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SENATE BILL NO. 285
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - SECOND SESSION
BY THE SENATE FINANCE COMMITTEE
Introduced: 4/15/26
Referred: Community and Regional Affairs, Finance
A BILL
FOR AN ACT ENTITLED
"An Act relating to the Rural Energy Infrastructure Organization; relating to the 1
Alaska affordable energy fund; relating to the Alaska Energy Authority; and providing 2
for an effective date." 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
* Section 1. AS 37.05.610(a) is amended to read: 5
(a) The Alaska affordable energy fund is created as a special account in the 6
general fund. The fund consists of the amount determined and deposited in the fund 7
under (b) of this section and interest earned on the fund balance. The purpose of the 8
fund is to provide a source from which the legislature may appropriate money to 9
develop energy infrastructure in communities in the unorganized borough that are 10
eligible for power cost equalization under AS 42.45.100 - 42.45.150 and that do 11
not have, and [TO DELIVER ENERGY TO AREAS OF THE STATE THAT] are 12
not expected to have, [OR DO NOT HAVE] direct access to a North Slope natural gas 13
pipeline. 14
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* Sec. 2. AS 44.83.030(a) is amended to read: 1
(a) The members of the board of directors of the authority are 2
(1) the commissioner of revenue; 3
(2) the commissioner of commerce, community, and economic 4
development; and 5
(3) seven [SIX] public members appointed by the governor as follows: 6
(A) one member with expertise or experience in managing or 7
operating an electric utility that is not connected to an interconnected electric 8
energy transmission network as defined in AS 42.05.790; 9
(B) one member with expertise or experience in developing 10
energy projects in rural communities; 11
(C) one member with expertise or experience in managing or 12
operating an electric utility connected to an interconnected electric energy 13
transmission network as defined in AS 42.05.790; 14
(D) one member with expertise or experience in managing a 15
municipally owned utility located off the interconnected road system or joint 16
action agency established under AS 42.45.310 located off the interconnected 17
road system; 18
(E) one member with financial expertise in large power 19
generation project development; [AND] 20
(F) one member with expertise or experience in finance, energy 21
policy, energy technology, engineering, law, or economics; and 22
(G) one member with expertise or experience in industrial 23
energy use, large-scale electric load development, or long-term electric 24
power procurement for major commercial or resource development 25
projects. 26
* Sec. 3. AS 44.83.070 is amended to read: 27
Sec. 44.83.070. Purpose of the authority. The purpose of the authority is to 28
promote, develop, and advance the general prosperity and economic welfare of the 29
people of the state by providing a means of financing and operating power projects, 30
including electric transmission and generation infrastructure in rural priority 31
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areas and facilities that recover and use waste energy, and by carrying out the powers 1
and duties assigned to it under AS 42.45. 2
* Sec. 4. AS 44.83.080 is amended to read: 3
Sec. 44.83.080. Powers of the authority. In furtherance of its corporate 4
purposes, the authority has the following powers in addition to its other powers: 5
(1) to sue and be sued; 6
(2) to have a seal and alter it at pleasure; 7
(3) to make and alter bylaws for its organization and internal 8
management; 9
(4) to adopt regulations governing the exercise of its corporate powers; 10
(5) to improve, equip, operate, and maintain power projects and bulk 11
fuel, waste energy, energy conservation, energy efficiency, and alternative energy 12
facilities and equipment; 13
(6) to issue bonds to carry out any of its corporate purposes and 14
powers, including the establishment or increase of reserves to secure or to pay the 15
bonds or interest on them, and the payment of all other costs or expenses of the 16
authority incident to and necessary or convenient to carry out its corporate purposes 17
and powers; 18
(7) to sell, lease as lessor or lessee, exchange, donate, convey, or 19
encumber in any manner by mortgage or by creation of any other security interest, real 20
or personal property owned by it, or in which it has an interest, when, in the judgment 21
of the authority, the action is in furtherance of its corporate purposes; 22
(8) to accept gifts, grants, or loans from, and enter into contracts or 23
other transactions regarding them, with any person; 24
(9) to deposit or invest its funds, subject to agreements with 25
bondholders; 26
(10) to enter into contracts with the United States or any person and, 27
subject to the laws of the United States and subject to concurrence of the legislature, 28
with a foreign country or its agencies, for the construction, financing, operation, and 29
maintenance of all or any part of a power project or bulk fuel, waste energy, energy 30
conservation, energy efficiency, or alternative energy facilities or equipment, either 31
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inside or outside the state, and for the sale or transmission of power from a project or 1
any right to the capacity of it or for the security of any bonds of the authority issued or 2
to be issued for the project; 3
(11) to enter into contracts with any person and with the United States 4
and, subject to the laws of the United States and subject to the concurrence of the 5
legislature, with a foreign country or its agencies for the purchase, sale, exchange, 6
transmission, or use of power from a project, or any right to the capacity of it; 7
(12) to apply to the appropriate agencies of the state, the United States, 8
and a foreign country and any other proper agency for the permits, licenses, or 9
approvals as may be necessary, to acquire, construct, maintain, and operate power 10
projects in accordance with the licenses or permits, and to obtain, hold, and use the 11
licenses and permits in the same manner as any other person or operating unit; 12
(13) to enter into contracts or agreements with respect to the exercise 13
of any of its powers, and do all things necessary or convenient to carry out its 14
corporate purposes and exercise the powers granted in this chapter; 15
(14) to recommend to the legislature 16
(A) the pledge of the credit of the state to guarantee repayment 17
of all or any portion of revenue bonds issued to assist in construction of power 18
projects; 19
(B) an appropriation from the general fund 20
(i) for debt service on bonds or other project purposes; 21
or 22
(ii) to reduce the amount of debt financing for the 23
project; 24
(15) to carry out the powers and duties assigned to it under AS 42.45 25
and AS 44.83.700 - 44.83.720; 26
(16) to make grants or loans to any person and enter into contracts or 27
other transactions regarding the grants or loans; 28
(17) to promote energy conservation, energy efficiency, and alternative 29
energy through training and public education; 30
(18) to acquire a Susitna River power project, whether by construction, 31
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purchase, gift, or lease, including the acquisition of property rights and interests by 1
eminent domain under AS 09; 2
(19) to perform feasibility studies and engineering and design with 3
respect to power projects; 4
(20) to acquire battery and other energy storage systems, whether by 5
direct ownership, purchase, grant, gift, or lease; 6
(21) through the Rural Energy Infrastructure Organization 7
established under AS 44.83.750, to plan, finance, develop, own, operate, manage, 8
maintain, repair, and replace electric transmission and generation infrastructure 9
in rural priority areas. 10
* Sec. 5. AS 44.83.090(a) is amended to read: 11
(a) The authority shall, in addition to the other methods that it may find 12
advantageous, provide a method by which municipal electric, rural electric, 13
cooperative electric, or private electric utilities and regional electric authorities, or 14
other persons authorized by law to engage in the distribution of electricity may secure 15
a reasonable share of the power generated by a project, or any interest in a project, or 16
for any right to the power and shall sell the power or cause the power to be sold at the 17
lowest reasonable prices that cover the full cost of the electricity or services, including 18
capital and operating costs, debt coverage as considered appropriate by the authority, 19
and other charges that may be authorized by this chapter. Except for a contract or lease 20
entered into under former AS 44.83.380 - 44.83.425 and a contract related to a 21
power project by the Rural Energy Infrastructure Organization established 22
under AS 44.83.750, a contract or lease for the sale, transmission, and distribution of 23
power generated by a project or any right to the capacity of it shall provide: 24
(1) for payment of all operating and maintenance expenses of a project 25
and costs of renewals, replacements, and improvements of it; 26
(2) for interest on and amortization charges sufficient to retire bonds of 27
the authority issued for the project and reserves for them, plus a debt service coverage 28
factor as may be determined by the authority to be necessary for the marketability of 29
its bonds; 30
(3) for monitoring of the project by the authority or its agents; 31
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(4) for full and complete disclosure to the authority of all factors of 1
costs in the transmission and distribution of power, so that rates to any persons may be 2
fixed initially in the contract or lease and may be adjusted from time to time on the 3
basis of true cost data; 4
(5) for periodic revisions of the service and rates to persons on the 5
basis of accurate cost data obtained by the accounting methods and systems approved 6
by the directors and in furtherance and effectuation of the policy declared in this 7
chapter; 8
(6) for the cancellation and termination of a contract or lease upon 9
violation of its terms by any person; 10
(7) for security for performance as the authority may consider 11
practicable and advisable, including provisions assuring the continuance of the 12
distribution and transmission of power generated by a project and the use of its 13
facilities for these purposes; and 14
(8) other terms not inconsistent with the provisions and policy of this 15
chapter as the authority may consider advisable. 16
* Sec. 6. AS 44.83 is amended by adding new sections to read: 17
Article 6A. Rural Energy Infrastructure Organization. 18
Sec. 44.83.750. Creation of organization. The Rural Energy Infrastructure 19
Organization is created as a division of the Alaska Energy Authority managed by the 20
board in consultation with the rural energy infrastructure advisory body. 21
Sec. 44.83.760. Purpose of organization. (a) The purpose of the organization 22
is to plan, finance, develop, own, operate, manage, maintain, repair, and replace 23
electric transmission and generation facilities in rural priority areas to bring affordable 24
and reliable power to rural areas of the state. 25
(b) A power project by the organization may include electric transmission 26
facilities that enable interconnection with the backbone transmission system as that 27
term is defined in AS 44.83.720. 28
Sec. 44.83.770. Rural energy infrastructure advisory body. (a) The rural 29
energy infrastructure advisory body is established in the organization. 30
(b) The advisory body consists of seven members appointed by the board as 31
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follows: 1
(1) one member with experience as a rural energy consumer who 2
resides in or has substantial professional experience serving a rural community; 3
(2) one member with expertise in rural energy systems with 4
demonstrated knowledge of the challenges and opportunities for energy development 5
in rural areas of the state; 6
(3) one member who represents an Alaska Native regional corporation 7
established under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act); 8
(4) one member who represents a nonprofit organization that serves a 9
rural community, an Alaska tribal health organization, or a regional housing authority 10
established under AS 18.55.996; 11
(5) one member who represents an Alaska Native village corporation 12
established under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act) that 13
provides power or bulk fuel to a rural community or a tribal government that provides 14
power or bulk fuel to a rural community; 15
(6) one member who represents an anchor tenant; and 16
(7) one member who represents an electric cooperative or nonprofit 17
utility with substantial and sustained energy delivery operations across multiple rural 18
communities. 19
(c) Members of the advisory body serve at the pleasure of the board. 20
(d) The provisions of AS 44.62.310 - 44.62.319 (Open Meetings Act) do not 21
apply to the advisory body. 22
(e) The advisory body shall advise the board on matters related to the 23
organization and make recommendations to the board about project selection and 24
prioritization, electric infrastructure planning, and strategic development in rural 25
priority areas. The advisory body's recommendations must consider the financial 26
viability and sustainability of projects, including the risk of default, insolvency, or 27
termination of anchor tenants or other key project participants. The advisory body 28
may, in coordination with employees of the authority, 29
(1) conduct technical, environmental, feasibility, and economic 30
analyses of power projects in rural priority areas, within the limits of available 31
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funding; 1
(2) identify potential electric transmission corridors, electric generation 2
sites, interconnections, and other critical infrastructure needs in rural priority areas; 3
and 4
(3) coordinate with federal, state, local, and tribal governments, Alaska 5
Native corporations established under 43 U.S.C. 1601 et seq. (Alaska Native Claims 6
Settlement Act), corporations organized under 25 U.S.C. 5124 (sec. 17 of the Indian 7
Reorganization Act), utilities, anchor tenants, and other stakeholders to facilitate 8
planning, development, financing, and operation of power projects in rural priority 9
areas. 10
(f) The advisory body may only advise and make recommendations to the 11
board and may not exercise the powers of the board or the authority. 12
Sec. 44.83.780. Rural energy infrastructure fund. (a) The rural energy 13
infrastructure fund is established in the authority. 14
(b) The authority shall separately account for all money, assets, income, and 15
receipts of the fund. The authority shall manage and invest the fund assets as provided 16
in AS 37.10.071. The legislature may appropriate to the fund 17
(1) interest and other income earned on money and assets of the fund; 18
(2) money received by the authority for the purposes of the 19
organization from federal, state, or other governmental units; 20
(3) gifts, grants, loans, and other contributions to the authority for the 21
purposes of the organization; 22
(4) revenue, receipts, and other money received from the organization's 23
power projects; and 24
(5) any other money received by the authority for the purposes of the 25
organization. 26
(c) Money in the fund may be used without further appropriation only to carry 27
out the purposes of the organization and to secure bonds of the authority issued to 28
finance the organization's power projects. Money in the fund does not lapse. 29
(d) Nothing in this section creates a dedicated fund. 30
Sec. 44.83.790. Definitions. In AS 44.83.750 - 44.83.790, 31
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(1) "anchor tenant" means an entity with substantial and sustained 1
energy needs whose long-term energy purchases have the potential to support the 2
organization's power projects in rural areas of the state; 3
(2) "board" means the board of directors of the authority; 4
(3) "commission" means the Regulatory Commission of Alaska; 5
(4) "organization" means the Rural Energy Infrastructure Organization 6
established by AS 44.83.750; 7
(5) "rural area of the state" means any area of the state located in the 8
unorganized borough; 9
(6) "rural priority area" means an area of the state in the unorganized 10
borough that 11
(A) includes or is reasonably expected to include an anchor 12
tenant with an electric load capable of supporting long-term development and 13
operation of electric transmission or generation infrastructure; 14
(B) demonstrates projected population stability or growth, or 15
other indicators of sustained or increasing electric demand; and 16
(C) is not served by the backbone transmission system as that 17
term is defined in AS 44.83.720. 18
* Sec. 7. AS 44.83.930(a) is amended to read: 19
(a) When a project is operated by the authority, the authority shall enter into 20
one or more contracts for the sale of electrical power, energy, transmission capacity, 21
or service from the project. Unless the contract is entered into under former 22
AS 44.83.380 - 44.83.425 or the contract is related to a power project by the Rural 23
Energy Infrastructure Organization established under AS 44.83.750, a contract 24
entered into under this section must meet all requirements of AS 44.83.090. 25
* Sec. 8. This Act takes effect July 1, 2026. 26