Legislature(2005 - 2006)SENATE FINANCE 532
02/13/2006 09:00 AM FINANCE
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* first hearing in first committee of referral
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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.