs, and asked the Task Force to develop a long-term energy plan to efficiently enhance Alaska's economic future.

One of the major recommendations made by the JEPTF was that the State "promote unified operation of Railbelt generation and transmission systems." A Unified System Operator would, by coordinating the resources of the various Railbelt utilities, be in a position to undertake the enormous financial obligation of upgrading the Railbelt. The demands of these infrastructure upgrades are beyond the financial capability of any single utility. This bill is a tool that would give a Joint Action Agency the financial stability to fulfill the role of a Unified System Operator.

HB 453 makes slight changes to existing statutes that permit certain entities to create what is called a Joint Action Agency under AS 42.45.300, a business organization of similar structure to an "S" or "C" corporation, partnership, cooperative or limited liability corporation (LLC). Specifically, language is added to AS 42.05.431(c) and AS 42.05.711(o) to exempt contracts by such an agency (a JAA) from regulation. This is altogether fitting and proper in that the entity that is exempted by this change to statute (the JAA) can only be made up of cooperatives under AS 10.25 or entities owned by a political subdivision of the state, both of whose governing bodies are publicly elected.

Further, contracts consummated by a JAA with another public utility for the sale of power, wheeling, storage, regeneration, or wholesale repurchase under a wholesale agreement would be an agreement between two or more willing and capable parties. Any dispute would be handled in superior court according to contractual law. For these reasons I strongly urge you to support HB 453.

# # #