Legislature(2007 - 2008)BUTROVICH 205

02/13/2008 03:30 PM Senate RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 251 VESSEL PERMIT SYSTEM TELECONFERENCED
Moved CSSB 251(RES) Out of Committee
*+ SB 246 SUSITNA HYDRO WORKING GROUP; REPORT TELECONFERENCED
Heard & Held
*+ SB 248 SALMON PRODUCT DEVELOPMENT TAX CREDIT TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
           SB 246-SUSITNA HYDRO WORKING GROUP; REPORT                                                                       
                                                                                                                                
4:53:02 PM                                                                                                                    
CHAIR HUGGINS announced SB 246 to be up for consideration.                                                                      
                                                                                                                                
4:54:47 PM                                                                                                                    
SENATOR JOE THOMAS, Alaska State  Legislature, sponsor of SB 246,                                                               
told members  this bill  establishes a  working group  to analyze                                                               
the potential  of a  hydroelectric power  project on  the Susitna                                                               
River.   It directs the governor  to designate a lead  agency and                                                               
establish  a  working group  to  consult  with organizations  and                                                               
departments to  analyze the hydroelectric potential.   The agency                                                               
will  review  and  update  past  studies,  bringing  the  current                                                               
feasibility, demand,  and cost analyses  back to  the legislature                                                               
at a designated date.                                                                                                           
                                                                                                                                
SENATOR THOMAS  noted in recent  years Alaskans have  seen energy                                                               
costs skyrocket.   High costs  and uncertainty make  it difficult                                                               
for  Alaskans  to  make  ends  meet  and  also  adversely  affect                                                               
economic growth.   The  energy from  a hydroelectric  facility is                                                               
predictable,  stable,  clean,  and low-cost;  for  instance,  the                                                               
Bradley Lake  hydroelectric dam produces energy  for the Railbelt                                                               
at 5 cents a kilowatt hour, far  below the 17.5 cents paid in the                                                               
Interior, not to mention rural areas.                                                                                           
                                                                                                                                
SENATOR  THOMAS  said  the majority  of  Railbelt  turbine  power                                                               
plants  are over  30 years  old; all  will need  retrofitting and                                                               
replacement, estimated at  $1 billion to $2.5 billion,  a cost he                                                               
predicted will  increase dramatically.  Once  replacements begin,                                                               
there will  still be rising  energy costs,  fluctuating operating                                                               
expenses, and high-pollution facilities.                                                                                        
                                                                                                                                
SENATOR THOMAS  pointed out that 25  years ago, when a  dam along                                                               
the Susitna  River was  looked at, Cook  Inlet gas  cost 25 cents                                                               
per million  cubic feet,  compared to  more than  $8 today.   The                                                               
population was substantially less, and  other energy costs were a                                                               
fraction of  today's costs.   He  suggested these  factors, along                                                               
with  environmental and  long-term  energy considerations,  merit                                                               
reopening the discussion.                                                                                                       
                                                                                                                                
SENATOR THOMAS noted this anticipates  that the designated agency                                                               
will work along with the U.S.  Army Corps of Engineers, which was                                                               
responsible for the  original study.  Urging support  for SB 246,                                                               
he  said nothing  is  as comprehensive  an  approach to  reducing                                                               
costs, emissions,  and dependency on finite,  nonrenewable energy                                                               
production for the Railbelt and adjacent areas.                                                                                 
                                                                                                                                
SENATOR THOMAS,  in response  to Chair  Huggins, relayed  what is                                                               
envisioned:  The  governor will pick the  Alaska Energy Authority                                                               
as an energy  coordinator.  That agency will  coordinate with the                                                               
Department  of  Natural  Resources; Department  of  Environmental                                                               
Conservation; Department  of Fish &  Game; Department of  Labor &                                                               
Workforce  Development;  Department   of  Commerce,  Community  &                                                               
Economic  Development;  and  Railbelt utilities  and  other  area                                                               
stakeholders.  The  intent is to update the old  study to reflect                                                               
current costs and  feasibility, as well as other  issues that may                                                               
have been raised.                                                                                                               
                                                                                                                                
SENATOR THOMAS reported that it is  anticipated to be done by the                                                               
end  of 2009,  though  he  expressed willingness  to  have it  be                                                               
longer.  He noted another  bill addresses a longer timeframe, and                                                               
the money is  addressed in both bills.   Regarding opposition, he                                                               
said almost  every comment  he's heard has  been that  people are                                                               
encouraged by revisiting  the Susitna issue; it  isn't just those                                                               
who worked on it before and thought it a good idea.                                                                             
                                                                                                                                
4:59:05 PM                                                                                                                    
GRIER  HOPKINS,  Staff  to  Senator   Joe  Thomas,  Alaska  State                                                               
Legislature,  explained  that now  the  Railbelt  uses about  800                                                               
megawatts  of power,  with  a maximum  capacity  of about  1,400.                                                               
Expected to increase  more than 40 percent in  the next 20 years,                                                               
this power  is generated by  an aging infrastructure.   With most                                                               
of it at least  30 years old, it will have to  be replaced in the                                                               
next 10 years, at a pretty high cost.                                                                                           
                                                                                                                                
MR. HOPKINS opined that the Susitna  option needs to be looked at                                                               
to ensure  the Railbelt isn't locked  into the same path  if it's                                                               
not the preferred  option.  This could be  an overarching project                                                               
that is stable, clean, renewable,  and low-cost, with predictable                                                               
energy   and  operating   costs   throughout  the   100-plus-year                                                               
lifespan.   Reopening the study  now would allow  the legislature                                                               
to make sure all options are judged before going down that path.                                                                
                                                                                                                                
CHAIR  HUGGINS  asked  which  communities   would  benefit.    He                                                               
surmised Fairbanks wouldn't  need the energy, since  it would get                                                               
natural gas from the proposed pipeline.                                                                                         
                                                                                                                                
SENATOR  THOMAS replied  he  hoped so,  but  also believed  there                                                               
would be a strong impetus to  sell that gas, as had happened with                                                               
oil.   That  would provide  the  most monetary  gain, though  not                                                               
necessarily if  one looked at  economic development in  Alaska, a                                                               
tougher hurdle.   He  cautioned against putting  all the  eggs in                                                               
one basket.                                                                                                                     
                                                                                                                                
CHAIR  HUGGINS   asked  if  he'd  coordinated   with  any  power-                                                               
generation organizations or received feedback.                                                                                  
                                                                                                                                
SENATOR THOMAS replied yes, as  far as looking at their interest.                                                               
Everyone spoken with had responded  positively.  He surmised more                                                               
letters of support would be forthcoming.                                                                                        
                                                                                                                                
5:01:43 PM                                                                                                                    
SENATOR  WAGONER informed  members  that he'd  talked to  fishing                                                               
groups and  other associations.   At one time, they  opposed this                                                               
project,  but with  new technologies  and  potential for  rearing                                                               
salmon and other sport fish, they're very supportive now.                                                                       
                                                                                                                                
SENATOR  WIELECHOWSKI  noted  he'd   forwarded  an  e-mail  about                                                               
possibly getting the U.S. Army Corps of Engineers involved.                                                                     
                                                                                                                                
SENATOR THOMAS responded that involvement  of the U.S. Army Corps                                                               
of Engineers  is anticipated,  since it  did the  original study.                                                               
But it isn't believed that such involvement can be mandated.                                                                    
                                                                                                                                
SENATOR GREEN recalled  a previous study group in  which the U.S.                                                               
Army Corps of Engineers was  listed as a participant, possibly in                                                               
legislation.  She suggested that participation is needed here.                                                                  
                                                                                                                                
SENATOR  THOMAS  replied  this  might  be  amended  to  add  some                                                               
language that anticipates or requests such involvement.                                                                         
                                                                                                                                
CHAIR HUGGINS held SB 246 over.                                                                                                 

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