Legislature(2011 - 2012)BARNES 124
03/01/2011 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB103 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 103 | TELECONFERENCED | |
HB 103-POWER PROJECT; ALASKA ENERGY AUTHORITY
3:09:09 PM
CO-CHAIR FOSTER announced that the only order of business would
be HOUSE BILL NO. 103, "An Act relating to the procurement of
supplies, services, professional services, and construction for
the Alaska Energy Authority; establishing the Alaska Railbelt
energy fund and relating to the fund; relating to and repealing
the Railbelt energy fund; relating to the quorum of the board of
the Alaska Energy Authority; relating to the powers of the
Alaska Energy Authority regarding employees and the transfer of
certain employees of the Alaska Industrial Development Export
Authority to the Alaska Energy Authority; relating to acquiring
or constructing certain projects by the Alaska Energy Authority;
relating to the definition of 'feasibility study' in the Alaska
Energy Authority Act; and providing for an effective date."
3:09:45 PM
CO-CHAIR FOSTER stated his intent to start committee work on HB
103 on 3/8/11, and asked that members submit amendments to the
co-chairs by 3/7/11. He noted that the Alaska Energy Authority
(AEA), Department of Commerce, Community & Economic Development
(DCCED), held public meetings on the bill in Fairbanks and
Talkeetna, and meetings are scheduled for Palmer, Anchorage, and
Kenai. Co-Chair Foster opened the hearing to public testimony.
3:12:11 PM
BECKY LONG informed the committee she attended the AEA open
house presentations and estimated 150 people were in attendance
at the Talkeetna meeting. She said 99 written questions were
submitted to the facilitators of the meeting, and opined many
participants were frustrated because there was no opportunity
for comments or follow-up questions from the residents. Many of
the questions asked about the lack of commitment on the part of
state agencies to energy efficiency and conservation, the
project's impact on fish, the project's impact on the northern
Susitna economy and on resident's livelihoods, the potential
seismic issues, and the potential siltation issues. Ms. Long
relayed the questions remained unanswered by AEA and its
consultants, who advised that more timely data is required.
When AEA was asked about the public process that allows
participation in the decision on whether the Susitna dam will be
the "mega-dam project," its representative indicated that the
legislature will ultimately decide, although HB 103 was not
mentioned. Attendees determined that legislative hearings were
their only opportunity to comment on the project, even though
AEA told them there will be time for public comment during the
Federal Energy Regulatory Commission (FERC) licensing process.
Ms. Long warned that there is momentum to commit state resources
now to "the largest state subsidy in Alaska history." She
expressed her opposition to HB 103 and the dam, and urged a more
public process. She encouraged the committee to take testimony
from AEA after its meetings are finished, and opined there is a
need for more public testimony so the state may hear its
residents' concerns about consumer, fiscal, and environmental
issues before a commitment of significant state resources is
made to the project.
3:16:45 PM
REPRESENTATIVE LYNN asked Ms. Long for her major objection to
the dam.
MS. LONG stated that residents are afraid of negative impacts to
fisheries, the environment, and their livelihoods. There are
also concerns about a "boom/bust economy," and electrical rates.
Although the state has an admirable mandate for 50 percent
renewable energy by 2025, she questioned whether one mega-
project, and "putting all our eggs in one basket," would fulfill
that mandate. She warned that AEA's seismic data is inaccurate
and many issues "need to be defined and are not being defined."
3:18:26 PM
REPRESENTATIVE LYNN expressed his support of the dam along with
the development of oil resources and a gas pipeline. A dam will
serve to broaden the state's energy resources and avoid all of
its eggs in one basket. However, Representative Lynn said he
wanted to know more about potential problems such as fault lines
and fisheries.
3:19:58 PM
REPRESENTATIVE SADDLER assured Ms. Long this hearing is not the
only opportunity for public comment on the Susitna dam proposal.
During the process, there will be scoping meetings to satisfy
the National Environmental Policy Act (NEPA), and opportunities
for public comment on the draft environmental impact statement
(EIS).
3:20:37 PM
CO-CHAIR PRUITT observed that legislators are asking questions
similar to those posed by the residents of Talkeetna. He
pointed out that all public testimony is available online
through the legislative information system, and he provided the
website information. He clarified that HB 103 is not a "go-
ahead to build the project," but creates an organization with
the ability to own, build, or operate the Watana dam, or other
smaller projects related to energy throughout the state.
3:23:09 PM
CHERYLL HEINZE, Director of Governmental and Public Affairs,
Matanuska Electric Association, Inc. (MEA), informed the
committee she was speaking on behalf of the Alaska Railbelt
Cooperative Transmission & Electric Company (ARCTEC), which is a
cooperative comprised of Golden Valley Electric Association
(GVEA), Homer Electric Association, Inc. (HEA), Chugach Electric
Association, Inc. (CEA), Matanuska Electric Association, Inc.
(MEA), and Seward Electric Utility. She referred to the last
paragraph of ARCTEC Resolution 11-002 and read:
Now therefore be it resolved that the legislature
grant the Alaska Industrial Development and Export
Authority with the powers necessary to accomplish the
objectives stated in state stature, including the
power to issue taxable and tax exempt bonds, and that
the legislature grant the Alaska Energy Authority the
right to acquire ownership interest in projects as
provided in state statute. Passed and approved by the
Board of Directors of ARCTEC, this fourteenth day of
January, 2011.
MS. HEINZE said ARCTEC is in support of the bill and its Senate
companion bill. She was also at the public meeting in Talkeetna
and opined the meeting did not go very well because the
presenters "did not quite have their answers together" for even
simple questions about safety. Ms. Heinze said her organization
wants the bill to pass, but acknowledged that there was a lot of
fear on the part of the residents of Talkeetna regarding their
safety.
REPRESENTATIVE PETERSEN recalled he asked the same question
about the dam breaking and the potential damage, and was assured
the town was so far downstream there would be "no large effect
on Talkeetna."
MS. HEINZE encouraged that speaker to visit Talkeetna.
3:27:30 PM
CO-CHAIR PRUITT asked who was presenting at Talkeetna.
MS. HEINZE said the presenters were two or three engineers, a
hydrologist, a wildlife biologist, a moderator, and a
representative from the utilities. She cautioned that the
residents did not get the whole picture of the answers to the
energy situation for the long-term.
3:28:41 PM
CO-CHAIR PRUITT cited Ms. Heinze's experience in governmental
affairs, and asked whether the presenters were knowledgeable.
MS. HEINZE relayed that the residents wanted to learn and did
not get the answers they needed. She restated her concern about
the residents' fears, and also that simple questions about
access to the river and flooding were put off instead of
addressed.
3:30:34 PM
CO-CHAIR PRUITT asked how much public knowledge is "out there"
about the project itself.
MS. HEINZE said, "I think it's fragmented ... they just don't
know, so there's a huge job of getting information out,
particularly to these folks in Talkeetna." In further response
to Co-Chair Pruitt, she agreed with the need for someone to
communicate, and offered MEA's help.
REPRESENTATIVE SADDLER recalled the committee was told that
Alaska is a seismic region, but there are similar dams built to
withstand seismic shocks. Furthermore, other energy measures
remain under consideration such as weatherization and improved
efficiency, natural gas, geothermal, and small hydro.
MS. HEINZE concluded the meeting was poorly managed.
3:34:20 PM
JIM SYKES said he was speaking on his own behalf and disclosed
that he served as an advisor to the Regional Integrated Resource
Plan (RIRP) for three years. He supported the concept of the
bill which allows AEA to carry the project, but questioned why
two Alaska Industrial Development and Export Authority (AIDEA)
board members are on the board. He was looking for more
consumer advocates and a cross-section of the public to serve as
members on the AEA board, and suggested this may be accomplished
by an advisory committee. Mr. Sykes pointed out the value of
public and utility groups meeting together. He understood the
business purpose of AEA creating subsidiary corporations, but
was troubled by the "carte blanche" approach without public
oversight. Mr. Sykes discussed coordinating emerging energy
technologies and energy efficiency with performance-based
contracting, and advised that residents now understand that the
benefits of these efforts are cost of energy savings, less
energy use, and the creation of local jobs. In fact, a
reduction of energy use in the Railbelt of 3 percent per year
for 15 years would reduce the need for such a large dam. The
legislature should establish a mechanism that would not only
allow a project to be built, but that would also choose the best
project. Mr. Sykes cautioned that during the evaluation of the
Susitna project, the dam was manipulated to "what they thought
they could sell to the legislature."
MR. SYKES restated the potential of other alternative sources of
power and opined the legislation should also ensure that there
is a parallel process for renewables - funded with an equal
amount of money - which advances along with the Susitna project.
Furthermore, although AEA is staffed with very competent people,
using Bradley Lake Hydro as a model is not appropriate. Mr.
Sykes concluded that AEA can handle the project, but there needs
to be "more involvement and consideration and research for the
larger project."
3:44:16 PM
BRAD JANORSCHKE, General Manager, Homer Electric Association
Inc. (HEA), stated that HEA serves the western half of the Kenai
Peninsula and supports HB 103 as written. He restated the
language of the bill and pointed out that HEA maintains and
operates Bradley Lake Hydro, which is currently the largest
hydroelectric (hydro) facility in the state. Although it is
one-fifth the size of the proposed Watana dam, Bradley Lake
Hydro is a successful model. In addition, HEA is a Railbelt
utility dependent upon natural gas for 92 percent of its energy
needs, thus its members are aware of the consequences of relying
on a single source of energy. Small-scale renewable projects
and conservation are notable, but there needs to be a reduction
in the dependence on natural gas for baseload generation, and
large-scale hydro is a realistic option. Mr. Janorschke closed,
saying HEA supports the governor's proposal on the project.
3:46:32 PM
REPRESENTATIVE SADDLER asked whether HEA supports the bill in
its entirety.
MR. JANORSCHKE said yes, HEA supports HB 103 as written.
CO-CHAIR PRUITT noted that the bill authorizes AEA with the
operation of the project. He asked whether the legislation
creates a benefit to HEA, and about its impact to the
relationship between HEA and AEA.
3:47:50 PM
MR. JANORSCHKE opined the legislation will not "change anything
for us." Currently, HEA operates and maintains Bradley Lake
Hydro on behalf of the state and participating utilities. If
AEA owned the project, HEA would encourage economical
maintenance and operation; in fact, all of the other utilities
would encourage operation of the facility by an experienced
utility located in the nearby geographic area.
3:49:26 PM
REPRESENTATIVE SADDLER asked, "What were the fears expressed
about Bradley Lake before it was built, and how well [have
those] been answered, or not?"
MR. JANORSCHKE expressed his understanding that there were
environmental and pricing concerns about the project; in fact,
in the early '90s Bradley Lake was an expensive source of
electric energy. Today, it is the second lowest, behind GVEA's
coal plant Healy Unit 1. He advised that HEA is proposing a
small-scale hydro project at Moose Pass and at a public meeting
with FERC concerns were raised. However, the original
opposition has been reduced because HEA responded to concerns
and modified its design. He urged AEA to closely follow
comments by members of the public.
3:52:28 PM
GERALD SOUSA spoke on his own behalf and disclosed he was a
member of the Alaska Department of Fish & Game (ADFG) Matanuska
Valley Advisory Committee. Mr. Sousa said he was a 40-year
resident of the Talkeetna area. He recalled that studies in the
'80s revealed that the dam project is on a fault line, and he
described the geography along the river. He said, " ... I
strongly suspect, being a layman, and just looking at the
topography [a dam breach] would wipe Talkeetna off the map," and
he reminded the committee its decision would affect future
generations. Mr. Sousa gave the example of the recent event in
Christchurch, New Zealand. Turning to economics, he pointed out
the cost overruns of the Port of Anchorage expansion project.
Regarding habitat, he related his experience in the '80s when he
saw salmon fry in the area that would suffer from siltation in
the spring. Mr. Sousa questioned why dams are being built in
Alaska when the rest of the country is tearing dams out. He
stated the dam will also negatively affect moose habitat due to
the loss of willows growing on the banks of the river, and cause
the loss of goats from the cliff sides. In addition, the water
table will drop which will limit recreational activities, and
silt will accumulate behind the dam. He encouraged the
construction of the gas pipeline bullet line to Fairbanks, and
the increase of energy efficiency to solve the problem without
destroying the ecosystem of the Susitna River drainage. He
strongly suggested the committee strike the specific Susitna dam
project from the bill.
3:58:29 PM
REPRESENTATIVE PETERSEN asked which river had smolt.
MR. SOUSA answered the Susitna River. He added that he was told
the silt will disturb the smolt's feed and thereby destroy most
of the fisheries in the river drainage.
REPRESENTATIVE PETERSEN recalled the committee was told 200
salmon were found.
MR. SOUSA estimated there were 200,000. He said he suspected
the fry go down the river and then come back to the clear water
before the Susitna "starts turning ... glacier."
4:01:00 PM
CARL CROSMAN stated that the location of the Copper River Valley
is not well known. He stated his support for small hydro
projects which will provide power and reduce the consumption of
fossil fuels, and the Copper Valley Electric Association (CVEA)
project at Allison Creek is a good example. Mr. Crosman
explained that this project will cost $32 million and will save
1.7 million gallons of fuel annually. He pointed out that the
first hydro plant in the state is still producing power using
the original equipment after 118 years. Continuing with the
savings projected over the lifetime of the project, he estimated
savings of 200,600,000 gallons of fossil fuel, which means the
project pays for itself every eight years and over its lifetime
saves $601 million. In addition, the project will provide 50-75
jobs lasting from 3 months to 2.5 years. Copper Valley Electric
is not asking for a grant, but for a zero- or low-interest loan
or matching grant, for an investment with a great return. This
is a run-of-the-river hydro plant that does not include a dam,
and has no downside. Public hearings with FERC have been held
and the electric cooperative's 3,700 members have invested $2
million. Mr. Crosman concluded that this is a needed proven
project that will produce power at sustainable rates for an area
that is not connected to the Railbelt.
4:06:16 PM
REPRESENTATIVE PETERSEN asked what ratepayers are currently
paying for electricity.
MR. CROSMAN said $0.39 cents per kilowatt. He added that the
project would raise CVEA's non-fuel-consumption power by 73
percent.
4:07:12 PM
RICHARD LEO said he was a 30-year resident of Trapper Creek. He
related his experience with the proposed South Denali Visitor
Center in the Alaska Range which was moved to a different
location as a result of public opposition. Mr. Leo concurred
with Ms. Heinze that the information about the dam needs to be
more precise; furthermore, the level of information about the
dam is minimal, and should not focus on whether the dam is
viable, but on what is accurate about the pros and cons. He
also agreed with the last speaker and Mr. Sykes that the
opportunity for smaller-scale projects is more viable than one
massive project which will cost over $5 billion, and which could
be delayed due to the level of public opposition. Sooner than
we think, the remarkable increase in technology will make other
forms of energy likely, and AEA and the legislature has a
responsibility to encourage tidal, wind, solar with battery
storage, and other alternatives. The nature of the Susitna dam
project is so huge it will affect the economy of the valley,
which is based on wilderness. In fact, this area is one of the
most profound and accessible wildernesses and it should not be
destroyed along with a great wild river. Mr. Leo concluded that
the study of other alternatives, such as the gas pipeline to
Fairbanks, should be pursued.
4:12:20 PM
SHERYL SALASKY agreed with Mr. Sykes's testimony. She expressed
her strong opposition to HB 103, and said she was not impressed
with AEA's presentation to the residents of Talkeetna. Ms.
Salasky opined AEA has not completed sufficient research;
furthermore, the format of the public presentation was
frustrating for residents because their questions about the
project, and their suggestions for alternative solutions, were
not discussed thoroughly. She suggested a portion of the money
for the dam project could be better spent developing multiple
smaller alternative solutions. Ms. Salasky cautioned that AEA
should not compare the Susitna project with the Bradley Lake
Hydro project because her experience as a biologist taught her
that the Susitna watershed is a more complex watershed system.
[HB 103 was heard and held.]
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