Legislature(2015 - 2016)BARNES 124

03/09/2015 01:00 PM RESOURCES


Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 105 AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 14 BAN PLASTIC MICROBEADS IN COSMETICS TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 92 LABEL GENETICALLY MODIFIED FOOD TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
*+ HJR 8 FEDS ALLOW STATE TO MAKE ENERGY CHOICES TELECONFERENCED
Moved CSHJR 8(ENE) Out of Committee
-- Public Testimony --
         HB 105-AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT                                                                     
                                                                                                                                
1:21:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NAGEAK  announced that the  second order of  business is                                                               
HOUSE BILL  NO. 105, "An Act  relating to the programs  and bonds                                                               
of  the  Alaska  Industrial  Development  and  Export  Authority;                                                               
related  to  the  financing   authorization  through  the  Alaska                                                               
Industrial  Development  and  Export  Authority  of  a  liquefied                                                               
natural gas production plant and  natural gas energy projects and                                                               
distribution systems  in the state;  amending and  repealing bond                                                               
authorizations granted  to the Alaska Industrial  Development and                                                               
Export Authority; and providing for  an effective date."  [Before                                                               
the committee was CSHB 105(ENE).]                                                                                               
                                                                                                                                
1:21:54 PM                                                                                                                    
                                                                                                                                
FRED  PARADY,   Acting  Commissioner,  Department   of  Commerce,                                                               
Community & Economic Development  (DCCED), began the introduction                                                               
of HB 105  by noting that Administrative Order  272 from Governor                                                               
Walker directs  the commissioner  of the Department  of Commerce,                                                               
Community &  Economic Development to  work to collaborate  at the                                                               
highest  levels of  his administration  to  advance the  Interior                                                               
Energy  Project (IEP)  to  reduce  the cost  of  energy into  the                                                               
Fairbanks area.   He said HB 105 supports that  purpose in simply                                                               
giving  more  options  in  how  to source  gas  to  support  that                                                               
project,  as  well  as updating  bond  limitations  and  deleting                                                               
outdated bond projects.                                                                                                         
                                                                                                                                
1:22:39 PM                                                                                                                    
                                                                                                                                
GENE  THERRIAULT, Energy  Policy  and  Outreach Director,  Alaska                                                               
Energy Authority (AEA), Alaska  Industrial Development and Export                                                               
Authority (AIDEA),  Department of Commerce, Community  & Economic                                                               
Development  (DCCED), continued  the  introduction of  HB 105  by                                                               
explaining  the provisions  of CSHB  105(ENE),  the bill  version                                                               
before the  committee.  He said  Section 1 provides an  update to                                                               
an existing limitation on AIDEA's ability  to bond for funds.  If                                                               
AIDEA is going  to participate in bonding a project  that is over                                                               
$6 million, AIDEA must receive  a resolution of approval from the                                                               
local government  on the  siting of the  proposed project.   That                                                               
existing cap of  $6 million has been in place  since 1990 and the                                                               
proposal is to  adjust that amount to reflect the  erosion of the                                                               
purchasing power due to inflation over that time period.                                                                        
                                                                                                                                
1:24:18 PM                                                                                                                    
                                                                                                                                
MR. THERRIAULT  explained Section  2 is an  additional adjustment                                                               
in AIDEA's ability to bond.   The existing bond limitation of $10                                                               
million,  page 2,  line 16,  was established  in 1990.   He  said                                                               
[raising it to  $25 million] will cover the  erosion of inflation                                                               
and make  an adjustment due  to the cost  of the type  of project                                                               
that  AIDEA is  asked to  participate in.   Section  3 makes  two                                                               
adjustments in AIDEA's ability to  participate with local lenders                                                               
in  commercial loans.   The  first adjustment,  page 2,  line 28,                                                               
caps the participation at $25  million, the current cap being $20                                                               
million, which was  established in 2005.   The second adjustment,                                                               
page 2, line  30, raises the cap from $20  million to $25 million                                                               
[for qualified energy development].   This cap was established by                                                               
the  sustainable  energy   transmission  and  supply  development                                                               
(SETS) statute  that was  passed a  number of years  ago.   It is                                                               
desired by  AIDEA to have the  dollar amounts for those  two caps                                                               
be equal.   He  noted that  all of page  3 is  existing statutory                                                               
language.  Turning to page 4 of  the bill he noted that Section 4                                                               
is  a new  section inserted  by  the House  Special Committee  on                                                               
Energy and  that in the original  bill this provision was  in the                                                               
repealer section.   The  original bill repealed  a number  of old                                                               
unused AIDEA bond authorizations, many  of which have been on the                                                               
books since  the 1990s.   The AIDEA board of  directors generally                                                               
won't utilize  authorizations that  become a certain  age because                                                               
the board  feels it  has to  go back to  policymakers to  get the                                                               
language refreshed  or to get  new authorization.  This  could be                                                               
because the anticipated project  for which the bond authorization                                                               
was  given  did  not  go   forward,  the  project  may  not  have                                                               
materialized, or the project may  not have survived the AIDEA due                                                               
diligence   process.     Bond  counsel   has  advised   AIDEA  to                                                               
periodically clean its books of  those old authorizations because                                                               
when bond  counsel goes out  to do a  new rating for  AIDEA those                                                               
authorizations can still weigh down  the institution's books even                                                               
though  they  likely  would  not  be utilized  by  the  board  of                                                               
directors.   One of the repeals  in the original bill  was for an                                                               
old  authorization that  allowed  for a  bulk commodities  inland                                                               
facility  to be  built somewhere  in  Cook Inlet.   That  project                                                               
never went  forward, but  legislators from  the Matanuska-Susitna                                                               
Valley who sit  on the House Special Committee  on Energy plucked                                                               
that one  project from  the repealer  section, refreshed  it, and                                                               
made a slight modification to  it, but tied the potential project                                                               
that  would come  forward from  this  refreshed authorization  to                                                               
facilities that would be built at Point MacKenzie.                                                                              
                                                                                                                                
1:27:52 PM                                                                                                                    
                                                                                                                                
MR.  THERRIAULT said  Section 5  relates to  the Interior  Energy                                                               
Project  (IEP), authorized  in 2013  under Senate  Bill 23.   The                                                               
concept under  Senate Bill  23 was  to help  finance a  source of                                                               
natural gas  off the North  Slope, primarily by helping  with the                                                               
financing of  a liquefied natural  gas (LNG) plant that  would be                                                               
able to  produce the product.   The estimated cost of  that plant                                                               
came  in higher  than  expected, however,  and  now with  further                                                               
development of natural  gas resources in the Cook  Inlet area the                                                               
AIDEA  board of  directors,  with the  support  of the  governor,                                                               
would  like to  look at  possibly sourcing  the natural  gas from                                                               
Cook Inlet.   To have  the flexibility  to do that,  the modified                                                               
language  proposed [in  the original  bill] removed  the language                                                               
specifying  that the  LNG plant  had to  be on  the North  Slope.                                                               
However,  Interior  members of  the  House  Special Committee  on                                                               
Energy were concerned that the  focus on Interior Alaska would be                                                               
lost and  so the original bill  was modified to ensure  that that                                                               
focus on  Interior Alaska was  not lost.   That doesn't  mean the                                                               
resource  produced  can't be  available  for  other areas.    The                                                               
thought  behind the  Interior Energy  Project is  that while  the                                                               
core demand of  the Fairbanks North Star Borough  helps to anchor                                                               
the project,  the commodity can be  used up and down  the highway                                                               
system,  have  possible  delivery through  the  freshwater  river                                                               
system and  maybe even coastal  Alaska, to help with  the overall                                                               
economics of  a project  because, as  with most  energy projects,                                                               
the higher the volume the lower the per unit price.                                                                             
                                                                                                                                
MR. THERRIAULT  noted Section 6  is one  of the repealers  but is                                                               
not  a complete  repealer.   The  language in  question was  last                                                               
modified by the legislature in  1992 and was a bond authorization                                                               
for the FedEx facilities at the  Anchorage airport.  Part of that                                                               
bond  authorization was  utilized  for the  construction of  that                                                               
facility and  the authorization dollar  amount that  was utilized                                                               
has been  repaid.  So, to  clean up the AIDEA  books the proposal                                                               
is  to move  the excess  bond authorization.   Section  7 is  the                                                               
complete  repeal  of  the remaining  old  authorizations  because                                                               
those  projects  never  advanced.   Section  8  is  an  immediate                                                               
effective date on the contents of the bill.                                                                                     
                                                                                                                                
1:31:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  observed that  title lines  3-4 on  page 1                                                               
talk  about production  plant, natural  gas energy  projects, and                                                               
distribution systems.   He further observed that  Section 4, page                                                               
4, lines 21-22,  talk about being located at  Point MacKenzie and                                                               
asked whether that should be reflected in the title.                                                                            
                                                                                                                                
MR.  THERRIAULT replied  he thinks  it is  included in  the title                                                               
because it deals with amending  and repealing bond authorizations                                                               
and that one amends an existing bond authorization.                                                                             
                                                                                                                                
1:32:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER commented he has  quite a few questions and                                                               
concerns about this  bill.  Regarding Section 4,  he recalled Mr.                                                               
Therriault's statement that this  pre-existing bond authority was                                                               
refreshed  with   a  slight  modification.     He   requested  an                                                               
explanation of what that "slight" modification did.                                                                             
                                                                                                                                
MR. THERRIAULT  responded that the  language was included  by the                                                               
House  Special Committee  on  Energy, and  AIDEA  didn't see  the                                                               
language until it  actually came out in  the committee substitute                                                               
(CS).   The modification removed  the language,  "related loading                                                               
and conveyor",  as well  as removed  the language  that specified                                                               
that  such a  facility could  be  built anywhere  in Cook  Inlet.                                                               
Language  was added  so  that  if it  were  to  move forward  the                                                               
facility or port would be located at Point MacKenzie.                                                                           
                                                                                                                                
REPRESENTATIVE HAWKER  noted this is  the authority for  AIDEA to                                                               
issue bonds  and said he  finds it interesting that  AIDEA didn't                                                               
know this amendment was coming  in the House Special Committee on                                                               
Energy.                                                                                                                         
                                                                                                                                
MR. THERRIAULT  answered that the  chairman of the  committee had                                                               
indicated he was considering that  and in a conversation with the                                                               
chairman's aide  it was stated  that it  may wait until  the bill                                                               
was  taken up  by  the  House Finance  Committee.   However,  the                                                               
language was included in the CS.                                                                                                
                                                                                                                                
1:34:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  observed that,  as modified,  the language                                                               
in CSHB  105(ENE) states that  AIDEA may issue bonds  to "finance                                                               
the acquisition, design, and construction  of a port facility and                                                               
equipment  related to  the development  and operation  of a  bulk                                                               
commodity  loading and  shipping terminal".   He  asked what  was                                                               
envisioned by the  original debt authority, what  was the project                                                               
going  to be,  and what  does AIDEA  envision the  project to  be                                                               
today  with the  "slight"  modification that  was  made to  those                                                               
words.                                                                                                                          
                                                                                                                                
MR.  THERRIAULT replied  his understanding  is that  initially it                                                               
was the possibility  of loading mineral elements and  that is why                                                               
the  word  "conveyor" was  included.    He  deferred to  Mr.  Ted                                                               
Leonard to further address what the original concept was.                                                                       
                                                                                                                                
TED  LEONARD, Executive  Director, Alaska  Industrial Development                                                               
and Export  Authority (AIDEA), Department of  Commerce, Community                                                               
& Economic  Development (DCCED),  responded the  original project                                                               
was to  be a mineral  bulk order or the  same type of  thing that                                                               
could be used for other bulk  commodities.  He offered his belief                                                               
that  the House  Special Committee  on Energy  is now  looking at                                                               
this as also being able to be  used as an LNG export facility and                                                               
that is  why the  committee took  out the wording.   He  said the                                                               
chair  of the  House Special  Committee on  Energy could  provide                                                               
more information on the intent.                                                                                                 
                                                                                                                                
REPRESENTATIVE  HAWKER   inquired  whether   he  is   correct  in                                                               
understanding  that Mr.  Leonard, a  representative of  AIDEA, is                                                               
saying he  is uncertain as  to the intent  in Section 4  and that                                                               
Mr. Leonard is not certain  what type of facility is contemplated                                                               
for which  the legislature would  be authorizing  state borrowing                                                               
of $50 million should this bill pass.                                                                                           
                                                                                                                                
MR.  LEONARD confirmed  Representative Hawker  is correct,  AIDEA                                                               
has not received a complete description of this.                                                                                
                                                                                                                                
REPRESENTATIVE HAWKER said this is a very important point.                                                                      
                                                                                                                                
1:37:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  said he  knows there is  discussion and                                                               
interest in a separate export project  from the west coast of the                                                               
Cook Inlet.   However,  he continued,  his focus  on this  is the                                                               
Interior  energy problem  and therefore  he will  need additional                                                               
follow-up.  He  offered his understanding that  the proposed line                                                               
for the  Alaska LNG  Project would  come to  or go  through Point                                                               
MacKenzie and commented  that that would be relevant  in terms of                                                               
infrastructure.                                                                                                                 
                                                                                                                                
CO-CHAIR NAGEAK asked  whether anyone on the committee  or in the                                                               
audience  can  respond  to  Representative  Josephson.    No  one                                                               
responded.                                                                                                                      
                                                                                                                                
1:38:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON said he would  feel more comfortable if the                                                               
title  of the  bill reflected  what the  intent is.   He  said he                                                               
still has the same concern as he has on Section 4.                                                                              
                                                                                                                                
MR. THERRIAULT replied that the  title in CSHB 105(ENE) came back                                                               
from the  drafters without that  change, which reflects  that the                                                               
drafters  considered the  title to  be adequate  as written.   He                                                               
said it is  in the committee's jurisdiction  to consider changing                                                               
the title.                                                                                                                      
                                                                                                                                
1:39:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON expressed his  concern that there have been                                                               
a number of  ideas for providing energy to the  Interior and some                                                               
have turned out  to be non-economic because  of the liquefaction.                                                               
Yet,  he  noted,  this  bill  is  targeting  strictly  energy  by                                                               
liquefaction; a  small diameter pipeline  from Cook Inlet  to the                                                               
Fairbanks  area  would  provide pipeline  gas  without  the  loss                                                               
through liquefaction  and transportation, and those  costs aren't                                                               
included in this.   He asked whether that  authority is somewhere                                                               
else within  AIDEA or whether there  is no authority in  AIDEA to                                                               
do a Cook Inlet pipeline with  gas of quality for burners without                                                               
the expense of  a gas treatment plant, giving  lower price energy                                                               
to Fairbanks.                                                                                                                   
                                                                                                                                
MR. THERRIAULT  responded that Mr. Bob  Shefchik, Project Manager                                                               
for  the Interior  Energy Project  and consultant  to AIDEA,  did                                                               
commit to Senator  Micciche that he would refresh  the members on                                                               
a possible pipeline  that would be able to  serve Interior needs.                                                               
He said Mr.  Shefchik also committed to work  with ENSTAR Natural                                                               
Gas  Company  because of  ENSTAR's  expertise  in pipeline.    He                                                               
further noted that  Mr. Shefchik will be in Juneau  on [March 10-                                                               
11]  and would  therefore be  available to  answer questions  and                                                               
meet  with Representative  Seaton.   Mr.  Therriault offered  his                                                               
understanding that the  cost of a pipeline is coming  in a little                                                               
higher  than  what  the  available  financing  is  and  said  Mr.                                                               
Shefchik could provide those numbers to Representative Seaton.                                                                  
                                                                                                                                
1:41:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  understood, then, that CSHB  105(ENE) does                                                               
not  include  any financing  authority  for  getting gas  to  the                                                               
Interior through  a pipeline from  Cook Inlet.  Rather,  the bill                                                               
is solely  that if Cook Inlet  gas is wanted, then  15 percent of                                                               
the  gas  would have  to  be  expended  to  liquefy it  and  then                                                               
transport it as LNG; that would  be the only way that AIDEA would                                                               
be able to finance Interior energy under this bill.                                                                             
                                                                                                                                
MR. THERRIAULT answered it is still  tied to LNG as a source when                                                               
looking at Section  5 of CSHB 105(ENE).  In  the last sentence of                                                               
Section 5, distribution "system"  is changed to "systems" because                                                               
the Regulatory  Commission of Alaska  (RCA) granted  the Interior                                                               
Gas  Utility (IGU)  the  service territory  outside  the core  of                                                               
Fairbanks,  so there  are currently  two distribution  systems in                                                               
Fairbanks.  Whether the  language "and affiliated infrastructure"                                                               
is   broad  enough   to  consider   pipeline   that  feeds   that                                                               
distribution  system  is   a  question  that  could   be  put  to                                                               
Legislative Legal and Research Services.   So, as was the case in                                                               
2013, the focus is on an LNG mechanism for the delivery.                                                                        
                                                                                                                                
MR. LEONARD added  that currently under the  SETS financing bill,                                                               
AIDEA cannot  finance a  pipeline from  Cook Inlet  to Fairbanks;                                                               
that is specifically  not included under what  a qualified energy                                                               
project is for AIDEA to finance under the SETS fund.                                                                            
                                                                                                                                
1:43:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON inquired about what fund and the source.                                                                  
                                                                                                                                
MR. LEONARD  replied it  is defined  under AS  44.88.900, Section                                                               
14,  which states  that "qualified  energy  development" means  a                                                               
project in the state  that involves liquefaction, regasification,                                                               
distribution, storage,  or use  of natural  gas except  a natural                                                               
gas pipeline project for transporting  natural gas from the North                                                               
Slope or Cook Inlet to market.                                                                                                  
                                                                                                                                
REPRESENTATIVE SEATON asked whether  the interpretation is that a                                                               
pipeline from the North Slope or  from Cook Inlet to market means                                                               
any sales.                                                                                                                      
                                                                                                                                
MR. LEONARD  responded yes, there  would have  to be a  change to                                                               
this section to utilize SETS funding for that type of project.                                                                  
                                                                                                                                
1:45:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  asked whether anything in  Section 4 makes                                                               
it clear  as to whether  the bulk commodity loading  and shipping                                                               
terminal  refers  to  loading and  shipping  things  overland  to                                                               
someplace within the state versus  loading and shipping something                                                               
away from the state as in exporting it via water.                                                                               
                                                                                                                                
MR. THERRIAULT answered he doesn't believe so.                                                                                  
                                                                                                                                
REPRESENTATIVE  HAWKER presumed  the language  in Section  4 that                                                               
the  "facility will  be owned  by the  authority" means  the port                                                               
facility.  He  inquired whether there is any  assurance that this                                                               
ownership through the proposed spending  authority of $50 million                                                               
will not be in competition with  any kind of a port facility that                                                               
is owned, operated, or invested in by the private sector.                                                                       
                                                                                                                                
ACTING COMMISSIONER  PARADY replied  he doesn't  believe so.   He                                                               
noted that  the original bill  simply repealed this  section with                                                               
the other  repealers and  said the  modification has  created the                                                               
questions that Representative Hawker is astutely asking.                                                                        
                                                                                                                                
1:47:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER argued  that  Section 5  is a  significant                                                               
restatement  of  the  uncodified  law that  was  passed  in  2013                                                               
following  a lengthy  public process  where the  legislature made                                                               
the policy  decision to authorize  an investment of  $275 million                                                               
in moving  gas from the  North Slope  and making it  available to                                                               
consumers in  Fairbanks.  Back  then it was called  gas trucking,                                                               
but now  it is being called  the Interior Energy Plan.   Of great                                                               
concern  at that  time was  the extremely  high cost  of consumer                                                               
energy in Fairbanks  and other Interior communities.   Under CSHB                                                               
105(ENE) the scope  of this policy call is being  changed to move                                                               
that appropriated money  to any project desired  that would bring                                                               
natural  gas  into   Interior  Alaska.    He   asked  whether  an                                                               
explanation can  be provided as  to what happened to  the project                                                               
that the legislature approved by  its policy decision in 2013 and                                                               
why AIDEA  is now  asking to be  able to take  the money  that is                                                               
left and spend it anywhere that AIDEA chooses to.                                                                               
                                                                                                                                
MR. LEONARD responded that AIDEA  moved forward with that project                                                               
and  the costs  came  in at  approximately  $13-$14 per  thousand                                                               
cubic  feet (MCF),  but  that didn't  meet  the community  target                                                               
goals.   A review  of the  community found  support for  AIDEA to                                                               
look at other alternatives to see  if the community goal could be                                                               
reached,  which  is  approximately  $15/MCF at  the  burner  tip.                                                               
Based on where AIDEA was at  on the trucking project with all the                                                               
different segments,  it was  looking like gas  to the  burner tip                                                               
was going to be over $19/MCF.                                                                                                   
                                                                                                                                
1:51:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  clarified that  there are two  numbers for                                                               
project anticipated costs of delivering  gas:  the estimated cost                                                               
of getting gas to the city  gate versus the estimated cost of gas                                                               
to the burner tip.  He requested the difference be explained.                                                                   
                                                                                                                                
MR. LEONARD  explained that cost  of gas  at city gate  means gas                                                               
into a plant in Fairbanks  prior to regasification and putting it                                                               
into  the system.   The  cost  of gas  to  burner tip  in a  home                                                               
includes [the cost to city  gate] plus cost of regasification and                                                               
distribution.  The  base estimate for cost to city  gate was $13-                                                               
$14 [per  MCF] and AIDEA  has not come to  a final cost  in that.                                                               
However, based on those costs  plus a distribution cost of $5-$6,                                                               
the estimated cost at burner tip would be approximately $19-$20.                                                                
                                                                                                                                
REPRESENTATIVE HAWKER  understood that the original  gas trucking                                                               
project,  as  envisioned and  authorized  by  the legislature  in                                                               
2013, was  determined unacceptable  to the  community due  to the                                                               
estimated  cost of  gas  to the  city gate  at  $13-$14/MCF.   He                                                               
further  understood that  according  to testimony  at a  previous                                                               
Legislative  Budget and  Audit  Committee  meeting the  community                                                               
goal was in the range of $11.                                                                                                   
                                                                                                                                
MR. LEONARD answered  the target goal mentioned  by the community                                                               
is $15/MCF,  but it doesn't  actually state  how much of  that is                                                               
for gas through  the different segments.   However, he continued,                                                               
it is  believed that to get  anywhere near the range  of $15/MCF,                                                               
gas to city gate would have to be in the range of $10-$11.                                                                      
                                                                                                                                
REPRESENTATIVE HAWKER understood that  Mr. Leonard's reference to                                                               
$15/MCF was  for the  cost to  burner tip,  and the  reference to                                                               
approximately $11/MCF was for the cost to city gate.                                                                            
                                                                                                                                
MR. LEONARD confirmed that to be correct.                                                                                       
                                                                                                                                
1:55:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER stated  that  the over-reaching  objective                                                               
here is  to get  cost relief  into Interior  Alaska, specifically                                                               
the community of Fairbanks.   He recalled an earlier announcement                                                               
that AIDEA intends  to purchase Fairbanks Natural Gas  (FNG).  He                                                               
noted that  that purchase  agreement includes  a contract  with a                                                               
subsidiary of Hilcorp  Energy Company (Hilcorp) to  move LNG from                                                               
the Cook Inlet to Fairbanks and  that this contract has a 10-year                                                               
committed delivery for  all gas required by  the current customer                                                               
base of  FNG at  $15 to  the city gate.   Yet,  the desire  is to                                                               
start over  and reconsider the  North Slope gas  trucking because                                                               
it came in at $13-$14 [to  city gate] while AIDEA invests another                                                               
$50 million  of public  funds in buying  FNG with  an inescapable                                                               
10-year  contract at  $15 [to  city gate]  while the  community's                                                               
acceptable  number  is $11  [to  city  gate].   He  requested  an                                                               
explanation  of this  paradox and  how that  integrates with  the                                                               
desire now  to continue to  look for  some other project  that is                                                               
unspecified  and for  which the  legislature would  be writing  a                                                               
blank check.                                                                                                                    
                                                                                                                                
MR.  LEONARD replied  AIDEA  does understand  that  paradox.   He                                                               
noted that  the RCA is looking  at that contract and  pointed out                                                               
that  the contract  will  be there  regardless  of whether  AIDEA                                                               
purchases the company.  He  said AIDEA is specifically looking at                                                               
this  purchase to  see how  it can  lower the  cost of  the total                                                               
system, which is  mainly the distribution system.   The belief is                                                               
that  AIDEA  can immediately  cut  that  by 8-15  percent,  which                                                               
lowers that total  cost to the burner tip.   Also, AIDEA realizes                                                               
it  will  have  to live  up  to  that  contract  as part  of  the                                                               
purchase, but AIDEA  believes it can lower the total  cost of gas                                                               
through the  blending of costs to  all of Fairbanks, and  that is                                                               
approximately 20 percent of the  total demand that AIDEA believes                                                               
is needed by  Fairbanks.  He said AIDEA is  still looking at what                                                               
is the best  source of gas to Fairbanks with  the lowest cost and                                                               
believes it needs to look at  the alternatives such as Cook Inlet                                                               
before moving forward.   It is not to say  that it couldn't still                                                               
be from  the North  Slope, but  AIDEA has been  asked to  look at                                                               
whether there  is an  alternative that  could provide  lower cost                                                               
gas and that  is the process that  AIDEA is asking to  be able to                                                               
move forward with.                                                                                                              
                                                                                                                                
2:00:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER   understood  AIDEA  is  asking   for  the                                                               
authority  to   finance  up  to  $275   million  of  development,                                                               
construction,  installation,   start-up  costs,   operation,  and                                                               
maintenance  for  an  LNG  plant  and  system.    Previously  the                                                               
legislature made the policy call  that it supported a system that                                                               
was very clearly North Slope gas  into Fairbanks.  He inquired as                                                               
to what is  AIDEA's current project plan that is  going to result                                                               
in potentially all of these savings.                                                                                            
                                                                                                                                
MR. LEONARD responded AIDEA does  not yet have the complete plan.                                                               
He  said AIDEA  is  going to  set  up  a system  to  look at  the                                                               
different alternatives and,  if there is a  better project coming                                                               
from the  south, AIDEA is  asking the legislature to  allow AIDEA                                                               
to move  forward with investing  in that project instead  of just                                                               
the North Slope.  He cannot  yet tell the committee which project                                                               
AIDEA would  invest in, but  AIDEA believes it needs  the ability                                                               
to  look at  investing in  a facility  that is  not on  the North                                                               
Slope if it could provide lower cost gas to Fairbanks.                                                                          
                                                                                                                                
ACTING  COMMISSIONER PARADY  pointed out  that the  authority for                                                               
the  investment  of  up  to  $275  million  is  in  the  original                                                               
legislation.   What's  at question  in  this bill  is simply  the                                                               
source of the gas - whether it  is the North Slope or Cook Inlet.                                                               
It is incumbent upon AIDEA that  the end price into the Fairbanks                                                               
community support the purposes of  the project, which is to lower                                                               
the cost  of energy  to those consumers  but also to  do so  at a                                                               
price  that   yields  a  conversion   rate  that   ultimately  is                                                               
successful.  That is why the tie  to the burner tip number of $15                                                               
and that  is why the drive  to consider alternatives.   But those                                                               
alternatives are  currently limited to  the North Slope,  and now                                                               
AIDEA is asking  for the authority to consider  Cook Inlet, which                                                               
does not foreclose the North Slope.                                                                                             
                                                                                                                                
2:02:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  noted   that  distribution  systems  have                                                               
consistently  been   the  total   responsibility  of   the  local                                                               
authority.   He said  he is concerned  with the  Hilcorp contract                                                               
being for  $15/MCF and the  statement that there will  be savings                                                               
on  the distribution  system.   He  inquired  whether that  means                                                               
AIDEA is  planning on  absorbing a  subsidy by  the state  of the                                                               
distribution system.  With a cost  to city gate of $15, the state                                                               
would have to build out the  distribution system for free to have                                                               
a burner tip cost of $15.                                                                                                       
                                                                                                                                
MR. THERRIAULT answered that the  original bill set in motion the                                                               
process of looking  at the cost of building  out the distribution                                                               
system  and using  the financing  tools available  to that.   The                                                               
SETS  funding has  an  ability to  delay  principle payments  and                                                               
adjust the  interest payments.   Specific  tools were  granted in                                                               
that original  financing package to  try to lower  that resulting                                                               
cost.   There  was  also  a capital  component  in  the blend  of                                                               
financing  tools,  which still  is  available  for the  board  to                                                               
figure out  where the consumer  gets the most advantage  from the                                                               
placement  of the  total tools  that  were granted  in that  2013                                                               
legislation.   Additionally,  the IGU  project is  a governmental                                                               
entity, so there  is not the profit  return/equity component that                                                               
a private  sector distribution system  has, which helps  to lower                                                               
the cost.  That is one of  the advantages of the Letter of Intent                                                               
that was signed  for AIDEA to purchase the  Pentex Alaska Natural                                                               
Gas Company,  LLC (Pentex) parent  company's assets, one  of them                                                               
being  the  existing  FNG  distribution  system.    Although  the                                                               
Fairbanks/North  Pole area  is  the  second largest  metropolitan                                                               
area, the overall demand is relatively  small for the cost of the                                                               
infrastructure  to serve  it.   Ensuring that  those two  systems                                                               
have the  lowest required return  on equity, integrating  the two                                                               
systems  for  the sharing  of  transmission  lines, storage,  and                                                               
regasification, and  linking them at  multiple points so  gas can                                                               
flow  back  and  forth  across  the  boundaries  of  the  service                                                               
territory  helps to  lower that  cost and  ultimately set  up the                                                               
possibility for combining the two systems into one.                                                                             
                                                                                                                                
2:06:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  pointed out that distribution  systems are                                                               
based on assessments of lots and  those are not subject to return                                                               
on equity because the equity comes  from the people who are being                                                               
serviced, not from  the service company - it is  a zero return on                                                               
equity  under the  current system.    For example,  if a  private                                                               
entity like  ENSTAR builds out a  system in a town  and $3,200 is                                                               
assessed  per lot  which is  then given  to ENSTAR,  there is  no                                                               
return on  equity because ENSTAR  had no equity input  into that.                                                               
He said he  is therefore unsure whether he is  hearing that state                                                               
equity is  going to  be substituted for  lot ownership  equity in                                                               
this system  and it will  be called a gift  from the state  for a                                                               
distribution  system.   If that  is done  as the  basis for  this                                                               
plan,  he  opined,  it  would  be totally  adverse  to  what  has                                                               
happened all across the state  and would be a tremendous inequity                                                               
of  gas  distribution,  and  he  is concerned  about  that.    He                                                               
requested that AIDEA provide a  definite outline of how the money                                                               
flows for  a distribution  system and  whether it  is a  loan and                                                               
what the  interest rate is.   Governments are doing that  now and                                                               
mostly there is  no return on equity because the  lot holders are                                                               
assessed and the assessments pay  that off over a 10-year period.                                                               
He said this is a question the committee needs to have answered.                                                                
                                                                                                                                
MR. THERRIAULT  replied that in Representative  Seaton's area the                                                               
municipality assessed  the lot  owners and  the state  provided a                                                               
grant of $10  million for the transmission system to  get the gas                                                               
to  the community,  thereby helping  to  lower [the  assessment].                                                               
When the Interior Energy Project  (IEP) was discussed in 2013, it                                                               
was looking at  the difference of sourcing gas off  of the ENSTAR                                                               
system  in Cook  Inlet.   The cost  of the  gas going  into those                                                               
pipes  is much  lower than  the cost  of the  gas going  into any                                                               
distribution  in Fairbanks  because  of  the geographic  distance                                                               
from the source, which is why  some extra tools were given to the                                                               
IEP.  They  give the AIDEA board some latitude  on where to apply                                                               
those  different  financing tools  to  help  the final  delivered                                                               
price to  the consumer.  The  community's target price of  $15 is                                                               
roughly  twice the  delivered price  in much  of the  Cook Inlet.                                                               
There are areas that have  this property tax assessment and there                                                               
were local improvement  districts (LIDs) on the  ENSTAR system in                                                               
the Matanuska-Susitna  area to help  push the pipes out  to areas                                                               
where  the  customer  density  was  lower.    The  price  of  the                                                               
commodity that  goes into the intake  of that pipe is  already so                                                               
much lower than anything that will  be able to be achieved in the                                                               
Interior, he reiterated.                                                                                                        
                                                                                                                                
2:10:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER recalled the  earlier testimony that it was                                                               
deemed necessary  for AIDEA to be  able to look at  sourcing gas,                                                               
including from  the Cook Inlet.   He also recalled  comments that                                                               
the savings that would immediately  be effectuated were basically                                                               
because  if the  state  goes into  competition  with someone  the                                                               
state doesn't have to make a  return on its investment or provide                                                               
for replacement costs like a business  does.  He said he is aware                                                               
of  at least  three private  sector entities  that are  currently                                                               
investigating  business plans  for delivering  gas from  the Cook                                                               
Inlet to  Fairbanks and he knows  that they have talked  to AIDEA                                                               
about this.   He asked  why the  committee would want  to approve                                                               
allowing AIDEA  to use  the state's taxing  authority to  go into                                                               
competition with those private sector entities.                                                                                 
                                                                                                                                
ACTING  COMMISSIONER  PARADY  responded  that  it  is  trying  to                                                               
achieve a  price that results  in conversion and, to  date, there                                                               
is no  evidence that  the private  sector is  able to  deliver at                                                               
that dollar.   He allowed he doesn't have  complete evidence that                                                               
AIDEA can either,  but fundamentally it is a matter  of trying to                                                               
solve  the pricing  issue  and the  conversion  in the  Fairbanks                                                               
Interior Energy Project.                                                                                                        
                                                                                                                                
REPRESENTATIVE  HAWKER  requested  an  explanation  of  the  term                                                               
"conversion factor."                                                                                                            
                                                                                                                                
ACTING COMMISSIONER  PARADY answered it is  getting homeowners to                                                               
convert to  natural gas  as a  source of  fuel for  home heating.                                                               
The term  conversion "rate" is  better than  conversion "factor."                                                               
The rate of conversion - enough  critical mass - must be achieved                                                               
to have a market.                                                                                                               
                                                                                                                                
2:12:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  said he doesn't  want anyone to  think him                                                               
unsympathetic to Fairbanks,  but he is all about trying  to do it                                                               
right.   He  said  he is  hearing a  price-driven  demand:   that                                                               
things will not  go forward until the number  being insisted upon                                                               
by  the community  is reached.    If the  very competent  private                                                               
sector folks in a very  competitive environment can't get it, the                                                               
only way  the state is going  to get it is  by essentially making                                                               
Fairbanks  a ward  of  the  state and  putting  it  on a  subsidy                                                               
forever,  and  he doesn't  think  anyone  wants that  to  happen.                                                               
Section  5 asks  the legislature  to write  a blank  check to  do                                                               
whatever  AIDEA decides  to do  without ever  coming back  to the                                                               
legislature for sanctioning or authority.   He inquired why AIDEA                                                               
doesn't come up with a  plan, numbers, contractors, and specifics                                                               
such as source  of gas and commitments to make  the gas available                                                               
that show AIDEA  can accomplish this at the  rate being requested                                                               
by the community, and then ask the legislature to pay for it.                                                                   
                                                                                                                                
ACTING  COMMISSIONER PARADY  replied  that  the description  just                                                               
offered by Representative Hawker is  the work that is underway by                                                               
the Interior Energy  Project team, which is to try  to find a gas                                                               
supply that works, utilize the  tools that are available to AIDEA                                                               
in terms of  liquefaction, transportation, storage, distribution,                                                               
and apply the state's leverage to  those activities in a way that                                                               
results  in a  price that  will  yield the  conversion rate  that                                                               
works.   He said AIDEA  is not asking  for a blank  check, rather                                                               
AIDEA is  asking for the  authority to take the  tools previously                                                               
offered  to it  by the  legislature and  consider an  alternative                                                               
source  to supply  that market.   He  said AIDEA  is open,  as it                                                               
should be, to any guidance  that the legislature cares to provide                                                               
in that direction.                                                                                                              
                                                                                                                                
2:15:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  offered his belief that  when legislators                                                               
approved that  original $275  million there  was a  trucking plan                                                               
and  a source  of gas.    There was  a  project in  front of  the                                                               
legislature and  that is what  he is  asking for before  making a                                                               
re-appropriation.  Without a plan it  is a blank check.  He asked                                                               
whether there  is any part of  the $275 million that  AIDEA needs                                                               
to continue the process on the road AIDEA is going down.                                                                        
                                                                                                                                
ACTING COMMISSIONER  PARADY recognized that this  discussion will                                                               
be continued and said the need  is for the ability to consider an                                                               
alternative source  of gas because AIDEA  was unable to get  to a                                                               
price that  worked.  The  full project detail that  the committee                                                               
is looking for is under development.                                                                                            
                                                                                                                                
REPRESENTATIVE JOHNSON said his question  is whether AIDEA can do                                                               
that study now without any additional money in this bill.                                                                       
                                                                                                                                
MR. THERRIAULT responded he thinks  there are some limitations in                                                               
using any of  the funds previously provided  from the legislature                                                               
to get  into any real  details of a  source other than  the North                                                               
Slope and whether AIDEA needs an authorization to do that.                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON stated he would  like to hear that because                                                               
he thinks the number the committee  needs to be looking at is the                                                               
number  that would  advance whatever  AIDEA needs,  not the  full                                                               
$275  million.   He requested  that the  committee hear  from Mr.                                                               
Leonard in this regard.                                                                                                         
                                                                                                                                
2:17:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  requested an  explanation of  the $750,000                                                               
that  was  approved  by  the  AIDEA  board  to  do  exactly  what                                                               
Representative Johnson is asking.                                                                                               
                                                                                                                                
MR.  THERRIAULT answered  that  a  lot of  that  effort was  also                                                               
looking at  changes to the  distribution system which  is covered                                                               
under the  existing language.   Savings were  looked at  and what                                                               
the price would  be if the price could be  lowered for the supply                                                               
for  that distribution  system.   He  said AIDEA  has held  focus                                                               
groups and  surveyed residents as  to their existing  price, what                                                               
AIDEA believed the target price  would bring their costs down to,                                                               
and  what  would be  the  rate  of  people  that would  make  the                                                               
expenditure to convert their home to  natural gas.  He said AIDEA                                                               
is not counting  on 100 percent conversion, but  rather has built                                                               
its numbers  around 75 percent, and  AIDEA is hoping a  price can                                                               
be achieved that would get a  higher conversion than that.  There                                                               
must be a certain volume in order to get the price.                                                                             
                                                                                                                                
2:18:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER said  when he asked what was  going on with                                                               
the money that had been appropriated,  he thinks he was told that                                                               
it was  really for something else  and not quite what  he took to                                                               
be  Representative  Johnson's  concern,  which is  to  bring  the                                                               
legislature  a project  and present  what works.   He  said AIDEA                                                               
Resolution  G15-02 authorizes  $500,000  from the  SETS fund  and                                                               
$200,000 from  AIDEA's economic development account  and that the                                                               
resolution  states  it  is for  a  process-driven  evaluation  of                                                               
alternative  means of  supplying energy  to Interior  Alaska that                                                               
meets the  needs of the  community.   He concluded that  AIDEA is                                                               
spending  $700,000  to   come  up  with  this   answer  that  the                                                               
legislature would like  to see before it makes  a policy decision                                                               
as to whether to invest hundreds  of millions of state dollars in                                                               
the project.                                                                                                                    
                                                                                                                                
MR. LEONARD replied the difference  is that under Resolution G15-                                                               
02 original SETS monies are  being used that were still available                                                               
to AIDEA  to look at  qualified energy  projects.  He  said AIDEA                                                               
cannot invest  funds under the new  SETS, Senate Bill 23,  of the                                                               
$125  million and  $150 million  of bonds  towards the  projects.                                                               
So, in  essence, AIDEA  has original  SETS funds  to look  at the                                                               
project; however, it  will take approximately three  months to go                                                               
through the  process and AIDEA  would then  have to wait  to come                                                               
back to the legislature next year  to get approval to invest in a                                                               
project  that doesn't  deal  with  North Slope  gas.   Putting  a                                                               
legislative session into  the mix before AIDEA is  able start the                                                               
process of investing in a  project would increase the time before                                                               
new gas would be going into Fairbanks.                                                                                          
                                                                                                                                
REPRESENTATIVE HAWKER clarified his  aforementioned cite was from                                                               
the memorandum  to the AIDEA board  members supporting Resolution                                                               
G15-02.  He  said he is uncomfortable with writing  a blank check                                                               
for [$275]  million when  he does  not know  more of  the project                                                               
details.                                                                                                                        
                                                                                                                                
2:22:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON requested  that  before the  bill is  next                                                               
brought up the co-chair solicit from  AIDEA a legal opinion as to                                                               
whether  the  interpretation  of "affiliated  infrastructure"  on                                                               
page 5 of the bill, lines  2-3, would expand to financing a small                                                               
diameter gasline from Cook Inlet to Fairbanks.                                                                                  
                                                                                                                                
REPRESENTATIVE HERRON  requested that the  title be looked  at by                                                               
the committee to ensure it is tight.                                                                                            
                                                                                                                                
2:24:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON understood  that for  the $275  million                                                               
AIDEA has not  exercised at this point the authority  given to it                                                               
by  the  legislature  to  obtain those  funds  and  develop  this                                                               
project.                                                                                                                        
                                                                                                                                
MR. THERRIAULT  replied a portion  of the capital  component that                                                               
was also included in 2013 has  been used and there have been some                                                               
loans from distribution work to FNG and IGU.                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  understood the  money AIDEA  is talking                                                               
about is  the grant  of about  $50 million that  was part  of the                                                               
2013 legislation.                                                                                                               
                                                                                                                                
MR. THERRIAULT responded that the grant was $57.5 million.                                                                      
                                                                                                                                
REPRESENTATIVE JOSEPHSON  understood the reason for  this bill is                                                               
because the North Slope plan  was uneconomical and AIDEA wants to                                                               
make an adjustment to something that might be more economical.                                                                  
                                                                                                                                
MR. THERRIAULT answered correct.                                                                                                
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  further   understood   the  bill   is                                                               
repealing a number  of other authorizations as a  cleanup to make                                                               
AIDEA's bonding portfolio look more attractive.                                                                                 
                                                                                                                                
MR. THERRIAULT replied correct.                                                                                                 
                                                                                                                                
2:25:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NAGEAK opened public testimony.                                                                                        
                                                                                                                                
2:25:56 PM                                                                                                                    
                                                                                                                                
LISA HERBERT,  Executive Director,  Greater Fairbanks  Chamber of                                                               
Commerce, testified in  support of HB 105.  She  said the chamber                                                               
believes Interior  Alaska remains the  place to do  business, but                                                               
the  chamber's mission  is made  more difficult  every year  that                                                               
goes by  without action towards  achieving low cost energy.   She                                                               
informed the committee that just  moments ago the chamber's board                                                               
of  directors wrapped  up a  meeting  with AIDEA  representatives                                                               
Dana Pruhs and  Bob Shefchik and voted unanimously  to support HB                                                               
105  and  SB  50.    The chamber's  understanding  is  that  this                                                               
legislation  provides  the  necessary  flexibility  to  AIDEA  to                                                               
advance a natural gas energy project  to address the high cost of                                                               
energy  in Interior  and rural  Alaska.   It is  another tool  in                                                               
AIDEA's toolbox  to meet the  stated goal of  bringing affordable                                                               
natural  gas to  the greatest  number of  Interior residents  and                                                               
businesses as  quickly as  possible.  Reducing  the high  cost of                                                               
energy  remains the  chamber's number  one critical  priority for                                                               
chamber  members as  well as  economic development  organizations                                                               
and  local governments  in  the Interior.    The chamber  remains                                                               
committed to  engaging with the  legislature, AIDEA, and  all the                                                               
community stakeholders  as affordable energy for  the Interior is                                                               
pursued.                                                                                                                        
                                                                                                                                
2:27:43 PM                                                                                                                    
                                                                                                                                
LUKE HOPKINS,  Mayor, Fairbanks North  Star Borough, said  he sat                                                               
in meetings  a couple of  years ago with former  Governor Parnell                                                               
and there was the  idea that this plan up north  would be the one                                                               
that   would  solve   the  energy   needs  of   Interior  Alaska,                                                               
specifically  within  the Fairbanks  North  Star  Borough.   [The                                                               
borough]  had already  set up  a municipal  utility to  cover the                                                               
area outside  of the existing  service area.   He said  that plan                                                               
for a North  Slope project wasn't anything that was  firmed up at                                                               
that point.  It  took months and months to even  get to the point                                                               
of what  is the right plan  to bring forward.   He requested that                                                               
his community  with its  air quality issues  and cost  of energy,                                                               
and the  second largest metropolitan  area in the state,  be able                                                               
to get  some flexibility through HB  [105] to be able  to proceed                                                               
with looking and penciling out.   The people in AIDEA will pencil                                                               
it out  and then  that will  become the  public process  that the                                                               
legislature  has heard  when it  was  said what  is happening  up                                                               
north.   He  urged  the  committee to  move  the  bill because  a                                                               
solution is  needed for his community  and the bill is  needed to                                                               
move forward and continue looking at other aspects.                                                                             
                                                                                                                                
2:30:38 PM                                                                                                                    
                                                                                                                                
JOMO   STEWART,  Energy   Project  Manager,   Fairbanks  Economic                                                               
Development Corporation,  offered his organization's  support for                                                               
HB 105.   He recalled that when this process  was started several                                                               
years ago the community goal was  to have affordable energy to as                                                               
many  people  as possible  as  quickly  as possible,  that  being                                                               
defined for natural gas as  $15 per million British thermal units                                                               
(MMBtu) to  80 percent  of community  structures within  three to                                                               
five years.   The reason  for choosing $15/MMBtu was  because the                                                               
cost of energy at the time  was $30/MMBtu, which is equivalent to                                                               
$30 per thousand cubic feet (MCF).   It was thought that to truly                                                               
have a favorable  impact upon the community  economy, natural gas                                                               
would need  to be cheap enough  to compete with wood  because the                                                               
community also  has an  air quality problem.   When  that process                                                               
was started the  community also had a broader  goal regarding the                                                               
Interior  Energy  Project.   When  the  community began  to  move                                                               
forward  with  how  to  design  a  system  it  was  shooting  for                                                               
replicable models,  recognizing that out of  over 200 communities                                                               
across the state,  only a handful actually  had affordable energy                                                               
on a  consistent basis, Anchorage being  one of them and  being a                                                               
community that  was directly  tied to the  Cook Inlet  gas fields                                                               
through the ENSTAR  system.  However, he continued,  for the vast                                                               
majority of other  communities energy does not  serve to underpin                                                               
diversified and growing economies,  but instead drains, cripples,                                                               
and  crushes   those  economies.     One  of  those   sources  of                                                               
replicability  was  when  the  Interior  Gas  Utility  (IGU)  was                                                               
created, a municipal utility that  could drive out those pipes to                                                               
those  lower and  medium density  areas  to ensure  that as  many                                                               
people as possible  in the community would be able  to tap in and                                                               
have  the benefit  of affordability.   The  other thing  that was                                                               
done was  to try to  come up with a  funding model that  would be                                                               
more  sustainable  and  replicable  than, say,  the  $10  million                                                               
direct grant  to get  pipes to  Homer, the $25  million to  get a                                                               
transmission  line to  the Fire  Island  wind farm,  and the  tax                                                               
credits  that go  into Cook  Inlet development.   He  pointed out                                                               
that  in 2014  the subsidy  for Cook  Inlet development  was $305                                                               
million, and $311 million in 2015,  and $282 million in 2016, and                                                               
by 2018 the subsidy  will be a total of $1.6  billion to keep gas                                                               
affordable  and available  to the  Cook  Inlet region.   For  the                                                               
Interior, the  right thing to do  seemed to be a  low-grant model                                                               
with loans  where the repayment  structure would make  more funds                                                               
available to bring  the benefits of natural  gas through creating                                                               
distribution systems  in other communities.   The belief  is that                                                               
it still  is the right  thing to do.   He urged the  committee to                                                               
look favorably  upon HB 105  and to move  it out of  committee as                                                               
rapidly as possible.                                                                                                            
                                                                                                                                
2:33:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NAGEAK closed public testimony and held over HB 105.                                                                   

Document Name Date/Time Subjects
3.9.15 HRES HB 105 Transmittal Letter.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES CSHB 105(ENE), version H.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 CSHB 105(ENE) Explaination of changes version A to version H.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES CSHB 105(ENE) Ver H Sectional Analysis.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 105 Fiscal Note.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 105 Fact Sheet.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES CSHB 105(ENE) FBX North Star Borough R2015-08.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 105 News Story Hilcorp not worried about Pentex Purchase.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 105 Sectional Analysis.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 92 Sponsor Statement.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 92 Fiscal Note.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 92 Sectional Analysis.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 92 GMO Q & A.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 14 Sponsor Statement.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 work draft, version W.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14, version A.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 Fiscal Note.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 Sectional Analysis.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 Graphic Page.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 News Article.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 5 Gyres Institute Position Paper.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 - Oppose Letter.docx HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 CS Explanation of Changes.docx HRES 3/9/2015 1:00:00 PM
HB 14
HB 105 HRES Fairbanks Chamber LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105
HB 105 HRES - Furie, LLC LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105
HB 105 HRES Fbks Economic Development Corp. LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105
HB 105 HRES Fbks North Star Borough Resolution R2015-08 - LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 92 D Stevens LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 105 - Interior Gas Utility LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105