Legislature(2011 - 2012)
04/19/2011 03:37 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| SB42 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 42(FIN)
"An Act relating to the quorum of the Alaska Energy
Authority; relating to the powers and duties of the
Alaska Energy Authority; relating to the acquisition
or construction of a Susitna River power project by
the Alaska Energy Authority; relating to the
definition of 'feasibility study' in the Alaska Energy
Authority Act; providing legislative approval for
certain loans from the power project fund; and
providing for an effective date."
3:37:45 PM
SARAH FISHER-GOAD, EXECUTIVE DIRECTOR, ALASKA ENERGY
AUTHORITY, explained that SB 42 allowed the Alaska Energy
Authority (AEA) to move forward with the Susitna River
hydroelectric project and increased the quorum for the
board of directors of AEA and Alaska Industrial Development
Export Authority (AIDEA) from three to four out of seven
members. The bill also provided legislative approval for
two power fund loan projects. The bill was similar to HB
103 that had been reported out of the House Finance
Committee the prior week. She delineated that the only
difference between both bills was the inclusion of the word
"acquisition" on Page 2, Line 29 in HB 103. The language
was not included in SB 42. She relayed that the change was
acceptable to AEA and that Page 3, Paragraph 18 provided
AEA with ample authorization to advance the Susitna River
hydroelectric power project.
3:40:03 PM
Representative Doogan wondered how the legislation was
impacted by the inclusion of the word "acquire" on Page 3,
Line 30 and the removal of the word "acquisition" on Page
2, Line 29. Ms. Fisher-Goad replied that both the Senate
Finance Committee and House Finance Committee versions
narrowed the scope of the legislation to allow AEA to move
forward specifically on the Susitna River hydroelectric
power project. She discussed that the inclusion of
"acquire" and "construct" on Page 3, Paragraph 12, allowed
AEA to apply to the appropriate agencies for permits and
licenses. She believed that Paragraph 18 included the
language that actually allowed AEA to construct and own the
hydroelectric project.
Representative Doogan wondered why the authority to acquire
had been removed from Page 2 and was left in on Page 3 of
the bill. Ms. Fisher-Goad did not know why the Senate had
left Paragraph 12 of SB 42 intact. She relayed that the
original versions of HB 103 and SB 42 were both broader in
scope and were not limited specifically to the Susitna
project.
Representative Costello believed that the difference was
related to language on Page 2, Line 28 "subject to
concurrence of the legislature." She did not think that
concurrence with the legislature was needed in the new
version. Ms. Fisher-Goad asked for clarification on the
question. She relayed that the SB 42 left the language
intact in the paragraph.
Representative Costello referred to Page 2, Paragraph 10
that outlined the powers of the authority; the word
"acquisition" had been removed from the paragraph that
included the language "subject to concurrence of the
legislature." The Senate had inserted the word "acquire" on
Page 3, Lines 10 and 30. She pointed out that no
requirement for the concurrence of the legislature was
included on Page 3. She interpreted that the Senate version
of the bill removed the concurrence of the legislature from
the ability for AEA to acquire the Susitna power project.
3:45:09 PM
Vice-chair Fairclough explained that the difference between
the House and Senate versions related to the removal of
"acquisition" on Page 2, Line 29 "…with a foreign country
or its agencies, for the construction, financing,
operation, and maintenance…" She furthered that on [Page 3]
Paragraph 10 pertained to the agency entering into a
contract; the Senate removed the ability for an agency to
enter into a contract without legislative concurrence.
Paragraph 12 permitted AEA to apply to the appropriate
agencies for permits, licenses, etc. in order to acquire,
construct, and operate a power project. She concluded that
the powers remained the same in both bills with the
exception of Page 2, Line 29 (removal of the word
"acquisition") the Senate removed the ability for AEA to
enter into a contract without legislative approval.
Representative Guttenberg ascertained that the legislation
cleared the way to begin the Federal Energy Regulatory
Commission (FERC) process. He wondered whether the
legislation essentially allowed the state to move forward.
Ms. Fisher-Goad replied in the affirmative.
Representative Guttenberg wondered what subsequent steps
would require legislative concurrence. Ms. Fisher-Goad
stated that the FERC process would take five to six years.
She believed that additional funds would be required for
the licensing process. She added that the construction and
power-sales agreements were additional opportunities for
legislative approval.
3:49:52 PM
Representative Gara qualified his support of the project
based on impacts to fisheries. He wanted to ensure that the
legislature had the ability to vote on the project before
construction begins. He deemed that nothing in statute
required legislative approval for the project to proceed in
the future. Ms. Fisher-Goad replied that Paragraph 18
contained the authorization for AEA to proceed with the
project.
Representative Gara shared concerns that the project could
advance without legislative approval. He spoke of the
undetermined cost of the project. He was uncomfortable
giving the agency the blanket authority to move forward
with the project without knowing whether it was cost
effective or harmful to fisheries. Ms. Fisher-Goad affirmed
that SB 42 granted legislative authority for AEA to own and
construct the project in Paragraph 18. She clarified that
AEA must obtain the ability to own the project before they
can apply to FERC.
3:53:22 PM
Representative Doogan referred to the deletion of the word
"acquisition". He wondered whether the change was
substantive. Ms. Fisher-Goad responded that it was not a
substantive change. She informed the committee that the
intent of the change was to narrow the scope of the
legislation to the Susitna project. The removal of the term
"acquisition" does not impede AEA's ability to advance the
project.
Representative Doogan asked whether a substantive change
within the functioning of AEA would happen with the
deletion of the word "acquisition." Ms. Fisher-Goad
responded in the negative.
Representative Wilson summarized that Paragraph 10 narrowed
the project to Susitna and required legislative
authorization for contracts. Paragraph 18 authorized
acquisition of the project. Ms. Fisher-Goad answered in the
affirmative.
Co-Chair Stoltze OPENED and CLOSED public testimony.
Vice-chair Fairclough referenced published fiscal note
number 9 (CED) in the amount of $1.763 million in FY 12 and
$1.418.5 million in the out years, for employee costs for
the Susitna Project Office. She cited published fiscal note
number 8 (CED) in the amount of $1.125 million in FY 12 and
$1.181.3 million in FY 13. The appropriation denoted
interagency receipts for estimated employee costs related
to the transfer of AIDEA employees contracted to AEA for
the Susitna project.
Representative Edgmon asked how the funding source related
to the Railbelt Energy Fund. Ms. Fisher-Goad answered that
the funding source for the fiscal note (FN 9) reflected
capital improvement projects (CIP) receipts, deducted from
a $65 million capital budget appropriation. The contractual
costs would remain a capital budget expense but are echoed
in the operating budget.
3:58:40 PM
Representative Edgmon wondered whether more money was
required for the following year's expenses. Ms. Fisher-Goad
responded that the annual report would provide more detail.
She was uncertain when the agency would require additional
funding.
Representative Gara asked if Paragraph 18 related to the
Susitna project subject to Paragraph 10 in the legislation.
Ms. Fisher-Goad explained that Paragraph 18 authorized AEA
to own and construct the Susitna power project. The
legislative approval was embedded in the legislation.
Paragraph 10 referred to entering into contracts, which
required legislative approval. Her interpretation of
Paragraph 18 was that it granted AEA the approval to move
forward with the Susitna project.
Representative Gara surmised that Paragraph 10 pertained to
other projects and Paragraph 18 was limited to the Susitna
project. Ms. Fisher-Goad replied in the affirmative. She
expounded that AEA did not have a revolving fund to enable
AEA to spend for its corporate purposes. The agency was
subject to the Executive Budget Act for its powers,
including appropriations to advance projects. She noted
that other routes could have been taken to obtain
legislative approval for the Susitna project. Legislative
approval was granted in Paragraph 18 of SB 42. Without
access to financing or a financing plan, the agency must
return to the legislature for additional funds.
4:04:36 PM
Co-Chair Thomas MOVED to report CSSB 42 (FIN) out of
committee with individual recommendations and the
accompanying fiscal note(s)
CSSB 42 (FIN) was REPORTED out of committee with a "do
pass" recommendation and with previously published fiscal
notes: FN 8 (CED), FN 9 (CED).
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