Legislature(2005 - 2006)SENATE FINANCE 532
02/22/2006 09:00 AM FINANCE
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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 third hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated that this bill is sponsored by the Rules Committee by Request of Governor Frank Murkowski. The bill would provide "Legislative approval to amend the Memorandum of Understanding (MOU) authorizing the sale of the Four Dam Pool hydroelectric project. The amendment addresses an escrow agreement signed by the Four Dam Pool Agency and the Alaska Energy Authority (AEA)." Version 24-GH1138\X is before the Committee. 9:19:39 AM RON MILLER, Executive Director, Alaska Industrial Development & Export Authority/Alaska Energy Authority, Department of Commerce, Community and Economic Development testified via teleconference from an offnet site. As authorized by Chapter 60 SLA 2000, an agreement and MOU for the sale and purchase of the AEA owned Four Dam Pool hydroelectric projects to the Four Dam Pool Power Agency was developed that included establishing a Power Cost Equalization (PCE) endowment, authorized Alaska Industrial Development & Export Authority (AIDEA) financing of the sale, and the incorporation into law of the MOU dated April 11, 2000 between AEA and the purchasing utilities. The April 2000 MOU and the agreement for the sale "were amended with the escrow agreement that AEA and the Four Dam Pool Power Agency entered into." Mr. Miller noted that the sale price of $73 million was established and a five million dollar credit was authorized "contingent on certain" conditions. One of those conditions was that by April 11, 2005, the Four Dam Pool Power Agency must have provided to AIDEA "an approved financing plan that demonstrated committed funds sufficient to complete" the Swan Lake and Tyee Lake hydroelectric projects. The plan also required the Four Dam Pool Power Agency to provide five million dollars to the PCE endowment. Those conditions were not met, and the Four Dam Pool Power Agency requested additional time in which to complete the financing plan. An agreement was subsequently made that provided the Four Dam Pool Power Agency additional time in which to complete their financing provided they deposited five million dollars into an interest bearing escrow account. Mr. Miller stated that this bill would provide Legislative approval allowing that amendment to apply to the original purchasing/sale agreement in the MOU. Were sufficient funds to complete the project not forthcoming, the principal and interest in the escrow account would be deposited in the PCE endowment fund. Were the financing completed, the principal and interest would be earmarked to provide the final funding of the project. 9:22:58 AM DAVID CARLSON, Chief Executive Officer, Four Dam Pool Power Agency, testified via teleconference from an offnet site and informed the Committee that once the Four Dam Pool Power Agency completes a 57 mile intertie segment linking the Tyee Lake and Swan Lake hydroelectric projects, a power transmission line would be available between Southeast Alaska communities from Ketchikan to Petersburg. "It has been a difficult project". As stated by Mr. Miller, one of the provisions in the original MOU was that a financial plan should have been presented by April 11, 2005, which was five years after the original agreement was signed. That had not occurred. This legislation would extend that date and would allow the five million dollars provided by the Four Dam Pool Power Agency to be applied toward the construction of the Swan Lake and Tyee Lake intertie. This project "is important" to both the Four Dam Pool Power Agency and Southeast Alaska. 9:24:11 AM Senator Bunde moved to report the bill from Committee with individual recommendations and accompanying fiscal note. There being no objection, SCS CS HB 243(FIN) was REPORTED from Committee with a new zero fiscal note dated February 1, 2006 from the Department of Commerce, Community and Economic Development.