AS Title 42, Chapter 45: Rural and Statewide Energy Programs

Article 1. Power Assistance Programs. Chapter 45. Rural and Statewide Energy Programs. Sec. 42.45.010. Power project fund. (a) The power project fund is established as a separate fund. The fund shall be distinct from any other money or funds of the authority and includes only money appropriated by the legislature, proceeds from the sale of loans appropriated by the legislature, and money deposited under (g) of this section. (b) The authority may make loans from the power project fund (1) to electric utilities, regional electric authorities, municipalities, regional and village corporations, village councils, and independent power producers to pay the costs of (A) reconnaissance studies, feasibility studies, license and permit applications, preconstruction engineering, and design of power projects; and (B) constructing, equipping, modifying, improving, and expanding small-scale power production facilities that are designed to produce less than 10 megawatts of power, bulk fuel storage facilities, and transmission and distribution facilities, including energy production, transmission and distribution, waste energy, energy conservation, energy efficiency, and alternative energy facilities and equipment; (2) to a borrower for a power project or for bulk fuel, waste energy, energy conservation, energy efficiency, or alternative energy facilities or equipment if (A) the loan is entered into under a leveraged lease financing arrangement; (B) the party that will be responsible for the power project or the bulk fuel, waste energy, energy conservation, energy efficiency, or alternative energy facilities or equipment is an electric utility, regional electric authority, municipality, regional or village corporation, village council, or independent power producer; and (C) the borrower seeking the loan demonstrates to the authority that the financing arrangement for the power project or the bulk fuel, waste energy, energy conservation, energy efficiency, or alternative energy facilities or equipment will reduce financing costs for the project, facilities, or equipment below costs of comparable public power projects, facilities, or equipment. (c) Before making a loan from the power project fund, the authority shall, by regulation, specify (1) standards for the eligibility of borrowers and the types of projects to be financed with loans; (2) standards regarding the technical and economic viability and revenue self-sufficiency of eligible projects; (3) collateral or other security required for loans; (4) the terms and conditions of loans; (5) criteria to establish financial feasibility and to measure the amount of state assistance necessary for particular projects to meet the financial feasibility criteria; and (6) other relevant criteria, standards, or procedures. (d) The authority may adopt regulations to establish the standards, criteria, and procedures for making loans under this section, including regulations to establish reasonable fees for applications and loan origination, and charges for reimbursement of the costs of analyzing the feasibility of a project. (e) Repayment of the loans shall be secured in any manner that the authority determines is feasible to assure prompt repayment under a loan agreement entered into with the borrower. The authority may make an unsecured loan from the power project fund to a borrower regulated by the Regulatory Commission of Alaska under AS 42.05 if the borrower has a substantial history of repaying long-term loans and the capacity to repay the loan. Under a loan agreement, repayment may be deferred for 10 years or until the project for which the loan is made has achieved earnings from its operations sufficient to pay the loan, whichever is earlier. (f) A loan for power projects and bulk fuel, waste energy, energy conservation, energy efficiency, and alternative energy facilities or equipment (1) may not be granted for a term that exceeds 50 years; and (2) shall be granted at an interest rate that is not less than zero percent and that is the lesser of (A) a rate equal to the percentage that is the average weekly yield of municipal bonds for the 12 months preceding the date of the loan, as determined by the authority from municipal bond yield rates reported in the 30-year revenue index of The Bond Buyer; or (B) a rate determined by the authority that allows the project to meet criteria of financial feasibility established under (c) of this section. (g) Loan repayments and interest earned by loans from the power project fund shall be deposited in the power project fund unless an appropriation to fund the loan directs otherwise. (h) The legislature may forgive the repayment of a loan made from the power project fund for a reconnaissance study or a feasibility study when the authority finds that the power project for which the loan was made is not feasible. (i) Money in the power project fund may be used by the legislature to make appropriations for costs of administering the fund. (j) The authority may not enter into a loan from the power project fund for a major project unless it has legislative approval of the project and the amount. An appropriation for the loan that names the project constitutes approval required by this subsection. A major project is a project in which the cumulative state monetary involvement, through loans, grants, and bonds, is at least $5,000,000 or a project for which a loan of more than $5,000,000 has been requested. (k) The authority may collect the fees and charges established under (d) of this section and shall deposit the money in the general fund. (l) The authority may sell loans of the power project fund with legislative approval. The authority may use money in the power project fund to repurchase loans sold under this subsection that default. Money received by the authority from the sale of loans under this subsection shall be deposited into the power project fund under (a) of this section. (m) A loan for a renewable energy resources project in which the cumulative state monetary involvement, through loans, grants, and bonds, is at least $5,000,000 may not be granted for a term that exceeds 50 years and may, notwithstanding (f)(2) of this section, be granted at an interest rate that is the lesser of (1) three percent lower than the rate determined under (f)(2)(A) of this section, but not less than one percent; or (2) a rate equivalent to the rate determined under (f)(2)(B) of this section. (n) In (m) of this section, “renewable energy resources” has the meaning given in AS 42.45.045 (l). Sec. 42.45.020. Rural electrification revolving loan fund. Sec. 42.45.030. Loan advisory committee. [Repealed, § 84 ch 58 SLA 1999.] . Sec. 42.45.040. Southeast energy fund. (a) The Southeast energy fund is established as a separate fund. The fund consists of (1) money appropriated to the fund by the legislature; (2) money transferred to it under former AS 42.45.050 ; (3) gifts, bequests, contributions from other sources, and federal money; (4) interest earned on the fund balance; and (5) investments, to be managed by the Department of Revenue, which shall be the fiduciary of the fund under AS 37.10.071 . (b) The fund is not a dedicated fund. (c) The authority may make grants from the Southeast energy fund to a municipality of the state, a joint action agency established under AS 42.45.300 and 42.45.310, a member-owned electric cooperative established under AS 10.25 , or another electric utility holding a certificate of public convenience and necessity under AS 42.05 for power projects, repayment of loans, and payments on bonds for hydroelectric projects and electrical transmission lines or interties serving Southeast Alaska that are entirely owned by the grantee. (d) An appropriation from the fund for a project described in (c) of this section lapses back into the fund if substantial, ongoing work on the project has not begun within seven years after the effective date of the appropriation. Sec. 42.45.045. Renewable energy grant fund and recommendation program. (a) A renewable energy grant fund is established as a separate fund to finance certain energy projects in Alaska. (b) The authority shall administer the fund as a fund distinct from other funds of the authority. The fund consists of (1) money appropriated to the fund by the legislature to provide grants for certain energy projects determined by the legislature; (2) gifts, bequests, contributions from other sources, and federal money; (3) interest earned on the fund balance; and (4) investments to be managed by the Department of Revenue, which shall be the fiduciary of the fund under AS 37.10.071 . (c) The fund is not a dedicated fund. (d) The authority shall, in consultation with the advisory committee established under (i) of this section and the Department of Natural Resources, (1) develop a methodology for determining the order of projects that may receive assistance, including separate requirements for grant eligibility, and adopt regulations identifying criteria to evaluate the benefit and feasibility of projects for which an applicant applies for support from the legislature, with the most weight being given to projects that serve any area in which the average cost of energy to each resident of the area exceeds the average cost to each resident of other areas of the state, and significant weight being given to a statewide balance of grant funds and to the amount of matching funds an applicant is able to make available; (2) make recommendations to the legislature for renewable power production reimbursement grants; and (3) not later than 10 days after the first day of each regular legislative session, submit to the legislature a report summarizing and reviewing each grant application submitted under this section and a recommended priority for awarding grants. (e) In consultation with the advisory committee established in (i) of this section, the authority shall make recommendations to the legislature regarding eligible applicants' projects that finance feasibility studies, reconnaissance studies, energy resource monitoring, and construction of renewable energy projects, natural gas projects, or transmission or distribution infrastructure located in Alaska that meet the requirements of (f), (g), or (h) of this section, as applicable, and shall, at least once each year, solicit from the advisory committee funding recommendations for all grants. (f) For a renewable energy project to qualify for a grant recommendation under (e) of this section, the project must (1) be a new project not in operation on August 20, 2008 or an addition to an existing project made after August 20, 2008; and (2) be a (A) hydroelectric facility; (B) direct use of renewable energy resources; (C) facility that generates electricity from fuel cells that use hydrogen from renewable energy resources or natural gas; or (D) facility that generates energy from renewable energy resources. (g) To qualify for a grant recommendation under (e) of this section, a project that is a natural gas project must benefit a community that (1) has a population of 10,000 or less; and (2) does not have economically viable renewable energy resources it can develop. (h) To qualify for a grant recommendation under (e) of this section, transmission or distribution infrastructure must link a renewable energy project or natural gas project to the transmission or distribution infrastructure. A grant may be recommended under this subsection even if the grant applicant is not itself financing the construction of the renewable energy project or natural gas project. (i) An advisory committee is established and consists of nine members, appointed as follows: (1) five members shall be appointed by the governor to staggered three-year terms, with one representative to be appointed from each of the following groups: (A) small Alaska rural electric utilities; (B) large Alaska urban electric utilities; (C) Alaska Native organizations; (D) businesses or organizations engaged in the renewable energy sector; and (E) the Denali Commission established under P.L. 105-277, 42 U.S.C. 3121 note; (2) two members of the house of representatives shall be appointed by the speaker of the house of representatives; and (3) two members of the senate shall be appointed by the president of the senate. (j) A member of the advisory committee appointed under (i) of this section serves without compensation but is entitled to travel and per diem expenses as provided in AS 39.20.180 . (k) The legislature may appropriate money for grants from the renewable energy grant fund for renewable energy projects described in this section. (l) In this section, (1) “eligible applicant” means an electric utility holding a certificate of public convenience and necessity under AS 42.05 , independent power producer, local government, or other governmental utility, including a tribal council and housing authority; (2) “fund” means the renewable energy grant fund; (3) “hydroelectric facility” has the meaning given to the term “project” under AS 42.45.350 ; (4) “natural gas project” means use or access of natural gas other than landfill or digester gas; (5) “renewable energy resources” means (A) wind, solar, geothermal, wasteheat recovery, hydrothermal, wave, tidal, river in-stream, or hydropower; (B) low-emission nontoxic biomass based on solid or liquid organic fuels from wood, forest and field residues, or animal or fish products; (C) dedicated energy crops available on a renewable basis; or (D) landfill gas and digester gas. Sec. 42.45.050. Four dam pool transfer fund. [Repealed, § 12 ch 60 SLA 2000.] Sec. 42.45.060. Approval by loan committee and legislature. [Repealed, § 11 ch 36 SLA 2004.] Sec. 42.45.065. Reimbursement for costs of power projects. (a) Subject to appropriations for the purpose, during each fiscal year, the authority shall allocate to each entity listed in (b) of this section an amount to reimburse the cost paid by the entity during the immediately preceding fiscal year for the principal and interest on outstanding debt for the project listed. An allocation may be made to an entity only if (1) the debt was incurred before July 1, 2005; and (2) the power project financed with the debt proceeds is owned and operated by the entity. (b) The authority may make an allocation to an entity under (a) of this section only for reimbursement of costs incurred for construction and renovation of the following power projects and only for reimbursement of total project costs incurred up to the following amounts: PROJECT Kodiak Electric Association, Inc. (Nyman Combined $ 6,000,000 Cycle Cogeneration Plant) Cordova Electric Cooperative (Power Creek Hydropower 12,000,000 Station) Golden Valley Electric Association (Rock Creek line 700,000 extension) Copper Valley Electric Association, Inc., Valdez 10,000,000 (cogeneration projects) The Four Dam Pool Power Agency (Southeast Intertie, 20,000,000 Swan Lake to Tyee Lake) Metlakatla Power and Light (utility plant and capital 3,000,000 additions) Article 2. Power Cost Equalization Endowment Fund. Sec. 42.45.070. Power cost equalization endowment fund established. (a) The power cost equalization endowment fund is established as a separate fund of the authority. The fund consists of (1) legislative appropriations to the fund that are not designated for annual expenditure for the purpose of power cost equalization; (2) accumulated earnings of the fund; (3) gifts, bequests, contributions of money and other assets, and federal money given to the fund that are not designated for annual expenditure for power cost equalization; and (4) [Repealed, § 13 ch 60 SLA 2000.] (b) Nothing in this section creates a dedicated fund. (c) [Repealed, § 13 ch 60 SLA 2000.] Sec. 42.45.080. Management of the power cost equalization endowment fund. (a) The power cost equalization endowment fund shall be managed by the corporation under AS 37.13.310 . (b) [Repealed, § 6 ch 12 SLA 2023.] (c) On June 30 of each year, the corporation shall determine (1) the average ending market value of the fund for the previous three closed fiscal years; and (2) the earnings of the fund for the previous closed fiscal year. Sec. 42.45.085. Use of the power cost equalization endowment fund. (a) Five percent of the amount determined by the corporation each year under AS 42.45.080 (c)(1) may be appropriated for the following purposes: (1) funding the power cost equalization and rural electric capitalization fund ( AS 42.45.100 ); (2) reimbursement to the corporation for the costs of managing the fund; and (3) reimbursement of other costs of administration of the fund. (b) Nothing in this section creates a dedicated fund. (c) If the amount appropriated under (a) of this section is insufficient to achieve the purposes of (a)(1) — (3) of this section, the amount shall be prorated among the purposes listed in (a)(1) and (2) of this section. (d) If the earnings of the fund for the previous closed fiscal year, as calculated under AS 42.45.080 (c)(2), exceed the appropriation under (a) of this section for the current fiscal year, the legislature may appropriate 70 percent of the difference between the earnings of the fund for the previous closed fiscal year, as calculated under AS 42.45.080 (c)(2), and the appropriation made under (a) of this section for the current fiscal year as follows: (1) if the amount calculated under this subsection is less than $30,000,000, that amount to a community revenue sharing or community assistance fund; or (2) if the amount calculated under this subsection is $30,000,000 or more, (A) $30,000,000 to a community revenue sharing or community assistance fund; and (B) the remaining amount, not to exceed $25,000,000, to the renewable energy grant fund established under AS 42.45.045 , to the bulk fuel revolving loan fund established under AS 42.45.250 , or for rural power system upgrades or to a combination of the funds or purposes listed in this subparagraph. Sec. 42.45.099. Definitions. In AS 42.45.070 — 42.45.099, (1) “corporation” means the Alaska Permanent Fund Corporation established in AS 37.13.040 ; (2) “fund” means the power cost equalization endowment fund established in AS 42.45.070 . Article 3. Power Cost Equalization and Rural Electric Capitalization. Sec. 42.45.100. Power cost equalization and rural electric capitalization fund. (a) The power cost equalization and rural electric capitalization fund is established as a separate fund for the purpose of (1) equalizing power cost per kilowatt-hour statewide at a cost close to or equal to the mean of the cost per kilowatt-hour in Anchorage, Fairbanks, and Juneau by paying money from the fund to eligible electric utilities in the state; and (2) making grants to eligible utilities under AS 42.45.180 to improve the performance of the utility. (b) The fund shall be administered by the authority as a fund distinct from the other funds of the authority. The fund is composed of (1) money appropriated to provide power cost equalization to eligible electric utilities and to provide grants for utility improvements; (2) money appropriated from the National Petroleum Reserve — Alaska special revenue fund under AS 37.05.530 (g); (3) money appropriated from the power cost equalization endowment fund ( AS 42.45.070 ) under AS 42.45.085 (a); (4) gifts, bequests, contributions from other sources, and federal money; and (5) interest earned on the fund balance. (c) The fund is not a dedicated fund. Sec. 42.45.110. Entitlement to power cost equalization. (a) The costs used to calculate the amount of power cost equalization for all electric utilities eligible under AS 42.45.100 — 42.45.150 include all allowable costs, except return on equity, used by the commission to determine the revenue requirement for electric utilities subject to rate regulation under AS 42.05 . The costs used in determining the power cost equalization per kilowatt-hour shall exclude any other type of assistance that reduces the customer's costs of power on a kilowatt-hour basis and that is provided to the electric utility within 60 days before the commission determines the power cost equalization per kilowatt-hour of the electric utility. In calculating power cost equalization, the commission may not consider validated costs or kilowatt-hour sales associated with a United States Department of Defense facility. (b) An eligible electric utility is entitled to receive power cost equalization (1) for sales of power to local community facilities, calculated in the aggregate for each community served by the electric utility, for actual consumption of not more than 70 kilowatt-hours a month for each resident of the community; the number of community residents shall be determined annually by the latest figures of the United States Bureau of the Census or other population data that the Department of Commerce, Community, and Economic Development determines is reliable; and (2) for actual consumption of not more than 750 kilowatt-hours a month sold to each residential customer. (c) The amount of power cost equalization provided for each kilowatt-hour under (b) of this section may not exceed 95 percent of the power costs, or the average rate for each eligible kilowatt-hour sold, whichever is less, as determined by the commission. However, (1) the power costs for which power cost equalization are paid to an electric utility are limited to minimum power costs of more than 12 cents a kilowatt-hour and less than $1 a kilowatt-hour; (2) each year, the commission shall adjust the power costs for which power cost equalization may be paid to an electric utility based on the weighted average retail residential rate in Anchorage, Fairbanks, and Juneau; however, the commission may not adjust the power costs under this paragraph to reduce the amount below the lower limit set out in (1) of this subsection; and (3) the power cost equalization for each kilowatt-hour may be determined for a utility without historical kilowatt-hour sales data by using kilowatt-hours generated. (d) An electric utility whose customers receive power cost equalization under AS 42.45.100 — 42.45.150 shall set out in its tariff the rates without the power cost equalization and the amount of power cost equalization per kilowatt-hour sold. The rate charged to the customer shall be the difference between the two amounts. Power cost equalization paid under AS 42.45.100 — 42.45.150 shall be used to reduce the cost of all power sold to local community facilities, in the aggregate, to the extent of 70 kilowatt-hours per month per resident of the community, and to reduce the cost of the first 500 kilowatt-hours per residential customer per month. (e) The power cost equalization program shall be administered by the authority based on a determination by the commission under (a) and (c) of this section of power cost equalization per kilowatt-hour for each eligible electric utility. (f) The authority may not deny an eligible electric utility power cost equalization because complete cost information is not available. The commission shall assist an eligible electric utility that is exempt from rate regulation under AS 42.05 to provide the cost information the commission considers necessary to comply with AS 42.45.100 — 42.45.150. Only power costs that are supportable may be considered in calculating power cost equalization. Each electric utility is responsible for keeping records that provide the information necessary to comply with AS 42.45.100 — 42.45.150 including records of monthly kilowatt-hour sales or generation, monthly fuel balances, fuel purchases, and monthly utility fuel consumption. (g) The commission shall determine the cost of fuel for each eligible electric utility using the procedure for approving fuel cost rate adjustments of electric utilities subject to rate regulation under AS 42.05 . (h) Each electric utility receiving power cost equalization approved by the commission shall (1) report monthly to the authority within the time and in the form the authority requires; and (2) use operational equipment designed to meter individual utility customer power consumption and to determine and record the utility's overall fuel consumption. (i) The authority shall review the report required under (h) of this section. After review and approval of the report, the authority shall, subject to appropriation, pay to each eligible electric utility an amount equal to the power cost equalization per kilowatt-hour determined under (a) and (c) of this section, multiplied by the number of kilowatt-hours eligible for power cost equalization that were sold during the preceding month to all customers of the utility under (b) of this section. Payment shall be made by the authority within 30 days after receipt from the utility of the report required under (h) of this section. If appropriations that have been made for the purpose by July 1 of a fiscal year are insufficient for payment in full, the amount paid to each electric utility shall be reduced on a pro rata basis. In making the pro rata reductions required by this subsection, the authority may not consider any potential supplemental appropriation until the appropriation has been enacted. Sec. 42.45.115. Exclusion from eligibility. (a) Notwithstanding the definition of “eligible electric utility” in AS 42.45.150 , an electric utility whose primary source of power for sale to customers is one or more of the power projects that were part of the former initial project may not be considered an eligible electric utility. (b) In this section, “former initial project” includes the Tyee Lake, Swan Lake, Solomon Gulch, and Terror Lake hydroelectric facilities. Sec. 42.45.120. Notice to customers. If an electric utility receives power cost equalization under AS 42.45.100 — 42.45.150, the utility shall either give to its electric service customers eligible under this program, for each period for which the payment is received, (1) the following notice: NOTICE TO CUSTOMERFor the most recent monthly reporting period under the State of Alaska's power cost equalization program, this utility's actual fuel efficiency for your community was __________________________________ kilowatt-hours a gallon. The applicable fuel efficiency standard set out in regulations for the power cost equalization program is __________________________________ kilowatt-hours a gallon.For the current billing period, the utility will be paid under the State of Alaska's power cost equalization program ( AS 42.45.100 ) to assist the utility and its customers in reducing the high cost of generation of electric energy.Your total electrical service cost $..........Less state equalization $..........Your charge $..........; or (2) a notice approved by the authority that provides electric service customers the same information provided by the notice in (1) of this section. Sec. 42.45.130. Cost minimization. (a) In order to qualify for power cost equalization, each electric utility shall make every reasonable effort to minimize administrative, operating, and overhead costs, including using the best available technology consistent with sound utility management practices. In reviewing applications for power cost equalization, the commission may require the elimination of unnecessary operating expenses. Each eligible electric utility shall cooperate with appropriate state agencies to implement cost-effective energy conservation measures and to plan for and implement feasible alternatives to diesel generation. (b) In this section, “energy conservation measures” include weatherization and other insulating methods, utilization of waste heat, appropriate sizing of new generating equipment, and other programs of the state or federal government intended and available for energy conservation. Sec. 42.45.140. Customer petitions. If the authority receives a petition requesting power cost equalization, signed by at least 25 percent of the customers of an electric utility that is subject to rate regulation under AS 42.05 and that has not applied for power cost equalization under AS 42.45.100 — 42.45.150, the authority shall require the utility to submit a power cost equalization application. Upon a determination of eligibility for power cost equalization, the utility, as a part of its service, shall receive power cost equalization and pass power cost equalization benefits to its customers under AS 42.45.100 — 42.45.150. Sec. 42.45.150. Definitions for AS 42.45.100 — 42.45.150. In AS 42.45.100 — 42.45.150, (1) “commission” means the Regulatory Commission of Alaska. (2) “community facility” means a water and sewer facility, public outdoor lighting, charitable educational facility, or community building whose operations are not paid for by the state, the federal government, or private commercial interests; (3) “eligible electric utility” or “electric utility” means a public, cooperative, or other corporation, company, individual, or association of individuals, and includes the lessees, trustees, or receivers appointed by a court, that (A) owns, operates, manages, or controls a plant or system for the furnishing, by generation, transmission, or distribution, of electric service to the public for compensation; (B) during calendar year 1983, had a residential consumption level of power eligible for power cost equalization under former AS 44.83 of less than 7,500 megawatt hours or had a residential consumption level of power eligible for power cost equalization under former AS 44.83 of less than 15,000 megawatt hours if the utility served two or more municipalities or unincorporated communities; and (C) during calendar year 1984, used diesel fired generators to produce more than 75 percent of the electrical consumption of the utility; an electric utility that is a subsidiary of another electric utility is an “eligible electric utility” if the operations of the subsidiary, considered separately, meet the eligibility requirements of AS 42.45.100 — 42.45.150; if an electric utility did not receive power cost assistance in 1983 but is otherwise eligible for power cost equalization under AS 42.45.100 — 42.45.150, the utility is an “eligible electric utility”; (4) “power costs” means costs used in determining power cost equalization under AS 42.45.110 (a) and (c). Sec. 42.45.160. Adjustments to power cost equalization. (a) The commission may adjust the power cost equalization per kilowatt-hour, determined under AS 42.45.100 — 42.45.150, payable to an electric utility that is subject to rate regulation under AS 42.05 if the (1) commission has approved a fuel cost rate adjustment caused by an increase or decrease in the electric utility's cost of fuel; (2) commission has approved a permanent or interim rate increase or decrease that establishes a higher or lower power cost; (3) authority has discovered, in reviewing the monthly data submitted by the electric utility, discrepancies that require adjustment of the power cost equalization; or (4) authority determines that appropriations are insufficient to finance full payments to eligible electric utilities. (b) An electric utility that is eligible to receive power cost equalization under this section and that receives power cost equalization per kilowatt-hour approved by the commission shall report monthly to the authority within the time and in the form the authority requires. An electric utility shall report (1) the power cost equalization per kilowatt-hour approved by the commission; (2) the total kilowatt-hours sold to each class of customer during the preceding month; (3) the total kilowatt-hours eligible for power cost equalization under this section sold to each class of customer during the preceding month; (4) the total kilowatt-hours generated during the preceding month, if available; (5) any commission approved amendments to the schedule of rates in effect during the preceding month; and (6) an increase or decrease in the current unit price of fuel from the base price used by the commission in determining power costs if the change is expected to result in a subsequent power cost equalization adjustment. (c) The provisions of AS 42.45.100 — 42.45.150 relating to the determination of the amount of power cost equalization and payment of the equalization assistance apply to equalization assistance under this section. Sec. 42.45.170. Equalization assistance to unregulated utilities. (a) An electric utility that is not subject to rate regulation by the Regulatory Commission of Alaska under AS 42.05 may receive power cost equalization if the utility is otherwise eligible for equalization assistance under AS 42.45.100 — 42.45.150 and if the utility (1) files with the commission financial data necessary to determine the power cost equalization per kilowatt-hour as prescribed by the commission and that is in compliance with AS 42.45.100 — 42.45.150; (2) reports monthly to the authority, within the time and in the form required, the information required in (b) of this section; (3) sets rates (A) that consider the power cost equalization provided under AS 42.45.100 — 42.45.150 by subtracting from its revenue requirements for electric services the power cost equalization per kilowatt-hour that it is eligible to receive; and (B) under which the power cost equalization provided in AS 42.45.070 — 42.45.110 is applied as a credit only against the cost of kilowatt-hours eligible for equalization assistance under AS 42.45.100 — 42.45.150 that are consumed by each customer in any month; (4) allows audits that the commission determines are necessary to ensure compliance with this section; and (5) furnishes its electric service customers eligible under this program a notice as specified in AS 42.45.120 . (b) An electric utility that is eligible to receive power cost equalization under this section shall report in accordance with (a)(2) of this section (1) the power cost equalization per kilowatt-hour approved by the commission; (2) the total kilowatt-hours sold to each class of customer during the preceding month; (3) the total kilowatt-hours eligible for power cost equalization under this section sold to each class of customer during the preceding month; (4) the total kilowatt-hours generated during the preceding month, if available; (5) any amendments to the schedule of rates in effect during the preceding month; and (6) an increase or decrease in the current unit price of fuel from the base price used by the commission in determining power costs if the change is expected to result in a subsequent equalization assistance level adjustment. (c) An electric utility that is eligible to receive power cost equalization under this section may have its power cost equalization per kilowatt-hour determination changed by the commission if the (1) commission has verified an increase or decrease in the electric utility's cost of fuel; (2) commission has verified an increase in rates based on an increase in costs; (3) authority has discovered, in reviewing the monthly data submitted by the electric utility, discrepancies that require adjustment of the power cost equalization; or (4) authority determines that appropriations are insufficient to finance full payments to eligible electric utilities. (d) The provisions of AS 42.45.100 — 42.45.150 relating to the determination of the amount of power cost equalization and payment of the equalization assistance apply to equalization assistance under this section. (e) An application for power cost equalization by an electric utility that is eligible to receive power cost under this section does not extend the jurisdiction of the Regulatory Commission of Alaska beyond that established by AS 42.05 . Sec. 42.45.180. Grants for utility improvements. (a) The authority may make a grant from the fund for an eligible utility for a small power project that will reduce the cost of generating or transmitting power to the customers of the utility. The amount of the grant may not exceed 75 percent of the cost of the project. The authority may not make a grant under this section unless the eligible utility has secured financing for 25 percent of the cost of the project from a source other than the power cost equalization and rural electric capitalization fund, as provided under (c) of this section. (b) The authority may not allocate more than three percent of the balance in the fund to grants under this section in a fiscal year. (c) In determining whether an eligible utility has secured financing for 25 percent of the cost of the project from a source other than the power cost equalization and rural electric capitalization fund, the authority shall accept solicited and unsolicited proposals for third party financing or for a joint venture between the utility and an entity from the private sector provided that the private sector participant has (1) a valid state business license; (2) a resolution or letter of agreement executed by the eligible utility agreeing to participation by the private sector participant; (3) a business plan that illustrates how the proposed project will reduce the cost of generating or transmitting power to the customers of the utility. (d) In this section, (1) “eligible utility” has the meaning given in AS 42.45.150 ; (2) “project” includes (A) power generation systems; (B) transmission systems; (C) distribution systems; (D) metering systems; (E) energy store systems; (F) energy conservation programs; and (G) bulk fuel storage facilities; (3) “small power project” means a new or modified project that will either generate, store, or conserve no more than 1.5 megawatts of power or provide a metering system, transmission system, distribution system, or bulk fuel storage facility that has an estimated cost of less than $3,000,000. Sec. 42.45.190. Definition for AS 42.45.100 — 42.45.190. In AS 42.45.100 — 42.45.190, “fund” means the power cost equalization and rural electric capitalization fund established under AS 42.45.100 . Article 4. Bulk Fuel Revolving Loan Fund. Sec. 42.45.200. Electrical service extension fund established. [Repealed, § 12 ch 36 SLA 2004.] Sec. 42.45.250. Bulk fuel revolving loan fund. (a) The bulk fuel revolving loan fund is established in the division to assist communities, utilities providing power in communities, and fuel retailers in communities in purchasing bulk fuel to generate power or supply the public with fuel for use in communities. A community, or a person generating power or selling fuel in a community or maintaining community facilities or infrastructure is eligible for a bulk fuel loan under AS 42.45.260 or a bulk fuel bridge loan under AS 42.45.270 to purchase bulk fuel to be used in the community. (b) Money in the fund may be used by the legislature to make appropriations for costs of administering AS 42.45.250 — 42.45.299. (c) [Repealed, § 2 ch 46 SLA 2012.] (d) [Repealed, § 2 ch 46 SLA 2012.] (e) [Repealed, § 2 ch 46 SLA 2012.] (f) [Repealed, § 2 ch 46 SLA 2012.] (g) [Repealed, § 2 ch 46 SLA 2012.] (h) [Repealed, § 2 ch 46 SLA 2012.] (i) [Repealed, § 2 ch 46 SLA 2012.] (j) [Repealed, § 2 ch 46 SLA 2012.] (k) [Repealed, § 2 ch 46 SLA 2012.] (l) [Repealed, § 2 ch 46 SLA 2012.] (m) [Repealed, § 2 ch 46 SLA 2012.] (n) The fund consists of (1) money appropriated to, transferred to, or received by gift, grant, devise, bequest, or donation to the fund; (2) principal and interest payments or other income earned on loans or investments of the fund and appropriated to the fund. (o) The fund is not a dedicated fund. (p) The division shall establish and implement a technical assistance program for borrowers. Technical assistance shall be provided to borrowers who need assistance in applying for a loan or who have received a bulk fuel loan to help those borrowers improve creditworthiness or other financial criteria likely to be considered by the division if the borrower applies for another bulk fuel loan in the future. The division may contract with a state agency or private contractor to administer or implement the technical assistance program. Sec. 42.45.260. Bulk fuel loan account; loans. (a) The bulk fuel loan account is established as a separate account within the fund. The division may make loans from the bulk fuel loan account as provided in AS 42.45.250 — 42.45.299. (b) The division shall establish by regulation criteria under which communities or entities eligible under AS 42.45.250 (a) may obtain a bulk fuel loan. The criteria must require the division to consider the applicant's creditworthiness and repayment history and may require the consideration of other factors. (c) The division shall evaluate each application for a bulk fuel loan and shall make findings if the application is denied. (d) Loans made from the bulk fuel loan account to one borrower (1) may not exceed $750,000 or, if the borrower is a cooperative corporation organized under AS 10.15 or an electric cooperative organized under AS 10.25 and uses the loan to purchase bulk fuel on behalf of more than one community, may not exceed $750,000 multiplied by the number of communities on whose behalf the bulk fuel is to be purchased or $1,800,000, whichever is less; (2) shall be repaid within one year after the date of the loan disbursement; and (3) may include additional terms and conditions required by the division. (e) The division may contract with a private contractor to administer the loan account. Sec. 42.45.270. Bulk fuel bridge account; loans. (a) The bulk fuel bridge loan account is established as a separate account within the fund. Subject to availability of funds in the account, the division may make bulk fuel bridge loans from the bulk fuel bridge loan account as provided in AS 42.45.250 — 42.45.299. (b) A community or person is eligible for a bulk fuel bridge loan only if the community or person (1) meets the requirements of AS 42.45.250 (a); and (2) has been denied an application for a bulk fuel loan under AS 42.45.260 . (c) Loans made from the bulk fuel bridge loan account to one borrower in a fiscal year (1) may not exceed $750,000; (2) shall be repaid within one year after the date of the loan disbursement; and (3) may include additional terms and conditions required by the division. (d) The division shall implement a technical assistance and counseling plan for borrowers who have received a bulk fuel bridge loan to help those borrowers improve creditworthiness or other financial criteria likely to be considered by the division if the borrower applies for another bulk fuel loan in the future. The division may contract with a state agency or outside contractor to administer or implement the technical assistance and counseling plan. Sec. 42.45.280. Bulk fuel loan and bulk fuel bridge loan interest rates. (a) Except as provided under (b) and (c) of this section, interest shall be charged on a bulk fuel loan and bulk fuel bridge loan at a base rate of four percent. (b) The division may establish by regulation a program to reduce the interest rate on the second and subsequent bulk fuel loans obtained by a borrower. In evaluating a potential interest rate reduction, the division shall consider the borrower's repayment history and any other criteria that may be established by regulation. The division may by regulation reduce the interest rate on a bulk fuel loan made by the division by one percent for a borrower who has had at least one previous bulk fuel loan made by the division or by two percent for a borrower who has had two or more previous bulk fuel loans made by the division. The division shall make findings if an application for an interest rate reduction is denied. (c) For the first time a borrower receives a bulk fuel bridge loan, the interest rate shall be zero percent. For all loans made after the first bulk fuel bridge loan to a borrower, the interest rate shall be set according to the procedure described in (a) of this section. Sec. 42.45.299. Definitions. In AS 42.45.250 — 42.45.299, unless the context otherwise requires, (1) “community” means an organized municipality or an unincorporated village that is a social unit if the organized municipality or unincorporated village has a population of less than 2,000 people; (2) “division” means the division in the Department of Commerce, Community, and Economic Development that is responsible for community and regional affairs; (3) “fund” means the bulk fuel revolving loan fund established in AS 42.45.250 (a) and administered under AS 42.45.250 — 42.45.299; (4) “person” (A) has the meaning given in AS 01.10.060 ; (B) includes a cooperative, a joint venture, and a governmental entity. Article 5. Joint Action Agencies. Sec. 42.45.300. Joint action agencies. Two or more public utilities may form a joint action agency for the purpose of participation in the design, construction, operation, and maintenance of a generating or transmission facility and to secure financing for carrying out the design, construction, operation, and maintenance of the facility. A joint action agency may request the Alaska Industrial Development and Export Authority to issue revenue bonds for projects of the agency. A joint action agency has the powers of a public utility under AS 42.05 . Sec. 42.45.310. Acquisition of power project. (a) Two or more public utilities that purchase power from a power project acquired or constructed as part of the former energy program for the state and owned by the authority under AS 44.83.396 may form a joint action agency under AS 42.45.300 and under this section to purchase the power project from the authority if the purchase and sale of the project has first been authorized by law. (b) The agency may (1) acquire, own, operate, and manage one or more power projects or generating or transmission facilities; and (2) participate in the design, development, construction, operation, and maintenance of a generating or transmission facility. (c) The agency is a body corporate and politic and an instrumentality of the public utilities that form the agency, but has a separate and independent legal existence from the public utilities. A debt, obligation, or liability of the agency does not constitute a debt, obligation, or liability of a public utility or the state. A liability incurred by the agency shall be satisfied exclusively from the assets or revenue of the agency, and a creditor of the agency or any other person does not have any right of action or claim against a public utility or the state, because of a debt, obligation, or liability of the agency. The agency has the powers of a public utility under AS 42.05 and the immunities of a public utility. In addition to the powers granted to the agency under AS 42.45.300 and this section, the agency has the power (1) to adopt bylaws of the agency; (2) to sue and be sued; (3) to carry out the authorized purposes of the agency; (4) subject to (e) of this section, to issue revenue bonds and other obligations that are not obligations of either the state or the public utilities that are parties to the agency agreement to provide financing to carry out the authorized purposes of the agency; (5) in addition to the powers of eminent domain in AS 42.05.631 , to exercise the powers of eminent domain and a declaration of taking to acquire land or materials within the boundaries of the power project purchased by the agency from the authority under the procedures set out in AS 09.55.240 — 09.55.460 to carry out the authorized purposes of a joint action agency; and (6) to use facilities, projects, and related assets owned, leased, or operated by the joint action agency as security in accordance with applicable law. (d) The agency is created by a written agreement among the public utilities forming the agency. Each public utility forming the agency shall adopt the terms of the agreement by ordinance or resolution.

After the public utilities that are parties to the agency agreement adopt and execute the agreement, the board of directors of the agency shall file the agency agreement with the Department of Commerce, Community, and Economic Development. Subject to (c) of this section, the agency agreement may define the powers, functions, and activities of the agency and specify the means by which they shall be performed. The agency agreement may establish the rights and responsibilities of the public utilities that form the agency. If applicable, the agency agreement must provide for (1) apportionment between the public utilities that are parties to the agency agreement of responsibility for expenses incurred in the performance of the functions or activities; (2) apportionment of fees or other revenue derived from the functions or activities and the manner in which the revenue shall be accounted for; (3) the transfer of personnel and the preservation of employment benefits; and (4) the rights of the public utilities that are parties to the agency agreement to terminate the agreement, subject to (e) of this section, including resolving disputes if the public utilities are unable, upon termination of the agency agreement, to agree on the transfer of personnel or the division of assets and liabilities between the parties to the agreement. (e) The public utilities that are parties to the agency agreement shall pledge and agree with the holders of revenue bonds or other obligations issued by the agency, including with a state entity that provides financing to the agency, that the public utilities and the agency will not terminate the agency or take any other action that would limit or alter the rights and powers vested in the agency by this section to fulfill the terms of a contract made by the agency with the holders of the bonds or other obligations and that the public utilities and the agency will not in any way impair the rights and remedies of the holders until the bonds or other obligations, together with the interest on them with interest on unpaid installments of interest, and all costs and expenses in connection with an action or proceeding by or on behalf of the holders of the bonds or other obligations are fully met and discharged. The agency may include this pledge and agreement of the public utilities and the agency, insofar as it refers to holders of bonds and other obligations of the agency, in a contract with the holders and, insofar as it relates to a state entity, in a contract with the state entity. (f) Bonds and other obligations issued by the agency and all interest and income from them and all fees, charges, funds, revenue, income, and other money pledged or available to pay or secure the payment of the bonds or obligations or interest on them are exempt from taxation. The real and personal property of the agency and the assets, income, and receipts of the agency are exempt from all taxes and special assessments of the state or a political subdivision of the state, except that electricity sold at retail by an agency is subject to the electric cooperative tax ( AS 10.25.540 — 10.25.570). (g) A loan to, investment in, or other financial assistance provided to the agency by the state or any political subdivision of the state does not constitute a violation of AS 37.10.085 . (h) An agency formed by, and that continues to include, one or more municipal public utilities is a political subdivision for purposes of AS 38.05.810 , and functions as a political subdivision in the acquisition and ownership of the power project under the agreement authorized by this section. Except as provided in this subsection, the agency is not a political subdivision of the state. (i) The agency may not sell a project owned by the agency to any purchaser without the approval of the legislature in advance of the effective date of the sale, except that a sale made to a public utility that is a party to the agreement does not require legislative approval. (j) Notwithstanding (i) of this section, the project and related assets may be transferred in connection with a foreclosure or other enforcement of a lien or security interest to a party holding a lien or security interest acquired under (c)(6) of this section or to another party without legislative approval. A party obtaining a property interest under this subsection may transfer that interest without legislative approval. (k) In this section, (1) “agency” means a joint action agency formed under this section; (2) “agency agreement” or “agreement” means the written agreement described in (d) of this section between or among the public utilities creating a joint action agency; (3) “parties to the agency agreement” means those public utilities that initially form the agency and, (A) in the event of a permitted withdrawal of a public utility from the agency in accordance with the terms of the agency agreement, those public utilities that remain parties to the agency agreement; and (B) if authorized by law, includes an additional public utility that becomes a party to the agency agreement; (4) “public utility” has the meaning given the term in AS 42.05.990 ; (5) “state entity” means a state department, authority, or other administrative unit of the executive branch of state government. Sec. 42.45.320. Liability, indemnification, and insurance. (a) A protected person is not individually liable for conduct performed within the scope of the person's duties for the agency. However, the protected person may be held individually liable for conduct if it was not reasonable for the person to believe that the conduct was in, or not contrary to, the best interests of the agency. (b) Unless prohibited by the agency agreement, the agency shall indemnify a protected person who is or may be made a party to a contested matter arising out of acts or omissions within the scope of the person's duties for the agency against expenses actually and reasonably incurred in connection with the contested matter. However, the agency may not indemnify the protected person if the person did not reasonably believe the conduct to be in, or not opposed to, the best interests of the agency. With respect to a criminal action or proceeding, the agency shall indemnify a protected person unless the person had reasonable cause to believe that the conduct was unlawful. (c) An agency may purchase and maintain insurance on behalf of a protected person against liability asserted against the protected person and incurred in an official capacity or arising out of the person's status. (d) In this section, (1) “agency” means a joint action agency formed under AS 42.45.310 ; (2) “conduct” includes action, inaction, and omission; (3) “contested matter” means a proposed, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative; (4) “expenses” include attorney fees, judgments, fines, and amounts paid in settlement; (5) “protected person” means a director, officer, employee, or agent of an agency. Article 6. Water-Power Development Projects. Sec. 42.45.350. Licensing of water-power development projects. (a) The Regulatory Commission of Alaska shall adopt regulations to establish a regulatory program for water-power development projects that qualify under this section. (b) The regulatory program established under this section must (1) protect the public interest, the purposes listed in (2) of this subsection, and the environment to the same extent provided by the requirements for licensing and regulation by the Federal Energy Regulatory Commission under 16 U.S.C. 792 — 823c and other applicable federal laws, including 16 U.S.C. 1531 et seq. (Endangered Species Act) and 16 U.S.C. 661 et seq. (Fish and Wildlife Coordination Act); (2) give equal consideration to (A) energy conservation; (B) the protection of, mitigation of damage to, and enhancement of, fish and wildlife, including related spawning grounds and habitat; (C) the protection of recreational opportunities; (D) the preservation of other aspects of environmental quality; (E) the interests of resident Alaska Natives; (F) other beneficial public uses, including irrigation, flood control, water supply, navigation; and (G) the interest of state residents and landowners; and (3) require, as a condition of a license for any qualifying project work, (A) the construction, maintenance, and operation by a licensee at the licensee's own expense of the lights and signals that may be directed by the secretary of the department of the United States government in which the United States Coast Guard is operating and the fishways that are prescribed by the Secretary of the Interior or the Secretary of Commerce, as appropriate; (B) the operation of any navigation facilities that may be constructed as part of any project to be controlled at all times by the reasonable rules and regulations that are adopted by the Secretary of the Army; and (C) conditions for the protection of, mitigation of damage to, and enhancement of fish and wildlife based on recommendations received under 16 U.S.C. 661 et seq. (Fish and Wildlife Coordination Act) from the National Marine Fisheries Service, the United States Fish and Wildlife Service, and the state Department of Fish and Game. (c) For purposes of this section, the term “qualifying project work” means a project work (1) that is not part of a project licensed under 16 U.S.C. 792 — 823c or exempted from licensing under 16 U.S.C. 792 — 823c or under 16 U.S.C. 2705 (sec. 405 of the Public Utility Regulatory Policies Act of 1978) before November 9, 2000; (2) for which a preliminary permit, a license application, or an application for an exemption from licensing has not been accepted for filing by the Federal Energy Regulatory Commission before November 9, 2000, unless the application is withdrawn at the election of the applicant; (3) that is part of a project that has a power production capacity of 5,000 kilowatts or less; (4) that is located entirely within the boundaries of the state; and (5) that is not located in whole or in part on an Indian reservation, a conservation system unit as defined in 16 U.S.C. 3102 (sec. 102, Alaska National Interest Lands Conservation Act), or on a segment of a river designated for study for addition to the National Wild and Scenic Rivers System. (d) In the case of nonqualifying project work that would be qualifying project work but for the fact that the project has been licensed or exempted from licensing by the Federal Energy Regulatory Commission before November 9, 2000, the licensee of the project may elect to make the project subject to licensing and regulation by the state under this section. (e) With respect to projects located in whole or in part on a reservation, a conservation system unit, or federal public land, a state license or exemption from licensing is subject to (1) the approval of the secretary of the federal department having jurisdiction over those lands; and (2) the conditions that the secretary may prescribe. (f) The Regulatory Commission of Alaska shall notify the Federal Energy Regulatory Commission not later than 30 days after making any significant modification to its regulatory program under this section. (g) In this section, (1) “federal public land” means the land and interest in land owned by the United States that is subject to private appropriation and disposal under public land laws, but does not include a reservation; (2) “licensee” means any person, state, or municipality licensed under the provisions of 16 U.S.C. 797 and any assignee or successor in interest of the licensee thereof; (3) “project” means, notwithstanding the definition in AS 42.45.990 , a complete unit of improvement or development, consisting of a power house, all water conduits, all dams and appurtenant works and structures, including navigation structures, that are a part of the unit, and all storage, diverting, or forebay reservoirs directly connected with the unit, the primary line or lines transmitting power from the unit to the point of junction with the distribution system or with the interconnected primary transmission system, all miscellaneous structures used and useful in connection with the unit or any part of the unit, and all water rights, rights-of-way, ditches, dams, reservoirs, land, or interests in land the use and occupancy of which are necessary or appropriate in the maintenance and operation of the unit; (4) “project work” means the physical structure of a project; (5) “reservation” (A) means a national forest; tribal land embraced within an Indian reservation; a military reservation; other land and an interest in land owned by the United States and withdrawn, reserved, or withheld from private appropriation and disposal under the public land laws; and land and an interest in land acquired and held for any public purposes; (B) does not include a national monument or national park. Article 7. Emerging Energy Technology Fund. Sec. 42.45.375. Emerging energy technology fund; grant program. Article 8. Miscellaneous Provisions. Sec. 42.45.400. [Renumbered as AS 42.45.900 .] Sec. 42.45.410. [Renumbered as AS 42.45.910 .] Sec. 42.45.900. Assistance to rural utilities. (a) The authority shall provide technical assistance to rural utilities including catastrophe prevention programs and other training programs for utility projects. The authority shall provide rural utilities with the technical assistance and training that the utilities need to improve the efficiency, safety, and reliability of their power systems and to prevent emergency situations from developing. At a minimum, the assistance and training must include information on (1) reducing distribution line losses; (2) installation of generators that are more fuel efficient; (3) preventative maintenance programs; (4) safety inspections; (5) installing and maintaining waste heat systems; (6) improved metering systems; (7) improved management and administration; and (8) coordinating regional activities, including circuit rider maintenance programs. (b) In providing rural utilities with technical assistance and training, the authority shall give priority to contracting with the private sector for these services. (c) This section does not create a duty in tort, and may not be the basis for an action against the state, the authority, or the officers, employees, agents, or contractors of either for damages, injury, or death. Sec. 42.45.910. Relationship with private sector. The authority shall, to the maximum extent feasible, carry out its powers and duties under this chapter by entering into contracts with appropriate entities in the private sector. Article 9. General Provisions. Sec. 42.45.990. Definitions. In this chapter, unless the context otherwise requires, (1) “authority” means the Alaska Energy Authority; (2) “feasibility study” (A) means a study conducted to establish the economic and environmental practicality of completing a proposed power project; (B) includes engineering and design work to meet the requirements for submission of a license application for a proposed new project to the Federal Energy Regulatory Commission; (3) “power” includes electrical energy generated, distributed, bought, or sold for lighting, heating, power, and every other useful purpose; (4) “power project” or “project” means a plant, works, system, or facility, together with related or necessary facilities and appurtenances, including a divided or undivided interest in or a right to the capacity of a power project or project, that is used or is useful for the purpose of (A) electrical or thermal energy production; (B) waste energy utilization and energy conservation; or (C) transmission, purchase, sale, exchange, and interchange of electrical or thermal energy, including district heating or interties; (5) “reconnaissance study” means a study conducted to assess the present and future electrical and thermal energy needs of an area.