Legislature(2007 - 2008)BARNES 124
03/06/2007 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| HB152 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 152 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 6, 2007
8:00 a.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Nancy Dahlstrom
Representative Kurt Olson
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
Representative Mark Neuman
OTHER LEGISLATORS PRESENT
Representative Bryce Edgmon
COMMITTEE CALENDAR
HOUSE BILL NO. 152
"An Act establishing a renewable energy fund and describing its
uses and purposes."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 152
SHORT TITLE: ESTABLISHING A RENEWABLE ENERGY FUND
SPONSOR(s): REPRESENTATIVE(s) HARRIS
02/26/07 (H) READ THE FIRST TIME - REFERRALS
02/26/07 (H) CRA, FIN
03/06/07 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
TOM WRIGHT, Staff
to the House Majority Office
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 152, on behalf of the sponsor,
Representative John Harris.
KACI SCHROEDER HOTCH, Staff
to Representative Bill Thomas
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 152, answered
questions.
CHRIS ROSE, Executive Director
Renewable Energy Alaska Project
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 152.
SARA FISHER-GOAD, Deputy Director, Project
Development/Operations
Alaska Industrial Development & Export Authority (AIDEA) and
Alaska Energy Authority (AEA)
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Related recommendations for HB 152.
PETER CRIMP, Program Manager
Alaska Energy Authority (AEA)
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 152.
PHIL STEYER, Director of Government Relations
Corporate Communications
Chugach Electric Association, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 152.
CONNIE FREDENBERG, Community Development
Aleutian Pribilof Islands Association
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 152, opined that it's
time Alaska started developing its renewable resources.
KATE TROLL, Executive Director
Alaska Conservation Alliance
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 152.
GREG EGAN, Remote Power Inc.
Fairbanks, Alaska
POSITION STATEMENT: During the hearing of HB 152, emphasized
the need to fund renewable energy programs.
REPRESENTATIVE BILL THOMAS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as a co-sponsor of HB 152 and former
sponsor of similar legislation last year.
MIKE MUSICK, General Contractor/Builder
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 152.
TODD HOENER, Energy Efficiency Specialist/Sustainable, Natural
Alternative Power Program Administrator
Golden Valley Electric Association
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 152.
BRAD REEVE, General Manager
Kotzebue Electric Association
Kotzebue, Alaska
POSITION STATEMENT: Testified in support of HB 152 as written.
RICH SEIFERT, Energy & Housing Specialist
Cooperative Extension
University of Alaska - Fairbanks
Fairbanks, Alaska
POSITION STATEMENT: During hearing of HB 152, suggested use of
the double benefit, double incentive system.
PETE KOMPKOFF
Chenega Bay, Alaska
POSITION STATEMENT: Testified in support of HB 152.
MICHAEL VIGIL
Chenega Bay, Alaska
POSITION STATEMENT: Testified in support of HB 152.
KATHRYN LAMAL, Vice President
Power Supply
Golden Valley Electric Association
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 152.
ACTION NARRATIVE
CO-CHAIR ANNA FAIRCLOUGH called the House Community and Regional
Affairs Standing Committee meeting to order at 8:00:35 AM.
Representatives Fairclough, Dahlstrom, Olson, Cissna, and Salmon
were present at the call to order. Representative LeDoux
arrived as the meeting was in progress. Also in attendance was
Representative Edgmon.
HB 152-ESTABLISHING A RENEWABLE ENERGY FUND
8:00:51 AM
CO-CHAIR FAIRCLOUGH announced that the only order of business
would be HOUSE BILL NO. 152, "An Act establishing a renewable
energy fund and describing its uses and purposes."
8:01:04 AM
TOM WRIGHT, Staff to the House Majority Office, Alaska State
Legislature, began by relating that HB 152 has been a
collaborative effort between Representative Harris and
Representative Thomas. He explained that the legislation
establishes a fund through the Alaska Energy Authority (AEA) for
grants or loans for renewable energy projects. The legislation
further establishes an advisory committee to advise AEA on the
types of projects being proposed for possible funding.
8:02:52 AM
REPRESENTATIVE SALMON pointed out that [natural] gas isn't
considered a renewable energy, and therefore he questioned why
it's included in the legislation.
8:03:32 AM
KACI SCHROEDER HOTCH, Staff to Representative Bill Thomas,
Alaska State Legislature, acknowledged that natural gas isn't
renewable energy. She explained that Representative Thomas
wanted to provide areas in Alaska that don't have access to
renewable resources a manner in which to reduce energy costs.
The legislation, she highlighted, specifies that natural gas
should be a last resort.
8:04:24 AM
REPRESENTATIVE CISSNA inquired as to the developmental
priorities.
MR. WRIGHT referred to page 4, lines 8-22, of the legislation,
which specifies the types of projects eligible for funding.
8:06:27 AM
REPRESENTATIVE CISSNA inquired as to the safeguard that some oil
and gas wouldn't trump the renewable energy sources for grant
monies.
MS. HOTCH pointed out that on page 5 the legislation specifies
that not more than 5 percent of the fund can go to natural gas.
She acknowledged that including natural gas is "opening the
door" to some extent, and therefore it will be a point of
discussion throughout the process.
CO-CHAIR FAIRCLOUGH pointed out that on page 2, subsection (b)
establishes an advisory board, which doesn't include an oil or
natural gas producer. Furthermore, on page 3, subsection (d)
specifies what the authority shall do, including establishing
rules and methodology for distribution and prioritization of the
projects. Co-Chair Fairclough opined that the aforementioned
will provide the safeguards.
8:08:56 AM
CHRIS ROSE, Executive Director, Renewable Energy Alaska Project
(REAP), began by explaining that REAP is a statewide coalition
of over 40 organizations interested in increasing renewable
energy production in Alaska. Mr. Rose related his support of HB
152 and urged the committee to pass it out in its current form.
Renewable energy resources, such as wind, hydro, and geothermal
are mature energy industries today and are competitively priced.
The aforementioned industries are growing rapidly due to fuel
price volatility and concern with regard to stabilizing energy
prices for consumers. Currently, the situation in the nation is
one in which states are directly competing on this front. As is
the case with other industries, governments that have created
the best incentive packages are those experiencing the largest
share of the billions of dollars being invested in this every
year. In fact, 22 states have mandates providing that a certain
percentage of electricity come from renewables and 14 states
have renewable energy funds similar to that proposed in HB 152.
Mr. Rose highlighted that Alaska has much better renewable
resource development potential than most, if not all of these
states, and yet Alaska doesn't have a statewide policy to
provide incentives for such development. The fund created under
HB 152 would provide upfront capital for projects that don't
have any fuel costs once in operation. Furthermore, the fund
would highlight renewable energy development in Alaska, and thus
send a message that the state is serious about developing those
resources. Mr. Rose then directed attention to the language
creating the advisory committee as it provides a mechanism for
renewable energy stakeholders to assist AEA in developing the
program. Mr. Rose concluded by opining that HB 152 is an
excellent way for the state to provide incentives that will
attract and increase renewable energy development in Alaska.
8:12:34 AM
SARA FISHER-GOAD, Deputy Director, Project
Development/Operations, Alaska Industrial Development & Export
Authority (AIDEA) and Alaska Energy Authority (AEA), Department
of Commerce, Community, & Economic Development (DCCED), related
that since renewable energy is a significant part of the work
done at AEA, she looks forward to working with the sponsors and
the committee to establish a renewable energy fund and program.
Ms. Fisher-Goad noted that the committee packet should include a
handout from AEA entitled, "Alternative Energy and Energy
Efficiency Overview." She then paraphrased from the following
recommendations [original punctuation provided]:
We recommend that the ability to make loans be removed
from the fund. We believe that the loan provision is
a duplication of the Power Project Fund [PPF]. The
PPF is a long-standing AEA loan fund that is available
for energy projects. Three of the most recent loans
from this fund were for renewable energy projects.
Chena Power's geothermal project, the City of Craig
for its wood-waste fired district heating system and
Aleutian Wind Energy for its Sand Point wind-diesel
hybrid project.
We propose that grant criteria be developed to require
a match that the applicant could either fulfill by
applying for a PPF loan or coming up with an equity
contribution by other means. This is the model
successfully used in AEA's energy cost reduction
program.
We recommend that the guidelines pertaining to the
"annual average amount of the fund" be removed.
Depending on the capitalization or balance of the
fund, it may be more appropriate for AEA to determine
the allocation amount. For example, if the balance of
the fund was $1 million, the most beneficial use of
the fund may be feasibility studies, reconnaissance
studies and energy resource monitoring. Design and
construction may not be a viable use with limited
funds. An alternative approach may be for AEA to
establish annual funding priorities in consultation
with the advisory committee.
On page 4, we recommend [sub]section (g) (3) be
removed. All projects, prior to construction must
have the necessary site control and environmental
permits. This is not a unique requirement for natural
gas projects. For example, biomass and hydroelectric
projects require environmental permits.
We recommend providing an effective date of July 1,
2007 coinciding with the start of the fiscal year.
8:17:05 AM
PETER CRIMP, Program Manager, Alaska Energy Authority (AEA),
Department of Commerce, Community, & Economic Development,
related support for HB 152, although he acknowledged that there
are some technical matters that need to be addressed.
8:17:54 AM
PHIL STEYER, Director of Government Relations, Corporate
Communications, Chugach Electric Association, Inc., related that
the Chugach Board of Directors has passed a resolution in
support of the establishment and legislative funding of a
renewable energy fund. He further related that Chugach Electric
Association, Inc. supports HB 152, particularly since the
legislation provides the ability to fund the transmission or
distribution line between a renewable energy project and the
grid. He remarked that a project idea isn't very practical if
the generation resource can't be connected with the customers.
Mr. Steyer mentioned that many people and organizations,
including Chugach Electric Association, Inc. worked together to
develop the language of HB 152.
8:19:21 AM
CONNIE FREDENBERG, Community Development, Aleutian Pribilof
Islands Association (APIA), began by noting that APIA is the
tribal consortium for the state's 13 Aleut tribes. She related
that for nearly four years, [the Aleutian Islands] have utilized
an alternative energy program. The Aleutian Islands have more
geothermal potential that all of North America, and furthermore
the entire region has outstanding resources and unmeasured tidal
power. The technology exists today to exploit the
aforementioned resources. Ms. Fredenberg opined that this fund
will benefit the entire state and address the root of the rural
energy crisis, which is the rising and volatile price of
imported fuel. She opined that Alaska should be amongst the
world's leaders in renewable energy development as the state has
all the raw resources and a critical need for it. Furthermore,
there are many capable and hardworking people throughout the
state who recognize the potential of the renewable energy
resources. Ms. Fredenberg urged the committee to make passage
of HB 152 a priority. In conclusion, she related a quote from
Nels Anderson in which he relates that although the energy
crisis caused by importing fuels may hit rural areas first, the
entire state and nation will face the same crisis. She opined
that it's time Alaska started developing these [renewable]
resources.
8:22:05 AM
KATE TROLL, Executive Director, Alaska Conservation Alliance,
began by relating that the Alaska Conservation Alliance is an
umbrella organization of 40 conservation groups in the state,
representing about 38,000 Alaskans. She then related strong
support for HB 152 and that supporting renewable energy is a top
priority of the organization. Ms. Troll highlighted what is
occurring in rural Alaska where many rural Alaskans spend up to
40 percent of their annual income on electricity, hot water, and
heating and cooling. The aforementioned is a staggering burden,
especially when compared to the urban environment. This
legislation, she opined, is a vital first step. She
acknowledged that renewable energy won't completely replace the
use of diesel in rural Alaska, but emphasized that renewable
energy has the potential to provide economic benefits in Alaska.
In fact, it was recently estimated that wind power is already
displacing more than 300,000 gallons of diesel fuel barged
annually to 130,000 residents of rural Alaska. Alaska possesses
a vast amount of renewable resources in the form of wind, tidal,
geothermal, biomass, waves, and hydropower that can be harnessed
with current technologies. With virtually no fuel costs and
increasingly affordable and efficient technologies coming to the
forefront, renewable energy has the potential to impart
significant economic benefits throughout Alaska. Many states
and nations are working successfully to develop their renewable
energy resources. Still, no other state has the vast tremendous
resources of renewable energy that is found in Alaska. She
relayed her excitement with regard to HB 152 and Alaska's
potential, with the political will and funding, to be the Saudi
Arabia of renewable energy. In conclusion, Ms. Troll urged the
committee to forward HB 152 with very little changes to it.
8:26:37 AM
GREG EGAN, Remote Power Inc., related that although his company
deals with wind and solar power systems on a smaller scale than
50 kilowatt (kW), he is fairly familiar with renewable energy in
Alaska. He informed the committee that in recent conversations
with a business owner in Bethel, it was apparent that the
business owner saw the benefit of utilizing wind power, but the
difficulty is in obtaining a loan for renewable energy. This
legislation will help with the aforementioned. He then
expressed concern with the oil tanks located next to rivers and
the oil barged on the rivers in rural Alaska because of the risk
associated with the fishery resources were there an oil spill.
Mr. Egan concluded by emphasizing the need to fund renewable
energy programs, at least loan programs.
8:29:16 AM
REPRESENTATIVE SALMON referred to page 4, lines 12 and 19 and
the requirement to generate more that 50 kW of energy. He
inquired as to the amount of power a solar panel produces.
MR. EGAN answered that although one can put together a 50 kW
solar array, it would be fairly expensive. He related that he
typically deals with lower-end users such as individual lodge
owners with needs smaller than 50 kW. Still, this legislation
is important because funding larger projects will displace more
fuel, he opined.
REPRESENTATIVE SALMON questioned why the 50 kW requirement
couldn't be smaller since smaller units could be tied together
to increase the energy capabilities.
MR. EGAN said that he has no problem with such.
MS. SCHROEDER HOTCH explained that the 50 kW requirement was
included in order to not allow individuals to obtain these
loans. She said that the [sponsor] is willing to research how
small the requirement can be without actually loaning to
individuals.
REPRESENTATIVE SALMON clarified that he is pointing out that
even small packages could be tied together to amount to an
operation larger than 50 kW.
8:33:22 AM
REPRESENTATIVE BILL THOMAS, Alaska State Legislature, speaking
as a co-sponsor, explained that the 50 kW was specified to
account for switching from heating fuel to electric heat. He
related that the community of Chenega runs 65 kW for 85 people.
Representative Thomas drew attention to the fact that HB 152
doesn't include a funding source because it should be put in by
the governor at that time.
8:35:49 AM
MIKE MUSICK, General Contractor/Builder, related that everyone
in the building industry with whom he has discussed the
legislation supports HB 152.
8:36:20 AM
TODD HOENER, Energy Efficiency Specialist//Sustainable, Natural
Alternative Power Program Administrator, Golden Valley Electric
Association (GVEA), informed the committee that GVEA's Board of
Directors has passed a resolution in support of HB 152. Mr.
Hoener related his support for HB 152, but noted that it doesn't
address energy efficiency and conservation. Energy efficiency
and conservation are necessary to ensure that renewable energy
is fully cost effective. He suggested that committee members
review the national renewable energy website. This legislation
only addresses supplying more energy rather than demanding that
energy is used efficiently and cost effectively. Energy
efficiency, demand-side management, has been treated as an
energy/fuel source by utilities for decades; it's treated as a
clean and cheap fuel source. The aforementioned is illustrated
in two news articles last week that Australian and European
manufacturers are phasing out incandescent bulbs as they're not
energy efficient. The other news article was about the Texas
electric utility giant, TXU Corporation, that is reducing its
planned construction of 11 coal-fired plants down to 3 and
investing $400 million to demand-side initiatives, energy
efficiencies, and alternative energies. As HB 152 suggests, the
national trends to increase energy independence, reduce
environmental health risks associated with green house gases,
and produce energy security benefits while reducing volatile
energy costs should be considered by the legislature.
Therefore, he suggested inserting language into HB 152 that
addresses the need to integrate energy efficiency technologies
and energy conservation practices into funding renewable energy
projects. Mr. Hoener recommended that the proposed advisory
committee include at least one member from a nonprofit agency or
for-profit business engaged in the energy efficiency sector. He
then recommended that the proposed advisory committee establish
methodology and regulations for determining projects, including
the need to address energy efficiency issues in any and all
projects. Without the aforementioned, HB 152 is merely supply-
side energy legislation, albeit a better energy. If the energy
efficiency isn't included with renewable energy projects, then
the state is again wasting the precious energy and fiscal
resources of Alaskans.
8:42:47 AM
BRAD REEVE, General Manager, Kotzebue Electric Association,
highlighted that at this point Kotzebue has the largest wind
farm in the state and thus is in favor of legislation such as HB
152. States, such as California, Texas, and Minnesota, that
have solid, renewable energy policies are developing their
resources to the maximum extent possible. Mr. Reeve, recalling
his visits to projects in those states, opined that [a renewable
energy policy] creates economic development and jobs. Rural
communities are suffering economically due to extreme fuel
prices. He indicated the importance of having a policy
dedicated to renewables that moves fuel dollars into the local
community and helps displace dollars leaving the community by
creating new jobs. Mr. Reeve then informed the committee that
about 10 years ago the Princeton Economic Research Institute
felt that potentially 70-90 coastal communities in Alaska could
benefit from using wind. He related support for HB 152 as its
written as it is beneficial in terms of having a solid policy of
reducing environmental risk and emissions while creating jobs.
8:45:04 AM
REPRESENTATIVE OLSON, recalling a visit to Mr. Reeve's facility
a few years ago, commented that he was impressed with the work
that he has done.
8:45:30 AM
RICH SEIFERT, Energy & Housing Specialist, Cooperative
Extension, University of Alaska - Fairbanks, noted that he
teaches cold climate building courses, and therefore energy
conservation and housing is one of his primary interests. In
fact, he mentioned that he did an entire exterior retrofit of
his 1975 home. He explained that he did the aforementioned
because the real solution to energy problems in Alaska is
getting a grip on the state's energy demand. Alaskans live at a
very high standard of living and use more British thermal units
Btus of fossil fuel per capita than anywhere else in the world,
and therefore Alaska owes it to the world to decrease that use.
Mr. Seifert agreed with Mr. Hoener in that HB 152 must address
demand reduction in order to maximize the efficient use of the
resource. However, he pointed out that energy conservation and
demand reduction both require capital funds upfront. Getting
the money to those who need it, in the amount necessary needs to
be clearly worked out in order to avoid another false start.
Mr. Seifert suggested a double benefit, double incentive system
that would reward communities and individuals by providing as
much money as the community saves through conservation. He
characterized the Energy Trust of Oregon as a good program and
the 50 kW limitation as a bad idea because the program should be
more flexible. In response to Co-Chair Fairclough, offered to
provide written comments to the committee.
8:50:20 AM
REPRESENTATIVE SALMON thanked Mr. Seifert for supporting
reducing the 50 kW limitation.
MR. SEIFERT opined that businesses have options that individuals
don't with regard to loans for alternative energy projects.
8:51:12 AM
REPRESENTATIVE CISSNA related her impression that the sponsor is
interested in making the legislation as good as it can be.
Therefore, she encouraged Mr. Seifert to get his comments to the
sponsor or committee.
MR. SEIFERT said he would do so.
8:52:41 AM
PETE KOMPKOFF began by noting that although he is the president
and tribal administrator of Chenega IRA Council, he is speaking
on his own behalf. He related his support for HB 152.
8:53:26 AM
MICHAEL VIGIL noted that he is the chairman and environmental
coordinator of the Chenega IRA Council. He opined that Alaska
is the largest land mass with such an abundance of natural
resources. He expressed hope that besides alternative energies,
natural gas will be provided to communities through which the
natural gas pipeline passes. He related his strong support of
HB 152.
8:55:23 AM
KATHRYN LAMAL, Vice President, Power Supply, Golden Valley
Electric Association, voiced strong support for HB 152. The
Interior of Alaska is committed to renewables and HB 152 would
help Alaska as a whole in reducing its reliance on hydrocarbons.
8:56:38 AM
CO-CHAIR FAIRCLOUGH, upon determining no one else wished to
testify, closed public testimony. She related that the sponsor
requested that HB 152 be held to review whether to incorporate
some of the suggestions made today. Therefore, HB 152 was held
over.
8:57:38 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 8:57 a.m.
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