Legislature(2005 - 2006)SENATE FINANCE 532

02/13/2006 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 188 BULK FUEL REVOLVING LOAN FUND CAP TELECONFERENCED
Heard & Held
+= HB 243 SWAN LAKE-TYEE LAKE INTERTIE TELECONFERENCED
Heard & Held
+ SB 207 AK AEROSPACE DEVEL. CORP BD MEMBERSHIP TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                                                                                                                
     CS FOR HOUSE BILL NO. 243(FIN)                                                                                             
     "An Act relating to the financial plan for the intertie                                                                    
     between the Swan Lake and Tyee Lake hydroelectric projects;                                                                
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
AT EASE 10:08:05 AM / 10:08:38 AM                                                                                           
                                                                                                                                
Co-Chair Green  ordered the bill SET  ASIDE as the bill's  presenter                                                            
was unavailable at the moment.                                                                                                  
                                                                                                                                
[NOTE: This  bill was re-addressed  later in  the meeting.  See Time                                                            
Stamp 10:35:18 AM.]                                                                                                             
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 243(FIN)                                                                                             
     "An Act relating to the financial plan for the intertie                                                                    
     between the Swan Lake and Tyee Lake hydroelectric projects;                                                                
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
10:35:18 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green ordered  the bill  back before  the Committee.  [See                                                            
Time Stamp 10:08:05 AM  for previous Committee action on this bill.]                                                            
                                                                                                                                
RON MILLER,  Executive  Director,  Alaska Industrial  Development  &                                                            
Export  Authority   and  Alaska  Energy  Authority,   testified  via                                                            
teleconference  from Anchorage  and noted  that Dave Carlson,  Chief                                                            
Executive Officer,  Four Dam Pool Power Agency (FDPPA)  had provided                                                            
his  testimony on  the  bill during  its  first hearing  before  the                                                            
Committee.                                                                                                                      
                                                                                                                                
Mr. Miller  stated  that the prior  Legislative  Session, the  House                                                            
Finance committee  substitute for this bill had been  transmitted to                                                            
this Committee.  That  bill, CS HB  243(FIN), extended  the date  by                                                            
which  the  FDPPA  must provide  a  financing  plan  to  the  Alaska                                                            
Industrial Development & Export Authority (AIDEA) for approval.                                                                 
                                                                                                                                
Mr. Miller  reminded the  Committee that  the initial agreement  for                                                            
the  sale and  purchase  of the  Four  Dam Pool  was  outlined in  a                                                            
Memorandum  of Understanding  (MOU)  that  specified  a $73  million                                                            
purchase price  and a five million  dollar credit that was  based on                                                            
certain  contingencies  being met.  One of those  contingencies  was                                                            
that the FDPPA  present to AIDEA, by April 11, 2005,  a finance plan                                                            
that demonstrated  committed funds sufficient to complete  the power                                                            
line  intertie system  between  Swan Lake  and Tyee  Lake. The  plan                                                            
FDPPA  provided to  AIDEA  in 2005  was based  on  "the request  and                                                            
receipt"  of federal  and State  grants. AIDEA  determined that  the                                                            
plan did not demonstrate  "committed funds necessary to complete the                                                            
Project",  and,  as a  result, they  notified  FDPPA  that the  five                                                            
million  dollar  credit  was  due to  the  Power  Cost Equalization                                                             
Endowment.                                                                                                                      
                                                                                                                                
Mr. Miller  stated that  during the Legislative  Interim, FDPPA  and                                                            
the Alaska Energy Authority  (AEA) reached an agreement to amend the                                                            
original credit  provisions of the Four Dam Pool Power  Project. AEA                                                            
agreed  to  allow  FDPPA  to place  five  million  dollars  into  an                                                            
interest  bearing escrow  account  and to provide  FDPPA  additional                                                            
time in  which to secure  funds to complete  the Swan Lake  and Tyee                                                            
Lake intertie  project. Were that project not completed,  that money                                                            
and the interest  would be released  to the Power Cost Equalization                                                             
Endowment.                                                                                                                      
                                                                                                                                
Mr.  Miller  stated that  in  order  to proceed,  that  August  2005                                                            
agreement  to extend  the date and  revise the  five million  dollar                                                            
credit conditions  must receive Legislative approval.  These amended                                                            
provisions  are  specified  in  committee  substitute,  Version  24-                                                            
GH1138\X that  is being offered to the Committee for  consideration.                                                            
                                                                                                                                
AT EASE 10:38:16 AM / 10:38:38 AM                                                                                           
                                                                                                                                
Co-Chair Wilken  moved the adopt committee  substitute, Version  24-                                                            
GH1138\X, as the working document.                                                                                              
                                                                                                                                
There being no  objection, the Version "X" committee  substitute was                                                            
ADOPTED as the working document.                                                                                                
                                                                                                                                
10:39:06 AM                                                                                                                   
                                                                                                                                
Senator Stedman  spoke to the importance  of the Swan Lake  and Tyee                                                            
Lake intertie  project,  which is  the issue pertinent  to the  five                                                            
million  dollar escrow  agreement. The  FDPPA is  in the process  of                                                            
updating their  power load study analysis  that would assist  in the                                                            
completion of  that project. The study should be completed  in March                                                            
2006. "There  is more than  a reasonable  chance" that that  project                                                            
would be completed.                                                                                                             
                                                                                                                                
10:39:55 AM                                                                                                                   
                                                                                                                                
BRIAN  BJORKQUIST,  Senior  Assistant Attorney  General,  Labor  and                                                            
State Affairs  Section,  Civil Division  (Anchorage), Department  of                                                            
Law, testified  via teleconference  from Anchorage and informed  the                                                            
Committee that he would be available to answer questions.                                                                       
                                                                                                                                
SARA FISHER-GOUD,  Alaska Energy Authority, Department  of Commerce,                                                            
Community  and Economic  Development  testified  via teleconference                                                             
from Anchorage and noted  that she also would be available to answer                                                            
questions.                                                                                                                      
                                                                                                                                
10:40:29 AM                                                                                                                   
                                                                                                                                
DAVE CARLSON,  Chief Executive Officer, Four Dam Pool  Power Agency,                                                            
testified  via  teleconference   from  Anchorage  and  informed  the                                                            
Committee that  the FDPPA is in support  of this legislation.  FDPPA                                                            
has worked  diligently with  AEA on this effort.  The Swan  Lake and                                                            
Tyee  Lake   intertie  would   provide  a   "vital  link  of   major                                                            
infrastructure"  to the  power grid  of southern  Southeast  Alaska.                                                            
This bill would allow that project to continue to move forward.                                                                 
                                                                                                                                
JON  BOLLING,   Chair,   Energy  Committee,   Southeast   Conference                                                            
testified via  teleconference from offnet site and  stated that this                                                            
intertie project is "strongly  supported" by the Conference. He also                                                            
acknowledged  the efforts conducted  by FDPPA and AEA. He  urged the                                                            
Committee to support the legislation.                                                                                           
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                

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