HB 312

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                                      HOUSE BILL NO. 312
                       IN THE LEGISLATURE OF THE STATE OF ALASKA
                   THIRTY-FOURTH LEGISLATURE - SECOND SESSION
 BY REPRESENTATIVE MCCABE
 Introduced: 2/18/26
 Referred: House Special Committee on Energy, Resources
                                               A BILL
                                    FOR AN ACT ENTITLED
1  "An Act relating to a state energy policy; relating to the green energy grant fund; and
2  providing for an effective date."
3  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
4    * Section 1. AS 38.95.430 is amended to read:
5Sec. 38.95.430. Carbon offset revenue. Twenty percent of the revenue
6generated from the carbon offset program shall be deposited into the green
7[RENEWABLE] energy grant fund (AS 42.45.045). The remaining 80 percent of the
8revenue from the carbon offset program shall be separately accounted for under
9AS 37.05.142 and may be appropriated by the legislature.
10   * Sec. 2. AS 42.05.141 is amended by adding a new subsection to read:
11(j)    The commission shall consider the state energy policy described in
12AS 44.99.115 in performing the duties assigned to the commission.
13   * Sec. 3. AS 42.45.010(m) is amended to read:
14(m) A loan for a green [RENEWABLE] energy resources project in which the
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1cumulative state monetary involvement, through loans, grants, and bonds, is at least
2$5,000,000 may not be granted for a term that exceeds 50 years and may,
3notwithstanding (f)(2) of this section, be granted at an interest rate that is the lesser of
4(1) three percent lower than the rate determined under (f)(2)(A) of this
5section, but not less than one percent; or
6(2) a rate equivalent to the rate determined under (f)(2)(B) of this
7section.
8   * Sec. 4. AS 42.45.010(n) is amended to read:
9(n) In (m) of this section, "green [RENEWABLE] energy resources" has the
10meaning given in AS 42.45.045 [AS 42.45.045(l)].
11  * Sec. 5. AS 42.45.045(a) is amended to read:
12(a) A green [RENEWABLE] energy grant fund is established as a separate
13fund to finance certain energy projects in the state [ALASKA].
14  * Sec. 6. AS 42.45.045(d) is amended to read:
15(d)   The authority shall, in consultation with the advisory committee
16established under (i) of this section and the Department of Natural Resources,
17(1) develop a methodology for determining the order of projects that
18may receive assistance, including separate requirements for grant eligibility, and adopt
19regulations identifying criteria to evaluate the benefit and feasibility of projects for
20which an applicant applies for support from the legislature, with the most weight being
21given to projects that serve any area in which the average cost of energy to each
22resident of the area exceeds the average cost to each resident of other areas of the
23state, and significant weight being given to a statewide balance of grant funds and to
24the amount of matching funds an applicant is able to make available;
25(2)      make    recommendations       to   the   legislature    for     green
26[RENEWABLE] power production reimbursement grants; and
27(3) not later than 10 days after the first day of each regular legislative
28session, submit to the legislature a report summarizing and reviewing each grant
29application submitted under this section and a recommended priority for awarding
30grants.
31  * Sec. 7. AS 42.45.045(e) is amended to read:
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1(e) In consultation with the advisory committee established in (i) of this
2section, the authority shall make recommendations to the legislature regarding eligible
3applicants' projects that finance feasibility studies, reconnaissance studies, energy
4resource monitoring, and construction of green [RENEWABLE] energy projects [,
5NATURAL GAS PROJECTS,] or transmission or distribution infrastructure located in
6Alaska that meet the requirements of (f), (g), or (h) of this section, as applicable, and
7shall, at least once each year, solicit from the advisory committee funding
8recommendations for all grants.
9   * Sec. 8. AS 42.45.045(f) is amended to read:
10(f) For a renewable energy project to qualify for a grant recommendation
11under (e) of this section, the project must
12(1) be a new project not in operation on August 20, 2008 or an addition
13to an existing project made after August 20, 2008; and
14(2) be a
15(A) hydroelectric facility;
16(B) direct use of green [RENEWABLE] energy resources;
17(C) facility that generates electricity from fuel cells that use
18hydrogen from green [RENEWABLE] energy resources [OR NATURAL
19GAS]; or
20(D) facility that generates energy from green [RENEWABLE]
21energy resources.
22  * Sec. 9. AS 42.45.045(h) is amended to read:
23(h)    To qualify for a grant recommendation under (e) of this section,
24transmission or distribution infrastructure must link a green [RENEWABLE] energy
25project [OR NATURAL GAS PROJECT] to the transmission or distribution
26infrastructure. A grant may be recommended under this subsection even if the grant
27applicant is not itself financing the construction of the green [RENEWABLE] energy
28project [OR NATURAL GAS PROJECT].
29  * Sec. 10. AS 42.45.045(l)(5) is amended to read:
30(5) "green [RENEWABLE] energy resources" means
31(A) wind, solar, geothermal, wasteheat recovery, hydrothermal,
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1wave, tidal, river in-stream, or hydropower;
2(B) low-emission nontoxic biomass based on solid or liquid
3organic fuels from wood, forest and field residues, or animal or fish products;
4(C) dedicated energy crops available on a renewable basis;
5[OR]
6(D) landfill gas and digester gas;
7(E) nuclear reactors;
8(F) natural gas extracted and processed in the state; or
9(G) any other energy resource that when used to generate
10energy releases
11(i)   emissions equivalent to or lower than energy
12generated from pipeline-quality natural gas; and
13(ii) less air pollution than energy generated, without
14the use of clean coal technology, from coal that is mined and
15processed in the state.
16  * Sec. 11. AS 42.45.045(l) is amended by adding a new paragraph to read:
17(6) "clean coal technology" means a method or system for deriving
18energy from coal that
19(A) captures at least 90 percent of carbon dioxide emissions
20through carbon capture utilization or storage; and
21(B)   reduces sulfur dioxide, nitrogen oxide, and particulate
22matter emissions to levels below current federal standards.
23  * Sec. 12. AS 42.45.085(d) is amended to read:
24(d) If the earnings of the fund for the previous closed fiscal year, as calculated
25under AS 42.45.080(c)(2), exceed the appropriation under (a) of this section for the
26current fiscal year, the legislature may appropriate 70 percent of the difference
27between the earnings of the fund for the previous closed fiscal year, as calculated
28under AS 42.45.080(c)(2), and the appropriation made under (a) of this section for the
29current fiscal year as follows:
30(1)    if the amount calculated under this subsection is less than
31$30,000,000, that amount to a community revenue sharing or community assistance
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1fund; or
2(2) if the amount calculated under this subsection is $30,000,000 or
3more,
4(A)     $30,000,000 to a community revenue sharing or
5community assistance fund; and
6(B) the remaining amount, not to exceed $25,000,000, to the
7green [RENEWABLE] energy grant fund established under AS 42.45.045, to
8the bulk fuel revolving loan fund established under AS 42.45.250, or for rural
9power system upgrades or to a combination of the funds or purposes listed in
10this subparagraph.
11  * Sec. 13. AS 44.83.080 is amended by adding a new subsection to read:
12(b)    The authority shall consider the state energy policy described in
13AS 44.99.115 in performing the duties assigned to the authority.
14  * Sec. 14. AS 44.99.115 is amended to read:
15Sec. 44.99.115. Declaration of state energy policy. The State of Alaska
16recognizes that the state's economic prosperity is dependent on available, reliable, and
17affordable residential, commercial, and industrial energy to supply the state's electric,
18heating, and transportation needs. The state also recognizes that worldwide supply and
19demand for fossil fuels and concerns about global climate change will affect the price
20of fossil fuels consumed by Alaskans and exported from the state to other markets. In
21establishing a state energy policy, the state further recognizes the immense diversity of
22the state's geography, cultures, and resource availability. Therefore, it is the policy of
23the state to
24(1) institute a comprehensive and coordinated approach to supporting
25energy efficiency and conservation by
26(A) encouraging statewide energy efficiency codes for new and
27renovated residential, commercial, and public buildings;
28(B) decreasing public building energy consumption through
29conservation measures and energy-efficient technologies; and
30(C)   initiating and supporting a program to educate state
31residents on the benefits of energy efficiency and conservation, including
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1dissemination of information on state and federal programs that reward energy
2efficiency;
3(2) encourage economic development by
4(A) promoting the development of renewable, green, or [AND]
5alternative energy resources, including geothermal, wind, solar, hydroelectric,
6hydrokinetic, tidal, and biomass energy, for use by Alaskans;
7(B) promoting the development, transport, and efficient use of
8nonrenewable, green, or [AND] alternative energy resources, including natural
9gas, coal, oil, gas hydrates, heavy oil, and nuclear energy, for use by Alaskans
10and for export;
11(C) working to identify and assist with development of the
12most cost-effective, long-term sources of energy for each community
13statewide;
14(D)   creating and maintaining a state fiscal regime and
15permitting and regulatory processes that encourage private sector development
16of the state's energy resources; and
17(E) promoting the efficiency of energy used for transportation;
18(3) support energy research, education, and workforce development by
19investing in
20(A) training and education programs that will help create jobs
21for Alaskans and that address energy conservation, efficiency, and availability,
22including programs that address workforce development and workforce
23transition; and
24(B) applied energy research and development of alternative and
25emerging technologies, including university programs, to achieve reductions in
26state energy costs and stimulate industry investment in the state;
27(4) coordinate governmental functions
28(A) by reviewing and streamlining regulatory processes and
29balancing the economic costs of review with the level of regulation necessary
30to protect the public interest;
31(B) by using one office or agency, as may be specified by law,
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1to serve as a clearinghouse in managing the state's energy-related functions to
2avoid fragmentation and duplication and to increase effectiveness; and
3(C) by actively collaborating with federal agencies to achieve
4the state's energy goals and to meet emissions, renewable, green, or [AND]
5alternative energy, and energy production targets.
6   * Sec. 15. AS 44.99.115 is amended by adding new subsections to read:
7(b) The State of Alaska recognizes the need to improve energy grid security in
8the state by minimizing the reliance on foreign nations and mainland United States
9sources for critical materials and fuel delivery. The state also recognizes that the Jones
10Act (P.L. 66-261) imposes significant restrictions on vessels that may transport energy
11commodities by water between United States' ports, including from mainland United
12States to the state. Therefore, to promote state energy grid security, it is the policy of
13the state to prioritize
14(1) local fuel sources that are primarily produced in the state, including
15natural gas from the North Slope and Cook Inlet, coal from the Interior region of the
16state, and nuclear materials processed or deployed by projects based in the state;
17(2) affordable energy sources that
18(A)   provide cost-effective means of heating, cooling, and
19generating electricity, with an average cost for each unit of energy output not
20exceeding rates for comparable sources over the past five years;
21(B)   have stable, predictable costs and consider life-cycle
22expenses including transportation, storage, and emissions control in the state's
23Arctic and rural conditions; and
24(C)   deliver substantial savings to homes, businesses, and
25communities compared to other sources;
26(3) reliable energy sources that
27(A) are readily available to meet the demands of residents at all
28times of day and during all seasons of the year with minimal interruptions
29during high-usage periods, including peak heating demands in subzero
30temperatures;
31(B)   include energy generated by hydrocarbons, which may
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1include natural gas, and clean coal technologies sourced and processed in the
2state; and
3(C) for power generation, have a minimum capacity factor of at
4least 50 percent, continuously dispatchable electricity output, the capability to
5ramp up or down electricity generation within one hour to stabilize the
6electrical grid, and the ability to complement and provide backup to renewable
7energy sources during periods of low availability, which may include periods
8when less energy is generated from wind or solar during winter months;
9(4) development of infrastructure necessary to deliver local, affordable,
10and reliable energy sources to residents, including in-state pipelines, liquefied natural
11gas terminals, coal-to-liquid facilities, and microgrids for remote communities.
12(c)   In this section, "green energy resource" has the meaning given in
13AS 42.45.045.
14  * Sec. 16. AS 42.45.045(g) and 42.45.045(l)(4) are repealed.
15  * Sec. 17. This Act takes effect immediately under AS 01.10.070(c).
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