Legislature(2011 - 2012)BARNES 124
02/21/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB312 | |
| HCR10 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 312 | TELECONFERENCED | |
| + | HCR 10 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 312-NATURAL GAS CONVERSION PROGRAM/FUND
8:04:53 AM
CHAIR MUNOZ announced that the first order of business would be
HOUSE BILL NO. 312, "An Act creating a low-interest loan program
for homeowners who convert their homes to natural gas-fired
heating; and creating the natural gas home heating conversion
loan fund."
8:05:28 AM
REPRESENTATIVE AUSTERMAN moved that the committee adopt
Amendment 1, labeled 27-LS1301\A.5, Nauman, 2/20/12, which read:
Page 1, line 2:
Following "gas-fired":
Insert ", propane-fired, biomass, or electric"
Following "the":
Delete "natural gas"
Page 1, line 6:
Delete "Natural Gas"
Page 1, line 7:
Delete "Natural gas home"
Insert "Home"
Page 1, line 10:
Delete "wood, or other non-natural gas-fired"
Insert "or wood"
Page 1, line 11:
Delete "heating device"
Insert ", propane-fired, biomass, or electric
heating device or district heat"
Page 2, line 4:
Delete "heating device"
Insert ", propane-fired, biomass, or electric
heating device or district heat"
Page 2, line 6:
Delete "heating device"
Insert ", propane-fired, biomass, or electric
heating device or district heat"
Page 2, line 16:
Delete "natural gas"
Insert "the energy source fueling or powering the
new heating device"
Page 2, line 18:
Delete "Natural gas home"
Insert "Home"
Page 2, line 19:
Delete "natural gas"
Page 2, line 20:
Delete "natural gas"
Page 2, line 27:
Delete "a natural gas-fired heating device"
Insert "the new natural gas-fired, propane-fired,
biomass, or electric heating device or district heat"
Page 2, line 31:
Delete "natural gas"
Page 3, line 2:
Delete "heating device"
Insert ", propane-fired, biomass, or electric
heating device or district heat"
8:05:57 AM
REPRESENTATIVE GARDNER objected for the purposes of discussion.
8:06:04 AM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, speaking
as the sponsor of HB 312, explained that in discussions with the
Alaska Housing Finance Corporation (AHFC) she understood that it
wanted the legislation to be more specific in regard to the
sources of energy. Being more specific should allow for the
regulations to be written in an easier fashion and the program
to come online in a quicker fashion. In response to Chair
Munoz, Representative T. Wilson confirmed that this loan program
would be for homes that convert from diesel generation to gas-
fired, propane-fired, biomass, an electric heating device, or
district heat. She clarified that Fairbanks has district heat,
which is heat [generated] by hot water. If a homeowner changes
from diesel to district heat, the result is zero emissions. She
stated that district heat is the cleanest energy available, but
it's only available to those residents within the city limits of
Fairbanks.
8:07:37 AM
REPRESENTATIVE SADDLER requested further explanation of district
heat, particularly in terms of how it is generated and
distributed.
REPRESENTATIVE GARDNER surmised that it's called district heat
because a massive boiler is being used to heat the water in a
central location and piped to homes.
8:08:30 AM
BRANDON BREFCZYNSKI, Staff, Representative T. Wilson, Alaska
State Legislature, explained that district heat is a byproduct
of the coal power plant and the hot water is piped to individual
residences. The individual residences must have a heat
exchanger, which converts the hot water into heat and pumps it
through baseboard units to provide heat in the home. In
further response to Representative Saddler, Mr. Brefczynski
confirmed that it's centrally generated and distributed.
8:09:21 AM
CHAIR MUNOZ inquired as to the anticipated beginning fund amount
if HB 312 becomes law.
8:09:40 AM
STACY SCHUBERT, Director, Governmental Affairs & Public
Relations, Alaska Housing Finance Corporation (AHFC), Department
of Revenue, answered that at this point AHFC doesn't have a good
feel for the amount of participation there will be in the loan
program. Therefore, AHFC isn't comfortable making an estimate
of the expenditure at this time.
8:10:17 AM
REPRESENTATIVE AUSTERMAN inquired as to why district heat is
noted only once in the legislation.
REPRESENTATIVE T. WILSON pointed out that the legislation refers
to "district heat" on page 2, lines 5 and 23. In further
response to Representative Austerman, Representative T. Wilson
noted her agreement that the reference to "district heat" should
be in the title as well.
8:11:47 AM
REPRESENTATIVE AUSTERMAN moved that the committee adopt an
amendment to Amendment 1 such that the language being inserted
by Amendment 1 on page 1, line 2, includes the following
language: ", district heat". He noted that the drafter should
work it in correctly. There being no objection, the amendment
to Amendment 1 was adopted.
8:12:23 AM
REPRESENTATIVE DICK questioned whether the use of the term
"biomass" is creating confusion because wood is biomass.
REPRESENTATIVE T. WILSON clarified that biomass encompasses more
than just wood heat.
REPRESENTATIVE DICK expressed the need to ensure that an
individual can't merely trade out one wood stove for another.
REPRESENTATIVE T. WILSON indicated that can't occur as it will
be specified in the AHFC regulations that specify that the
conversion would have to be a unit that's more economical and
efficient. In fact, by the way the Environmental Protection
Agency (EPA) does its certification one is almost required to
convert to something more economical.
8:14:03 AM
REPRESENTATIVE SADDLER asked if the intent of HB 312 is
primarily cost savings for consumers or to address air quality
issues.
REPRESENTATIVE T. WILSON opined that Amendment 1 makes the
program more of a statewide program, although the program
originally targeted Fairbanks to address its air quality issues.
8:15:00 AM
REPRESENTATIVE SADDLER returned to the question of how wood
isn't biomass, and asked whether a homeowner could convert from
a wood stove to a wood pellet stove.
REPRESENTATIVE T. WILSON emphasized that the main goal of the
program is to convert from oil. She reiterated that biomass
encompasses more than just wood as it now includes wood chips,
wood pellets, and compressed logs. She opined that the
definition of biomass is continually changing.
8:16:42 AM
REPRESENTATIVE SADDLER asked if the sponsor considered having
the legislation target [conversions] from wood and oil and leave
it to the consumer to determine what kind of alternative energy
is utilized. He asked why the sponsor specified [conversions]
from oil to specific [alternative energies].
REPRESENTATIVE T. WILSON mentioned that she had an amendment to
open the program to everything, but she was concerned that would
cause other problems. With regard to the lack of reference to
solar energy, she pointed out that it isn't affordable to
convert to for residential areas, which this legislation
targets. If other alternative energy not specified in the
legislation becomes affordable over time, the statute could be
amended to address it at that time.
REPRESENTATIVE SADDLER encouraged the sponsor to place some
sideboards on the definition of biomass.
8:18:45 AM
JOHN ANDERSON, Weatherization Officer, Alaska Housing Finance
Corporation, Department of Revenue, explained that biomass is
simply a larger outdoor unit that usually serves larger
buildings, such as a school. He clarified, "You wouldn't do a
swap of a biomass for a residential unit."
8:19:12 AM
REPRESENTATIVE SADDLER asked if the sponsor has any evidence
that there would be any net increase in air quality by moving
from oil or wood-fired to electric [heating].
REPRESENTATIVE T. WILSON said that Fairbanks residents wouldn't
change to electric any time soon because of the high cost of
electricity in Fairbanks. Electricity was added to the
legislation in order to encompass those areas in the state where
electricity is more affordable.
CHAIR MUNOZ acknowledged that biomass technology is now
typically used for larger commercial buildings, but pointed out
that the Southeast Integrated Resource Plan energy adviser
discussed the opportunity to use biomass in home heating in
Southeast Alaska. Therefore, the sponsor was asked to consider
incorporating that into the legislation as it was broadened to
be applicable statewide.
8:20:37 AM
REPRESENTATIVE CISSNA, drawing from several conferences she's
attended, related that biomass was discussed in terms of peat
and other products that don't have to be from a tree. Although
she said she was happy to see the amendments to HB 312, she had
the impression the discussion centers on switching from one
[energy source] to another. She opined that it would be nice
for a homeowner to have a burner that can be converted from one
kind of fuel to another while still using the same equipment.
REPRESENTATIVE T. WILSON said that would be for the homeowner to
decide. The intent of HB 312 is to acknowledge that oil is one
of the dirtiest ways to heat a home and the cost of it continues
to increase. The desire, she opined, is to encourage residents
to consider alternative energy sources for air quality reasons
as well as to achieve affordability for the homeowner. She
highlighted that the rater is involved in order to help the
homeowner make decisions based on what would work best in their
particular case.
8:23:52 AM
REPRESENTATIVE GARDNER asked if the proposed program would be
able to use the existing home energy raters, or would there have
to be a new training program for raters.
MR. ANDERSON answered that he would anticipate using the same
rater pool and AkWarm energy rater software to run various
scenarios on the energy source in the community and recommend
the most efficient unit. He characterized this proposed program
as a conversion program.
8:24:45 AM
KATIE KOESTER, Community & Economic Development Coordinator,
City of Homer, related support for HB 312. The City of Homer is
expecting to bring natural gas to Homer as it's located only 14
miles away. While conversion to natural gas would generate
large savings to residents, businesses, and public buildings,
there will be significant upfront costs for those in the Homer
area. The upfront costs would include the tariff to help pay
for the transmission line, distribution system within city
limits that is estimated to be over $20 million, and the hookup
fee from the main line to the residence/business that is about
$1,000, and the cost of converting home appliances and heating
to natural gas. She opined that this proposed low-interest loan
program would help individuals to be able to access the benefits
of natural gas, which could generate savings in the long term.
8:26:27 AM
REPRESENTATIVE SADDLER asked whether having this type of fund in
place is premature since there is no secured supply for natural
gas in Fairbanks.
REPRESENTATIVE T. WILSON characterized the program as another
tool that's available. She said she couldn't imagine anyone
putting out the significant cost for natural gas at this point
when the discussion has been that it won't be available for 30
years. Therefore, the legislation includes other options that
are currently available as well as natural gas that is already
available in certain parts of the state. She noted that there
are still discussions about trucking, which would make it to the
consumer sooner. In further response to Representative Saddler,
she clarified that it's a one-time loan per customer.
8:27:52 AM
REPRESENTATIVE GARDNER recalled that the one-time loan amount is
$7,500, and asked if that amount would cover the conversion
cost.
REPRESENTATIVE T. WILSON responded that the $7,500 would cover
the actual furnace/appliance, although there may be additional
costs to run the line to the residence.
8:28:30 AM
REPRESENTATIVE FOSTER posed a scenario in which a homeowner
utilizes the loan program for a conversion and then sells the
home one year after the conversion. He asked if the homeowner
will have to pay back the loan right away. Taking the scenario
further, he asked if a homeowner who does a conversion, sells
the home with the conversion, can then purchase another home and
perform another conversion on a different house if the original
loan was paid off.
REPRESENTATIVE T. WILSON acknowledged that would be addressed in
regulation. However, she related her desire for it to be a one-
time loan to the individual, just as is the case for other AHFC
loan programs. Representative T. Wilson related her
understanding that a homeowner would have to specify in the
contract to sell the house that he/she has paid off the loan.
8:29:41 AM
REPRESENTATIVE GARDNER withdrew her objection to Amendment 1.
8:29:55 AM
There being no further objection, Amendment 1, as amended, was
adopted.
8:30:10 AM
REPRESENTATIVE AUSTERMAN moved to report HB 312, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes.
REPRESENTATIVE GARDNER objected for discussion. She explained
that although she is anxious about moving legislation such as
this with an indeterminate fiscal note that could become a large
fiscal note, she understands the urgency of the situation in
Fairbanks because of the air quality issues and in other
communities because of the price of energy. Representative
Gardner then withdrew her objection.
8:31:42 AM
There being no further objection, CSHB 312(CRA) was reported
from the House Community and Regional Affairs Standing
Committee.
8:32:02 AM
The committee took an at-ease from 8:32 a.m. to 8:34 a.m.