House Energy Committee narrows scope of Alaska RPS, approves rate-recovery restriction in 4-3 vote

Juneau — On April 24, the Alaska House Energy Committee considered 16 amendments to the committee substitute for House Bill 153, a bill that would establish a renewable portfolio standard (RPS) for specified electric utilities. Committee members defeated Representative Rauscher’s amendment to apply the RPS to the entire state, and approved, by a 4-3 roll-call, an amendment that would bar utilities from recovering RPS noncompliance fees through customer rates. The committee then set the bill aside to allow more talks with utilities.

The bill matters because it targets how the state’s electrical utilities must add renewable generation and how any shortfalls would be handled financially. Committee debate highlighted a divide between lawmakers who want uniform treatment across Alaska’s many small, often islanded utilities and lawmakers who want an RPS focused on the Railbelt’s integrated grid and its cooperative utilities.

Representative Rauscher moved amendment 1 to include “the entire state of Alaska, all the utilities,” arguing that fines or fees collected for failing to meet the RPS could be turned over to the Renewable Energy Fund and dispersed anywhere in the state rather than staying with the affected utility. “If they’re not gonna meet the percentages, they’re gonna have fines,” Rauscher said, urging a uniform approach so ratepayer money would benefit the local utility’s service area.

Sponsor Representative Holland opposed amendment 1, saying the bill’s focus is the Railbelt — the larger integrated grid where utilities can share generation. “Putting this requirement on all of the, you know, nearly 200 small utilities trying to each individually come up with an RPS compliance ... I just I I don't see that requirement being something that all those individual utilities can ever begin to accomplish,” Holland said, adding that small islanded systems lack the ability to integrate and share renewable generation the Railbelt utilities have. The committee rejected amendment 1 on a roll-call of 3 ayes and 4 nays.

Representative Rauscher then moved amendment 2, which would prevent a load-serving entity from recovering RPS compliance costs by raising customer rates or imposing additional surcharges. Holland and other members questioned whether carving out renewables costs from general rate-recovery would create an uneven treatment compared with other utility costs. “The structure of treating renewables differently than the way we're treating all of the other costs ... is something that I think we need to look at,” Holland said.

John Espindola of the Regulatory Commission of Alaska (RCA) advised the committee that the Railbelt electric utilities are cooperative utilities and that if fines or fees could not be passed directly to ratepayers, the cooperatives would still need to remain solvent. “The utility would have to somehow assume those costs, which we believe would ultimately ... get passed on to ratepayers,” Espindola said, noting he did not want to speak for utilities themselves.

Supporters of amendment 2 framed it as a protection for ratepayers, particularly in rural and off‑road communities where residents already face much higher energy costs. Opponents warned the amendment could simply make cost recovery less transparent while not ultimately shielding customers from increased charges. After discussion, the amendment passed on a 4-3 roll call.

Committee members repeatedly noted the intent of the bill is to avoid collecting fees where possible and to incentivize utilities toward renewable deployment rather than generate revenue from penalties. Holland said staff in her office and the sponsor’s office are working with utilities to refine the bill and minimize unintended consequences. The sponsor gave order‑of‑magnitude figures discussed in committee — an illustrative increase “about 4%” if a utility did nothing by an interim date, and “about 7%” by a later point — and said those figures came from early utility conversations rather than a finalized utility analysis.

No formal action was taken to move the bill out of committee; after the two amendment votes, chairs and members agreed to set House Bill 153 aside to pursue further discussions with the larger set of utilities and stakeholders. The committee noted that public testimony had been left open from the previous hearing and that the bill will return to committee once staff and utilities have had a chance to review updated bill language.

Votes at a glance: Amendment 1 (Rauscher) — to apply the RPS statewide: failed, 3 ayes, 4 nays. Amendment 2 (Rauscher) — bar utilities from recovering RPS noncompliance fees through customer rates: approved, 4 yeas, 3 nays.

The committee adjourned early and will meet again next Tuesday to continue business.