Legislature(2017 - 2018)CAPITOL 17
03/08/2018 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB374 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 374 | TELECONFERENCED | |
HB 374-ON-BILL FINANCING OF ENERGY IMPROVEMENTS
10:23:50 AM
CHAIR WOOL announced that the only order of business would be
HOUSE BILL NO. 374, "An Act relating to on-bill financing by an
electric or gas distribution utility for certain energy
efficiency and conservation improvements."
10:24:13 AM
REPRESENTATIVE RAUSCHER moved to adopt the proposed committee
substitute (CS) for HB 374, labeled 30-LS1333\R, Laffen, 3/7/18,
as the working draft.
CHAIR WOOL objected for discussion.
10:24:51 AM
ROB EARL, Staff, Representative Adam Wool, Alaska State
Legislature, paraphrased the changes in Version R, which read
[original punctuation provided]:
· P. 1, lines 11-13
This is reworded language recommended by the drafter
to make it clear that if the utility enters an on-bill
financing agreement, they will be using a meter
conservation charge and the charge may only be used to
recover the costs listed.
· P. 1, line 10: "energy Storage device" is inserted
after "energy efficiency device". This insertion is
also added to the other 14 times the list of eligible
devices appears in the bill.
· P.2, lines 6-9
Subsection (b) has been replaced. The new language
makes it clear that any building that is fully
constructed and in use will qualify.
10:26:28 AM
REPRESENTATIVE RAUSCHER directed attention to [page 2] line 9
and offered anecdotes regarding the various phases of initial
construction within his nearby community, which included Tyvek,
tar paper, blue tarps, and siding without the window cut-outs.
He asked how the financing would view this.
MR. EARL, in response, explained that initial construction was
not defined in statute, and offered his belief that common usage
of the phrase would mean that people were living in a fully
enclosed structure with electricity. He opined that a blue tarp
for a roof would most likely not qualify for financing.
REPRESENTATIVE RAUSCHER pointed out that this would negate about
70 percent of the homes in his community.
REPRESENTATIVE JOHNSTON said that many homes in Fairbanks
started with the basement and worked up. She suggested to tie
this initial construction to construction financing, and leave
it open to those who did not require financing. She opined that
this might offer better clarity.
CHAIR WOOL offered his belief that many of the building projects
which slowly morphed were "probably self-financed" as a
construction loan would be on a timetable with a contractor. He
allowed that, as this was at the discretion of the utility, the
utility could say whether the home was not quite ready.
REPRESENTATIVE JOHNSTON suggested that not under new
construction financing could be a line of demarcation.
REPRESENTATIVE RAUSCHER asked if Representative Johnston wanted
to offer this as an amendment.
CHAIR WOOL said that he would prefer not to re-write the bill at
this juncture in committee. He acknowledged that someone living
in a house would qualify as "not under initial construction."
He suggested that an energy saving device might be installed
during the initial construction phase and that some of the
determinations might be left to the discretion of the utility.
REPRESENTATIVE RAUSCHER suggested that this be vetted in the
next committee of referral, the House Labor and Commerce
Standing Committee.
10:32:03 AM
GENE THERRIAULT, Alaska Industrial Development and Export
Authority (AIDEA), in response to Chair Wool, explained that a
building with utility service that someone was using was
obviously being lived in. [indisc] He suggested that a
definition could be determined between now and the next
committee [indisc]
CHAIR WOOL offered his belief that a certain amount should be
left to the discretion of the utility to determine whether
construction was initial or more complete.
REPRESENTATIVE JOHNSON shared that the Matanuska Electric
Association, Inc. (MEA) already had experience with this type of
program. She read from a prepared statement, which stated: "it
generally costs more for a utility to properly spool up,
provide, and administer a lending function." MEA pointed out
that they were not a professional lending institution, and that
customers financed by MEA were required to incur all costs
associated with closing a commercial loan. In comparing with
the Lower 48, the larger the customer base, the less expensive
the program. She pointed out that this program could take
business from professional lending institutions for construction
and improvement loans.
REPRESENTATIVE JOHNSON added that MEA had addressed the need to
analyze debt, even as that was not a primary function of a
utility. She added that, as a public utility, taking risk on
utility funding to do improvement loans was questionable.
10:36:43 AM
CHAIR WOOL pointed out that the participation was completely
voluntary, and that no utility had to enter into the
transaction. He noted that the proposed bill just allowed the
debt to be placed on the utility bill, which increased the
tendency to pay it back as a person could lose their utility.
He added that it was intended to lower the utility bill and the
savings would at least partially offset the incurred debt. He
shared that some utilities would support the program, and some
would not.
REPRESENTATIVE JOHNSON offered her belief that MEA was in
support of the proposed bill, as long as it was voluntary, even
though they had reasonable concerns.
CHAIR WOOL reminded the committee that this was a completely
voluntary program.
REPRESENTATIVE JOHNSON stated that it was not her intent to kill
the bill or make it harder. She surmised that there had been a
similar program in the past.
10:39:08 AM
CHAIR WOOL removed his objection. There being no further
objection, Version R was adopted as the working draft.
10:39:25 AM
REPRESENTATIVE RAUSCHER moved to report CSHB 374, Version 30-
LS1333\R, Laffen, 3/7/18, out of committee with individual
recommendations and the accompanying zero fiscal notes. There
being no objection, CSHB 374(ENE) was moved from the House
Special Committee on Energy.
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