Legislature(2019 - 2020)SENATE FINANCE 532
04/30/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB91 | |
| SB103 | |
| SB104 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 91 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 103 | TELECONFERENCED | |
| += | SB 104 | TELECONFERENCED | |
SENATE BILL NO. 91
"An Act relating to the development and operation of a
hydroelectric site at the Nuyakuk River Falls;
providing for the amendment of the management plan for
the Wood-Tikchik State Park; and providing for an
effective date."
9:37:41 AM
SENATOR LYMAN HOFFMAN, SPONSOR, relayed that he had been
trying to address the issue of rural energy costs for some
time. He thought SB 91 offered an opportunity to lower
energy costs in the Bristol Bay Region. He provided a
Sponsor Statement:
SB 91 adds the operation of a hydroelectric site at
Nuyakuk River to the Wood-Tikchik Management plan
stating that it "is not considered an incompatible use
in the Wood-Tikchik State Park".
Nushagak Electric & Telephone Cooperative (NETC) has
advanced this project through public outreach, desktop
feasibility research using existing data, and onsite
work that is permissible under the current statutory
and management plan restrictions. SB 91 allows further
onsite studies to advance the project evaluation
process.
There are two potential hydroelectric sites currently
in the Park enabling statutes, Grant Lake and Elva
Lake. SB 91 adds Nuyakuk to that list.
The Nuyakuk site is preferable for several reasons;
Low impact, this is a diversion project with
no dam and no significant change in the natural
course of the river
Production, the project has the potential to
provide 100% of the current electric needs for
several communities
Location, this site is close to the Park
boundaries and would have a very small footprint
in the Park
The Nuyakuk Hydroelectric Project is a regional
infrastructure development that will bring both low
cost, renewable energy and broadband
telecommunications to at least six communities
throughout northern Bristol Bay. This design would
divert water from above the falls, flow the diversion
through an underground 1500' penstock (pipe), through
a powerhouse and back into the river in a tale race
below the falls. The powerhouse would have a very low
visual impact.
The overall cost of this 30-megawatt regional
hydroelectric project, including transmission
facilities and communications fiber, is estimated at
$140 million. This would be first hydroelectric
project in SW Alaska with regional service. In
addition to Dillingham, the communities served include
Aleknagik, Koliganek, New Stuyahok, Ekwok and
Levelock. The potential also exists for service to
additional communities.
This project has enjoyed the support of local
stakeholders, public administration and park
management in the efforts to date. SB 91 is necessary
to further project evaluation and permitting.
Senator Hoffman addressed the Sectional Analysis for the
bill (copy on file):
Section 1: Adds "or the Nuyakuk River Falls" to AS
41.21.167(c) to include it on a list of sites that are
not considered an incompatible use of the Wood Tikchik
State Park.
Section 2: Instructs the Wood-Tikchik State Management
Council along with the Department of Natural Resources
to amend the Wood Tikchik Management Plan to conform
with the change made in Section 1.
9:41:48 AM
Co-Chair Stedman wanted to engage in discussion on the
river system in the area. He asked about volumes of water
during winter.
Co-Chair von Imhof noted that the demand for freezer space
in the summer could also be an issue to consider.
9:43:34 AM
BOB ARMSTRONG, ELECTRIC OPERATIONS MANAGER, NUSHAGAK
ELECTRIC AND TELEPHONE COOPERATIVE, discussed the
presentation "Nuyakuk Hydroelectric - Hydropower for
Bristol Bay," (copy on file). He relayed he had arrived in
Dillingham three years previously at which time he too over
operations for the cooperative.
9:44:22 AM
Mr. Armstrong looked at Slide 2, "Logical Natural
Location":
? Glacial moraine defines Wood Tikchik lake system
Creates natural dam
Lake acts as a natural Sediment deposition site
Nuyakuk Falls acts as a natural spillway
Mr. Armstrong directed attention to the map on the slide.
He pointed out the line of mountains and the top part of
the lake system that came out the Nuyakuk River and broke
over the ridge. He explained that the lakes acted as a
sediment pond and the falls were like a spillway;
altogether the land was like a natural dam.
9:45:08 AM
Mr. Armstrong spoke to Slide 3, "Tikchik Lake":
The lake system feeding the falls is 1544 square
miles
? This slide compares Tikchik Lakes and Lake Mead
? Each red line is 35 miles
Mr. Armstrong said that the hope was to tap the river at
the upper side of the falls. He noted the size of the water
reservoir, pointing out Lake Meade of the right and the
Tikchik Lake System on the left.
9:45:21 AM
Mr. Armstrong referenced Slide 4, "Power Production
Location and Potential":
? Nuyakuk Falls
? 2.5 miles inside WTSP
? Flow monitored by USGS since 1953
? Initial evaluation is diverting <25% flow 4.5 to
>10 MW
? Enough production for regional distribution
? Production potential matches seasonal demand
Mr. Armstrong stated that he had visited the USGS site,
which contained over 60 years of daily flow data, and had
used Google Earth Pro to determine a desktop prediction of
the drop at the falls. He clarified that the power demand
in Dillingham was higher in the summer than in the winter
due to fish processing. He added that summer was when river
flows were at their height. He shared that the demand for
power was lowest in the winter when river flows were
slowest.
9:46:42 AM
Senator Wielechowski asked about the required mega-watt
usage for the area.
Mr. Armstrong informed that the area peaked at 4.8 MW,
which was the highest ever. He added that the up-river
villages were about 600 kilowatt (KW).
Senator Wielechowski asked about a potential plan for
transmission lines.
Mr. Armstrong specified that the information was in a
future slide.
9:47:18 AM
Senator Bishop asked about potential ice facilities in the
region.
Mr. Armstrong stated that no entity had approached the
company about an ice facility. He was certain that the
issue would be explored. He noted that lower energy cost
savings would be passed on to fishermen.
Senator Bishop thought it was interesting the USGS has been
monitoring the flow of the river since 1953. He asked
whether hydropotential had been considered for the area in
the past.
Mr. Armstrong answered in the negative.
9:48:40 AM
Co-Chair Stedman asked about the KW rate that communities
could expect.
Mr. Armstrong stated that upcoming studies would determine
the KW amount. The amount of water that could be used would
determine the price. The electric company was cooperative,
and therefore not for profit, so the more wattage that
could be sold, the less it would cost.
Co-Chair Stedman thought that using current consumption it
could be expected that consumption would increase. He was
pleased to see there was a proposed increase in
generational capacity. He expected that the rates were in
the region of $.50 to $.60 per KW and hoped that the
project would cut those costs in half.
Mr. Armstrong thought a fuel surcharge would come off the
cost at the top, $.17 out of the $.42 currently charged to
residents.
9:50:55 AM
Senator Wielechowski revealed that he had a potential
conflict as he worked for the Electrical Workers Union.
9:51:16 AM
Co-Chair von Imhof noted the windmills she had seen in
Dillingham. She asked whether there was a planned
comparison between hydro and wind power. She asked how the
transmission line would compare to wind power.
Mr. Armstrong responded that the hydropower would be less
expensive than wind. He explained that the problem with
wind in Dillingham was that the mountains were set back off
the road system, so there were no roads to the
mountaintops, where the wind would be optimal. He said that
there were smaller windmills that did okay and added that
the state had conducted a wind study that had shown that
all the sites that would provide enough power for the
community were inaccessible.
Co-Chair von Imhof referenced the price of the project, and
asked Mr. Armstrong how the funds were to be secured.
Mr. Armstrong stated that the cooperative would go to the
Rural Utility Service (RUS), which was a government agency
that loaned money to cooperatives across the country. He
said that a meeting had occurred in Washington D.C. where
it had been established that the service would cover the
financing.
Co-Chair von Imhof asked if the $20,000 fiscal note would
be used to cover a business analysis of loan and financing
costs. She understood that the question would be answered
later in the presentation.
9:53:27 AM
Mr. Armstrong turned to Slide 5, "Power Plant":
? The falls occur at an oxbow in the river
? An intake above the falls
? Short (approx. 2500 ft. forebay)
? Short power channel (1500')
? Powerhouse with two 5MW bulb-type turbines
? Affected water flow 3000 feet from the top of the
falls to the bottom
Mr. Armstrong directed attention to the blue line on the
map on the slide, which showed where the falls would be
tapped. He said that the process would result in little
water temperature change and the nitrogen levels would
remain like the natural levels found in the falls.
9:54:35 AM
Senator Wielechowski asked whether there were concerns
about impacts on fish.
Mr. Armstrong stated that there were strong concerns about
fish, which had prompted the urgency to complete the
studies. He said that the board had passed a fish first
policy and would abandon the project if the studies proved
that the project would be damaging to the fishery. He
mentioned the Federal Energy Regulatory Commission (FERC)
process, and which was rigorous in its environmental
protections.
Senator Wielechowski asked whether there was a salmon run
in the area.
Mr. Armstrong responded in the positive. The cooperative
thought the project would leave the fish free to ascend and
descend the river. The project was designed to co-exist
with the environment.
9:56:16 AM
Senator Wilson asked about the current stage of the permits
for the project.
Mr. Armstrong stated that June 2019 would be the 1-year
anniversary on the FERC permit; the permit gave a three-
year maximum to complete the studies. There had been two
studies done the previous year. Further studies required by
the FERC process required the passage of the legislation.
9:56:57 AM
Co-Chair von Imhof asked which bills Mr. Armstrong was
speaking of.
Mr. Armstrong replied SB 91 and the house companion bill HB
99.
9:57:09 AM
Mr. Armstrong considered Slide 6, "Extent of the watershed
that is upstream of the Project." The slide showed the
location of the site according to the overall fishery.
9:57:28 AM
Mr. Armstrong displayed Slide 7, "Transmission System,"
which showed a map depicting the transmission lines. He
noted that the yellow lines indicated already existing
lines, the red showed the lines that would be constructed.
9:57:56 AM
Senator Wielechowski asked whether there was any plan to
have transmission lines go to mines in the region.
Mr. Armstrong answered in the negative. He said that the
closest mine was 9 miles away and there would not be enough
power to support a mining operation.
9:58:32 AM
Co-Chair Stedman referenced past energy projects and
cautioned that it was prudent to expect the project to run
over schedule. He recalled one intertie section to Wrangell
that came in on budget, but all other projects had been far
off original projections. He recommended adding cost
overruns to any analysis.
10:00:03 AM
Co-Chair von Imhof added that a lot of the projects in
Southeast Alaska had been funded by grants rather than
loans. She thought it was important to incentivize
consumers to pay rates.
Co-Chair von Imhof looked at Slide 7 and assumed that the
transmission lines were aerial. She noted that there was a
great deal of plane activity in the area. She wondered
whether part of the study would consider air traffic, and
overall environmental, safety.
Mr. Armstrong confirmed that the area would be studied for
safety. The line to Aleknagik was at the top of the glacier
moraine and was a good route. He added that all the
geographic challenges would be included in the studies. He
added that the cooperative had been investigating a new
kind of pole that vibrated into the ground, negating the
need to dig or pour concrete. He offered that there would
not be a huge tower system.
10:03:00 AM
Mr. Armstrong highlighted Slide 8, "Considerations":
? Project would displace 1.5M gallons of fuel oil
annually at current consumption of 25,000 MWHs
? Estimated yearly average power production for this
project is
72,800MWHs this would displace 3+M gallons of fuel
? Estimated cost to build $120M
? Estimated cost avoidance (NETC ONLY) over 40-year
license period:
Fuel at current cost ($2.10/gallon) $126M
Scheduled genset maintenance $9M
Regulatory compliance for diesel generation $12M
Total $147M
THIS TOTAL IS ASSUMEING ALL THE COST STAY THE SAME FOR
THE NEXT 40 YEARS!
? Transmission system would provide a route for
Broadband middle mile expansion
Mr. Armstrong thought there might be grant opportunities
for some of the proposed project. He explicated that an
additional feature would be the hard-line fiber for
broadband to upriver villages and to Dillingham.
10:04:27 AM
Co-Chair Stedman thought as long as the consumer rate was
lower than the target of $.60, he expected that the
economic activity in Dillingham was more competitive and
there would be economic activity generated by the project.
Mr. Armstrong agreed. He had been working with cooperatives
for 30 years. He said that energy costs were the baseline
of any community economy.
10:06:06 AM
Senator Bishop looked at the proposal and considered the
issue of global warming and wondered what affect the
project would have on the state's carbon footprint.
Mr. Armstrong replied that he did not have a number. He
stated that emissions tests had been performed under
permit. He stated that the carbon footprint of the project
was not part of any study. He offered the numbers from the
emissions testing.
Senator Bishop pondered whether the completed FERC study
would include the carbon footprint.
Mr. Armstrong said that it would be included in the FERC
study.
10:07:53 AM
Co-Chair Stedman commented that he had villages in his
district that used hydropower as well as diesel. He mused
that the cost of power prevented villages from enjoying
Christmas lights. He thought that bringing lower cost of
power to the communities in the area would improves
peoples lives in small ways like being able to enjoy
Christmas lights during the holidays. He reiterated that
the time and money budget for the project should plan for
additional time and expense.
10:09:32 AM
Co-Chair von Imhof OPENED public testimony.
COREY WARNOCK, MCMILLEN JACOBS ASSOCIATION, WASHINGTON (via
teleconference), spoke in favor of the legislation. He
thought he was invited to testify in order to shed light on
the FERC regulatory process. He asserted that the intent of
the bill was to allow the study to go forward to determine
the viability of the project. He stated that there was a
rigorous process that needed to take place over the next 3
to 4 years that would determine whether the project could
move forward.
10:12:12 AM
Co-Chair Stedman thought rural Alaskans deserved equal
access to energy as those in urban areas.
10:13:06 AM
ROBERT HIMSCHOOT, CEO AND GENERAL MANAGER, NUSHAGAK
ELECTRIC CORPORATION (via teleconference), relayed that the
corporation had looked at the project and believed that it
would get communities off diesel; the overall savings of
1.5 million gallons of diesel per year was considerable.
He believed that there was solid regional support for the
project and that there had been due diligence to determine
the viability of the project. He thought the project held
huge potential for the regional economy.
10:15:12 AM
PETER ANDREW, PRESIDENT, NUSHAGAK CORPORATION (via
teleconference), said he had served on the board for 20
years. He offered his availability for questions. He noted
strong community support for the project.
10:16:35 AM
MARK LISAC, SELF, DILLINGHAM (via teleconference), spoke in
support of SB 91. He was a Nushagak Cooperative member and
a renewable energy advocate. He had been opposed to past
proposed projects, which had been found unfeasible. He
supported the bill because it was the only way to get
permission to determine the feasibility of the project. He
thought the potential energy security and reduction of
diesel usage was important to consider.
10:18:37 AM
PAUL LIEDBERG, SELF, DILLINGHAM (via teleconference),
supported the bill. He had been a resident of Alaska for
40 years. He had worked in resource management. He thought
it was important to consider the original intent of the
management plan for the Wood-Tikchik State Part. He noted
that considerable debate went into the decision to
establish the park. He thought it was important to consider
whether the impact of the project was a fair exchange for
the impacts to the park, the environment, and the regional
communities. He supported the project if it did not
materially conflict with the original intent of the park.
He could not comment on whether he supported the full
development of the project but believed that the studies
should move forward. He thought it was important to be
watchful that potential impacts be minimized as the state
worked for greater energy access.
10:21:35 AM
Co-Chair von Imhof CLOSED public testimony.
10:21:53 AM
Co-Chair Stedman reminded that in the early 1900's the
community of Petersburg had built a hydro plant. The
venture had been costly and was built to make ice for
fishing. The change enabled the fishing fleet to stay
longer and have larger catches. The hydro project was still
functional. He recalled that the Gold Creek hydro project
th
had been built in the early 20 century and was still
functional. He noted that neither of the projects had
adversely affected the communities they were build in.
Co-Chair Stedman addressed environmental impacts. He
asserted that the worldwide projection of fuel consumption
was on the rise and that there were not enough people in
Western Alaska to affect the carbon footprint. He discussed
population disparities between Western Alaska and other
parts of the world. He thought most of the state was a
park, and that there was a very small human footprint on
the land in the state. He supported moving forward to
complete an analysis and electrify the region with
hydropower.
10:25:38 AM
TIM GRUSSENDORF, STAFF, SENATOR LYMAN HOFFMAN, addressed FN
1, OMB Component 3001, from the Department of Natural
Resources. The note was for $20,000 to revise the existing
state park management plan and to match the statutory
changes required in the bill.
SB 91 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 91 Concerns.pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 91 |
| SB 91 Sponsor Statement, Sectional and project update.pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 91 |
| SB 91 letters of support.pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 91 |
| Hydro presentation 3-18_cw_3_25_18.pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 91 |
| SB 103 Work Draft Version G.pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 103 |
| SB 103 Explanation of Changes SB 103 (FIN).pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 103 |
| SB 104 Work Draft Version K.pdf |
SFIN 4/30/2019 9:00:00 AM SFIN 2/4/2020 9:00:00 AM |
SB 104 |
| SB 104 Explaination of Changes version K.pdf |
SFIN 4/30/2019 9:00:00 AM SFIN 2/4/2020 9:00:00 AM |
SB 104 |
| SB 104 Unrestricted General Fund Spreadsheet.pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 104 |
| SB 103 Support Letters.pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 103 |
| SB 104 Support Letter.pdf |
SFIN 4/30/2019 9:00:00 AM |
SB 104 |