03/09/2010 03:00 PM House ENERGY

                   HB 305-OMNIBUS ENERGY BILL                                                                               
                                                                                                                              
                                                                                                                                
3:14:16 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  MILLETT  announced that  the  first  order of  business                                                               
would  be  HOUSE  BILL  NO.  305, "An  Act  relating  to  energy;                                                               
relating  to  the  board  of   directors  of  the  Alaska  Energy                                                               
Authority;  amending the  size and  composition of  the board  of                                                               
directors of the Alaska Energy  Authority by removing the members                                                               
of  the Alaska  Industrial  Development and  Export Authority  as                                                               
directors  of  the  Alaska Energy  Authority  and  providing  for                                                               
designation or appointment of other  members; amending the quorum                                                               
requirement  for the  board  of directors  of  the Alaska  Energy                                                               
Authority; and relating to nuclear waste material."                                                                             
                                                                                                                                
3:15:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON  moved to adopt  the Committee Substitute  for HB
,  version  E,  as  the  working document.    There  being  no                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
3:15:45 PM                                                                                                                    
                                                                                                                                
ADAM  BERG,  Staff,  Representative Bryce  Edgmon,  Alaska  State                                                               
Legislature,  introduced  the  committee substitute  to  HB  305,                                                               
version E.   Mr. Berg said the  first major change to  HB 305 was                                                               
to remove  sections referring to  the energy use  index database,                                                               
audits of public facilities, and  any reports or tasks associated                                                               
with  the aforementioned.    Also deleted  was  the section  that                                                               
required agencies  requesting a  capital project costing  over $1                                                               
million  to  attach energy  audits,  cost  savings analyses,  and                                                               
proposals  for energy  efficiency  improvements.   Regarding  the                                                               
Department of Education and Early  Development (EDD) and schools,                                                               
specific  codes, such  as the  International Energy  Conservation                                                               
Code (IECC), were deleted, and  new language leaves the selection                                                               
of  codes up  to the  department  of EDD.   Mr.  Berg opined  the                                                               
original  intent  of  those  sections  was  preserved  by  adding                                                               
operations  and  maintenance  cost  report  language  that  would                                                               
enable  school  districts  to  take   future  energy  costs  into                                                               
consideration.   He  turned to  the subject  of tax  credits, and                                                               
said changes in  that section of the bill mirror  the language in                                                               
SB  220, version  K.    In addition,  changes  were  made to  the                                                               
technical  language  in  the  nuclear power  section  of  HB  305                                                               
wherein  language was  clarified,  but the  intent is  unchanged.                                                               
Also, the name of the  alternative energy revolving loan fund was                                                               
changed  to  apply  strictly to  commercial  buildings,  and  the                                                               
maximum loan was  increased from $30,000 to $50,000.   He pointed                                                               
out that technical language changes  to the renewable energy fund                                                               
section  do not  affect the  intent  of that  section.   Finally,                                                               
there were  no changes  to the department  of energy  section, or                                                               
the emerging technology  fund.  Mr. Berg  advised that amendments                                                               
to the bill will be offered  to the committee for voting when the                                                               
bill is  again before the  committee.  Items  under consideration                                                               
for amendments  include issues related to  compressed natural gas                                                               
for  state  vehicles,  the  Low  Income  Home  Energy  Assistance                                                               
Program (LIHEAP), a  wood stove program, the  bulk fuel revolving                                                               
loan fund,  the bridge loan program,  fuel co-operative language,                                                               
and an energy efficiency public relations campaign.                                                                             
                                                                                                                                
3:20:02 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  MILLETT asked  committee members  to submit  amendments                                                               
prior to the 3/16/10 meeting.                                                                                                   
                                                                                                                                
3:20:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  appreciated the work of  the committee and                                                               
staff.   He  expressed his  concern regarding  the creation  of a                                                               
department  of  energy.   Representative  Ramras  asked  for  the                                                               
theory  behind the  department of  energy, and  for its  possible                                                               
effect  on  all   of  the  present  state   energy  advisors  and                                                               
directors.   The  availability  of a  fiscal  note concluded  his                                                               
interrogative.                                                                                                                  
                                                                                                                                
3:22:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR MILLETT  asked a representative  of the  U.S. Department                                                               
of Energy (DOE) in Washington,  D.C., whether Alaska is unique in                                                               
having  DOE  funds  disbursed  to   the  Alaska  Housing  Finance                                                               
Corporation (AHFC).  She was told  "we are the only state that is                                                               
so discombobulated that  we have a housing  corporation in charge                                                               
of our  energy program money."   She opined that  Gene Therriault                                                               
is in the cabinet level  position for energy, and Steve Haagenson                                                               
"has direct  contact with  the third  floor;" however,  without a                                                               
formal  directive,  who  manages  what  program  is  unknown  and                                                               
frustrating.   Although  there is  a fiscal  note attached  to HB
, Co-Chair Millett questioned  its accuracy.  She acknowledged                                                               
that there  is not a lot  of support from the  administration for                                                               
the  department of  energy,  but  stressed that  the  idea is  to                                                               
streamline  government,  and to  have  a  one-stop shop  for  all                                                               
energy issues.  She observed  that the new administration has not                                                               
warmed to  the possibility that  there is "a fundamental  flaw in                                                               
our administration when it comes to energy."                                                                                    
                                                                                                                                
3:25:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  agreed that  representatives of  the DOE                                                               
do not know with whom to  talk in Alaska; in fact, his impression                                                               
is that there is no central point for contact.                                                                                  
                                                                                                                                
3:27:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS   suggested  the  committee   should  hear                                                               
testimony  from Mr.  Therriault,  as he  is the  administration's                                                               
senior  energy policy  person.    He stated  the  benefit to  the                                                               
committee   from   hearing    Mr.   Therriault   articulate   the                                                               
administration's position on the department of energy.                                                                          
                                                                                                                                
3:29:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON  agreed with Co-Chair Millett  and Representative                                                               
Ramras.   He  also noted  the absence  of Mr.  Therriault at  the                                                               
Alaska  Federation of  Natives  (AFN)  convention, although  many                                                               
other  representatives from  the administration  were there.   He                                                               
pointed out  that Mr. Therriault  could explain to  the committee                                                               
how the  administration plans to  consolidate, and align,  all of                                                               
the various elements of energy in a master plan.                                                                                
                                                                                                                                
3:29:55 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  MILLETT  observed  that  Gene  Therriault's  title  is:                                                               
Senior  Policy Advisor  for In-state  Energy.   She said  the co-                                                               
chairs  will extend  an  invitation  to him,  and  to the  Alaska                                                               
Energy Authority (AEA), to testify on 3/16/10.                                                                                  
                                                                                                                                
3:30:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN concurred.                                                                                              
                                                                                                                                
CO-CHAIR EDGMON concurred.                                                                                                      
                                                                                                                                
3:30:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN agreed.                                                                                                 
                                                                                                                                
3:31:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  encouraged the  committee to  request that                                                               
Mr.  Therriault present  an organization  chart,  and that  Jerry                                                               
Gallagher,  Legislative and  Communications  Director, present  a                                                               
fiscal note  illustrating the costs  of the  fractured department                                                               
of   energy  that   already  exists.     He   concluded  that   a                                                               
reorganization  and  consolidation  of   the  existing  de  facto                                                               
department of energy  is the intent of the committee,  and of the                                                               
portion of  HB 305  that relates  to the  establishment of  a new                                                               
department of energy.                                                                                                           
                                                                                                                                
3:33:40 PM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON  recalled hearing from constituents  and entities                                                               
that  there  is  no  coordination  or  centralization  of  energy                                                               
offices  within  the  state; however,  representatives  of  state                                                               
agencies maintain that there is no  problem.  The messages are on                                                               
two different tracks,  and he supported asking  Mr. Therriault to                                                               
provide the answer to why consolidation is not needed.                                                                          
                                                                                                                                
3:34:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   RAMRAS  observed   that  the   argument  against                                                               
establishing a new  department of energy is  the budget increment                                                               
it creates.  He expressed his interest in seeing a "de-                                                                         
constructed  organization chart"  with the  costs of  the various                                                               
energy  functions  pulled  out   of  different  departments,  and                                                               
consolidated.    If  the   resulting  consolidation  is  revenue-                                                               
neutral, it  would demonstrate support  for reorganization.   For                                                               
those who  are resistant to  growing government, it  is important                                                               
to see  that the increment for  the creation of a  new department                                                               
is   equal   to   the   decrements   in   existing   departments.                                                               
Representative Ramras cautioned that  "fiscal notes [can] reflect                                                               
that degree of resistance."                                                                                                     
                                                                                                                                
3:37:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR MILLETT  assured the  committee that  the creation  of a                                                               
new  department  of  energy  is   an  opportunity  to  streamline                                                               
government, not to grow government.   She said she will work with                                                               
the administration in order to  have information prepared for the                                                               
3/16/10 meeting.                                                                                                                
                                                                                                                                
[Although not formally stated, HB 305 was held.]