Legislature(2009 - 2010)BUTROVICH 205

02/22/2010 03:30 PM RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 220 ENERGY EFFICIENCY/ ALTERNATIVE ENERGY TELECONFERENCED
Heard & Held
*+ SB 277 PUB. UTILITY EXEMPTION: RENEWABLE ENERGY TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
          SB 220-ENERGY EFFICIENCY/ ALTERNATIVE ENERGY                                                                      
                                                                                                                                
3:39:29 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI  announced SB 220  to be up  for discussion                                                               
purposes  only since  the committee  didn't have  a quorum  [CSSB
220(RES),  labeled 26-LS1197\K,  was  before  the committee].  He                                                               
said  they had  a couple  of  amendments before  them; the  first                                                               
[labeled 26-LS1197\K.11, Kane]  was to create a  new loan program                                                               
within  the  Department  of   Commerce,  Community  and  Economic                                                               
Development  (DCCED)  for  businesses interested  in  alternative                                                               
energy and energy efficiency.                                                                                                   
                                                26-LS1197\K.11                                                                  
                                                        Kane                                                                    
                                                                                                                                
                         AMENDMENT K.11                                                                                     
                                                                                                                                
       OFFERED IN THE SENATE       BY SENATOR MCGUIRE TO:                                                                       
     CSSB 220(RES), Draft Version "K"                                                                                           
                                                                                                                                
     Page 12, line 3, through page 13, line 18:                                                                                 
          Delete all material and insert:                                                                                       
        "* Sec. 17. AS 45.88.010(a) is amended to read:                                                                     
          (a)  There is established in the Department of                                                                        
     Commerce,  Community,  and   Economic  Development  the                                                                    
     alternative energy conservation  revolving loan fund to                                                                
     carry  out the  purposes of  AS 45.88.010 -  45.88.090.                                                                    
     Loans  made under  AS 45.88.010 -  45.88.090 are  to be                                                                    
     used                                                                                                                       
               (1)   to develop  means of  energy production                                                                
     utilizing one or more alternative energy systems; and                                                                  
               (2)    to  purchase, construct,  and  install                                                                
     energy   conservation    improvements   in   commercial                                                                
     buildings [ENERGY SOURCES OTHER  THAN FOSSIL OR NUCLEAR                                                                
     FUEL, INCLUDING,  BUT NOT LIMITED TO,  WINDMILLS, WATER                                                                    
     AND SOLAR ENERGY DEVICES].                                                                                                 
        * Sec. 18.  AS 45.88.010 is amended by  adding a new                                                                  
     subsection to read:                                                                                                        
          (e)  The Alaska energy conservation revolving                                                                         
     loan fund consists of                                                                                                      
               (1)   money appropriated  to the fund  by the                                                                    
     legislature;                                                                                                               
               (2)   gifts, bequests, or  contributions from                                                                    
     other sources;                                                                                                             
               (3)    principal  and  interest  payments  or                                                                    
     other  income earned  on loans  or  investments in  the                                                                    
     fund and appropriated to the fund; and                                                                                     
               (4)     money  chargeable  to   principal  or                                                                    
     interest  that  is  collected  through  liquidation  by                                                                    
     foreclosure  or other  processes  on  loans made  under                                                                    
     AS 45.88.010 - 45.88.090 and appropriated to the fund.                                                                     
        * Sec. 19. AS 45.88.020(a) is amended to read:                                                                        
          (a)  The department may                                                                                               
               (1)      make   loans   for   the   purchase,                                                                    
     construction,    and   installation,    in   commercial                                                                
     buildings that are located in the state, of                                                                            
              (A)  alternative energy systems; and                                                                      
               (B)  energy conservation improvements;                                                                       
               (2)   adopt  regulations  necessary to  carry                                                                    
     out  the   provisions  of  AS 45.88.010   -  45.88.090,                                                                    
     including regulations to  establish reasonable fees for                                                                    
     services provided and charges for collecting the fees;                                                                     
               (3)  collect the  fees and collection charges                                                                    
     established under this subsection.                                                                                         
        * Sec. 20.  AS 45.88.025 is amended by  adding a new                                                                  
     section to read:                                                                                                           
          Sec. 45.88.025. Eligibility. To be eligible for a                                                                   
     loan under AS 45.88.010 - 45.88.090, an applicant must                                                                     
               (1)    physically  reside in  the  state  and                                                                    
     maintain a domicile in the  state during 12 consecutive                                                                    
     months prior to the date  of application for a loan and                                                                    
     may not have                                                                                                               
               (A)   declared  or  established residency  in                                                                    
     another state; or                                                                                                          
               (B)   received residency  or a  benefit based                                                                    
     on residency from another state;                                                                                           
               (2)  be at least 51 percent owned by                                                                             
     individuals  described in  (1) of  this section  if the                                                                    
     applicant   is  a   corporation,   joint  venture,   or                                                                    
     partnership; or                                                                                                            
               (3)  be a nonprofit organization under                                                                           
     AS 10.20.                                                                                                                  
        *   Sec.  21.   AS 45.88.030(a)   is  repealed   and                                                                  
     reenacted to read:                                                                                                         
          (a)  A loan made under AS 45.88.010 - 45.88.090                                                                       
     may not  exceed $50,000.  If the requested  loan amount                                                                    
     exceeds  $30,000, the  applicant  must  deliver to  the                                                                    
     department  a  document  from a  financial  institution                                                                    
     stating that                                                                                                               
               (1)  the applicant has been denied a loan                                                                        
     for the same purpose; or                                                                                                   
               (2)  the loan from the financial institution                                                                     
     is contingent  on the applicant  also receiving  a loan                                                                    
     from the fund.                                                                                                             
        * Sec. 22. AS 45.88.030(e) is amended to read:                                                                        
          (e)  The rate of interest for a loan under                                                                        
     AS 45.88.010 -  45.88.090 shall be  the prime  rate, as                                                                
     defined  by AS 44.88.599,  plus  one percentage  point,                                                                
     but may  not be less than  five percent a year  [FOR AN                                                                
     ALTERNATIVE  ENERGY  SYSTEM  IS FIVE  PERCENT  FOR  THE                                                                    
     FIRST  $15,000  OF THE  LOAN  AND  15 PERCENT  FOR  THE                                                                    
     AMOUNT OF THE LOAN THAT EXCEEDS $15,000].                                                                                  
        * Sec. 23.  AS 45.88.030 is amended by  adding a new                                                                  
     subsection to read:                                                                                                        
          (f)  A loan under AS 45.88.010 - 45.88.090 must                                                                       
     be secured  by a mortgage or  other security instrument                                                                    
     in the real  property to be improved and a  lien on the                                                                    
     improvements financed with the loan.                                                                                       
        * Sec. 24. AS 45.88.090(a) is amended to read:                                                                        
          (a)  In AS 45.88.010 - 45.88.090,                                                                                     
               (1)  "alternative energy system"                                                                           
               (A) [(1)]  means a source of thermal,                                                                        
     mechanical  or electrical  energy that  [WHICH] is  not                                                                
     dependent  on oil  or gas  or  a nuclear  fuel for  the                                                                    
     supply  of  energy  for   space  heating  and  cooling,                                                                    
     refrigeration  and  cold   storage,  electrical  power,                                                                    
     mechanical power, or the heating of water;                                                                                 
               (B) [(2)]  includes                                                                                          
               (i) [(A)]  an alternative energy property as                                                                 
     defined by  26 U.S.C.  48(a)(3)(A) (Sec. 301,  P.L. 95-                                                                    
     618, Internal Revenue Code);                                                                                               
               (ii) [(B)]  a  method of architectural design                                                                
      and construction which provides for the collection,                                                                       
     storage, and use of direct radiation from the sun;                                                                         
               (iii)  [(C)]   a woodstove  with a  catalytic                                                                
      converter or a catalytic converter for a wood stove;                                                                      
     [AND]                                                                                                                      
               (iv)  [(D)]   a steam,  hot water,  or ducted                                                                
     hot air central heating system that uses wood or coal                                                                      
     for fuel; and                                                                                                          
               (v)  a high efficiency wood pellet stove;                                                                    
               (C) [(3)]  does not include                                                                                  
               (i)  [(A)]   a  stove  that  uses only  wood,                                                                
     coal, or oil for fuel; or                                                                                                  
               (ii) [(B)]  a fireplace or fireplace insert;                                                             
               (2)  "commercial building"                                                                                   
               (A)  means a building  that is intended to be                                                                
     used for commercial purposes;                                                                                          
               (B)  does not include                                                                                        
               (i)   a residential structure or  mobile home                                                                
     that contains one to four family housing units; or                                                                     
               (ii)   individual  units  of condominiums  or                                                                
     cooperatives;                                                                                                          
               (3)  "energy conservation improvement" means                                                                 
               (A)  structural insulation;                                                                                  
               (B)  thermal windows and doors;                                                                              
               (C)   a  furnace replacement  burner designed                                                                
     to achieve a reduction in the amount of fuel consumed                                                                  
     as a result of increased combustion efficiency;                                                                        
               (D)   a  device for  modifying flue  openings                                                                
      designed to increase the efficiency of operation of                                                                   
     the heating system;                                                                                                    
               (E)    an  electrical or  mechanical  furnace                                                                
     ignition system that replaces a gas pilot light;                                                                       
               (F)    an   automatic  energy-saving  setback                                                                
     thermostat;                                                                                                            
               (G)    a  meter  that displays  the  cost  of                                                                
     energy usage;                                                                                                          
               (H)  caulking and  weather stripping of doors                                                                
     and windows;                                                                                                           
              (I)  insulating shades and shutters;                                                                          
               (J)  air and water recuperators."                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 13, line 19, following "45.88.010(c),":                                                                               
          Delete "45.88.030(e)"                                                                                                 
          Insert "45.88.030(c), 45.88.030(d),"                                                                                  
                                                                                                                                
     Page 14, following line 10:                                                                                                
          Insert a new bill section to read:                                                                                    
         "* Sec. 31. The uncodified law of the State of                                                                     
     Alaska is amended by adding a new section to read:                                                                         
          REVISOR'S INSTRUCTION. The revisor of statutes                                                                        
     shall change  the heading  of art.  1 of  AS 45.88 from                                                                    
     "Alternative   Energy    Revolving   Loan    Fund"   to                                                                    
     "Alternative   Energy   Conservation   Revolving   Loan                                                                    
     Fund.""                                                                                                                    
                                                                                                                                
GREG WINEGAR,  Director, Division  of Investments,  Department of                                                               
Commerce, Community  and Economic Development  (DCCED), explained                                                               
that Amendment  K.11 makes two  fundamental changes to  the bill.                                                               
It adds  conservation improvements  as an eligible  purpose along                                                               
with alternative energy systems, which  was in the original bill.                                                               
The other  major change is  that the bill now  targets commercial                                                               
buildings as  residential structures  are eligible for  a similar                                                               
type of loan  through AHFC. The thinking  on commercial buildings                                                               
was  to avoid  duplication  as  AHFC already  has  a program  for                                                               
residential type loans.  So this bill will  now target commercial                                                               
buildings that are owned by Alaskan residents.                                                                                  
                                                                                                                                
SENATOR STEDMAN joined the committee.                                                                                           
                                                                                                                                
MR.  WINEGAR said  the loan  limit  was changed  from $30,000  to                                                               
$50,000 and  this would  allow borrowers  to not  only put  in an                                                               
energy  system   but  also  to   take  advantage  of   loans  for                                                               
conservation-type things.                                                                                                       
                                                                                                                                
3:41:38 PM                                                                                                                    
MIKE PAWLOWSKI, aide  to Senator McGuire, said Mr.  Winegar did a                                                               
great job of explaining the  purpose of the amendment. He pointed                                                               
out that  language in Section  21, on  page 2, lines  22-28, asks                                                               
applicants  to  work  with  their   financial  institution  as  a                                                               
commercial  entity if  the loan  is  over $30,000;  they have  to                                                               
present a  "turn down letter"  to the department,  something that                                                               
is  done  in  other  programs  to maintain  where  the  state  is                                                               
supplementing rather  than competing with the  regular commercial                                                               
loan sector.                                                                                                                    
                                                                                                                                
3:43:12 PM                                                                                                                    
SENATOR STEVENS joined the committee.                                                                                           
                                                                                                                                
CO-CHAIR WIELECHOWSKI remarked that he  was very happy to see the                                                               
definition  of  "energy  conservation  improvement."  Finding  no                                                               
further questions, he set Amendment K.11 aside.                                                                                 
                                                                                                                                
CO-CHAIR WIELECHOWSKI said that Sharon Long would explain the                                                                   
next amendment for its sponsor, Senator Huggins.                                                                                
                                                                                                                                
3:43:46 PM                                                                                                                    
SHARON  LONG,  aide  to  Senator  Huggins,  explained  that  this                                                               
conceptual amendment  strives to  delete prohibitions  in current                                                               
Alaska statutes  which prevent consideration of  nuclear projects                                                               
as  part   of  the  energy  alternative   projects  by  inserting                                                               
"nuclear" after "including"  on page 2, line 24  of CSSB 220(RES)                                                               
version K.                                                                                                                      
                                                                                                                                
She explained another amendment by Senator Huggins labeled 26-                                                                  
LS1197\K.10                                                                                                                     
                                                26-LS1197\K.10                                                                  
                                                        Kane                                                                    
                                                                                                                                
                         AMENDMENT K.10                                                                                     
                                                                                                                                
     OFFERED IN THE SENATE       TO:  CSSB 220(RES), Draft                                                                      
     Version "K"                                                                                                                
                                                                                                                                
     Page 1, line 5, following "loan fund,":                                                                                  
          Insert "to nuclear waste material, to nuclear                                                                       
     energy production and facilities,  to the definition of                                                                  
     'power  project' or  'project' as  it relates  to rural                                                                  
     and  statewide energy  programs and  the Alaska  Energy                                                                  
     Authority,  to the  definition  of 'alternative  energy                                                                  
     system,'"                                                                                                                
                                                                                                                                
     Page 3, line 18:                                                                                                           
          Delete "sec. 15"                                                                                                      
          Insert "sec. 20"                                                                                                      
                                                                                                                                
     Page 3, following line 20:                                                                                                 
     Insert new bill sections to read:                                                                                          
        "* Sec. 4. AS 18.45.020 is amended to read:                                                                         
          Sec. 18.45.020. United States licenses or permits                                                                   
     required.  A  person  may not  manufacture,  construct,                                                                  
     produce,  transfer,  acquire,   or  possess  a  special                                                                    
     nuclear material, by-product  material, special nuclear                                                                
     material   facility,   by-product  material   facility,                                                                
     production  facility, or  utilization facility,  or act                                                                    
     as an operator of  a production facility or utilization                                                                
     facility,  wholly   within  the  state   without  first                                                                
     obtaining  a  license or  permit  for  the activity  in                                                                    
     which the  person proposes to  engage from  the Nuclear                                                                    
     Regulatory  Commission  if  the commission  requires  a                                                                    
     license or  permit to be obtained  by persons proposing                                                                    
     to engage in the activities.                                                                                             
        * Sec. 5. AS 18.45.025(a) is amended to read:                                                                         
          (a)  A person may not construct a nuclear fuel                                                                        
     production  facility,   nuclear  utilization  facility,                                                                
     utilization   facility,   reprocessing   facility,   or                                                                    
     nuclear waste  disposal facility  in the  state without                                                                    
     first  obtaining  a  permit   from  the  Department  of                                                                    
     Environmental  Conservation to  construct the  facility                                                                    
     on  land designated  by the  legislature  under (b)  of                                                                    
     this section.                                                                                                              
        * Sec. 6. AS 18.45.025(b) is amended to read:                                                                         
          (b)  The legislature shall designate by law the                                                                       
     land in  the state on  which a nuclear  fuel production                                                                    
     facility,  nuclear  utilization  facility,  utilization                                                            
     facility,  nuclear  reprocessing facility,  or  nuclear                                                            
     waste disposal facility may  be located. In designating                                                                    
     the land in the state on which                                                                                             
               (1)  a nuclear utilization facility or                                                                       
     utilization  facility may  be located,  the legislature                                                                
     shall act  in the interest of  regulating the economics                                                                
     of nuclear energy;                                                                                                     
               (2)  a nuclear fuel production facility,                                                                 
     [NUCLEAR  UTILIZATION,] nuclear  reprocessing facility,                                                                
     or nuclear waste disposal facility  may be located, the                                                                    
     legislature shall act to protect  the public health and                                                                    
     safety.                                                                                                                    
        * Sec. 7. AS 18.45.025(c)  is repealed and reenacted                                                                  
     to read:                                                                                                                   
          (c)  The Department of Environmental Conservation                                                                     
     shall  adopt  regulations  governing  the  issuance  of                                                                    
     permits  required by  (a) of  this section.  However, a                                                                    
     permit may  not be  issued until the  municipality with                                                                    
     jurisdiction  over  the   proposed  facility  site  has                                                                    
     approved the permit."                                                                                                      
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 7, following line 28:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 15. AS 42.45.990(4) is amended to read:                                                                     
               (4)  "power project" or "project" means a                                                                        
     plant,  works,  system,   or  facility,  together  with                                                                    
     related  or  necessary  facilities  and  appurtenances,                                                                    
     including  a  divided or  undivided  interest  in or  a                                                                    
     right to  the capacity of  a power project  or project,                                                                    
     that is used or is useful for the purpose of                                                                               
               (A)  electrical  or thermal energy production                                                                    
     [OTHER THAN NUCLEAR ENERGY PRODUCTION];                                                                                    
               (B)    waste  energy utilization  and  energy                                                                    
     conservation; or                                                                                                           
               (C)  transmission,  purchase, sale, exchange,                                                                    
     and  interchange  of   electrical  or  thermal  energy,                                                                    
     including district heating or interties;"                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 12, following line 2:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 22. AS 44.83.990(6) is amended to read:                                                                     
               (6)   "power  project" or  "project" means  a                                                                    
     plant,  works,  system,   or  facility,  together  with                                                                    
     related  or  necessary  facilities  and  appurtenances,                                                                    
     including  a  divided or  undivided  interest  in or  a                                                                    
     right to  the capacity of  a power project  or project,                                                                    
     that is used or is useful for the purpose of                                                                               
               (A)  electrical  or thermal energy production                                                                    
     [OTHER THAN NUCLEAR ENERGY PRODUCTION];                                                                                    
               (B)    waste  energy utilization  and  energy                                                                    
     conservation; or                                                                                                           
               (C)  transmission,  purchase, sale, exchange,                                                                    
     and  interchange  of   electrical  or  thermal  energy,                                                                    
     including district heating or interties;"                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 13, following line 18:                                                                                                
          Insert a new bill section to read:                                                                                    
        "* Sec. 27. AS 46.11.900(1) is amended to read:                                                                     
               (1)  "alternative energy system"                                                                                 
               (A)   means a source of  thermal, mechanical,                                                                    
     or electrical  energy that is  not dependent on  oil or                                                                    
     gas [OR  A NUCLEAR FUEL]  for the supply of  energy for                                                                    
     space  heating  and  cooling,  refrigeration  and  cold                                                                    
     storage,  electrical power,  mechanical  power, or  the                                                                    
     heating of water;                                                                                                          
               (B)  includes                                                                                                    
               (i)    an   alternative  energy  property  as                                                                    
     defined by 26 U.S.C. 48(a)(3)(A); and                                                                                      
               (ii)   a method  of architectural  design and                                                                    
     construction   that   provides  for   the   collection,                                                                    
     storage, and use of direct radiation from the sun;"                                                                        
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 13, line 19:                                                                                                          
          Delete "AS 45.88.010(c)"                                                                                              
          Insert "AS 18.45.027; AS 45.88.010(c)"                                                                                
                                                                                                                                
     Page 13, line 20:                                                                                                          
          Delete "sec. 15"                                                                                                      
          Insert "sec. 20"                                                                                                      
                                                                                                                                
     Page 13, line 21:                                                                                                          
          Delete "sec. 11"                                                                                                      
          Insert "sec. 16"                                                                                                      
                                                                                                                                
     Page 13, lines 21 - 22:                                                                                                    
          Delete "sec. 12"                                                                                                      
          Insert "sec. 17"                                                                                                      
                                                                                                                                
     Page 13, line 27:                                                                                                          
          Delete "sec. 13"                                                                                                      
          Insert "sec. 18"                                                                                                      
                                                                                                                                
                                                                                                                                
MS. LONG  explained that new language  on page 1, line  5, aligns                                                               
the title  of the bill  with the changes  that are made  later in                                                               
it. The amendment inserts a new  Section 4 that speaks to federal                                                               
licensing and  permits; AS 18.45  only speaks to  federal aspects                                                               
of  atomic   energy.  It   includes  "special   nuclear  material                                                               
facility, by-product  material facility"  in order to  cover more                                                               
projects or  activities in  this section for  which a  license or                                                               
permit  may  be needed  from  the  Nuclear Regulatory  Commission                                                               
(NRC).                                                                                                                          
                                                                                                                                
She continued explaining that it adds  new sections 4, 5, 6 and 7                                                               
on page 3 of the bill.                                                                                                          
                                                                                                                                
CO-CHAIR  WIELECHOWSKI  interrupted  to  ask if  lines  14-18  in                                                               
Section 4 on page 1 of the  amendment that say, "A person may not                                                               
manufacture, construct, produce, transfer,  acquire, or possess a                                                               
special  nuclear material,  by-product material,  special nuclear                                                               
material  facility..."  meant  that  they are  expanding  what  a                                                               
person cannot produce.                                                                                                          
                                                                                                                                
MS.  LONG  answered yes;  it  repeals  the prohibitions  "if  the                                                               
commission  requires  a  license  or permit  to  be  obtained  by                                                               
persons proposing to engage in  these activities." [page 1, lines                                                               
20-21 of Amendment K.10].                                                                                                       
                                                                                                                                
CO-CHAIR  WIELECHOWSKI  asked  Brian Kane,  Legislative  Drafting                                                               
Attorney, to explain what that language was attempting to do.                                                                   
                                                                                                                                
3:47:27 PM                                                                                                                    
BRIAN KANE,  Legislative Affairs  Attorney, explained  that these                                                               
sections in  AS 18.45 have  a lot  of terms that  were previously                                                               
used and mismatched  throughout - sometimes it would  have a full                                                               
phrase with  "facilities" and sometimes "facility"  wasn't there.                                                               
The goal  here was  to cover every  possibility that  the Nuclear                                                               
Regulatory Commission  could cover,  because as  it stood  it was                                                               
just  special nuclear  material and  by-product material.  Adding                                                               
"facility" adds the possibility of  a special nuclear facility or                                                               
by-product  material  facility  in  connection  with  the  actual                                                               
material.  Then a  person  has  to obtain  that  permit from  the                                                               
federal government before they can take any further steps.                                                                      
                                                                                                                                
CO-CHAIR  WIELECHOWSKI  asked him  to  talk  about the  interplay                                                               
between   federal   and   state  regulation   regarding   nuclear                                                               
facilities and energy.                                                                                                          
                                                                                                                                
MR. KANE  answered that he  had done  some reading on  the Atomic                                                               
Energy Act and  said that basically the federal  government has a                                                               
pretty long and complex list  of permits and applications to even                                                               
start  the process  of  putting together  a  nuclear facility  or                                                               
producing  any  kind  of nuclear  energy.  Basically  the  Atomic                                                               
Energy  Act  preempts  everything  a  state  could  do  with  the                                                               
exception of economic  regulation, which comes a  little later in                                                               
this  amendment.  The idea  is  to  fulfill  all of  the  federal                                                               
obligations first, then you would  proceed to the different state                                                               
permitting processes.                                                                                                           
                                                                                                                                
CO-CHAIR WIELECHOWSKI  said it seems  that section 4  is changing                                                               
that  you  couldn't  own  a  special  nuclear  material  facility                                                               
without getting permission from the Nuclear Regulatory Agency.                                                                  
                                                                                                                                
MR. KANE answered  yes; it's just making that clear  by adding it                                                               
to the list of things the federal permit is required for.                                                                       
                                                                                                                                
3:50:57 PM                                                                                                                    
MS.  LONG explained  that she  found out  that the  state has  no                                                               
regulations  and no  permit requirements  right  now for  nuclear                                                               
energy.  The Nuclear  Regulatory  Commission has  a step  process                                                               
where a person  first has to have a licensed  nuclear power unit.                                                               
You have to get  an early site permit and do  a lot of scientific                                                               
field work.  So far,  there are no  small licensed  nuclear power                                                               
units.                                                                                                                          
                                                                                                                                
CO-CHAIR WIELECHOWSKI asked if she  found that most states have a                                                               
fairly  complex  set  of  regulations   on  top  of  the  federal                                                               
regulations or do they mostly rely on the federal regulations.                                                                  
                                                                                                                                
MS.  LONG and  Mr.  Kane said  they didn't  know  what the  other                                                               
states are doing.                                                                                                               
                                                                                                                                
Back to  the amendment, she  said Section  5 speaks to  the state                                                               
licensing permits and requirements  and adds "nuclear utilization                                                               
facility" to  conform with  other definitions.  Section 6  of the                                                               
amendment amends  AS 18.45.025 to  say that when  the Legislature                                                               
designates the land  in the state on which  a nuclear utilization                                                               
facility may  be located, it  must act  only in the  interests of                                                               
regulating the  economics of nuclear  energy. This is based  on a                                                               
series of court cases that Mr. Kane could explain.                                                                              
                                                                                                                                
MS. LONG  said Section  7 of  the amendment  deletes a  line that                                                               
states that  a permit may  not be  issued unless approved  by the                                                               
Governor,  leaving  only  a  requirement   for  approval  by  the                                                               
Department  of Environmental  Conservation  in the  municipality.                                                               
So, this section retains local  approval for a project that might                                                               
be in  any particular  area, but removes  the Governor's  part in                                                               
it. Any  project would still  be dealing  with the NRC,  DEC, AEA                                                               
and a local political subdivision.                                                                                              
                                                                                                                                
3:53:39 PM                                                                                                                    
SENATOR HUGGINS  clarified that Section  7 allows some  degree of                                                               
local control.                                                                                                                  
                                                                                                                                
MS. LONG  added that the  people she  talked to surmised  that it                                                               
would probably be a local  political subdivision that would bring                                                               
this kind of project forward to the state.                                                                                      
                                                                                                                                
CO-CHAIR WIELECHOWSKI clarified  that a permit has  to go through                                                               
the DEC and the municipality  with jurisdiction over the proposed                                                               
facility. If  it was in  Anchorage, it  would have to  go through                                                               
the Anchorage Assembly.                                                                                                         
                                                                                                                                
MS. LONG said yes.                                                                                                              
                                                                                                                                
CO-CHAIR  WIELECHOWSKI asked  what  happens if  it's  in an  area                                                               
without a local government.                                                                                                     
                                                                                                                                
MS.  LONG answered  that  after discussions  with  Mr. Kane,  her                                                               
sense was  that they  would be  dealing with the  NRC and  DEC. A                                                               
community in  the unorganized  borough would  go directly  to the                                                               
state.                                                                                                                          
                                                                                                                                
She said  Section 15  adds a new  section to page  7 of  the bill                                                               
that amends  the definition of  "power project" that  deletes the                                                               
exclusion  of  nuclear energy  in  relation  to statewide  energy                                                               
programs.                                                                                                                       
                                                                                                                                
Section  22 of  the  amendment amends  the  definition of  "power                                                               
project" to  delete the exclusion  of nuclear energy  in relation                                                               
to the  Alaska Energy Authority (AEA)  on page 12, line  2 of the                                                               
bill. This  will allow  the AEA to  consider power  projects that                                                               
depend  on  a  thermal,  mechanical  or  electrical  system  that                                                               
depends   on  nuclear   power.  Now   those  projects   can't  be                                                               
considered.                                                                                                                     
                                                                                                                                
Language  on page  4, line  11, of  the amendment  eliminates the                                                               
prohibition of  transporting nuclear  waste material.  Section 27                                                               
on page  3, lines 25-30  of the  amendment deletes "or  a nuclear                                                               
fuel" - another exclusion.                                                                                                      
                                                                                                                                
CO-CHAIR WIELECHOWSKI asked her to explain it a little bit more.                                                                
                                                                                                                                
MS.   LONG  explained   that   the   state  currently   prohibits                                                               
transportation of  nuclear waste  material. This  would eliminate                                                               
that. A  nuclear power project  generates nuclear waste  and that                                                               
would have to  be transported somewhere. She said  that the state                                                               
allows use of  nuclear power for medical purposes  and she needed                                                               
to check on how that was dealt with.                                                                                            
                                                                                                                                
3:57:59 PM                                                                                                                    
MR. KANE added that AS 18.45.027  has part (A) and part (B); part                                                               
(B) actually has  an exclusion for radioactive  materials used in                                                               
medicine,  education or  scientific research  as an  exception to                                                               
the high level nuclear waste material that can be transported.                                                                  
                                                                                                                                
CO-CHAIR  WIELECHOWSKI  asked  who  would  be  able  to  transfer                                                               
nuclear material under the proposal on  page 4, and if they would                                                               
have to be regulated by the RCA or the NRC.                                                                                     
                                                                                                                                
MR. KANE  answered that state  law would  then be silent  to that                                                               
situation.                                                                                                                      
                                                                                                                                
CO-CHAIR WIELECHOWSKI  said it would  be important to  figure out                                                               
what the federal regulations are  for transportation in case they                                                               
need to enact  some other state law or regulation  to control who                                                               
transfers nuclear material.                                                                                                     
                                                                                                                                
3:59:44 PM                                                                                                                    
MS.  LONG  said  the  remaining sections  of  the  amendment  are                                                               
renumbering.                                                                                                                    
                                                                                                                                
SENATOR HUGGINS commented  that Galena was attempting  to look at                                                               
a small nuclear  module, but every time it was  brought up there,                                                               
it  was  suddenly  found  to be  prohibited.  This  removes  that                                                               
prohibition and puts the skeletal  structure in place for further                                                               
regulation. He  said the French  use nuclear for about  7 percent                                                               
of their  power and  Japan is number  2 internationally  and that                                                               
further, "We  ought to at least  have a system that  allows us to                                                               
have that conversation in some reality if it comes to fruition."                                                                
                                                                                                                                
CO-CHAIR WIELECHOWSKI  agreed that it  is a conversation  that is                                                               
worth having  - if it  can be  done safely and  cost effectively.                                                               
He asked Ms. Long if she had  idea of cost for building a nuclear                                                               
plant.                                                                                                                          
                                                                                                                                
MS. LONG  said she had no  idea, but she knows  that Westinghouse                                                               
and Toshiba  would like  to license  a small  unit that  would be                                                               
appropriate for  the Galena project.  She explained  that because                                                               
of  court   cases,  the  state  has   regulatory  authority  over                                                               
economics only  for these things  while the NRC has  control over                                                               
health and safety issues.                                                                                                       
                                                                                                                                
4:02:13 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI asked if the RCA  or NRC would set rates on                                                               
a nuclear power plant.                                                                                                          
                                                                                                                                
MR.  KANE  replied   that  would  be  something   the  RCA  could                                                               
potentially control.                                                                                                            
                                                                                                                                
CO-CHAIR WIELECHOWSKI asked Sarah Fisher-Goad  if the AEA had any                                                               
comments on this amendment.                                                                                                     
                                                                                                                                
4:03:26 PM                                                                                                                    
SARAH FISHER-GOAD,  Alaska Energy  Authority, responded  that AEA                                                               
had  no comments  on the  amendment,  but said  she would  answer                                                               
questions on how it pertains to  either the Power Project Fund or                                                               
the AEA statutes.                                                                                                               
                                                                                                                                
CO-CHAIR  WIELECHOWSKI   asked  for  a  quick   overview  of  its                                                               
relationship to those two things.                                                                                               
                                                                                                                                
MS. GOAD answered if this  amendment were to be incorporated into                                                               
SB 220,  the Power  Project Fund would  be an  eligible financing                                                               
vehicle  for a  nuclear project.  With  respect to  the AS  44.83                                                               
change that would allow "nuclear"  to be included as a definition                                                               
of "power  project," she  mentioned that  AEA has  other statutes                                                               
that do not allow them to own  new projects. If the desire was to                                                               
allow them  to own a future  new project, be it  any project, the                                                               
statutes would have to be changed.                                                                                              
                                                                                                                                
SENATOR HUGGINS  said it appears  that under AEA's  authority and                                                               
responsibility she  would want a  reasonable portfolio  of energy                                                               
projects  and  capabilities  to choose  from,  not  that  nuclear                                                               
should be  number 1 or  number 29, but  it would just  become one                                                               
option among others.  He asked if she any  difficulty with having                                                               
it as part of a portfolio.                                                                                                      
                                                                                                                                
MS. GOAD  answered that  this amendment  allows them  to consider                                                               
nuclear; right  now they  don't have a  position with  respect to                                                               
whether that  should be  included or not.  But if  this amendment                                                               
were adopted they would consider  nuclear projects through either                                                               
the Power Project  Fund or through administering  a grant through                                                               
a program on a future project. It  is a policy call that she said                                                               
she  was not  prepared to  answer.  She wanted  her testimony  to                                                               
describe  how nuclear  would be  considered if  it was  included.                                                               
Right now  they don't have  nuclear projects to consider.  If AEA                                                               
would have  to be  involved in  a project  like this,  they would                                                               
have additional costs, but not now.                                                                                             
                                                                                                                                
MS. LONG  said Mr.  Pawlowski just  passed her  a note  that says                                                               
Title  42.05.990 (Public  utilities and  carriers) does  say that                                                               
RCA would regulate nuclear rates.                                                                                               
                                                                                                                                
CO-CHAIR WIELECHOWSKI  asked Mr. Pickett  from the RCA if  he had                                                               
any comments.                                                                                                                   
                                                                                                                                
4:08:09 PM                                                                                                                    
BOB  PICKETT, Chairman,  Regulatory Commission  of Alaska  (RCA),                                                               
said that other RCA members would answer those questions.                                                                       
                                                                                                                                
RICHARD       GAZAWAY,       Administrative      Law       Judge,                                                               
Legislation/Regulation,  Regulatory Commission  of Alaska  (RCA),                                                               
Department  of  Commerce,   Community  and  Economic  Development                                                               
(DCCED), said  he was  trying to  figure out  what section  of AS                                                               
42.05.990 Mr. Pawlowski  was referencing when he  said they would                                                               
regulate the nuclear facility.                                                                                                  
                                                                                                                                
MR. PAWLOWSKI  said he was  referencing AS 42.05.990 that  says a                                                               
utility that  serves one  or more customers  and makes  more than                                                               
$50,000 a  year is  regulated by  the RCA.  So, presuming  that a                                                               
nuclear facility sold more than  $50,000 in electricity a year it                                                               
wouldn't be rate regulated by the RCA.                                                                                          
                                                                                                                                
4:09:16 PM                                                                                                                    
STEWART GARY,  Assistant Attorney  General Representing  the RCA,                                                               
Department  of Law  (DOL), agreed  with that  assessment. To  the                                                               
extent  that  a  nuclear  facility is  generating  and  providing                                                               
electric  power   for  compensation   it  would  be   within  the                                                               
definition   of   a  public   utility   -   specifically  in   AS                                                               
42.05.990(4)(a)  which  provides  that every  entity  that  owns,                                                               
operates, manages or controls any  plant, pipeline, or system for                                                               
furnishing   by   generation,   transmission   or   distribution,                                                               
electrical  service to  the public  for compensation.  It doesn't                                                               
specifically  mention   nuclear.  Electrons  are   electrons;  if                                                               
electrical power generation  is being provided to  the public for                                                               
compensation it's going to meet that definition.                                                                                
                                                                                                                                
CO-CHAIR WIELECHOWSKI asked  if they see any  concerns that would                                                               
require the  Legislature to enact  any other  legislation. Should                                                               
they adopt this amendment or  another one that allows for nuclear                                                               
energy production in Alaska?                                                                                                    
                                                                                                                                
MR. PICKETT  answered that  this amendment,  specifically, hadn't                                                               
been analyzed,  but probably not. He  said he would look  it over                                                               
by Wednesday.                                                                                                                   
                                                                                                                                
4:11:22 PM                                                                                                                    
SENATOR WAGONER  withdrew Amendment K.6 [introduced  on 2/18/10].                                                               
He said he was going to develop  it into a committee bill or wait                                                               
until next year. There were no objections and it was so ordered.                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 220 version K.pdf SRES 2/15/2010 3:30:00 PM
SRES 2/18/2010 3:30:00 PM
SRES 2/22/2010 3:30:00 PM
SRES 2/24/2010 3:30:00 PM
SB 220
SB 277 Bill Packet.pdf SRES 2/22/2010 3:30:00 PM
SB 277
Possible Amendment - 26-LS1197K.11.pdf SRES 2/22/2010 3:30:00 PM
Possible Amendment - 26-LS1197K.10.pdf SRES 2/22/2010 3:30:00 PM
Possible Amendment - Energy Policy_Nuclear.pdf SRES 2/22/2010 3:30:00 PM