Legislature(2021 - 2022)SENATE FINANCE 532
05/04/2021 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB123 | |
| HB27 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 27 | TELECONFERENCED | |
| + | SB 123 | TELECONFERENCED | |
| += | SB 97 | TELECONFERENCED | |
| += | HB 69 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 123
"An Act establishing the Alaska energy independence
program and the Alaska energy independence fund in the
Alaska Industrial Development and Export Authority;
and providing for an effective date."
9:22:48 AM
AT EASE
9:26:23 AM
RECONVENED
9:27:34 AM
ALAN WEITZNER, EXECUTIVE DIRECTOR, AIDEA (via
teleconference), introduced his support staff. He
highlighted that Alaska Industrial Development and Export
Authority (AIDEA) was a self-funding, public corporation.
He announced that he would begin with slide 6 of the
presentation, "Alaska Energy Independence Fund (AK EIF)."
9:27:49 AM
Mr. Weitzner addressed slide 6, "AIDEA and AEA":
Alaska Industrial Development and Export Authority
(AIDEA)
Mission: To promote, develop, and advance economic
growth and diversification in Alaska by providing
various means of financing and investment.
Alaska Energy Authority
Mission: To reduce the cost of energy in Alaska.
AEA is Alaska's energy office and lead agency for
statewide energy policy and program development.
The purpose and function of the AK EIF aligns with
AIDEA's existing scope establishing loan programs,
working with Alaska's financial sector and private
investors, as well as managing capital funds, such as
the Loan Participation Program (Enterprise Development
Account) and Development Project Financing (Economic
Development Account).
AIDEA would oversee loan programs and financial
management in partnership with AEA's energy and
technical subject matter expertise, leveraging
existing shared infrastructure and services.
An independent, five-person advisory board would
provide guidance on investment opportunities to AIDEA
and AEA. The advisory board's authority would not
supersede the governing authority of the AIDEA/AEA
Board.
9:29:19 AM
Mr. Weitzner pointed to slide 7, "Total Energy Consumption
Per Capita, 2018 (million Btu)," which offered the
following top 5 energy consumers in the country, per
capita:
1. Wyoming 967MMBtu
2. Louisiana 945MMBtu
3. North Dakota 872MMBtu
4. Alaska 830MMBtu
5. Iowa 513MMBtu
Average 358
Mr. Weitzner noted that Alaskas consumption was
approximately twice that of the national average, which he
suggested was due to Alaskas unique energy requirements,
such as the high energy demand in winter and the energy
intensive focused industry in the state. He proposed that
embracing renewable fuel sources like hydroelectric power,
wind power, and solar energy, Alaska was in the position to
be a leader in energy independence in the country.
9:30:38 AM
Senator Wielechowski surmised that the North Slope used
1bcf per day, or 40 percent of the states total energy
consumption.
9:30:59 AM
Mr. Weitzner replied in the affirmative.
9:31:06 AM
Co-Chair Bishop wondered whether Senator Wielechowski was
considering the fuel gas on the North Slope.
9:31:09 AM
Senator Wielechowski replied in the affirmative.
9:31:25 AM
Mr. Weitzner looked at slide 8, "Total Energy Expenditures
Per Capita, 2018 (U.S. dollars), which listed the top five
states in the category of total energy expenditures per
capita:
1. Wyoming - $8,651
2. North Dakota - $8,097
3. Alaska - $8,060
4. Louisiana - $7,537
5. Texas - $5,345
Average - $4,291
Mr. Weitzner related that Alaskan consumers paid some of
the highest energy rates in the country. He noted that the
th
cost of energy in the state ranked 11 nationally but when
rd
broken down on a per capita basis, the state ranked 3 and
was nearly twice the national average. He stated that
roughly 11 percent of Alaskas gross domestic product (GDP)
went to energy expenditures. He contended that the EIF
could have significant positive impacts for Alaska.
9:32:47 AM
MORGAN NEFF, CIO, AIDEA (via teleconference), looked at
slide 9, "What is the AK EIF?"
• The Alaska Energy Independence Fund (AK EIF)
serves a public purpose in meeting the unique
energy needs of Alaska to promote sustainable
clean energy projects through loan programs.
• Often referred to as a "green bank", the AK EIF
functions as a public-private entity that uses
modest amounts of public funding to leverage
private capital to accelerate investment in clean
energy projects.
• AK EIF meets the criteria to receive and manage
funds anticipated to become available through
pending federal legislation.
Mr. Neff noted that green banks were not actual banks and
did not compete with actual banks. He said that they were
designed to work collaboratively with the banking and
private sector of Alaska to accelerate and enhance
investment across the state. He shared that every green
bank was designed around a purpose and was a paint by
numbers approach to addressing critical needs for each
individual state and community. He furthered that unique
energy needs and cost burdens would be identified
throughout the state to deploy a program with multiple
tools that would incentivize borrowers and the private
sector. He noted that once the anticipated federal dollars
came through, they would offset administrative operating
costs.
9:35:18 AM
Co-Chair Bishop emphasized the importance of working with
private banks in the state when executing the EIP program.
9:35:40 AM
Senator Olson surmised that the green bank would be
available to private individuals that wanted to construct
alternative energy sources in their private home.
9:35:57 AM
Mr. Neff agreed, and explained that the green back would be
available for all residents of the state.
9:36:08 AM
Senator Olson wondered who he should direct members of his
constituency to for more information an applying.
9:36:12 AM
Mr. Neff explained that the full program would be rolled
out with an application process. He said that any
accessibility limitations to applications would be
addressed.
9:36:39 AM
Senator Olson asked when people would be able to apply.
9:36:42 AM
Mr. Neff responded that SB 123 had an effective date of
January 2022.
9:36:52 AM
Senator Wielechowski wondered whether the low-interest
loans would be available to for-profit corporations.
9:37:05 AM
Mr. Weitzner replied that the funds would be available to
for-profit corporations. He said that the program was
intended to target industrial, commercial, and residential
programs across the state.
9:37:25 AM
Co-Chair Bishop asked whether guidelines of the amount of
funds available to applicants versus need of those applying
would be considered.
9:37:47 AM
Mr. Weitzner replied that flexibility on establishing
programs would help to that end. He said that they had
looked to other green banks in the country for guidance.
9:38:32 AM
Senator Wielechowski asked whether there was any language
in the bill that would prohibit a significant amount of the
loans or grants going to large industries.
9:38:51 AM
Mr. Weitzner corrected that the programs were for loans and
not grants. He furthered that at the current stage there
were no limitations in the legislation as it was believed
that program flexibility was paramount. He said the
advisory bord would provide guidance for the programs. He
added that green banks that had experienced success in the
country had not included such limitations on industry.
9:40:10 AM
Mr. Neff looked at slide 10, "Initial Capitalization and
Funding":
.notdefProposed initial capitalization: $10 million
appropriation from State of Alaska UGF with an
anticipated federal match.
Mr. Neff relayed that like the underlying financing tools
and need to work with the private sector community in the
state drove the methodically designed aspect of the fund,
so was the initial capitalization. He stated that the
numbers on the slide were derived from extensive study and
analysis of existing green banks in the country and their
initial capitalization, and were meant to ensure against
over, and under, capitalization.
9:40:59 AM
AT EASE
9:42:09 AM
RECONVENED
Mr. Neff continued to discuss slide 10. He related that
initial capitalization was critically important. He said
that the initial capitalization of the New York,
Connecticut, and Maryland green banks had been studied
based on their GDP, GDP per capita, total population, total
energy expenditures per capita, and their initial
capitalization based on those factors, He added that
private capital leverage was critical. He noted that each
of the green banks had been successful in deploying a
modest amount of green bank capitalization into
substantial, multi-leverage component of financial sector
capital; from approximately $6 to $8 private financial
capital to each green bank dollar. He shared that in 2020,
Connecticut was able to deploy $36 million green bank
dollars to leverage over $312 million in total investment
for the year. He noted the two fiscal notes attached to the
legislation one for the initial capitalization of the $10
million and another for the Operating Budget from ADIEA
receipts. He said that the fund was designed so that the
return would offset expenses and be in the position to
accept operational capital from the proposed national
legislation.
9:44:32 AM
Mr. Weitzner interjected that the benefits of the fund to
the state was economic development in the state and jobs.
He said that in 2019 the green bank in Connecticut had
generated significant opportunity for investment than
previous grant programs. He added that 13,000 jobs had been
created and $1.5 billion in investment. He pointed out that
a definition for sustainable energy development in the
legislation. He stressed that the fund could only be used
for sustainable energy projects.
9:46:44 AM
Mr. Weitzner looked at slide 12, "Economic Benefits to the
AK EIF.":
Average annual cost of energy per Alaskan - $8,060
Modest public funds + private investment in clean
energy Create AK EIF
10 percent - $806: average annual energy savings per
Alaskan
20 percent - $1,612: average annual energy savings per
Alaskan
30 percent - $2,418: average annual energy savings per
Alaskan
Injects Hundreds of Millions of Dollars into Alaskas
Economy
Frees up approx. $589 million to $1.7 billion in
discretionary spending every year
9:47:49 AM
Mr. Neff addressed slide 13, "National Green Bank and
Accelerator":
HR 806 Clean Energy and Sustainability Accelerator
Act
S 283 National Climate Bank Act
o Congress has introduced the Accelerator Act that
would form a national "green bank" capitalized
with $100 billion.
square4 Bipartisan co-sponsors, including Alaska
Rep. Don Young.
o If/when passed, these acts would provide
investment and operational capital.
square4 Creation of the AK EIF would allow Alaska to
receive additional investment and
operational capital for a "green bank".
o The Clean Energy and Sustainability Accelerator
is part of the Biden Administration's American
Jobs Plan ("The Infrastructure Bill").
9:49:04 AM
Mr. Neff pointed to slide 14, "Alaska Energy Independence
Fund (AK EIF)":
OVERVIEW
"An Act creating the Alaska energy independence fund
in the Alaska Industrial Development and Export
Authority; and providing for an effective date."
square4 Make capital more accessible to borrowers
for sustainable energy development projects.
• Partner with private capital to fund
businesses and projects, including
energy-efficiency, renewable power,
micro-grid, transportation, sustainable
agriculture, and more.
square4 Incentivize co-investment in the non-fossil
fuel energy sector between the public (the
State of Alaska through AIDEA in partnership
with Alaska Energy Authority), Alaska's
financial sector, private investors, and
philanthropic donors.
square4 AK EIF bill aligns with the proposed federal
bills, including the new definition of
"sustainable energy development".
9:50:03 AM
Mr. Neff discussed slide 15, "Alaska Energy Independence
Fund (AK EIF)":
Financing and Investments
• The Fund would leverage its capital alongside
Alaska's financial sector to enhance total
investment in Alaskan clean energy programs and
projects.
• Eligible to make loans, provide credit
enhancement structures, purchase loans, provide
development funding and other forms of financing
for sustainable energy development in Alaska's
commercial, residential, and industrial market
sectors.
• The Fund would consist of appropriations made by
the legislature, loans or other assets
transferred to the Fund by AIDEA, unrestricted
loan payments, interest, or other income earned
on loans, investments or assets of the fund, and
available federal funding.
9:50:50 AM
Mr. Neff addressed slide 16, "Program Workflow." The slide
presented a flow chart illustrating the program workflow.
9:51:39 AM
Mr. Neff pointed to slide 17, "Alaska Energy Independence
Fund (AK EIF)." The slide highlighted the various ways the
green bank fund functions would improve independent energy
investment:
Functions of the Fund
The AK EIF prioritizes affordable, local, reliable,
sustainable, and independent energy.
Barrier to Investment Perceived project risk
Solution Credit enhancement
Examples Provide a loan loss reserve; can mitigate
risk and allow investment to flow at longer term of
lower rate
Barrier to Investment Inefficiencies of scale
Solution Aggregation and warehousing
Examples Aggregate small projects to meet scale to
attract private capital
Barrier to Investment First-in-kind transaction
Solution Technical assistance
Examples Put in technical legwork that comes with
closing more labor intensive, innovative transactions
Barrier to Investment Marginal economics
Solution Co-investment
Examples Lend to project, in senior or junior
position, to improve overall economics for investors
and customers
9:53:37 AM
Co-Chair Bishop wondered whether there would be electronic
and paper applications available, particularly for those
without computer access.
9:54:03 AM
Mr. Neff replied that while the program was being developed
into its full comprehensive nature, the ability for all
communities to access applications had been identified as a
consideration.
9:54:27 AM
Senator Hoffman spoke of the success of the Alaska
weatherization programs. He thought that if homes were
going to have clean energy for heat it was also important
that the homes be properly weatherized for efficiency.
9:57:51 AM
Mr. Weitzner replied that one of the largest programs
offered by green banks in the lower 48 was energy
efficiency. He said that the proposed legislation
contained, within the definition of sustainable energy
development, several elements that concentrate on energy
efficiency. He believed that programs could be developed to
address Senator Hoffmans concerns.
9:58:53 AM
Senator Hoffman responded that the state had several
successful loan programs. He thought that the proposed loan
program was good if the recipient could repay the loan, but
people in rural Alaska paid the highest costs for energy in
the world, while having the lowest incomes in the state. He
did not think that the proposed loan program would help
those people.
10:01:17 AM
Senator Wielechowski understood that as the program
developed it could be used to provide weatherization
programs or provide low-income loans to huge and profitable
corporations. He pointed out that the advisory board that
would be set up did not have to have legislative approval.
He thought it could be beneficial, and wondered whether
AIDEA would support, that one of the chairs on the board be
someone from rural Alaska, a utility co-op, or a consumer
protection organization to ensure that the funds went to
Alaskan consumers, who desperately needed low-cost energy
solutions.
10:02:29 AM
Mr. Neff replied that the bill was introduced based off the
advisory board. He suggested AIDEA was amenable to
suggestions from the legislature on how the advisory board
should be developed to best serve the fund and communities.
10:02:49 AM
Senator Wilson thought that the economic benefits on slide
12 were possibly misstated. He wondered whether the numbers
reflected the total cost, across the state, per family. He
pondered whether the average family of 5 paid $40,000 on
annual energy costs.
10:03:13 AM
Mr. Neff responded that the calculation was on a per capita
basis. He said that a 10 to 30 percent reduction in $6
billion in annual expenditures would result in the numbers
reflected on the slide. He conceded that an all things
being equal data set had been used.
10:03:50 AM
Senator Wilson thought that the $589 million to 1.7.
billion in freed up discretionary spending was a false
statement.
10:04:11 AM
Mr. Neff replied that the analysis was correct based off a
10 to 30 percent reduction across the EIA numbers of
approximately $8,000 per capita, based on a total
population of 730,000, which equated to under $6 billion in
annual energy expenditures per year, and was just under 11
percent of the annual GDP.
10:04:36 AM
Senator Wilson argued that if all things were not equal
the number was wrong. He maintained that the figure was
inaccurate of the actual benefits that the bill would
provide for Alaskans.
10:04:49 AM
Senator Wielechowski cited Page 4, section 5 of the
legislation, which gave the authority to create limited
liability corporations (LLC), or limited partnerships, not
only for the purpose of the program but seemingly for any
AIDEA purpose. He wondered why AIDEA needed the authority.
10:05:19 AM
Mr. Weitzner replied that under AS 44.88.172, AIDEA already
had the authority to create subsidiary corporations. He
said that the additional language in the bill would allow
for those same subsidiaries to be created under the EIF. He
clarified that the language currently in the legislation
was in the previously cited statute.
10:06:24 AM
Mr. Neff concluded his presentation.
10:06:41 AM
Mr. Weitzner addressed the Sectional Analysis (copy on
file):
Section 1 Amends AS 44.88.070 Purpose of the
authority to add "sustainable energy development"
under the various means of financing and means of
facilitating financing provided.
Section 2 Amends AS 44.88.159(a) under Interest
rates to add "the Alaska energy independence fund
(AS 44.88.452) under AS 44.88.450-44.88.456."
Section 3 Amends AS 44.88.159(b) under Interest
rates to add "the Alaska energy independence fund
(AS 44.88.452) under AS 44.88.450-44.88.456."
Section 4 Amends AS 44.88.159(g) under Interest
rates to add reference to "sustainable energy
development".
Section 5 Amends AS 44.88.178 Creation of
subsidiaries to allow the authority to create one or
more subsidiaries "for the purpose of administering,
operating, or expanding the Alaska energy independence
program." It also states, "Subject to limitations for
the use of the economic development account under AS
44.88.172 and the Alaska energy independence fund
under AS 44.88.450-44.88.456," in reference to the
authority's ability to transfer assets to a subsidiary
created under this section.
10:08:16 AM
Co-Chair Bishop solicited questions from the committee.
10:08:20 AM
Senator Wielechowski said that he would research the
statutes in Section 5 offline.
10:08:28 AM
Mr. Neff continued with the Sectional Analysis:
Section 6 Amends AS 44.88 by adding four (4) new
sections:
AS 44.88.450 Alaska energy independence program
creates the program within AIDEA to make loans
and provide other forms of financing for
sustainable energy development in the state and
establishes an Advisory Board, consisting of five
members appointed by the Governor, to make
recommendations to AIDEA on the fund programs and
best practices.
AS 44.88.452 Alaska energy independence fund
establishes the fund within AIDEA for the uses
and purposes of AS 44.88.450-.456. It states the
fund consist of appropriations made by the
legislature, loans or other assets transferred to
the fund by AIDEA, unrestricted loan repayments,
interest, or other income earned on loans,
investments, or assets of the fund, and available
federal funding. The fund is not an account in
the revolving loan fund (AS 44.88.060) and
requires AIDEA to account for the fund separately
from the revolving fund. Finally, this section
allows AIDEA to create additional accounts in the
fund; and to transfer amounts between accounts in
the funds (subject to agreements made with the
holders of AIDEA's bonds or with other persons).
AS 44.88.454 Sustainable energy development;
powers and duties of the authority outlines
AIDEA's abilities, subject to AS 44.88.450-.456:
? Establish a subsidiary corporation subject
to the requirements of AS 44.88.178;
? Establish financing programs and products
that AIDEA deems necessary to encourage and
promote sustainable energy development in
the state;
? Invest in eligible sustainable energy
development alone or with other investors
(including private capital providers);
? Provide capital and fund management to
eligible sustainable energy development and
specifies in what forms this is allowable;
? Make and execute contracts and other
instruments to implement AS 44.88.450-.456;
? Acquire real or personal property by
purchase, transfer, or foreclosure when the
acquisition is necessary to protect AIDEA's
interest in a loan or other financial
product;
? Enter into lease-purchase agreements
(subject to AS 36.30.085);
? Defer principal payments or capitalize
interest on loans;
? Provide financing and services to
municipal energy improvement assessment
programs established in accordance with AS
29.55.100; and
? Exercise any other power necessary to
implement AS 44.88.450-.456.
This section (AS 44.88.454) also allows AIDEA to
adopt regulations to implement AS 44.88.450-.456,
including:
? An application process for acquiring
financing under the Alaska energy
independence program;
? Qualifications for applicants applying for
financing under the program;
? Record keeping requirements to accumulate
and track measurable data related to the
fund; and
? Fiscal controls for the fund.
AS 44.88.456 Limitations on financing; use as
security prohibits AIDEA from using the fund
established in AS 44.88.452 to make a loan
guarantee if the amount exceeds $20 million
unless AIDEA has obtained legislative approval.
It states financing under AS 44.88.454 is limited
to the life of eligible sustainable energy
development, with financing limited by the
estimated useful life of the project. Finally, it
states AIDEA may use the fund established in AS
44.88.452 as security for a bond guarantee as
long as it doesn't conflict with subsection (1)
of this section.
Section 7 Amends AS 44.88.900 Definitions to add
definitions for "sustainable energy development" and
"eligible sustainable energy development".
Section 8 Provides a January 1, 2022 effective date
for this Act.
10:13:33 AM
Senator Wielechowski looked at Section 7, line 9, and asked
for an example of industrial decarbonization.
10:13:51 AM
Mr. Weitzner replied that much of the language mimicked
what was in the national act. He listed some examples.
10:14:24 AM
Senator von Imhof thought that there should be further
conversation regarding small versus large companies. She
said that assurances need to be made that the loans were
paid back to the green bank. She assumed that the green
banks would not compete with commercial banks.
10:14:58 AM
Mr. Weitzner replied that the green banks would work hand
in hand with commercial banks.
10:15:05 AM
Senator von Imhof wondered how the green banks would work
with the commercial banks.
10:15:19 AM
Mr. Weitzner reiterated that the programs would work hand
in hand with the financial sector.
10:16:20 AM
Senator von Imhof wondered how quickly the money could be
deployed.
10:16:35 AM
Mr. Weitzner responded that first regulation for the
programs would need to be put in place with input from the
advisory board, banks, and credit unions.
10:17:12 AM
Mr. Neff furthered that talks with the Coalition of Green
Capital had identified $5 billion that could go into a
program in Anchorage that would generate substantial
savings and job growth. He
10:18:22 AM
Mr. Weitzner added that the capitalization from the general
fund was to initiate some of the credit enhancement
programs that would bring in the financial sector. The
capital was to leverage programs for future investment.
10:18:57 AM
Senator von Imhof noted that deploying $10 million would
take time. She noted the four new positions listed on the
fiscal note. She asked why the loan servicing processor
already employed by AIDEA could not absorb the extra work
generated by the bill.
10:19:47 AM
Mr. Weitzner said that the fiscal note positions were in
anticipation of the growth of the program. He explained
that the EIF would deal with more loans than other
programs, which would create more work and the necessity
for more positions.
10:21:17 AM
Mr. Neff added that the new positions would also receive
anticipated federal appropriations and help to target the
critical leverage ratio.
Co-Chair Bishop asked whether there was a possibility to
leverage $130 million in federal funds.
Mr. Neff replied in the affirmative.
10:22:16 AM
Senator Wielechowski asked whether, instead of
appropriating $10 million from the general fund, would
there be anything that would stop the legislature from
reappropriating the $10 million from the already $400
million in liquid assets currently held by AIDEA.
10:22:46 AM
Mr. Weitzner referred to AS 44.88.020:
There is created the Alaska Industrial Development and
Export Authority. The authority is a public
corporation of the state and a body corporate and
politic constituting a political subdivision within
the Department of Commerce, Community, and Economic
Development, but with separate and independent legal
existence.
Mr. Weitzner referred to AS 44.88.190(b):
(b) The funds, income, or receipts of the authority
may not be considered or constitute money of the
state, nor may real property in which the authority
has an interest be considered land owned in fee by the
state or to which the state may become entitled or in
any way land belonging to the state, or state land
referred to in Art. VIII of the Alaska Constitution.
Mr. Weitzner cited AS 44.88.120(b):
(b) The bonds issued by the authority do not
constitute an indebtedness or other liability of the
state or of a political subdivision of the state,
except the authority, but shall be payable solely from
the income and receipts or other funds or property of
the authority. The authority may not pledge the faith
or credit of the state or of a political subdivision
of the state, except the authority, to the payment of
a bond and the issuance of a bond by the authority
does not directly or indirectly or contingently
obligate the state or a political subdivision of the
state to apply money from, or levy or pledge any form
of taxation whatever to the payment of the bond.
Mr. Weitzner contended that the statutes ensured that AIDEA
could act as a public corporation and a development finance
authority for the state. He argued that directing an
appropriation out of AIDEAs funds would directly impact
its ability to interact with the private sector for the
leverage within the EIF. He said that other green banks
used appropriated funds. He stated that Senator
Wielechowskis suggestion would also affect bonding
capacity. He highlighted that in 2019, an appropriation of
$2 million had directly impacted the way that credit
agencies viewed AIDEAs credit rating and financial
integrity. He said that this resulting in a four-level
reduction of their credit rating and credit agencies
questing the management of capital reserves by AIDEA.
10:25:15 AM
Mr. Weitzner hoped he had sufficiently answered Senator
Wielechowskis question.
10:25:42 AM
Senator Wielechowski thought that the argument made by Mr.
Weitzner was one of why AIDEA should be opposing the use of
tens of millions of their funds to pay oil tax credits. He
wondered whether there was a distinction.
10:26:01 AM
Mr. Weitzner believed that there was an amendment of the
governors budget that addressed the use of general funds
to pay the credits.
10:26:20 AM
Senator Wielechowski asked whether Mr. Weitzner would agree
that it was inappropriate to use AIDEA funds to pay oil tax
credits.
10:26:29 AM
Mr. Weitzner replied that he had cited the statutes to
reply directly to Senator Wielechowskis question about
using AIDEA funds to fund the EIF. He said that the
administration had put forth legislation concerning the use
of general funds.
10:26:50 AM
Senator Wilson pointed to Page 5, lines 16 through 19:
(b) The fund consists of appropriations made by the
legislature, loans or other assets transferred to the
fund by the authority, unrestricted loan repayments,
interest, or other income earned on loans,
investments, or assets of the fund, and available
federal funding.
Senator Wilson wondered which other funds could be
transferred by AIDEA.
10:27:20 AM
Mr. Weitzner replied that the intent was to be able to
transfer existing energy loans that fit the definition of
sustainable energy development under the EIF.
10:27:46 AM
Senator Wielechowski noted that there were $60 million in
AIDEA funds for oil tax credits in the current operating
budget crafted by the other body. He pointed Section 7 and
asked whether there was a scenario where low interest loans
for fossil fuel development would be acceptable.
10:28:17 AM
Mr. Weitzner responded that the EIF was addressing
sustainable energy in the state, which would require a
unique approach, particularly in rural areas that were
reliant on diesel generation.
10:28:55 AM
Senator Olson thought that the provisions of the bill would
be helpful to rural Alaska. He expressed concern that the
bill could overly benefit corporations. He wondered why his
constituents should support the legislation.
10:29:40 AM
Mr. Weitzner believed that the bill addressed the unique
energy needs of the state. He did not believe that the bill
focused on large corporations working in the state but
built on the capacity for clean, renewable energy and
energy efficiency throughout the state.
10:30:39 AM
Senator Olson looked at Sections 5 and 6. He contended that
the definitions addressed many of the for-profit
corporations working in the state. He spoke of the HR 806,
on the federal level, and wondered how SB 123 was in
parallel with the federal legislation.
10:31:36 AM
Mr. Weitzner responded that HR 806 and SB 123 were aligned.
He deferred further response to a representative from
Coalition for Green Capital.
10:32:16 AM
Co-Chair Bishop looked at Section 7, line 19. He wondered
whether snow machines would qualify under the bills
definition of clean transportation.
10:33:04 AM
Mr. Neff responded that the program was designed to serve
the public purpose and address the unique energy needs of
the state. He said that regulations and programs would be
defined by the advisory board.
10:33:33 AM
Mr. Weitzner cited Section 7, lines 14 and 15:
(ii) other sustainable technologies including
distributed generation, advanced battery, and combined
heat and power;
Mr. Weitzner cited Section 7, lines 19 through 21:
(F) clean transportation, including battery electric
vehicles, hydrogen vehicles, plug-in hybrid electric
vehicles, and other zero-emissions vehicles for
consumers, businesses, government, and public transit;
Mr. Weitzner surmised that snow machines would be
applicable under the language in Section 7.
10:34:21 AM
Senator Wilson countered that under the language, the loan
program would be in competition for a car loan from a
commercial bank.
10:34:49 AM
Mr. Weitzner reiterated that the programs would work with
the commercial banks and would not be in competition with
them.
10:35:28 AM
Senator Wielechowski looked at Section 7, lines 23 through
25:
(H) any other emissions reduction or energy efficiency
technology the authority determines to be consistent
with the Alaska energy independence program;
Senator Wielechowski thought the language was quite broad
and wondered whether it could include a coal burning plant,
provided the plant was run as clean as possible.
10:35:51 AM
Mr. Weitzner noted that the language defining sustainable
energy development, on the federal level and in SB 123,
would allow for coal burning plants. He added that the
focus would be on improving energy efficiency and reducing
greenhouse gasses.
10:37:14 AM
BERT HUNTER, CONNECTICUT GREEN BANK, STAMFORD, CT (via
teleconference), spoke in support of the bill.
10:43:37 AM
CHRIS ROSE, EXECUTIVE DIRECTOR, REAP, SUTTON (via
teleconference), testified in support of the legislation.
10:48:48 AM
Co-Chair Bishop OPENED public testimony.
10:49:03 AM
LIZZIE NEWELL, AFACT, ANCHORAGE (via teleconference), spoke
in support of the bill. She believed the legislation would
help with climate change, energy costs, and job insecurity
in the state. She relayed a personal story about acquiring
affordable energy.
10:51:58 AM
HEATHER KOPONEN, SELF, FAIRBANKS (via teleconference),
echoed the concerns of Senator Wielechowski, and the make-
up of the advisory board. She stressed the need for a
transparent public process.
10:53:39 AM
ROBERT VENABLES, EXECUTIVE DIRECTOR, SOUTHEAST CONFERENCE,
JUNEAU (via teleconference), spoke in support of the
legislation. He stressed that energy issues had been
paramount in the state for decades. He believed that the
bill was consistent with the states energy policy and
would help to finance energy solutions for the state. He
stressed that reducing energy costs would produce
significant savings to Alaskans.
10:56:27 AM
JOMO STEWART, FAIRBANKS ECONOMIC DEVELOPMENT, FAIRBANKS
(via teleconference), testified in support of the
legislation. He noted that capital was often a barrier to
the viability of energy projects. He believed that the bill
filled the gap between grants and traditional loans. He
thought that the most important part of the legislation was
allowing AIDEA to deviate form traditional investor rules
and financing criteria.
10:58:47 AM
TIM DILLON, EXECUTIVE DIRECTOR, PENINSULA ECONOMIC
DEVELOPMENT DISTRICT, KENAI (via teleconference), spoke in
support of the legislation. He highlighted the benefits of
the EIF. He urged committee support for the legislation.
11:00:10 AM
MARGI DASHEVSKY, SELF, ANCHORAGE (via teleconference),
spoke in support of Green Bank, but felt that AIDEA had a
long-standing record of public distrust and mismanaged
investments. She believed that legislative oversight of the
intent of the legislation was paramount and that all
projects receiving loans specify how their project would
reduce greenhouse gas emissions. She believed that the
legislation required further amending.
11:01:52 AM
Co-Chair Bishop CLOSED public testimony.
SB 123 was HEARD and HELD in committee for further
consideration.