Legislature(2007 - 2008)BARNES 124
03/20/2007 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB202 | |
| HB152 | |
| HB202 | |
| HB152 | |
| HB202 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 202 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 152 | TELECONFERENCED | |
HB 152-ESTABLISHING A RENEWABLE ENERGY FUND 8:55:06 AM CO-CHAIR FAIRCLOUGH announced that the final order of business would be HOUSE BILL NO. 152, "An Act establishing a renewable energy fund and describing its uses and purposes." The committee took an at-ease from 8:55 a.m. to 8:58 a.m. 8:58:50 AM REPRESENTATIVE NEUMAN moved to adopt CSHB 152, Version 25- LS0413\V, Kane, 3/20/07, as the working document. There being no objection, Version V was before the committee. 8:59:27 AM CHARISSE MILLET, Staff to Representative John Harris, Alaska State Legislature, explained that within Version V Section 2, which establishes a renewable energy project fund, was added. The aforementioned funds would be under the umbrella of the Power Project Fund (PPF) within the Alaska Energy Authority. Section 3 takes the loan component out of the fund, and thus this section would be used as the grant money for the renewable energy fund. Version V also includes some other technical changes such as the elimination of the requirement for there to be a minimum of 50 kilowatts in order to allow other user groups to use the renewable energy fund and the account. Version V also eliminates the reference to "electric grids" and replaces it with "transmission and distribution lines" in order that those projects that are connectors to the renewable energy projects will have some opportunity to have their portion of the project funded through these accounts. One of the main changes embodied in Version V is that it provides for 5 percent of market value (POMV) of the fund in order to have a self- sustaining fund. Therefore, the loan component is a revolving loan fund and the grant fund is a POMV fund. Section 3(k) is merely boiler-plate language regarding the components of the board. Under Version V, the state government board seat would be held by the Denali Commission as it's an advocate for rural renewable energy projects. Furthermore, the sponsor felt that the Denali Commission would provide good input with regard to the focus of the renewable energy fund and may provide some matching federal funds. 9:02:57 AM REPRESENTATIVE CISSNA recalled U.S. Senator Ted Stevens address to the legislature in which he focused on the need for state funding to the Denali Commission. She said that although she is a proponent of the Denali Commission having a long life, there's a question as [to its funding]. Therefore, she inquired as to what the legislature should do when something isn't embedded in the state structure. MS. MILLET related her understanding that the Denali Commission was included because it doesn't seem that it would be going away this year or next year. Furthermore, the hope is that the Denali Commission will continue. However, Ms. Millet pointed out that the Denali Commission is merely part of an advisory board established under HB 152 and thus the composition of the board could be amended to add state government as a member if the Denali Commission no longer existed. 9:04:47 AM REPRESENTATIVE JOHN HARRIS, Alaska State Legislature, sponsor, highlighted that the Denali Commission has been involved in many rural projects, including energy projects. A good portion of what HB 152 attempts to address is rural energy, especially attempting to reduce costs to the rural areas of the state, he said. Although this legislation isn't exclusively for rural Alaska, it is predominantly for rural areas where it's more difficult to generate cheap energy. The Denali Commission actually petitioned the sponsor to be an active part in this process [proposed by HB 152]. 9:06:01 AM REPRESENTATIVE NEUMAN directed attention to page 3, line 6, and inquired as to whether the funds for this fund would come from the permanent fund dividend or the Railbelt Energy Fund. REPRESENTATIVE HARRIS said that he didn't know from where the funds for this proposal will come. The first step is to authorize the program in statute. He offered to work with the Finance Committees and the administration to determine funding sources. He mentioned that the funds could come from a variety of sources, including the 2007 surplus. Representative Harris said that although this program probably won't be funded when it goes through the legislative process, the hope is that at the conclusion of the budget process there will be some seed money to generate revenue. He noted that this proposal is similar to the power cost equalization (PCE) fund in which a set amount of funds are placed in a fund from which the interest/earnings are used to facilitate and pay for projects. He also likened the proposal embodied in HB 152 to the former science and technology fund. In further response to Representative Neuman, Representative Harris suggested that perhaps a portion of the 2007 surplus will be utilized, but at this point there's no set amount. He emphasized the need to generate a decent amount of revenue from the earnings of whatever funds are utilized. Again, he related that there could be a variety of funding sources and it would depend upon what's politically palatable. 9:10:03 AM REPRESENTATIVE SALMON referred to Section 3(f)(2) of HB 152, which specifies that in order for a renewable energy project to qualify for a grant or loan, the project must "generate more than 50 kilowatts of electricity and distribute the electricity to more than 20 end users". He then inquired as to what [language] replaces that in Version V. MS. MILLET said that the aforementioned limiting language was deleted. She noted that AEA would be able to relate the problems associated with limiting it to 50 kilowatts and 20 end users. REPRESENTATIVE HARRIS interjected that he didn't want to limit [a renewable energy project] or what qualifies. 9:11:52 AM REPRESENTATIVE SALMON recalled that HB 152 specified that the Alaska Native organizations would qualify as a housing authority. REPRESENTATIVE HARRIS said he believes that's correct. MS. MILLET confirmed that [Alaska Native organizations] remain qualifying entities in [Version V]. 9:12:23 AM CO-CHAIR FAIRCLOUGH related that committee members have expressed concern that the committee just received Version V and committee members wish to hold HB 152 until Thursday in order to provide an opportunity to review Version V. Additionally, numerous individuals have signed up to testify on HB 152, although the public testimony has been closed. Therefore, she announced that the committee has decided to reopen the public hearing. Co-Chair Fairclough, drawing upon her experience of attending the Energy Council, recalled that there was great concern with regard to the efficient use of energy. Therefore, she asked if the sponsor would consider, on the criteria for qualification on the project, a criteria that would include efficient use of energy. MS. MILLET said that the efficiency language wasn't included in the legislation, although the legislation does include language that establishes criteria. She noted that AEA has been very effective in not doing a project unless it's economical and makes good sense. Therefore, developing the criteria has been left to the regulatory process. REPRESENTATIVE HARRIS said that there are the following two thoughts: the cost of generating power; the facility/procedure to make it cost-efficient for the end user. Representative Harris acknowledged that although there is the desire to have less expensive power, people need to use common sense and build correctly. He opined that one certainly wouldn't want to dump electricity into a system that doesn't call for conservation. Representative Harris then related that he doesn't have a problem with the legislation being held over. 9:16:17 AM REPRESENTATIVE CISSNA characterized HB 152 as important legislation. She noted that she has been very interested in this legislation, and therefore she asked if the sponsor would work with her on potential amendments. REPRESENTATIVE HARRIS replied yes. He then credited Representative Thomas and his staff who sponsored other legislation that has been incorporated into HB 152. Representative Thomas and his staff did a considerable amount of work to get the legislation to its current point, he mentioned. 9:17:50 AM REPRESENTATIVE NEUMAN related that the City of Galena is reviewing partnering with Japan on a small nuclear plant in rural Alaska. He asked if such a program would qualify as an alternative energy program under this legislation. REPRESENTATIVE HARRIS replied yes. He recalled that a few years ago the legislature appropriated $500,000 to facilitate the economics and engineering for that particular project. If the project can be done economically, it would be helpful to the rural parts of the state as nuclear energy is a very inexpensive power source that can be moved into villages and other areas. However, the difficulty with nuclear energy is waste and how to deal with it over time. Obviously, the amount of funds available to do these things won't be large initially, although it will take large capital infusions to establish wind generation power and other alternative energy projects. REPRESENTATIVE NEUMAN referred to page 3, line 6, and related his understanding that the language infers that the state is seeking help from private industry. REPRESENTATIVE HARRIS replied yes, adding that help [would be welcome] from anywhere. He noted that the utility companies within the state are trying to partner with state agencies. He mentioned the rural intertie and the DC power cable prototype. 9:20:50 AM MS. MILLET pointed out that the last section of Version V delegates the appointments by the governor to the advisory committee. 9:21:39 AM CO-CHAIR FAIRCLOUGH then reopened the public hearing on HB 152. [Further testimony on HB 152 was taken later in this hearing.] HB 152-ESTABLISHING A RENEWABLE ENERGY FUND CO-CHAIR FAIRCLOUGH then allowed those who had missed the earlier opportunity to testify on HB 152 the ability to do so. 9:27:08 AM CHRIS ROSE, Executive Director, Renewable Energy Alaska Project, related his support of HB 152 and urged its passage. 9:28:20 AM CO-CHAIR FAIRCLOUGH again closed public testimony on HB 152. [HB 152 was held over.]
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