2000-04-12                     House Journal                      Page 3078
HB 446                                                                       
HOUSE BILL NO. 446 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
"An Act establishing and relating to the power cost equalization              
endowment fund; relating to the power cost equalization and rural              
electric capitalization fund; authorizing and relating to the sale of          
the four dam pool hydroelectric project; establishing and relating             
to joint action agencies created to purchase power projects; and               
providing for an effective date."                                              
                                                                               
was read the first time and referred to the Finance Committee.                 
                                                                               
The following fiscal note applies:                                             
                                                                               
Fiscal note, Dept. of Community & Economic Development, 4/12/00                
                                                                               
The Governor's transmittal letter dated April 11, 2000, appears below:         
                                                                               
"Dear Speaker Porter:                                                          
                                                                               
This bill I am introducing today implements the terms of a                     
Memorandum of Understanding  (MOU) between the Alaska Energy                   
Authority (AEA) and several Alaska communities and utilities served            
by the Four Dam Pool projects for the sale of those hydroelectric              
facilities.  This sale represents years of hard work by AEA and the            
local utilities and meets the three principles essential to a successful       
agreement:                                                                     

2000-04-12                     House Journal                      Page 3079
HB 446                                                                       
1)  The sale must return fair value to the state for its assets and          
meet sound business practices as judged by the AEA;                            
2)  The sale must benefit Alaska communities and their ratepayers            
through local control and economic development                                 
opportunities;                                                                 
3)  Proceeds from the sale must be used to provide long-term                 
funding of the Power Cost Equalization (PCE) program.                          
                                                                               
This bill authorizes the sale of the Four Dam Pool to the purchasing           
utilities pursuant to the MOU.  The Alaska Industrial Development &            
Export Authority (AIDEA) is authorized to provide financing for the            
sale, not to exceed $110 million.  It also authorizes a "joint action          
agency" to enable the new utility pool to operate and issue bonds.             
                                                                               
To receive the sale proceeds for long-term PCE funding, an                     
endowment fund is established under the management of the                      
Department of Revenue.  Seven percent of endowment earnings will               
be used annually to fund the PCE program.  Other funds, such as the            
securing of federal funds, may also be placed in the endowment.                
                                                                               
Any shortfall in funding the $15.7 million PCE program from                    
endowment earnings would be met through a portion of the AIDEA                 
annual dividend, not to exceed $9 million annually.                            
                                                                               
Although time in this session may be short, the opportunity to                 
culminate years of negotiations, to provide financial benefit to the state     
and local communities, and to create a mechanism for long-term                 
funding of PCE cannot be lost.  I urge your prompt consideration of            
this landmark piece of legislation.                                            
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"