Legislature(1993 - 1994)
02/11/1993 03:00 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE
STANDING COMMITTEE
February 11, 1993
3:00 p.m.
MEMBERS PRESENT
Rep. Bill Hudson, Chairman
Rep. Joe Green, Vice Chairman
Rep. Eldon Mulder
Rep. Brian Porter
Rep. Bill Williams
Rep. Jerry Mackie
MEMBERS ABSENT
Rep. Joe Sitton
COMMITTEE CALENDAR
*HB 101: "An Act relating to the adoption of the National
Electrical Code and the National Electrical Safety
Code."
MOVED FROM COMMITTEE
*HB 50: "An Act authorizing the Anchorage to Kenai
Peninsula and the Healy to Fairbanks power
transmission interties and approving the design
and construction costs of the interties; and
providing for an effective date."
HEARD AND HELD IN COMMITTEE
*HB 51: "An Act making a special appropriation for design
and construction of power transmission interties
between Anchorage and the Kenai Peninsula and
between Healy and Fairbanks; and providing for an
effective date."
HEARD AND HELD IN COMMITTEE
* First public hearing.
WITNESS REGISTER
REP. MIKE NAVARRE
Alaska State Legislature
State Capitol, Room 521
Juneau, Alaska 99801-1182
465-3779
Position Statement: Prime Sponsor of HB 50 and HB 51
DAN BLOOMER
Executive Staff Assistant
Chugach Electric Association
5601 Minnesota Drive
Anchorage, Alaska 99505
762-4595
Position Statement: Supported HB 50 and HB 51
DAVE BURLINGAME
Manager, Power Control
Chugach Electric Association
5601 Minnesota Drive
Anchorage, Alaska 99505
762-4789
Position Statement: Supported HB 50 and HB 51
CLAYTON HURLESS
General Manager
Copper Valley Electric Association
P.O. Box 45
Glennallen, Alaska 99588
822-3767
Position Statement: Supported HB 50 and HB 51
GARY CROUSE, President
Board of Directors
Matanuska Electric Association
19701 Shumagin Circle
Eagle River, Alaska 99577
694-5116
Position Statement: Supported HB 50 and HB 51
JIM KOHLER
Southeast Conference
124 W. 5th
Juneau, Alaska 99801
463-3445
Position Statement: Supported HB 50 and HB 51
BOB MARTIN, Chairman
Alaska Energy Authority
P.O. Box 210149
Auke Bay, Alaska 99821
789-3196
Position Statement: Supported HB 50 and HB 51
RON GARZINI
Executive Director
Alaska Energy Authority
P.O. Box 210149
Auke Bay, Alaska 99821
789-3196
Position Statement: Supported HB 50 and HB 51
PREVIOUS ACTION
BILL: HB 101
SHORT TITLE: NATIONAL ELECTRICAL CODE
BILL VERSION:
SPONSOR(S): LABOR & COMMERCE
TITLE: "An Act relating to the adoption of the National
Electrical Code and the National Electrical Safety Code."
JRN-DATE JRN-PG ACTION
01/29/93 178 (H) READ THE FIRST TIME/REFERRAL(S)
01/29/93 179 (H) LABOR & COMMERCE, FINANCE
02/11/93 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 50
SHORT TITLE: AUTHORIZING POWER TRANSMISSION INTERTIES
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) NAVARRE, Carney, Brice,
Sitton, Menard, Davies
TITLE: "An Act authorizing the Anchorage to Kenai Peninsula
and the Healy to Fairbanks power transmission interties and
approving the design and construction costs of the
interties; and providing for an effective date."
JRN-DATE JRN-PG ACTION
01/14/93 58 (H) READ THE FIRST TIME/REFERRAL(S)
01/14/93 59 (H) LABOR & COMMERCE, FINANCE
02/11/93 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 51
SHORT TITLE: APPROP: POWER TRANSMISSION INTERTIES
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) NAVARRE, Carney, Brice,
Sitton, Menard, Davies
TITLE: "An Act making a special appropriation for design and
construction of power transmission interties between
Anchorage and the Kenai Peninsula and between Healy and
Fairbanks; and providing for an effective date."
JRN-DATE JRN-PG ACTION
01/14/93 59 (H) READ THE FIRST TIME/REFERRAL(S)
01/14/93 59 (H) LABOR & COMMERCE, FINANCE
02/11/93 (H) L&C AT 03:00 PM CAPITOL 17
ACTION NARRATIVE
TAPE 93-10, SIDE A
Number 001
CHAIRMAN BILL HUDSON called the House Labor and Commerce
Committee to order at 3:07 p.m. on February 11, 1993.
Members present were Reps. Hudson, Mulder, Williams, Green
and Porter. Rep. Sitton was absent.
HB 101: NATIONAL ELECTRICAL CODE
REP. ELDON MULDER moved to pass HB 101 with individual
recommendations. No objections were heard, it was so
ordered.
HB 50: AUTHORIZING POWER TRANSMISSION INTERTIES
HB 51: APPROP: POWER TRANSMISSION INTERTIES
Number 101
REP. MIKE NAVARRE, PRIME SPONSOR OF HB 50 AND HB 51,
testified that he has long been a supporter of these bills.
He also outlined the information in the packets the members
had in front of them.
CHAIRMAN HUDSON asked Rep. Navarre to go over the costs of
the bill.
Number 180
REP. NAVARRE answered that HB 51 was the appropriation bill
for HB 50. He stated the appropriation would be
approximately $90 million from the Alaska Energy Authority
and the other $90 million would come from the Railbelt rate
payers. The total cost of the project would be
$180,000,000.
CHAIRMAN HUDSON asked for the figures on the Sutton to
Glennallen interties.
REP. NAVARRE replied that it was a total of $40,000,000.
He stated there is currently $117,000,000 in the Railbelt
Energy Fund.
Number 237
REP. BRIAN PORTER inquired if that figure included the
interest accrued.
REP. NAVARRE answered yes.
REP. PORTER asked if the Sutton to Glenallen intertie
funding would come from the Railbelt Energy Fund.
REP. NAVARRE answered in the positive. He said he
considered Glenallen to be part of the Railbelt. Rep.
Navarre further noted the funding for any Southeast projects
should come from the Four Dam Pool Fund.
Number 264
DAN BLOOMER, EXECUTIVE STAFF ASSISTANT, CHUGACH ELECTRIC,
testified in support of HB 50 and HB 51. He noted that the
construction of these interties has been a priority to the
electric utilities in the Railbelt since 1987 when the
Railbelt Energy Council first recommended the projects to
the legislature. Funding for these projects was first set
aside in 1986 when the legislature created the Railbelt
Energy Fund with the money left over from the Susitna
project.
MR. BLOOMER noted that the fund has been used over the years
for a variety of projects not related to the Railbelt or
energy.
Number 300
MR. BLOOMER stated the electric utilities have offered to
share in the cost of the intertie projects with the state.
MR. BLOOMER noted that, although there has been some
argument regarding the exact level of the benefits of these
projects by the experts, the Alaska Energy Authority has
concluded the benefits will exceed the cost of the project.
MR. BLOOMER listed some of the expected benefits of the
project:
1) increased reliability;
2) reduce the number and duration of transmission related
power outages;
3) more energy to be delivered to areas experiencing power
outages from unaffected areas;
4) transfer lowest cost energy available throughout the
Railbelt grid to the place where it is needed, which will
ultimately reduce the cost to the consumer;
5) utilities could share generation facilities and thus
reduce costs by not having to build costly facilities;
6) utilities could share reserve capacity; and
7) reduce lose of energy through transmission from one
point to another.
MR. BLOOMER concluded by saying Chugach believes the
projects to be solid; they have stood the test of economic
analysis and will yield direct benefits for 3/4 of the
state's population for the next 50 years.
Number 373
CHAIRMAN HUDSON asked Mr. Bloomer how long the project was
expected to take.
MR. BLOOMER answered two to three years.
Number 403
CHAIRMAN HUDSON asked how the utilities would fund their 50
percent of the project.
MR. BLOOMER responded that bonding would go through the
Alaska Energy Authority or Chugach would sell bonds on the
open market and share that cost with the other utilities.
CHAIRMAN HUDSON wondered if the Alaska Industrial
Development Authority (AIDA) would play into the funding and
if anyone from AIDA was present at the meeting. No response
was heard from the audience.
Number 414
REP. GREEN stated that this project seemed to have a lot of
support and questioned why it had been delayed. He asked,
What would happen if this legislature did not pass it, and
is there any jeopardy with the funds if they are not used in
the near future?
MR. BLOOMER responded that eventually if this legislation is
not passed the utilities will implement the project and the
rate payers will have to pay double the amount. He further
stated that the utilities are all nonprofit cooperatives or
municipalities so there is no profit motive.
(Rep. Mackie arrived at 3:35 p.m.)
REP. NAVARRE added that at one time the fund was tapped for
a number of non-energy related projects, which was the real
danger of not using the money now for its stated use.
REP. MACKIE asked if the sponsor would entertain a friendly
amendment to include the Southeast intertie projects.
Number 458
DAVE BURLINGAME, MANAGER OF POWER CONTROL FOR CHUGACH
ELECTRIC, testified in support of HB 50 and HB 51. He
stated that in many instances utilities are forced to
maintain costly generation of power, not for load purposes,
but as a hedge against outages. With the interties in
place, the need for the above would go down and therefore
the costs would also.
CHAIRMAN HUDSON asked what was the capacity of the Bradley
Lake project and what was the consumption level on the
Kenai.
MR. BURLINGAME answered that the peaking capacity of Bradley
Lake was 120 megawatts and the consumption level of the
Kenai was 84 megawatts.
Number 570
REP. GREEN asked if this intertie would put the Soldotna
generation unit on a standby or emergency position.
MR. BURLINGAME answered that all the plants would be used to
offset generation when needed, as opposed to being
maintained just for reliability only.
CHAIRMAN HUDSON asked that the record show Rep. Olberg
joined the committee.
Number 590
CLAYTON HURLESS, GENERAL MANAGER OF THE COPPER VALLEY
ELECTRIC ASSOCIATION, testified on behalf of HB 50 and HB
51. Mr. Hurless stated that his concern over the years has
been the extremely high rates the consumer pays. The
consumers in his area pay some of the highest unsubsidized
rates in the world.
MR. HURLESS noted that, as a result of the high rates,
economic development opportunities have been restrained.
TAPE 93-10, SIDE B
Number 000
CHAIRMAN HUDSON suggested that the committee would be aided
by a schematic showing where the interties would be
physically located.
Number 100
GARY CROUSE, PRESIDENT OF THE BOARD OF DIRECTORS FOR THE
MATANUSKA ELECTRIC ASSOCIATION, echoed the comments already
on record.
Number 219
JIM KOHLER, REPRESENTING THE SOUTHEAST CONFERENCE, supported
interties and further noted that Southeast was in urgent
need of the same. Mr. Kohler stated that the two things to
have in order to develop and sustain economic development
were transportation and power.
Number 290
CHAIRMAN HUDSON asked Mr. Kohler for more information from
the Southeast Conference.
Number 298
BOB MARTIN, GENERAL MANAGER OF TLINGIT HAIDA REGIONAL
ELECTRICAL AUTHORITY AND CHAIRMAN OF THE ALASKA ENERGY
AUTHORITY, testified in support of HB 50 and HB 51. Mr.
Martin stated that the National Energy Liability Council
evaluated the current Railbelt system and found it to be
inadequate, and with the proposed interties, to be marginal
at best.
MR. MARTIN reiterated many of the comments previously given.
RON GARZINI, EXECUTIVE DIRECTOR OF THE ALASKA ENERGY
AUTHORITY (AEA), asked the committee to take a look at the
testimony of the commissioner of Commerce. Mr. Garzini
stated he believed the concept of a low-interest loan with
long-term payback would work well to fund the interties.
The AEA was recommending that the legislature authorize the
northern and southern interties.
MR. GARZINI stated that the only difference between the
AEA's proposal and the one before the committee was that
there would be a $90,000,000 zero-interest loan to be paid
back over 50 years. This is the difference between a direct
grant and a loan with favorable terms. The money paid back
then could be used to fund other projects. He stated the
AEA also recommended that funds be set aside for the
intertie between Sutton and Glennallen.
MR. GARZINI informed the committee that the AEA was working
with the Southeast Conference for the purpose of picking the
most beneficial project, and they would like to reserve
$40,000,000 for a zero-interest loan.
Number 530
CHAIRMAN HUDSON inquired as to when the administration's
energy bill would be available for review by the committee.
MR. GARZINI replied that it was his understanding it was the
highest priority in the Governor's office and should be out
early next week.
Number 561
REP. PORTER asked if it was the position of the
administration that they were not supportive of HB 50 and
HB 51.
MR. GARZINI directed the committee to the commissioner of
Commerce's statement, which in effect said that they
supported the interties and the funding, but the
administration wanted to see a broader energy program.
CHAIRMAN HUDSON attempted to clarify the question by stating
that in his opinion the committee was looking for any and
all options laid before them that would accomplish the two
interties.
TAPE 93-11, SIDE A
Number 010
CHAIRMAN HUDSON announced that he would hold the bills in
committee and adjourned the meeting at 4:44 p.m.
| Document Name | Date/Time | Subjects |
|---|