Alaska lawmakers eye bills on neighborhood solar, green bank and renewable energy benchmarks

Alaska lawmakers are set to take up several renewable energy policy proposals starting later this month, including for neighborhood solar projects, loans for sustainable energy programs and setting standards for utilities’ clean power generation.

The 33rd Alaska Legislature is scheduled to start its regular session in Juneau on Jan.16, and lawmakers are eyeing renewable energy expansion for many reasons.

Progressives highlight the need to scale back fossil fuel emissions, which drive climate change. Others point to the economic benefits of moving away from costly fossil fuels like diesel, especially in rural areas. And just about everyone in Alaska’s Railbelt region is worried about a looming natural gas shortfall threatening to drive up the cost of heat and electricity.

There are at least three bills to watch this session that are aimed at growing Alaska’s renewable energy production.

Community solar

Senate Bill 152 would allow neighbors to group together to put up small-scale renewable energy projects. That could be a small solar farm, or even a wind or hydroelectric project. 

“The idea is really to provide more options for people across Alaska, more energy options,” said Sen. Bill Wielechowski, an Anchorage Democrat sponsoring the bill.

Those kinds of small renewable projects are done in conjunction with a local utility company, Wielechowski said. The community members who invested in the project benefit from the electricity it generates, and any extra electricity gets sold back to the utility. 

“If you’re in a condo association, and you want to put several solar panels on some roofs and provide that energy for people in the association, you can’t do it under the current regulations,” he said. “So this would allow that sort of activity to occur.”

Chugach Electric Association pitched a community solar project to the state regulatory commission in 2019, but it was rejected in part because there was no legal framework in place. The utility recently submitted another proposal for a small community solar project that could produce enough electricity to power several dozen homes. 

The idea to provide regulations for these kinds of neighborhood-level projects gained steam early in the last legislative session, Wielechowski said. He introduced the bill last spring and thinks there will be support for it this session.

Green bank

Senate Bill 125, proposed by Gov. Mike Dunleavy, would establish what’s called a “green bank” under the Alaska Housing Finance Corporation. 

Known as the “Alaska Energy Independence Fund,” the green bank would provide loans to families and rural utilities to help finance sustainable energy projects, including power generation and storage, as well as efficiency improvements. 

Nonpartisan Anchorage Rep. Calvin Schrage spoke about the benefits of a green bank at an event last month hosted by Alaska Common Ground. He said a state-backed program will help subsidize small renewable energy projects and make them more profitable for Outside investors. 

“It allows us to attract that Outside money and some inside from our local institutions and steer it towards renewable energy projects,” Schrage said.

Schrage also noted that the federal government has set aside tens of billions of dollars to fund green banks nationwide under the Inflation Reduction Act. SB 125 and its companion bill in the House are both waiting in finance committees and expected to advance this session.

Renewable Portfolio Standard

Sen. Löki Tobin, an Anchorage Democrat, and Rep. Jesse Sumner, a Wasilla Republican, are pushing a “renewable portfolio standard,” also known as an RPS, for Railbelt utilities. The RPS bill sets benchmarks for how much of a utility’s power generation should come from renewable sources. 

In this case, the bill proposes a standard to ensure 25% of Railbelt power is generated by renewable methods by 2027, which Tobin calls “very achievable.” It aims for 80% renewables by 2040.

Dunleavy is also a proponent of the RPS, though it faces pushback from utilities, who oppose a government mandate and say rushing the ongoing transition to renewable energy sources could result in higher electricity costs.

Railbelt utilities are also facing an impending natural gas shortfall, which could result in dramatic increases to residents’ electricity and heating bills. Clean energy advocates say high standards like those in the RPS proposal could save consumers billions of dollars in fuel costs in coming decades. 

RPS bills in the House and Senate are also awaiting consideration by committees. 

At the Alaska Common Ground event, Tobin urged passage of the RPS. The technology to rapidly deploy renewables is available, she said, and the climate benefits shouldn’t be ignored.

“These aren’t partisan ideas,” she said. “These are ideas that are about what we can invest in to make sure that our young kids have a future and a planet to inherit.”