Legislature(2011 - 2012)BARNES 124

01/31/2012 03:00 PM House ENERGY


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03:06:19 PM Start
03:07:24 PM HB250
04:19:37 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 250 EXTEND RENEWABLE ENERGY GRANT FUND TELECONFERENCED
Moved CSHB 250(ENE) Out of Committee
           HB 250-EXTEND RENEWABLE ENERGY GRANT FUND                                                                        
                                                                                                                              
3:07:24 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT  announced that the  only order of  business would                                                              
be HOUSE  BILL NO. 250, "An  Act relating to the  renewable energy                                                              
grant  fund  and  recommendation  program; and  providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
3:07:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  moved  to adopt  the  proposed  committee                                                              
substitute  (CS) for HB  250, identified  as 27-LS1060\D,  Nauman,                                                              
1/30/12, as the working document.                                                                                               
                                                                                                                                
REPRESENTATIVE FOSTER objected for the purpose of discussion.                                                                   
                                                                                                                                
CO-CHAIR  PRUITT called  attention  to  page 1,  line  10, of  the                                                              
proposed  CS and  said the  only  change made  to the  bill is  to                                                              
change the longevity of the fund from ten years to five years.                                                                  
                                                                                                                                
REPRESENTATIVE FOSTER removed his objection.                                                                                    
                                                                                                                                
3:08:48 PM                                                                                                                    
                                                                                                                                
There  being no further  objection,  the proposed  CS for  HB 250,                                                              
Version D, was before the committee.                                                                                            
                                                                                                                                
3:09:04 PM                                                                                                                    
                                                                                                                                
KACI SCHROEDER,  Staff, Representative  Bill Thomas,  Alaska State                                                              
Legislature,  on  behalf  of Representative  Thomas,  joint  prime                                                              
sponsor, introduced  the proposed CS  for HB 250, saying  the bill                                                              
reauthorizes  the renewable  energy  grant fund  for another  five                                                              
years.  The fund  was established in 2008 and  has supported about                                                              
200 projects  across the state,  focusing on areas where  the cost                                                              
of energy  is high.    At the  end of 2011,  21 projects  were on-                                                              
line  and  it  is  estimated  that  by  2013,  the  fund  will  be                                                              
responsible  for displacing  six  million gallons  of diesel  fuel                                                              
each  year in  Alaska.   The bill  also  contains the  legislative                                                              
intent to fund the program at $50 million per year.                                                                             
                                                                                                                                
REPRESENTATIVE  SADDLER asked  about  the kinds  of projects  that                                                              
remain unfunded.                                                                                                                
                                                                                                                                
MS. SCHROEDER deferred to the Alaska Energy Authority (AEA).                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  then referred  to a third-party  review by                                                              
the Vermont  Energy Investment Corporation  - that is  expected in                                                              
March, 2012 - and  asked Ms. Schroeder whether action  on the bill                                                              
could wait for the results of the review.                                                                                       
                                                                                                                                
3:11:23 PM                                                                                                                    
                                                                                                                                
MS. SCHROEDER said the sponsor would prefer not to wait.                                                                        
                                                                                                                                
3:12:44 PM                                                                                                                    
                                                                                                                                
PETER  CRIMP,   Deputy  Director,  Alternative  Energy   &  Energy                                                              
Efficiency,  AEA, Department  of  Commerce,  Community &  Economic                                                              
Development  (DCCED),  in  response  to  Representative  Saddler's                                                              
earlier question,  said one of AEA's focuses  is toward developing                                                              
heat energy  projects that provide  thermal energy.   He explained                                                              
that the  renewable fund  advisory committee  directed the  agency                                                              
to  emphasize  the  development   of  wood-fired  boiler  systems,                                                              
particularly   in  rural   areas  where   they  are   economically                                                              
beneficial and  fairly easy to "get  off the ground."   This is an                                                              
area of  a substantial  increase in the  numbers of  proposals and                                                              
recommendations received  in Round 5 [the fifth  grant application                                                              
period].   In general,  the program  has shied  away from  new and                                                              
emerging technologies  due to their risk and  because the Emerging                                                              
Energy Technology Fund Grant Program will provide for them.                                                                     
                                                                                                                                
3:14:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  asked whether  the  technical quality  of                                                              
the proposals has improved.                                                                                                     
                                                                                                                                
MR. CRIMP  said yes.   Applicants have  adopted a phased  approach                                                              
to the process which is pre-feasibility analysis, full-                                                                         
feasibility and  conceptual design, final design,  permitting, and                                                              
construction.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SADDLER then  asked  how the  program will  evolve                                                              
over the next seven years.                                                                                                      
                                                                                                                                
3:16:41 PM                                                                                                                    
                                                                                                                                
SARA  FISHER-GOAD,  Executive  Director,   AEA,  DCCED,  said  the                                                              
agency has  begun to  see larger  and more expensive  construction                                                              
projects in Round  5.  The cap on the funding  recommendations for                                                              
lower-cost areas  has been  raised to $4  million and the  cap for                                                              
higher-cost areas has  been raised to $8 million,  so projects are                                                              
coming in  at higher costs and  higher levels of difficulty.   She                                                              
cautioned  that  regional-spreading   may  be  more  difficult  to                                                              
maintain as  the funding for one  project could possibly  meet the                                                              
statutory  requirement.   Generally, Ms.  Fisher-Goad expected  to                                                              
receive  the same  type of  projects, and  agreed that  applicants                                                              
are becoming more  familiar with the program.  The  agency has the                                                              
ability to change  the focus, but she did not  anticipate a change                                                              
from the emphasis on heat recovery.                                                                                             
                                                                                                                                
3:18:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FOSTER  asked for  the total amounts  requested and                                                              
rewarded in the last round.                                                                                                     
                                                                                                                                
MS.  FISHER-GOAD  answered  $132,900,000  was  requested  and  $43                                                              
million  was recommended  in  Round  5.   In  further response  to                                                              
Representative Foster,  she acknowledged the purpose  for a third-                                                              
party contractor,  Vermont Energy Investment Corporation,  to look                                                              
at the program  is to search for  changes and improvements.    She                                                              
opined the  agency needs to make  sure the public knows  about the                                                              
availability of the  program, and also needs to  provide technical                                                              
assistance,  especially  to rural  areas.   The  program  contains                                                              
sufficient  flexibility  to make  improvements  without  statutory                                                              
recommendations.   Technical assistance on applications  is needed                                                              
in  rural  communities;  in  fact,   efforts  are  being  made  to                                                              
coordinate with  AEA's Rural Power  System Upgrade  (RPSU) program                                                              
and  incorporate  appropriate  alternative   or  renewable  energy                                                              
projects.                                                                                                                       
                                                                                                                                
3:21:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FOSTER agreed  technical  expertise  is needed  on                                                              
applications for projects in rural Alaska.                                                                                      
                                                                                                                                
MS.  FISHER-GOAD, in  response  to Representative  Petersen,  said                                                              
$176 million has  been appropriated to the  program, approximately                                                              
$80 million has  been disbursed, and the balance  is approximately                                                              
$90 million.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK observed  AEA  is allowed  to take  up to  $2                                                              
million  of the  interest  holdings.   Most  recently, the  actual                                                              
cost of  administering the  energy grant  funds was $1.2  million.                                                              
He  asked  why the  cost  was  so  high,  and how  that  cost  was                                                              
absorbed.                                                                                                                       
                                                                                                                                
MS.  FISHER-GOAD  recalled  when   the  original  legislation  was                                                              
passed  the  intent  of  the original  fiscal  note  was  just  to                                                              
establish  the  baseline of  the  program.    The actual  cost  of                                                              
managing   the   program  had   been   adjusted   by  a   separate                                                              
appropriation to use  the interest earnings of the  fund to manage                                                              
the actual  funded projects, the  economic firms, and  the support                                                              
of the  University of  Alaska Anchorage,  Institute of  Social and                                                              
Economic Research (ISER) for the evaluation of projects.                                                                        
                                                                                                                                
3:25:43 PM                                                                                                                    
                                                                                                                                
MR. CRIMP added  that AEA's management of projects  is "active" in                                                              
that  it  establishes milestones,  reviews  conceptual  and  final                                                              
designs,  accept designs,  controls  the due  diligence of  funds,                                                              
contacts  grantees,  issues  notifications  of  non-response,  and                                                              
provides accounting services and oversight.                                                                                     
                                                                                                                                
REPRESENTATIVE TUCK  pointed out the  cost for FY 12  increases to                                                              
$1.6 million and  cautioned that $2 million may not  be enough for                                                              
the next five years.                                                                                                            
                                                                                                                                
MS.  FISHER-GOAD advised  that  the total  number  of projects  is                                                              
peaking and  will level off after  some are done and closed.   She                                                              
estimated  that up  to $2  million is  sufficient to  pay for  the                                                              
administrative  costs of  managing the  program, and  said AEA  is                                                              
comfortable with that appropriation.                                                                                            
                                                                                                                                
3:29:18 PM                                                                                                                    
                                                                                                                                
MS.  FISHER-GOAD,  in further  response  to  Representative  Tuck,                                                              
confirmed  that  there  will  always  be  a need  for  a  bank  of                                                              
economists  to evaluate  projects.   Her agency  may also  need to                                                              
provide additional  technical assistance,  perhaps in the  form of                                                              
application training workshops.                                                                                                 
                                                                                                                                
REPRESENTATIVE  TUCK then  asked for the  common reasons  projects                                                              
are not selected.                                                                                                               
                                                                                                                                
3:30:56 PM                                                                                                                    
                                                                                                                                
MR. CRIMP acknowledged  that about two-thirds of  the applications                                                              
are not  recommended by AEA.   For the  most part,  AEA recommends                                                              
against approximately  80 percent of the applications  because the                                                              
projects  were not  ready to proceed  within  the timeframe.   The                                                              
agency seeks  to best serve the  public not by "banking  money for                                                              
projects  ...  [but] by  making  the  money  work within  ...  the                                                              
closest timeframe  as possible."  Other reasons  are technical and                                                              
feasibility problems, and poor economics.                                                                                       
                                                                                                                                
MR.   CRIMP   assured   Representative   Tuck   that   AEA   loves                                                              
hydroelectric projects.                                                                                                         
                                                                                                                                
REPRESENTATIVE SADDLER  asked for an estimate on  how much federal                                                              
money has been leveraged by the grants so far.                                                                                  
                                                                                                                                
3:32:49 PM                                                                                                                    
                                                                                                                                
MS. FISHER-GOAD offered  to provide the specific  dollar amount to                                                              
the committee when possible.                                                                                                    
                                                                                                                                
MR. CRIMP,  in response  to Representative  Saddler's question  on                                                              
whether the  renewable energy grant  fund projects will  result in                                                              
a  reduction  of need  for  AEA's  Power Cost  Equalization  (PCE)                                                              
program, said he  has performed a quick analysis  based on partial                                                              
energy  production in  2011.   Although  21 construction  projects                                                              
are "up and  running," and AEA  is collecting data, the  impact on                                                              
rates  is a  difficult  question because  the  cost of  operation,                                                              
maintenance, and  debt service must  be balanced against  the cost                                                              
of diesel fuel.   Mr. Crimp offered to provide  the committee with                                                              
the  analysis  he  has.    In  response  to  Co-Chair  Pruitt,  he                                                              
clarified  that  there  are approved  projects  slated  for  urban                                                              
areas  in Southeast,  and  in the  Railbelt,  such  as the  Golden                                                              
Valley  Electric Association  (GVEA)  Eva Creek  Wind project  and                                                              
the  Municipality  of Anchorage  Regional  Landfill  Gas-to-Energy                                                              
gas generating plant.                                                                                                           
                                                                                                                                
3:36:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FOSTER   returned  to  questions   about  the  PCE                                                              
program and asked for the formula used to determine the rate.                                                                   
                                                                                                                                
MS. FISHER-GOAD  reminded the committee  the PCE rate is  based on                                                              
a  weighted-average  rate of  the  residential ratepayers  in  the                                                              
communities of  Fairbanks, Juneau, and  Anchorage.  At  this time,                                                              
the  "floor for  the program"  is  13.42 cents  per kilowatt  hour                                                              
(kWh).  The  PCE program formula  is 95 percent of  the difference                                                              
between one  dollar and the base  rate, unless the utility  in the                                                              
PCE-eligible  community is  rate-based.   There  are actually  two                                                              
ways the  PCE rate  can be  evaluated, both  with the  intent that                                                              
residents in  a PCE community pay  their rate less the  PCE level,                                                              
thereby  bringing their  cost  close  to the  base  rate of  13.42                                                              
cents per kWh for 500 kWhs per month.                                                                                           
                                                                                                                                
3:37:55 PM                                                                                                                    
                                                                                                                                
MR. CRIMP  added that his  analysis looked  at the impact  on four                                                              
power projects which  have been in operation for much  of one year                                                              
in PCE  communities.  In Gustavus,  the Falls Creek  Hydroelectric                                                              
Project saved  1.5 cents per kWh  for PCE customers, and  saved 28                                                              
cents  per  kWh  for  customers  not eligible  for  PCE,  such  as                                                              
commercial facilities.   He  pointed out that  savings to  the PCE                                                              
program in  the amount of  $172,000 - because  the price  of power                                                              
was brought  down and less  PCE was required  for the  community -                                                              
were put  back in  the PCE "kitty."   Thus  savings are  "a little                                                              
bit  for  the  PCE  customers,  a  lot  for  the  non-PCE-eligible                                                              
customers, and ... a lot for the PCE program itself."                                                                           
                                                                                                                                
CO-CHAIR  PRUITT asked  how much  was  spent in  Gustavus to  save                                                              
$172,000 per year.                                                                                                              
                                                                                                                                
3:40:31 PM                                                                                                                    
                                                                                                                                
MR. CRIMP said his  analysis is based on the formula  and "is more                                                              
representative,"  and so  AEA needs  to provide  a succinct  table                                                              
with that information.                                                                                                          
                                                                                                                                
CO-CHAIR  PRUITT  then asked  whether  AEA's  focus  is to  see  a                                                              
project  through to  the  end.   He has  heard  concerns from  the                                                              
management of "different  power groups around,  associations" that                                                              
a smaller utility  may want to test a water source  of energy, and                                                              
AEA may  help them  determine whether a  certain source  of energy                                                              
is viable, and then move on.                                                                                                    
                                                                                                                                
3:42:18 PM                                                                                                                    
                                                                                                                                
MS. FISHER-GOAD  appreciated talking about the energy  pathway and                                                              
AEA's effort  with regional planning  to determine what  should be                                                              
done, in  different regions  and communities,  to reduce  the cost                                                              
of energy.   The renewable energy  grant fund is a  very effective                                                              
tool  and has  produced beneficial  results  in some  communities,                                                              
but there  are some  areas that may  not have renewable  resources                                                              
to develop.   In that  case, other AEA  programs such as  the RPSU                                                              
program -  along with  state and federal  funding from  the Denali                                                              
Commission   -  may  provide   benefits   to  ensure  that   rural                                                              
communities  have  an  efficient   powerhouse,  perhaps  with  the                                                              
integration  of wind power  generation.   End-user efficiency  and                                                              
demand  side management  (DSM) of  a  powerhouse may  be the  most                                                              
effective  assistance   for  some   communities.     Although  the                                                              
renewable  energy  grant fund  is  playing  an important  role  in                                                              
renewable  projects, regional  planning  indicates  that there  is                                                              
not one answer for every community or region.                                                                                   
                                                                                                                                
3:45:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  PRUITT  asked  whether the  fund  includes  transmission                                                              
lines.                                                                                                                          
                                                                                                                                
MS.  FISHER-GOAD   confirmed  that   transmission  lines   from  a                                                              
renewable project are eligible.                                                                                                 
                                                                                                                                
3:46:36 PM                                                                                                                    
                                                                                                                                
MR.  CRIMP  gave examples  of  two  projects  on Prince  of  Wales                                                              
Island,  one a  hydroelectric power  plant requiring  transmission                                                              
lines, and one an extension of an existing grid.                                                                                
                                                                                                                                
MR. CRIMP,  in response  to Representative  Saddler, said  AEA has                                                              
ten reviewers, two  staff at ISER, and ten contractors  working on                                                              
projects  during  a  two and  one-half  month  period.  Additional                                                              
staff is not needed because AEA is getting more efficient.                                                                      
                                                                                                                                
3:48:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT asked  for the top reason that a  request would be                                                              
rejected.                                                                                                                       
                                                                                                                                
MR. CRIMP  said  it is likely  to be  because a  component of  the                                                              
earlier stage  of development, such  as the feasibility  study, is                                                              
not  completed.    In further  response  to  Co-Chair  Pruitt,  he                                                              
estimated  that a  Request for  Proposal (RFP)  published in  late                                                              
July would be due in mid-September, and funded July 1.                                                                          
                                                                                                                                
REPRESENTATIVE  PETERSEN restated AEA's  projection that  by 2013,                                                              
the renewable energy  grant fund would have displaced  six million                                                              
gallons of diesel fuel.                                                                                                         
                                                                                                                                
3:50:49 PM                                                                                                                    
                                                                                                                                
MR.  CRIMP said  yes.   By 2013,  the program  will be  displacing                                                              
approximately 3.5  million gallons per year.   In further response                                                              
to  Representative   Petersen,  he  said   he  did  not   want  to                                                              
mischaracterize  the amount of  the estimated  savings as it  is a                                                              
diesel  equivalent,   which  includes  a  significant   amount  of                                                              
natural gas.   However, at this  time diesel fuel for  power costs                                                              
from $3.50 to $5.50 per gallon, and the savings are substantial.                                                                
                                                                                                                                
REPRESENTATIVE  PETERSEN has  heard Alaska  is the  envy of  other                                                              
western states because of its investment in renewable energy.                                                                   
                                                                                                                                
REPRESENTATIVE SADDLER  quoted from a document titled,  "Report to                                                              
Alaskans," that  indicated "AEA  estimates by  the end of  '13, 44                                                              
projects will  be complete,  saving more  than 10 million  gallons                                                              
of diesel annually."                                                                                                            
                                                                                                                                
3:53:36 PM                                                                                                                    
                                                                                                                                
MR.  CRIMP explained  the  discrepancy is  that  the known  diesel                                                              
equivalent  displacement  is  for   the  years  2009-2011.    This                                                              
creates a 1-year  lag; by the end  of 2013, given the  projects of                                                              
Rounds 1-4, we're  "expecting over 10 million,  beginning in 2014;                                                              
so, by  the end of  2014 [there will  be] 10 plus  million gallons                                                              
equivalent displacement."                                                                                                       
                                                                                                                                
CO-CHAIR PRUITT  requested clarification on whether  some projects                                                              
will be affected by the "doubling of the caps."                                                                                 
                                                                                                                                
MS. FISHER-GOAD  reiterated that the grant  recommendation program                                                              
provided  $43  million  of recommended  projects.    The  advisory                                                              
committee discussed  lifting the  caps, making adjustments  to the                                                              
amounts of  the caps,  and whether the  caps should  be cumulative                                                              
or on a  round-by-round basis.   She expressed her belief  that at                                                              
this point, no  applicant for one particular project  can get more                                                              
than $8 million cumulatively for that project.                                                                                  
                                                                                                                                
CO-CHAIR PRUITT opened the hearing to public testimony.                                                                         
                                                                                                                                
3:56:15 PM                                                                                                                    
                                                                                                                                
CHRIS ROSE,  Executive Director,  Renewable Energy Alaska  Project                                                              
(REAP),  informed the  committee  REAP is  a statewide,  nonprofit                                                              
coalition of  79 varied  organizations that  all work  together to                                                              
educate and  advocate for  the increased  production of  renewable                                                              
energy.    On  behalf of  REAP, he  expressed his  support for  HB
250, and  disclosed that he  is a member  of the renewable  energy                                                              
fund  advisory  committee.    The  primary  goal  of  REAP  is  to                                                              
increase the  production of renewable  energy in Alaska,  which is                                                              
important  because  renewable  energy   will  provide  predictably                                                              
priced  energy in  an  era of  volatile diesel  fuel  prices.   He                                                              
expressed his  belief that  the renewable  energy fund  program is                                                              
running  smoothly  from its  beginning  four  years ago,  and  the                                                              
impact  of  the  program  will   increase  as  more  projects  are                                                              
completed.   In fact, only about  one-half of the  projects funded                                                              
so  far  are  construction  projects;   even  so,  the  cumulative                                                              
savings have  been about  $7 million  in fuel.   Mr. Rose  pointed                                                              
out  that by  2016  there will  be  diesel equivalent  savings  of                                                              
about  11.6  million  gallons  per  year, and  in  excess  of  $20                                                              
million in  savings.  In  answer to an  earlier question,  he said                                                              
the  projects   under  construction   have  leveraged   over  $100                                                              
million.   He  stressed  the importance  of  extending the  sunset                                                              
date so there is  no interruption of the program,  and so projects                                                              
that would  be at the construction  stage in Round 6 are  not "put                                                              
in  limbo."   He urged  the  committee to  pass  the bill  without                                                              
further amendment and make any necessary changes next session.                                                                  
                                                                                                                                
4:02:01 PM                                                                                                                    
                                                                                                                                
GENE THERRIAULT,  Vice President  of Resource Development,  Golden                                                              
Valley Electric  Association (GVEA),  expressed his support  of HB
250.  Since the  beginning of the renewable resource  energy grant                                                              
fund  program,  GVEA  has  successfully  used  grants  to  assess,                                                              
develop,  and integrate  renewable power  for projects  such  as a                                                              
waste heat  recovery system  and the  construction of  the state's                                                              
largest solar water  heating system.  In addition,  GVEA purchases                                                              
power  from  two  independent  power   producers  that  have  also                                                              
received funds  for electric  generation plants.    The  renewable                                                              
energy  funds are  important  to  cover the  initial  costs of  an                                                              
energy  project   because  the  highest  risk  is   taken  at  the                                                              
beginning  of  a  project  - even  a  large  utility  cannot  fund                                                              
feasibility studies.   Although GVEA began the  evaluation of what                                                              
will be  the largest  non-hydro renewable  energy source  of power                                                              
at Eva Creek,  it used a $20,000  grant for an  integration study.                                                              
Based  on  that  study,  the  Eva  Creek  Wind  project  is  under                                                              
construction.  Final  funding for the project will be  a mix of 15                                                              
percent  state  funds  and  85   percent  ratepayer  funds.    Mr.                                                              
Therriault also  noted that GVEA  used grant funds  to investigate                                                              
two  other  sources  of  alternative  renewable  power  that  were                                                              
deemed  uneconomic; however,  the  information  obtained is  still                                                              
valuable.  He  urged the passage of  HB 250 this year  in order to                                                              
continue the program without interruption.                                                                                      
                                                                                                                                
4:06:27 PM                                                                                                                    
                                                                                                                                
CLAY   KOPLIN,   Chief   Executive   Officer,   Cordova   Electric                                                              
Cooperative,  said  his  company  has  received  renewable  energy                                                              
grant  funds  and supports  the  extension  of  the program.    He                                                              
described  how  Cordova  Electric combined  grant  funds,  Federal                                                              
Emergency  Management  Agency  (FEMA)  assistance,  and  ratepayer                                                              
funds  to  rebuild  its Humpback  Creek  Hydroelectric  plant  and                                                              
successfully  produce 1,500,000  kWhs  of  energy, saving  370,000                                                              
gallons in  diesel fuel  per year.     He opined the  application,                                                              
review,  and reward  process is  appropriate for  small and  large                                                              
utilities, and well-administered  by experienced AEA staff.    Mr.                                                              
Koplin  concluded  that there  is  no  reason  not to  extend  the                                                              
program for at least another five years.                                                                                        
                                                                                                                                
4:08:53 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  PRUITT  asked  what  percentage  of  Cordova  Electric's                                                              
power comes from renewable sources.                                                                                             
                                                                                                                                
MR.  KOPLIN said  his company  budgeted  80 percent  hydroelectric                                                              
generation  this  year,  and  Cordova   is  currently  saving  $16                                                              
million  in diesel  fuel.   He stressed  that  the most  important                                                              
beneficiaries are  the fish processing plants which  have expanded                                                              
greatly  due  to  a  13  percent   reduction  in  base  rates  for                                                              
electricity.   Mr.  Koplin said,  "We actually  have a future  and                                                              
I'd  really  like to  see  this  program  extended so  that  other                                                              
communities  ...  can  assure  their   futures;  this  program  is                                                              
meaningful and I really support seeing it extended."                                                                            
                                                                                                                                
4:10:35 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT  asked for an estimate  of the savings  to Cordova                                                              
Electric's customers.                                                                                                           
                                                                                                                                
MR.  KOPLIN  recalled  $8  million   was  needed  for  the  proper                                                              
construction  of  the project  -  hydroelectric  is a  very  large                                                              
investment initially  - and  the life of  the project will  be 100                                                              
years.   Cordova is  now displacing  $1.2 million  of diesel  fuel                                                              
and  he estimated  customers  are  seeing  an average  13  percent                                                              
decrease in the cost of electricity for every rate class.                                                                       
                                                                                                                                
4:11:58 PM                                                                                                                    
                                                                                                                                
WALTER ROSE,  Regional Energy  Specialist, Community  Planning and                                                              
Development  Program,  Kawerak,  Inc.  ("Kawerak"),  informed  the                                                              
committee  Kawerak  is  a  regional  nonprofit  tribal  consortium                                                              
serving the  Bering Strait region  of Western Alaska.   The remote                                                              
and isolated, Native  villages in this region are  almost entirely                                                              
dependent on diesel  fuel and gasoline, which costs  an average of                                                              
$6  per gallon  for  electricity  generation, space  heating,  and                                                              
transportation.     The renewable  energy  grant fund  has made  a                                                              
difference  in this  region,  but  there are  numerous  beneficial                                                              
projects  still  to  complete.   Extending  the  renewable  energy                                                              
grant  fund   will  enable   communities  to  continue   strategic                                                              
regional  energy   planning  and  to  move  forward   with  viable                                                              
projects.  Kawerak strongly supports CSHB 250, Version D.                                                                       
                                                                                                                                
4:13:50 PM                                                                                                                    
                                                                                                                                
DAVE  MESSIER,   Energy  Department,   Yukon  River   Inter-Tribal                                                              
Watershed Council  (YRITWC) said his organization  represents over                                                              
50 small  Native villages  throughout the  Yukon River  basin from                                                              
Eagle  to Emmonak.   He  expressed  YRITWC's support  for HB  250,                                                              
noting YRITWC  was awarded  a grant for  a project in  Ruby, which                                                              
turned out  to be a  great learning experience  and a good  use of                                                              
the  state's  resources.     He  agreed  that  diesel   is  not  a                                                              
sustainable  choice  for  the  future,  as  some  communities  are                                                              
paying $9.50 per gallon for heating fuel.                                                                                       
                                                                                                                                
4:16:08 PM                                                                                                                    
                                                                                                                                
LISA  HERBERT, Executive  Director, Greater  Fairbanks Chamber  of                                                              
Commerce  ("Chamber"), said  the Chamber  encourages support  from                                                              
the legislature and  the governor for initiatives  that will lower                                                              
the cost of  energy in the Interior.   The high cost  of energy is                                                              
the  Chamber's   number  one  legislative   priority  and   is  an                                                              
overwhelming  problem in  Fairbanks for  businesses and  families.                                                              
Costly  energy is  halting economic  development  in this  region.                                                              
The renewable  energy grant fund  is an initiative that  will play                                                              
a positive  role in the  future of Fairbanks  by reducing  the use                                                              
of  diesel  and wood  burning  stoves,  and thereby  reducing  the                                                              
negative effects on  its air quality.  Along  with other programs,                                                              
HB 250 is part of the solution to the energy needs of Fairbanks.                                                                
                                                                                                                                
CO-CHAIR PRUITT closed public testimony.                                                                                        
                                                                                                                                
4:18:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON  moved to report  the CS for HB  250, Version                                                              
27-LS1060\D,  Nauman, 1/30/12,  out of  committee with  individual                                                              
recommendations and the accompanying fiscal notes.                                                                              
                                                                                                                                
There being no objection, CSHB 250(ENE) was reported from the                                                                   
House Special Committee on Energy.                                                                                              

Document Name Date/Time Subjects
HB 250 - 1 Version B (original bill).pdf HENE 1/31/2012 3:00:00 PM
HB 250
HB 250 - 2 Version D (draft CS).pdf HENE 1/31/2012 3:00:00 PM
HB 250
HB 250 - 3 Sponsor Statement.pdf HENE 1/31/2012 3:00:00 PM
HB 250
HB 250 - 4 Fiscal Note-DCCED-AEA-01-20-12.pdf HENE 1/31/2012 3:00:00 PM
HB 250
HB 250 - 5 Wrangell Letter of Support.pdf HENE 1/31/2012 3:00:00 PM
HB 250
HB 250 - 6 ML&P Letter of Support.PDF HENE 1/31/2012 3:00:00 PM
HB 250