Legislature(2011 - 2012)BARNES 124

03/27/2012 03:00 PM House ENERGY


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 336 ENERGY ASSISTANCE PROGRAM & VOUCHERS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 323 NONATTAIN AREA HOME HEATING SYSTEM GRANTS TELECONFERENCED
Heard & Held
-- Public Testimony --
<Bill Held Over from 3/22/12>
          HB 336-ENERGY ASSISTANCE PROGRAM & VOUCHERS                                                                       
                                                                                                                                
3:09:04 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER announced that the  first order of business would                                                               
be HOUSE BILL NO. 336,  "An Act establishing an energy assistance                                                               
program in the  Department of Revenue to issue  an energy voucher                                                               
to  Alaska permanent  fund dividend  recipients; and  relating to                                                               
the analysis  and recommendation of an  energy assistance program                                                               
by the governor."                                                                                                               
                                                                                                                                
3:09:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER moved  to  adopt  the proposed  committee                                                               
substitute  (CS)   for  HB  336,  Version   27-LS1403\I,  Nauman,                                                               
3/26/12, as the working document.                                                                                               
                                                                                                                                
3:09:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER objected for the purpose of discussion.                                                                  
                                                                                                                                
3:09:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STEVE  THOMPSON, Alaska State Legislature,  gave a                                                               
short history of the origins of  the bill, explaining that in the                                                               
Interior,  rural areas  of Alaska,  and Fairbanks,  the costs  of                                                               
home  heating and  electricity are  higher  than house  payments.                                                               
This situation  is unsustainable  and residents have  been forced                                                               
to move away.   Representative Thompson said  the bill authorizes                                                               
a voucher  that can be  used for 250 gallons  of fuel oil  or for                                                               
1,600 kilowatts (kW)  of electrical power.  The  proposed CS adds                                                               
to the  bill a  qualification that a  recipient must  be eligible                                                               
for the  2012 permanent fund  dividend (PFD) in order  to qualify                                                               
for a voucher.  He then  compared the cost of energy in Fairbanks                                                               
with  that of  other areas  of the  state:   residents along  the                                                               
northern  coast and  in Barrow  have  access to  natural gas  for                                                               
$0.08  to  $0.10  per  kW   hour;  residents  in  Southeast  have                                                               
hydroelectric  power;  in  Fairbanks, residents  pay  over  $0.23                                                               
cents  per   kW  hour  and   $4.15  per  gallon  for   fuel  oil.                                                               
Representative  Thompson  said,  "People  are just  not  able  to                                                               
survive with that kind of  billing."  In rural areas, electricity                                                               
can be as high  as $0.50 cents per kilowatt hour  and fuel oil is                                                               
higher also,  causing an exodus  from villages to Anchorage.   He                                                               
pointed out that there is  cheap energy "up north," in Southeast,                                                               
in the Cook Inlet-Kenai area,  and in the Matanuska-Susitna (Mat-                                                               
Su)  region   and  concluded  that  Fairbanks   needs  help  now.                                                               
Although  Fairbanks  would  prefer  a large  project  to  provide                                                               
sustainable energy  into the long-range future,  the voucher will                                                               
show that the  state is concerned, and this relief  is welcome in                                                               
the  interim.   Furthermore, the  bill requires  that after  this                                                               
year the  administration will decide what  to do in the  next few                                                               
years  so  that  the  remote  areas of  the  state  can  survive,                                                               
especially  in  areas   that  do  not  qualify   for  power  cost                                                               
equalization (PCE).                                                                                                             
                                                                                                                                
3:15:38 PM                                                                                                                    
                                                                                                                                
TOM  STUDLER,  staff  to Representative  Steve  Thompson,  Alaska                                                               
State Legislature, said the proposed  CS retains all of the major                                                               
elements of  the original bill  while incorporating  changes that                                                               
will ease  the administration of  the energy voucher  program for                                                               
fuel  distributors   and  state  agencies.     He  described  the                                                               
procedure followed  by a  fuel distributor  to redeem  the energy                                                               
voucher and to  determine the amount of the state  payment.  This                                                               
procedure prevents  manipulation of  the retail price  of energy,                                                               
makes  the cost  of  the program  more  predictable, reduces  the                                                               
administrative challenges,  allows the credit  to be used  to pay                                                               
debts  to the  distributors, assists  the distributors  with cash                                                               
flow, and encourages energy conservation.   Mr. Studler explained                                                               
section 1  of the bill directs  that the state send  a voucher to                                                               
every adult PFD  recipient - in the  fall of 2012 -  which can be                                                               
redeemed at  a fuel distributor or  utility for the value  of 250                                                               
gallons  of heating  oil, 350  hundreds  of cubic  feet (CCF)  of                                                               
natural gas,  or 1,500  kW hours of  electricity.   The recipient                                                               
decides how  to use the voucher  and gives it to  the distributor                                                               
of their choice.   The distributor then sends the  voucher to the                                                               
state with claims  for payment.  Upon receipt of  the voucher and                                                               
claim,  the state  sends the  payment  to the  distributor to  be                                                               
credited to the  voucher recipient's account.  The  amount of the                                                               
state payment will  be calculated by multiplying  the quantity of                                                               
fuel provided by  the voucher, by the  distributor's retail price                                                               
for that type of  energy on a specific date in  2012.  The credit                                                               
can be used only for  energy at the recipient's primary residence                                                               
in Alaska and  is not transferrable or payable  in cash, although                                                               
it can  be used to pay  a debt to the  distributor.  Distributors                                                               
can  decide  whether  to  deliver  fuel  immediately  after  they                                                               
receive a  voucher, or wait  until they receive payment  from the                                                               
state.   The  credit remains in the account until  it is spent on                                                               
energy  delivered to  the recipient's  home.   If the  account is                                                               
closed before all the credit  is used, then the distributor sends                                                               
the  balance back  to the  state.   Vouchers may  not be  sold or                                                               
transferred, and require  the signature of the  recipient and the                                                               
distributor.   Recipients  may request  a replacement  voucher in                                                               
the name of their landlord or  a check for $250.  Individuals may                                                               
also qualify  for a cash  payment of $250 if  they do not  have a                                                               
qualified  distributor  in  their community.    Participation  by                                                               
distributors is  voluntary and the  program will  be administered                                                               
by the Alaska Housing and  Finance Corporation (AHFC), Department                                                               
of  Revenue (DOR).    Section 2  of the  bill  provides that  the                                                               
governor must  hear public testimony, evaluate  options, and make                                                               
a recommendation for  the best energy relief program  that can be                                                               
instituted in  2013 and beyond.   Prior to 10/1/12,  the governor                                                               
must  analyze  a  fuel price  reduction  program,  an  individual                                                               
account   program,   and   alternative  options,   and   make   a                                                               
recommendation to the legislature  for an efficient and equitable                                                               
program.    Section 3  of the bill  provides that AHFC  may adopt                                                               
emergency regulations and is exempt  from procurement law for the                                                               
purposes  of implementing  the  energy  voucher program  rapidly.                                                               
Section 4 of  the bill provides for an  immediate effective date.                                                               
Finally, Mr. Studler pointed out  that the proposed CS designates                                                               
that AHFC - instead of DOR - administer the program.                                                                            
                                                                                                                                
3:21:22 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER recalled in Glennallen  biomass and wood are used                                                               
for  generating  energy.   He  asked  whether the  program  would                                                               
address how to provide for the  equivalent cost for cords of wood                                                               
for heating.                                                                                                                    
                                                                                                                                
MR. STUDLER responded that there is  no way to address all of the                                                               
alternative  sources  of fuel  on  an  equitable basis;  however,                                                               
almost everyone  uses electricity and  residents who use  wood or                                                               
biomass for heating could apply the voucher to electricity.                                                                     
                                                                                                                                
REPRESENTATIVE  THOMPSON   added  that  the   administration  for                                                               
suppliers  of cordwood  would be  difficult,  for instance,  most                                                               
people gather  their own wood  and do  not purchase it  through a                                                               
distributor.                                                                                                                    
                                                                                                                                
REPRESENTATIVE FOSTER suggested adjusting the $250 amount.                                                                      
                                                                                                                                
3:24:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER asked  how to justify the  fact that every                                                               
dividend recipient  would get a  voucher regardless of  the rates                                                               
they pay for energy, or their means.                                                                                            
                                                                                                                                
REPRESENTATIVE THOMPSON  advised everyone should  benefit equally                                                               
statewide.  To ask for benefits  for one community and not others                                                               
is a  difficult problem.  The  difference is that 250  gallons of                                                               
heating oil  may have a lesser  value in another location  in the                                                               
state,  and each  area will  get a  different amount  for heating                                                               
oil, or for 1,500 kW per hour of electricity.                                                                                   
                                                                                                                                
REPRESENTATIVE SADDLER surmised section 1  of the bill appears to                                                               
begin a PCE program for urban areas.                                                                                            
                                                                                                                                
REPRESENTATIVE THOMPSON  agreed "there  could be a  better answer                                                               
out there," but relief is needed  for the next five years to keep                                                               
families in Fairbanks until a solution is found.                                                                                
                                                                                                                                
3:28:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  PRUITT   asked  for  explanations  of   a  "fuel  price                                                               
reduction program" and an "individual account program."                                                                         
                                                                                                                                
REPRESENTATIVE THOMPSON said the intent  of section 2 of the bill                                                               
is that beginning  in 2013, the governor and his  staff will look                                                               
at programs  that will reduce  the cost  of fuel oil  by reducing                                                               
taxes  or other  options.    There  are many  ideas that  must be                                                               
researched  besides "giving  a check  out" that  could result  in                                                               
meaningful relief.                                                                                                              
                                                                                                                                
3:31:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON assumed there is a companion bill.                                                                         
                                                                                                                                
MR. STUDLER said SB 203 is a very similar bill.                                                                                 
                                                                                                                                
3:31:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN called attention to  page 3, lines 30 and                                                               
31 of the bill, and asked  whether the voucher would be viewed as                                                               
income by the Internal Revenue  Service (IRS), U.S. Department of                                                               
the Treasury.                                                                                                                   
                                                                                                                                
REPRESENTATIVE THOMPSON  answered yes,  and added that  the value                                                               
of  the voucher  would be  considered  as revenue  and income  by                                                               
federal programs, and could affect recipients of federal aid.                                                                   
                                                                                                                                
REPRESENTATIVE TUCK asked how the  state will verify if a balance                                                               
is  left in  a closed  account, and  whether AHFC  would need  to                                                               
verify that a voucher was not used in more than one location.                                                                   
                                                                                                                                
REPRESENTATIVE THOMPSON  said each voucher would  be numbered and                                                               
identified with a name.  He  added that AHFC will develop details                                                               
on the  administration of  the program.   In further  response to                                                               
Representative  Tuck,   he  confirmed  that  two   vouchers  with                                                               
different names could be used on one account.                                                                                   
                                                                                                                                
3:35:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  asked whether  members of  one household                                                               
could use vouchers at different distributors.                                                                                   
                                                                                                                                
REPRESENTATIVE THOMPSON indicated yes.                                                                                          
                                                                                                                                
REPRESENTATIVE  TUCK  asked whether  $250  may  be more  than  an                                                               
Anchorage utility bill.                                                                                                         
                                                                                                                                
MR. STUDLER said he was unsure.                                                                                                 
                                                                                                                                
CO-CHAIR FOSTER  restated his  questions about  the low  value of                                                               
the voucher to  those who heat with biomass, wood,  and coal, and                                                               
about the  pre-qualification of  a distributor.   Also,  he asked                                                               
whether  the   Alaska  Energy  Authority  (AEA),   Department  of                                                               
Commerce, Community  & Economic  Development, could  provide AHFC                                                               
with the  British thermal unit  (Btu) equivalencies  for biomass,                                                               
wood, and coal.                                                                                                                 
                                                                                                                                
3:38:05 PM                                                                                                                    
                                                                                                                                
JOHN ANDERSON,  Project Officer, Weatherization, AHFC,  said AHFC                                                               
can provide  the Btu equivalencies for  alternate energy sources.                                                               
Furthermore, AHFC  intends to follow  the Low Income  Home Energy                                                               
Assistance  Program  (LIHEAP),   Administration  for  Children  &                                                               
Families, U.S.  Department of Health and  Human Services, process                                                               
for the  administration of  the program,  which does  accept wood                                                               
vendors.                                                                                                                        
                                                                                                                                
CO-CHAIR  PRUITT   asked  whether  there  would   be  "struggles"                                                               
administering vouchers that are issued in the names of tenants.                                                                 
                                                                                                                                
MR.  ANDERSON  estimated  there are  100,000  renters  and  6,000                                                               
landlords across the state.  He  said this could be a complicated                                                               
issue.                                                                                                                          
                                                                                                                                
3:39:49 PM                                                                                                                    
                                                                                                                                
STACY  SCHUBERT,   Director,  Governmental  Relations   &  Public                                                               
Affairs,  AHFC,  in  response   to  Co-Chair  Pruitt,  said  AHFC                                                               
currently  does not  have the  means to  implement this  program.                                                               
With an appropriate  legislative appropriation, administration of                                                               
the  program could  be "contracted  out," and  she was  unable to                                                               
provide a specific cost at this time.                                                                                           
                                                                                                                                
CO-CHAIR FOSTER asked  whether adding wood, biomass,  and coal to                                                               
the bill would create an issue for AHFC.                                                                                        
                                                                                                                                
MR. ANDERSON  opined adding additional energy  sources complicate                                                               
the program, but it is not impossible to do so.                                                                                 
                                                                                                                                
REPRESENTATIVE TUCK  asked how  to ensure  that vouchers  are not                                                               
sold or traded.                                                                                                                 
                                                                                                                                
MR. ANDERSON  observed there would have  to be a random  audit of                                                               
the distributors.                                                                                                               
                                                                                                                                
REPRESENTATIVE  TUCK suggested  the use  of information  from PFD                                                               
applications.                                                                                                                   
                                                                                                                                
REPRESENTATIVE PETERSEN  asked whether  AHFC will  get a  list of                                                               
residents  who have  qualified  for  a PFD  to  determine who  is                                                               
eligible for the program.                                                                                                       
                                                                                                                                
MS. SCHUBERT understood that the  bill directs the Permanent Fund                                                               
Dividend  Division, DOR  to  provide  AHFC with  a  list for  the                                                               
distribution of the vouchers.                                                                                                   
                                                                                                                                
3:43:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN asked whether a  landlord has a choice to                                                               
apply  their voucher  to  their personal  residence  or to  other                                                               
properties they own.                                                                                                            
                                                                                                                                
3:44:00 PM                                                                                                                    
                                                                                                                                
MS.  SCHUBERT advised  that the  bill  provides for  negotiations                                                               
between  a  landlord  and  a  tenant  leading  to  a  contractual                                                               
agreement.  Also, a signature  is required both from the landlord                                                               
and  tenant.   She  deferred  to  the  bill sponsor  for  further                                                               
details.                                                                                                                        
                                                                                                                                
REPRESENTATIVE PETERSEN observed a landlord  may pay a portion of                                                               
the utilities on behalf of a tenant.                                                                                            
                                                                                                                                
MS. SCHUBERT  said she was  unsure; however, AHFC, as  a landlord                                                               
itself, is studying this issue.                                                                                                 
                                                                                                                                
3:45:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER removed  his objection.   There  being no                                                               
further  objection, the  proposed CS  for HB  336, identified  as                                                               
Version I, was adopted as the working document.                                                                                 
                                                                                                                                
3:45:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER moved to  adopt the fiscal note identified                                                               
as HB336-DOR-TAX-03-02-12.                                                                                                      
                                                                                                                                
REPRESENTATIVE PETERSEN  objected for the purpose  of discussion.                                                               
He advised that the aforementioned  fiscal note is indeterminate,                                                               
pointing out that the fiscal note  is zero on the front page, but                                                               
costs range from $115 million to $430 million on page 2.                                                                        
                                                                                                                                
REPRESENTATIVE TUCK  asked whether  there is  no longer  a fiscal                                                               
note from  the Department of Administration  (DOA), identified as                                                               
HB336-DOA-OAH-3-8-12.                                                                                                           
                                                                                                                                
MR. STUDLER expressed  his belief that the  previous fiscal notes                                                               
submitted with  the original  bill will  be resubmitted  with the                                                               
proposed  CS.   In further  response to  Representative Tuck,  he                                                               
said he  would inquire as to  whether DOA will resubmit  a fiscal                                                               
note.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  TUCK  cautioned that  more  fiscal  notes may  be                                                               
added to the bill.                                                                                                              
                                                                                                                                
3:48:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  removed his  objection.  There  being no                                                               
further   objection,  fiscal   note  HB336-DOR-TAX-03-02-12   was                                                               
adopted.                                                                                                                        
                                                                                                                                
CO-CHAIR FOSTER opened public testimony.                                                                                        
                                                                                                                                
3:48:58 PM                                                                                                                    
                                                                                                                                
MARIE DARLIN, Representative, AARP,  referred to written comments                                                               
previously  submitted  in  support  of HB  336.    Although  this                                                               
program is not the final answer  to high energy costs, AARP is in                                                               
support  of the  bill because  it  will help  Alaskans pay  their                                                               
utility bills  and the cost of  energy is one of  AARP's members'                                                               
main concerns.                                                                                                                  
                                                                                                                                
3:50:20 PM                                                                                                                    
                                                                                                                                
ANDRIA AGLI, Manager, Shareholder  & Corporate Relations, Bristol                                                               
Bay Native  Corporation (BBNC), read  from the  following written                                                               
testimony as follows [original punctuation provided]:                                                                           
                                                                                                                                
     I am  a shareholder  of Bristol Bay  Native Corporation                                                                    
     (BBNC) and  the manager  for shareholder  and corporate                                                                    
     relations for  BBNC.   Thank you  for inviting  BBNC to                                                                    
     testify in  support of HB  336 today.  We  support this                                                                    
     bi-partisan legislation.                                                                                                   
                                                                                                                                
     I grew up in the village  of South Naknek on the Alaska                                                                    
     Peninsula  and return  every summer  to commercial  and                                                                    
     subsistence fish.   I have  family that still  live and                                                                    
     work there year  round.  The high cost  of heating fuel                                                                    
     and electricity is  a challenge not only  for my family                                                                    
     back   in  Bristol   Bay,   but   all  across   Alaska.                                                                    
     Currently, the cost of heating  fuel in South Naknek is                                                                    
     $ 5.25  per gallon.   The cost  of electricity  is more                                                                    
     than $.50  per kWh.   These  prices hit  everyone hard.                                                                    
     Legislative  efforts to  provide  financial relief  for                                                                    
     these  high prices  are  necessary  and certainly  have                                                                    
     BBNC's support.                                                                                                            
                                                                                                                                
     We  are an  economic cornerstone  for Bristol  Bay take                                                                    
     the responsibilities that come  with that position very                                                                    
     seriously.  We've got more  than 9,000 shareholders and                                                                    
     since  1978  we've  paid  more  than  $100  million  in                                                                    
     dividends  to our  shareholders.   In 2012  alone, BBNC                                                                    
     will distribute another $13  million to shareholders in                                                                    
     dividends.     We've  also  established   an  education                                                                    
     foundation  that   provides  scholarships   for  higher                                                                    
     education  and   vocational  training,   we've  created                                                                    
     internships  and job  opportunities; we've  established                                                                    
     an  Elder benefit  program,  and also  in  40 years  of                                                                    
     business  have advocated  on  behalf  of the  economic,                                                                    
     cultural  and subsistence  rights of  our shareholders.                                                                    
     We  continue this  work today  to ensure  our corporate                                                                    
     mission of "Enriching our Native way of life."                                                                             
                                                                                                                                
     While  BBNC is  pursuing new  responsible economic  and                                                                    
     investment  opportunities  in  the Bristol  Bay  region                                                                    
     that  will help  better the  lives of  our shareholders                                                                    
     and  residents, we  support  renewable energy  programs                                                                    
     and   both   renewable   and   non-renewable   resource                                                                    
     development   that    responsibly   allows    for   our                                                                    
     shareholders to continue to sustain their way of life.                                                                     
                                                                                                                                
     The  BBNC Board  recently directed  the corporation  to                                                                    
     invest $30  million over  the next  5 years  within the                                                                    
     region.  Our  shareholders have told us  they need help                                                                    
     with  the high  cost of  heating fuel  and electricity.                                                                    
     BBNC's  investment efforts  will identify  and evaluate                                                                    
     projects  that  could  help provide  some  energy  cost                                                                    
     relief.  BBNC supports  the legislature's efforts to do                                                                    
     the same with this particular legislation.                                                                                 
                                                                                                                                
     High energy  costs represent the greatest  challenge to                                                                    
     the  economic success  of villages  in the  Bristol Bay                                                                    
     region, where average families pay  more for their home                                                                    
     energy  bills than  they do  for rent  or for  mortgage                                                                    
     payments.   It is  for this  reason the  BBNC advocates                                                                    
     for energy programs that  provide current and long-term                                                                    
     solutions to this growing crisis.                                                                                          
                                                                                                                                
     House  Bill 336  is a  very good  complement to  BBNC's                                                                    
     strategy to invest  in the Bristol Bay  region, and has                                                                    
     BBNC's full  support.  This  will not change  the price                                                                    
     of  heating  oil or  the  cost  of electricity  in  the                                                                    
     short-term;  however, it  will provide  some relief  to                                                                    
     rural residents.                                                                                                           
                                                                                                                                
     Section 1  of the bill  will provide an  energy voucher                                                                    
     to  every adult  PFD  recipient.   For many  households                                                                    
     this  will  provide  immediate energy  relief  but  for                                                                    
     households   that   include  extended   families   with                                                                    
     multiple adults  living under the same  roof, the total                                                                    
     voucher  amount received  by this  legislation will  be                                                                    
     significantly greater.   While this is  not a permanent                                                                    
     fix,  again,   it  will   help  the   current  economic                                                                    
     hardships that are felt in our rural communities.                                                                          
                                                                                                                                
     Section 2  of the  legislation is also  helpful because                                                                    
     it  will   prompt  ideas  for   longer-term  assistance                                                                    
     strategies for  dealing with  the recurring  problem of                                                                    
     high  energy costs.   BBNC  applauds the  legislature's                                                                    
     effort to  get such  strategies on  the table  as long-                                                                    
     term energy solutions are needed statewide.                                                                                
                                                                                                                                
     In  closing,  BBNC  supports HB  336  because  it  will                                                                    
     provide short-term  energy assistance to those  who are                                                                    
     impacted the  most and provide a  mechanism to consider                                                                    
     more  permanent   energy  solutions  to   this  ongoing                                                                    
     crisis.   Both are needed  to bring energy costs  to an                                                                    
     affordable level to the benefit of all Alaskans.                                                                           
                                                                                                                                
     Thank you for  the Committee's time this  afternoon.  I                                                                    
     would be  happy to  answer any  questions that  you may                                                                    
     have.                                                                                                                      
                                                                                                                                
3:56:18 PM                                                                                                                    
                                                                                                                                
CHRIS  STORHOK,  Specialist,  Economic Development  Division  and                                                               
Alaska  Regional  Development   Organization  (ARDOR),  Fairbanks                                                               
North Star  Borough (FNSB), said  the FNSB mayor's office  and he                                                               
personally support the  bill.  Mr. Storhok  related that families                                                               
in the Fairbanks  region are struggling to pay  their heating and                                                               
power  bills  and  need  short-term   relief  until  a  long-term                                                               
solution  is found.    Because  of this  strain  on the  economy,                                                               
businesses are suffering and people are leaving the community.                                                                  
                                                                                                                                
REPRESENTATIVE SADDLER asked what  residents in the Interior have                                                               
done in  the past  in response to  fluctuations in  energy prices                                                               
and periods of extremely cold weather.                                                                                          
                                                                                                                                
MR.  STORHOK recalled  when oil  prices were  $125 per  barrel in                                                               
2007, "there was considerable  belt-tightening," and the governor                                                               
provided energy  relief which helped significantly.   Personally,                                                               
he  installed  a  more  efficient  furnace,  but  many  residents                                                               
switched to  outdoor wood boilers  which caused an  air pollution                                                               
problem.  Many hard choices were made.                                                                                          
                                                                                                                                
4:00:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER asked  whether  local residents  expected                                                               
the energy dividend by the  previous governor to continue, or did                                                               
they recognize it as a "one-time-only deal."                                                                                    
                                                                                                                                
MR.  STORHOK recalled  the program  was  recognized as  one-time-                                                               
only, and was  followed by lower energy prices.   Also, there was                                                               
optimism that  a gas  pipeline or  a coal-to-liquids  plant would                                                               
come  to   Fairbanks.  In  further  response   to  Representative                                                               
Saddler, he said the voucher  is the solution because FNSB worked                                                               
with  the Cold  Climate  Housing Research  Center, University  of                                                               
Alaska Fairbanks,  AHFC, and federal programs  to weatherize many                                                               
homes; however,  some homeowners  in the middle-income  level are                                                               
now prevented  from completing energy efficiency  upgrades by the                                                               
"credit  crunch."   He opined  Fairbanks has  taken advantage  of                                                               
existing energy efficiency programs, "but  we still have a way to                                                               
go."                                                                                                                            
                                                                                                                                
4:03:56 PM                                                                                                                    
                                                                                                                                
JOY  HUNTINGTON, Legislative  Liaison,  Tanana Chiefs  Conference                                                               
(TCC), stated  the TCC organization  is the Native  nonprofit for                                                               
the Interior  that represents 42 federally  recognized tribes and                                                               
about 40 villages.   Ms. Huntington stated the  highest price for                                                               
fuel in  the state is in  Arctic Village, where it  costs $10 per                                                               
gallon.   She  stated  her support  of HB  336,  noting that  TCC                                                               
anticipates  a long-term  solution is  coming; in  fact, TCC  has                                                               
received over $1 million through  AEA's renewable energy fund for                                                               
future biomass heat facilities.   Although this bill provides for                                                               
a short-term solution, at this time  there is a great need in the                                                               
Interior  region  where   it  has  been  extremely   cold.    Ms.                                                               
Huntington expressed  TCC's intent to continue  working with AHFC                                                               
and  other   agencies  on  weatherization  and   other  long-term                                                               
projects such  as wood heating,  clean diesel,  pre-paid electric                                                               
metering, and Organic Rankine cycle (ORC) projects.                                                                             
                                                                                                                                
4:09:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER   asked  for  more  information   on  ORC                                                               
projects.                                                                                                                       
                                                                                                                                
MS. HUNTINGTON  said an ORC  project has  been funded by  AEA and                                                               
the Denali  Commission and is  being tested at the  University of                                                               
Alaska on  improving the fuel  efficiency of a  diesel generator.                                                               
She offered to provide more information.                                                                                        
                                                                                                                                
4:10:39 PM                                                                                                                    
                                                                                                                                
WALTER  ROSE,  Energy   Specialist,  Kawerak,  Inc.  ("Kawerak"),                                                               
informed the  committee Kawerak is the  regional Native nonprofit                                                               
serving 20 tribes in the Bering  Strait.  Kawerak supports HB 336                                                               
because expensive  heating fuel has  been hurting the  region for                                                               
years;  for example,  fuel  oil  costs an  average  of $6.33  per                                                               
gallon.  The  average home in the region consumes  800 gallons to                                                               
1,000 gallons of heating fuel per  year, and last January was the                                                               
coldest on record,  thus heating fuel consumption  was 23 percent                                                               
above normal.  Although the future  is unknown, the passage of HB
336 will  leave the region  better prepared  for next year.   Mr.                                                               
Rose opined the  best way to use state funds  for energy relief -                                                               
during times  when oil prices are  high - is unclear,  and HB 336                                                               
requires   investigations  and   makes  recommendations   to  the                                                               
governor.   Kawerak also  supports the  bill because  it provides                                                               
fuel in  the short  run, while  searching for  a sensible  way to                                                               
provide  relief in  the  future.   In  addition,  by  the use  of                                                               
vouchers,  HB 336  minimizes the  potential for  fraud and  abuse                                                               
without  added  bureaucracy,  and   it  quickly  and  effectively                                                               
provides energy security for next winter.                                                                                       
                                                                                                                                
4:13:24 PM                                                                                                                    
                                                                                                                                
JOMO  STEWART, Program  Manager,  Fairbanks Economic  Development                                                               
Corporation (FEDC),  stated HB 336 is  not the kind of  bill FEDC                                                               
normally  supports,  but  does.     He  explained  that  FEDC  is                                                               
dedicated  to  building  a  system across  the  state  that  more                                                               
equitably  distributes energy  and creates  a basis  for economic                                                               
development,  growth, and  prosperity, as  modeled by  the ENSTAR                                                               
gas  system in  Anchorage.   However, in  Alaska during  times of                                                               
high energy costs, it is difficult  for residents who use oil for                                                               
space heating or  to generate electricity.    Unlike the previous                                                               
resource  rebate, which  was not  equitable in  the value  of the                                                               
energy  used, HB  336  is an  equitable  distribution of  energy:                                                               
giving the most  value to those who  need it most.    Mr. Stewart                                                               
also  stated FEDC's  and his  personal support  of the  reporting                                                               
required  by  the  bill  which  will enable  the  state  and  the                                                               
legislature to  gain an  understanding of the  impact of  the oil                                                               
economy on Alaska residents.                                                                                                    
                                                                                                                                
4:16:40 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER held over HB 336.                                                                                               
                                                                                                                                

Document Name Date/Time Subjects
1a CSHB 336 Version I.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
1 HB 336 version A.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 336
2 HB 336 Sponsor Statement.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 336
2a CSHB 336 Sponsor Statement.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
2aa CSHB 336 Sectional Analysis.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
3 HB336-DOR-TAX-03-02-12.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
4HB336-DOA-OAH-3-8-12.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
5 HB336-DOR-PFD-03-02-12.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
6 HB 336 support letter AARP.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
7 HB 336 Kawerak letter of support.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
8 HB 336 Bristol Bay letter of support.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
9 AK Commision on Aging HB 336 Energy Assistance.pdf HENE 3/27/2012 3:00:00 PM
HENE 4/3/2012 3:00:00 PM
HB 336
1a CS HB 323( ).pdf HENE 3/27/2012 3:00:00 PM
HB 323
1 HB 323 version M).pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
2 HB 323 sponsor statement.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
3 HB 323 - Fiscal Note AHFC.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
4HB 323-DOR-AHFC-03-01-12.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
5 HB 323 - State Implementation Plan (SIP).pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
6 HB 323 standards.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
7 HB 323 - EPA Wood Stove Certification.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
8 HB 323 annual savings.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
9 HB 323 Supporting Map.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
10 HB 323 - Support Letter Fairbanks.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
11 HB 323 - Air Quality Highway Sanctions.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
12 HB 323 - Support Letter FNSB.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
13 HB 323 - Support Letter North Pole.pdf HENE 3/13/2012 3:00:00 PM
HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323
B- HB 323 Presentation.pdf HENE 3/22/2012 3:00:00 PM
HENE 3/27/2012 3:00:00 PM
HB 323