Legislature(2007 - 2008)
03/25/2008 02:40 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| HB418 | |
| HB336 | |
| HB49 | |
| SB249 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 336
An Act directing the Alaska Energy Authority to
conduct a study of and to prepare a proposal for an
appropriately sized Susitna River hydroelectric power
project; and providing for an effective date.
[RECORDING EQUIPMENT FAILURE MUCH OF RECORDING IS
INAUDIBLE]
REPRESENTATIVE CRAIG JOHNSON, SPONSOR, introduced his
staff, Debbie Higgins. He pointed out the letter contained
in the member's packet itemizing the breakdown of the $1
million dollar expenditure. (Copy on File).
Representative Johnson requested questions be directed to
the Alaska Energy Authority (AEA) & urged quick passage of
the bill.
2:43:57 PM
Co-Chair Meyer asked AEA's position on the study for moving
the project forward.
2:45:26 PM
JIM HEMSATH, DEPUTY DIRECTOR FOR DEVELOPMENT, ALASKA ENERGY
AUTHORITY (AEA), ANCHORAGE (Testified via teleconference),
responded that the Susitna Dam study is one component of
the long range State plan. The plan has some history in
people's minds and could be a significant player in
determining alternative energy statewide costs. There is
no way to determine if it will be successful until it is
complete and defines the engineering information and update
cost determinations.
2:46:14 PM
Representative Hawker thanked AEA for flushing out the
cost proposal, indicating his support; however, pointed
out that the fiscal note requests a selection from AEA's
approved contractors. He reminded member's that these are
public funds and there are procurement concerns. He
worried the wording would preclude some Alaska bidders from
the process & he urged that AEA provide every possible
opportunity for Alaska hire.
Representative Gara requested a review of the studies
already done. He wanted to make sure that past reviews
compare the costs of power to the costs of other potential
projects such as the gas or bullet line. He recommended
comparisons be made and asked if the sponsor would support
that.
Representative Johnson was concerned with increased costs
when comparing studies. The bill provides for a
cornerstone of an alternative energy plan for the State.
He was already hesitant to ask the Committee for $1 million
dollars, adding that when the review is complete, the costs
will clearly be known. He did not think HB 336 was the
vehicle to begin studying all energy projects.
Representative Gara submitted that the study and proposal
should not be undertaken unless it is definitely viable.
He advised that the study would not be useful unless other
projects had also been considered. Representative Johnson
responded that it was not his intention to determine a
broad based energy component. The bill is only a first
step in the process. He hoped that the Legislature could
scrutinize other alternatives not included in HB 336.
2:51:48 PM
Representative Gara referenced Line 8, with regard to
conducting a study and preparing a proposal. He wondered
if this project made more sense than other statewide
proposals and encouraged that all be considered.
Representative Johnson referenced number six on the
accompanying explanation, stating "developing a final
report"; he did not oppose amending proposal to report.
He knew that the $1 million dollars would provide a
finished product. Representative Gara agreed that the
change would help.
2:53:49 PM
Representative Hawker warned Representative Johnson about
adopting the change too quickly. He did not see how it
could flush anything out, and possibly affecting the fiscal
note. He supported keeping "proposal".
2:54:32 PM
Representative Gara believed the legislation could impact
the fisheries. He requested a summary of the power aspects
& the affect on the fisheries. From the update of old
reports, there is indication that there could be a minimal
impact to fisheries. Representative Johnson did not think
that was necessary, adding that a beneficial sideline could
result in a recreational fishing lake.
Representative Gara suggested adding a Letter of Intent and
offered to speak with the sponsor at a later date. He
maintained that he was not comfortable with a study
submitted from a few years ago. [Inaudible]
Representative Johnson acknowledged if they had been
comfortable with the Susitna report, they would have
already started building. He believed that making the
report would either raise or decrease the necessary "flags"
of potential.
2:57:16 PM
Co-Chair Chenault commented on other alternative energy
projects. He recommended using those funds used to
determine if the projects are viable. He asked if the
study would look at the statewide dip-net fishery areas.
Representative Johnson laughed, it could possibly be a
hatchery for dip-netting.
Co-Chair Chenault referenced the side by side comparison,
looking at the cubic watt hour output. He inquired the
current kilowatt usage in the Railbelt area.
Representative Johnson did not know. He hoped that one of
the responsibilities of the new Energy Coordinator position
would be to outline current consumption.
Co-Chair Chenault asked about the State's estimated future
use of electricity.
3:01:16 PM
Representative Kelly agreed with Representative Gara about
using the "report language, which he believed could make
the consultants reach higher and that most of the results
would be borrowing information from AEA. He suggested that
#2 could cover environmental concerns. He commented on
hiring from outside the State for consultants, especially
when the need for specialized project understanding
sometimes does not exist within State; he supported those
hires. He encouraged the use of milestones in the
legislative determination. Representative Johnson agreed,
pointing out that the 2010 date was included. The first
million dollars does not address all necessary costs for
st
the project. HB 336 provides only the 1 step. He wanted
to see accountability.
3:04:44 PM
Representative Kelly appreciated that. He pointed out that
other utilities are required to provide periodic studies.
He recommended consulting those utilities before making a
comparison.
3:05:34 PM
Representative Gara [inaudible]. He asked if it was a wise
use of funds, pointing out that AEA is capable of providing
information on existing studies. The amount [$1 million
dollars] is not enough to provide a full comprehensive
study and he asked if Alaskan's really wanted to run that
risk. Representative Johnson replied yes. The State
should run the risk of spending the $1 million dollars in
order to determine if it could be a viable project. He
said if it was a less than 50% chance, he would not be
presenting it. He maintained that there is good
information available and the proposed funding elevates it
to a higher level, realizing it is a risk and that the
outcome is not known. He concluded that the upside is that
it will provide a comparison to other projects on the
table.
3:08:27 PM
Representative Gara understood the need for the assessment
request and asked for testimony from the AEA contracting
staff.
Mr. Hemsath replied that there should be significant
engineering and review necessary to determine the real
numbers. The study will attempt to provide a number with
good definition. By taking time, upgrading the information
and providing the engineering as it relates to the building
size, determining a cost in power & compared to existing
costs of power. He noted the staff at AEA is competent,
but does not have the detailed engineering background
needed for the expert study. The $1 million dollars will
cover the costs of about 20 senior professional engineers
that can look at the power aspects, reviewing what has been
done in the past and validate the design envisioned for the
next 20-years.
3:10:53 PM
Representative Gara agreed. [Inaudible]
Representative Kelly supported the comments made by Mr.
Hemsath. He noted that AEA is a small group and that they
need to take the requested resources and hire professional
consultants. He indicated his support for the bill.
3:11:52 PM
Co-Chair Meyer pointed out that the Co-Chairs had taken
the liberty of changing the funding source for the fiscal
note, removing the funds now from the Railbelt Energy
Fund. Representative Hawker voiced support for the fund
source change. He asked about the out years, recommending
they be zeroed out. Co-Chair Meyer agreed. Representative
Johnson also agreed.
3:14:28 PM
Representative Hawker commented on a previous
recommendation for replacing "proposal" with "report". He
was uncomfortable with using the report and suggested
replacing it with "an assessment of the viability".
Representative Johnson acknowledged that was the goal,
being more concise. Representative Hawker offered another
suggestion, adding language "a report, assessing the
viability of a project".
Co-Chair Meyer recommended the change be given more thought
and then made on the House floor.
Representative Kelly agreed that either phrase would work.
He thought that the options of consideration were in regard
to the implication of a proposal assessing the viability of
the project. He wanted to examine multiple options.
Representative Johnson hoped that the bill proposes a good
project. He anticipated specific combinations worth it,
for the State to invest and move forward.
3:19:16 PM
Co-Chair Meyer encouraged that further discussion occurs on
the House floor.
3:19:30 PM
Vice-Chair Stoltze MOVED to REPORT CS HB 336 (RES) out of
Committee with individual recommendations and with the new
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 336 (RES) was reported out of Committee with a "do
pass" recommendation and with a new fiscal note by the
House Finance Committee for Department of Commerce,
Community and Economic Development.
3:20:19 PM
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