Legislature(2007 - 2008)SENATE FINANCE 532
03/26/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB 303 | |
| SB185 | |
| HB 152 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 303 | TELECONFERENCED | |
| + | SB 185 | TELECONFERENCED | |
| + | HB 152 | TELECONFERENCED | |
| + | TELECONFERENCED |
CSHB 152(RES) "An Act establishing a renewable energy project account and a renewable energy fund and describing their uses and purposes." Co-Chair Stedman spoke to this first hearing of the bill. He described the intent was to hear from the Bill's Sponsor and take public testimony. 10:08:14 AM Representative Bill Thomas presented an overview of the bill that attempts to meet the energy needs throughout Alaska. He declared that the high cost of fuel has made it difficult for Alaska residents to make ends meet which has a direct impact on Alaska's economy. He reported the renewable energy options in Alaska are wind, geothermal, solar, tidal and hydro. Many communities in Alaska have been researching cleaner, more cost-effective energy sources but need funding to help harness this energy. Representative Thomas maintained that HB 152 will establish a renewable energy fund, administrated by the Alaska Energy Authority, and an advisory committee appointed by the Governor from various utility, environmental, business, state and Native interest groups. He described the fund as offering both loan and grant options for applicants to give pursue valid renewable energy source in their areas. Representative Thomas stated, for the record, that twenty three House members and fifteen members of the Senate support this bill. Co-Chair Stedman referenced a request for a $300 million endowment but questioned what other funding might be used to capitalize this process. 10:12:35 AM Representative Thomas remarked that when the bill started last year, there was no initial plan for funding. He informed the Committee that the Governor offered $250 million into a renewable energy plan and now the bill is trying to move along because of the large Alaska surplus this year. He noted that the $300 million, at seven percent, would provide a $21 million per year fund to start many of these projects and hopefully add additional monies over the years. Senator Elton questioned on Page 4, line 1, which refers "to be eligible for a grant it must be a hydro electric facility." He questioned if "facility" covers intertidal or just the hydroelectric project. Representative Johnson believed this to include the intertidal line where the communities need to be linked. Senator Elton asked if this would be the same definition under a loan component of the program. 10:15:18 AM Senator Dyson questioned that since Alaska has some of the largest coal deposits in America why was not coal included. Representative Thomas replied that coal is not considered a renewable energy. He reported that natural gas was allowed because there is a place between Fairbanks and Canadian border where there is no wind or tidal resources so the natural gas pipeline gas will be allowed at the last alternative. Senator Dyson pressed that under this bill why could not coal be used as the last alternative. Representative Thomas replied that the bill was trying to deal with renewable energy, not fossil fuel. 10:17:44 AM Representative Thomas continued that when this bill was being drafted three years ago, coal did not have a good reputation compared to natural gas. He stressed that natural gas would be allowed as it would be following the highway. 10:18:59 AM Co-Chair Hoffman asked if the advisory committee on Page 5 was so that the Legislature could adjust the projects as they saw fit. 10:19:24 AM JOHN BITNEY, STAFF, REPRESENTATIVE JOHN HARRIS, disclosed that the advisory committee was being formed to help set up the methodology to rank and score projects after they have been received by the Alaska Energy Authority. He stressed that any funds for grants available would be subject to appropriation. Co-Chair Hoffman questioned that once submitted what would be the role of the Legislature in reviewing or adjusting that list. Mr. Bitney responded that the program would operate like other programs that are ranked, scored, evaluated and presented to the Legislature. He reiterated that the advisory committee would give the Legislature guidance. 10:21:07 AM Co-Chair Stedman questioned if an endowment of $300 million was created yielding approximately $15 million to be expensed would this remove the Legislature entirely from the process. Mr. Bitney responded that there is no intention to remove the Legislature from the process since the funds are subject to appropriation. Co-Chair Stedman addressed a scenario where there would be $15 million on the table with high expectation that the Legislature would fund the projects submitted. 10:23:37 AM Mr. Bitney responded that there are a large number of projects and he sees an endowment of $15 million as not an outstanding amount of money to get many projects working since some can be expensive and large scale. He noted that, if the Legislature chooses, it may want enlarge the annual amount. Mr. Bitney thought it would be interesting which projects will be up for the first go around and he anticipated there would be a lot of them. Co-Chair Stedman questioned if one of the projects alone was budgeted at $500 million. Mr. Bitney agreed. 10:25:26 AM Senator Elton responded that there is talk that the Legislature has a lot of authority in granting these loans, but in Section 2, it simply states that the authority and consultation for the projects ride with the advisory committee. He remarked that it seems to give the advisory committee the power to make a loan or provide a grant outside the Legislature. Mr. Bitney responded that he does not see how to get around the appropriation authority of the Legislature. Senator Elton asked if anything in this bill relinquishes the authority of the Legislature. Mr. Bitney responded that there are other funds that are an appropriation given every year and the agency is giving authority for those grants. Senator Elton asked if the new director of the Alaska Energy Agency is an employee of the Governor and if this bill needs to accommodate that switch. Senator Elton advised it could be awkward in potentially giving the authority to the Governor. Co-Chair Stedman asked that the agency return with comments for Senator Elton's questions. 10:29:32 AM Co-Chair Hoffman supported the concept but mentioned two problems. He emphasized that there are viable projects that need to proceed and it is important to respond to today's oil prices by implementing these alternative energy projects now. He wondered if that could be addressed and also questioned where the agency envisioned receiving the money to jump-start this fund and how large could it get. 10:30:56 AM Mr. Bitney remarked that a memo was submitted requesting a $300 million appropriation into the fund for the first year. Co-Chair Hoffman raised this question because Senator Murkowski mentioned an energy bill that passed the U.S. Congress and wondered if there were funds attached to that legislation. He pointed out that if there were a possibility for matching funds from the federal government it could be mentioned that Alaska was stepping up to the plate with this appropriation. Co-Chair Hoffman asked if the Agency should be pursuing and funding existing projects first so Alaskans can see their energy rates reduced much earlier and at a faster pace. Mr. Bitney responded he would check with Senator Murkowski to see if this new legislation in Congress will involve matching federal funds. Mr. Bitney communicated that the agency would like to see the existing projects met in this year's capital budget process. 10:35:01 AM Co-Chair Stedman pointed out that one issue today is the high revenue stream. He emphasized that there are many questions on the type and selection of renewable energy resources. He stressed that the Legislature does not want to select less beneficial choices to the citizens of the state based on political pressure. He felt everyone would be better served in concentrating on the process and policy and not allocating several million to a particular area without more study. 10:39:02 AM CHRIS ROSE, EXECUTIVE DIRECTOR, RENEWABLE ENERGY ALASKA PROJECTS testified via teleconference and supported HB 152 with there many members throughout the state. He stressed that it is impossible to be competitive in the world economy without a stable source of energy. He believed when there are no fossil fuels involved, stable prices occur. Mr. Rose noted that this is also a local entity which can supply local jobs. He concluded that the development of an advisory energy authority would set up a process to start testing these to get most viable projects. 10:42:29 AM EARNEST WEISS, MAYOR, CITY OF KING COVE testified via teleconference in support of the bill. He cited that King Cove has, for more than ten years, one of the most prolific run-of-the-river hydro electric facilities in the state that provides more than half of the community's annual power production. He noted that at twenty four cents a kilowatt hour, King Cove had one of the lowest, single-site costs of power among all the communities in Alaska. He asserted that the community is looking forward to an even more advanced facility for a stronger saving for its citizens. 10:45:41 AM GARY HENNIGH, CITY ADMINISTRATOR, CITY OF KING COVE testified via teleconference, and supported HB 152. He reiterated that King Cove decided in the early 90s to build this renewable energy river hydro project and it has proved a smart choice. He noted that the methodology for establishing the new loans and grants from the new fund should focus on places like King Cove. 10:47:55 AM PHIL STEYER, DIRECTOR OF CORPORATE COMMUNICATIONS, CHUGACH ELECTRIC testified via teleconference in support of HB 152. He would like to raise the ratio from ninety-three percent of natural gas and seven percent hydroelectric to a higher amount of hydroelectric. AT EASE: 10:48:45 AM RECONVENED: 10:49:04 AM 10:49:07 AM SCOTT SALINE, REFRIGERATION CONTRACTOR, SITKA testified via teleconference, and referred to Section 3, line 19, "provide for renewable power production." He expounded on renewable BTU production. He stressed that the more efficient method is GO thermal exchange heating, using the heat of the ocean or Yukon River to reject heat into people's home. 10:53:20 AM BILL LEIGHTY, DIRECTOR, THE LEIGHTY FOUNDATION, supported the bill. He noted that anything achieved in Alaska will have great demonstration value within the state and to the world. RECESSED: 10:55:25 AM RECONVENED: 4:55:44 PM
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