Legislature(2007 - 2008)Anch LIO Conf Rm
07/17/2008 04:00 PM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB4002|| HB4003 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB4002 | TELECONFERENCED | |
| += | HB4003 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
Anchorage, Alaska
July 17, 2008
4:00 p.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Nancy Dahlstrom
Representative Mark Neuman
Representative Kurt Olson
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Bryce Edgmon (via teleconference)
Representative Scott Kawasaki (via teleconference)
Representative Peggy Wilson (via teleconference)
Senator Joe Thomas (via teleconference)
Senator Thomas Wagoner
COMMITTEE CALENDAR
HOUSE BILL NO. 4002
"An Act establishing the Alaska resource rebate program and
relating to the program; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 4003
"An Act making supplemental appropriations to the Alaska Energy
Authority for power cost equalization; making special
appropriations to the Department of Revenue and to the
Department of Health and Social Services for the Alaska resource
rebate program; making a special appropriation to the Department
of Revenue for the payment of certain shared taxes relating to
aviation fuel; and providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB4002
SHORT TITLE: RESOURCE REBATE PROGRAM FOR RESIDENTS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
07/09/08 (H) READ THE FIRST TIME - REFERRALS
07/09/08 (H) CRA, FIN
07/11/08 (H) CRA AT 8:00 AM BARNES 124
07/11/08 (H) Heard & Held
07/11/08 (H) MINUTE(CRA)
07/15/08 (H) CRA AT 8:00 AM BARNES 124
07/15/08 (H) Heard & Held
07/15/08 (H) MINUTE(CRA)
07/17/08 (H) CRA AT 4:00 PM Anch LIO Conf Rm
BILL: HB4003
SHORT TITLE: APPROP: ENERGY RELIEF/REBATE/FUEL TAX
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
07/09/08 (H) READ THE FIRST TIME - REFERRALS
07/09/08 (H) CRA, FIN
07/11/08 (H) CRA AT 8:00 AM BARNES 124
07/11/08 (H) Heard & Held
07/11/08 (H) MINUTE(CRA)
07/15/08 (H) CRA AT 8:00 AM BARNES 124
07/15/08 (H) Heard & Held
07/15/08 (H) MINUTE(CRA)
07/17/08 (H) CRA AT 4:00 PM Anch LIO Conf Rm
WITNESS REGISTER
INEZ WEBB
Anchorage, Alaska
POSITION STATEMENT: Representing self, testified in support HB
4002 and HB 4003.
APRIL FERGUSON
Acting Chief Operating Officer
Bristol Bay Native Corporation (BBNC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 4002 and HB
4003.
ANDREA VEATCH
Anchorage, Alaska
POSITION STATEMENT: Representing self, testified in opposition
of HB 4002 and HB 4003.
DARYL NELSON
Chugiak, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
BONNIE NELSON
Chugiak, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
PAUL D. KENDALL
Anchorage, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
MARGARETT MANOUSOFF
Anchorage, Alaska
POSITION STATEMENT: Representing Alaska Conservation Solutions,
testified on HB 4002 and HB 4003.
MARYANNE PEASE
MAP Consulting
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 4002 and HB
4003.
RAY WARD
Anchorage, Alaska
POSITION STATEMENT: Representing self, testified in support of
HB 4002 and HB 4003.
JODI KAREZ
Anchorage, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
SARA SCANLAN, Deputy Director
RurAL CAP Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 4002 and HB
4003.
SALLY SPIEKER
Anchorage, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
PATRICK LUBY, Advocacy Director
AARP
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 4002 and HB 4003.
DIANE HOLMES
Anchorage, Alaska
Representing self
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
TOM KAKOSH
Anchorage, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
JEFF STEVEN
United Fisherman's Marketing Association (UFMA)
Kodiak, Alaska
Anchorage, Alaska
POSITION STATEMENT: Representing self and the UFMA, testified
in support of HB 4002 and HB 4003.
ROCHELLE VAN DEN BROEK
Executive Director
Cordova District Fishermen United
Cordova, Alaska
POSITION STATEMENT: Representing self and CDFU, testified in
support HB 4002 and HB 4003.
DEBORAH TEMMERMAN
Cordova, Alaska
Representing self
POSITION STATEMENT: Representing self, testified in support of
HB 4002 and HB 4003.
KEITH VAN DEN BROEK
Cordova, Alaska
POSITION STATEMENT: Representing self, testified in support of
HB 4002 and HB 4003.
GARY HAY
Tok, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
SHEILA HOWE
Anchorage Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
GARY HART
Nome, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
BARBARA MADISON
Ambler, Alaska
POSITION STATEMENT: Representing self, testified in support HB
4002 and HB 4003.
GEORGE GUY
Alaska
POSITION STATEMENT: Representing self, testified in support HB
4002 and HB 4003.
ALVERN CLEVELAND
Noorvik, Alaska
POSITION STATEMENT: Representing self and the City of Noorvik
testified on HB 4002 and HB 4003.
JAMES HOTAI
Valdez, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
JAMES FLOYD
Tok, Alaska
POSITION STATEMENT: Representing self, testified on HB 4002 and
HB 4003.
ACTION NARRATIVE
CO-CHAIR GABRIELLE LeDOUX called the House Community and
Regional Affairs Standing Committee meeting to order at 4:00:24
PM. Representatives Salmon, Dahlstrom, Neuman, Olson, LeDoux,
and Fairclough were present at the call to order.
Representative Cissna arrived as the meeting was in progress.
Representatives Edgmon, Kawasaki, and Wilson and Senators
Wagoner and Thomas (via teleconference) were also in attendance.
HB4002-RESOURCE REBATE PROGRAM FOR RESIDENTS
HB4003-APPROP: ENERGY RELIEF/REBATE/FUEL TAX
4:00:35 PM
CO-CHAIR LeDOUX announced that the only order of business would
be a hearing on two bills: HOUSE BILL NO. 4002, "An Act
establishing the Alaska resource rebate program and relating to
the program; and providing for an effective date."; and HOUSE
BILL NO. 4003, "An Act making supplemental appropriations to the
Alaska Energy Authority for power cost equalization; making
special appropriations to the Department of Revenue and to the
Department of Health and Social Services for the Alaska resource
rebate program; making a special appropriation to the Department
of Revenue for the payment of certain shared taxes relating to
aviation fuel; and providing for an effective date."
4:01:26 PM
INEZ WEBB stated that everyone is aware of the devastation to
the economy from increased oil prices and "feel it in the
pocketbooks" no matter what residence. She explained that she
was born and raised in Dillingham as were her parents and
grandmothers. She offered that she is fortunate to have a
"decent job" and to live in Anchorage where energy costs are
still reasonable. However, the same cannot be said for her
relatives in rural Alaska who experience astronomical cost of
living expenses, she stated. She opined that while many factors
contribute to the high cost of living, transportation costs are
the key. She offered that consumer products must be barged in
or flown in and account for the cost of milk at $8 per gallon,
cereal at $7.50, ice cream at $9 for one-half gallon, and that a
small package of diapers costs $30. Furthermore, fuel costs are
high with gas prices at $6.23 per gallon last week. She also
noted that Dillingham is a hub community and that surrounding
villages experience much higher costs.
MS. WEBB related that she uses every means possible to assist
her family by purchasing goods in Anchorage and transporting
them to Dillingham using "snail mail," or urging colleagues to
take an extra piece of luggage when traveling to Dillingham.
Although this helps, it is not enough, she said. She expressed
concern that her family is at risk. She offered that HB 4002
and HB 4003 will only provide a short-term fix for a nationwide
problem; the bills will help Alaskan families survive the long
winter. She characterized Alaska as one community and urged
members to please provide funding for these bills. She thanked
members for their consideration of HB 4002 and HB 4003 and for
their dedication and service to Alaskans.
4:04:18 PM
APRIL FERGUSON, Acting Chief Operating Officer, Bristol Bay
Native Corporation (BBNC), offered her belief that no other
issue is as important or as critical as energy. She commended
the legislature's proactive stance to address this issue prior
to this coming winter. She offered that all communities in
Alaska have been affected by the increased cost of fuel,
particularly the majority of the communities in the state that
are "off the road system." She opined that these communities
are seriously challenged to maintain infrastructure and their
community members during the winter months. She characterized
the energy issue as a "state of emergency" in Alaska. She
thanked legislators for bringing this issue before the
legislature and the public at large. She further opined that if
solutions are not immediately forthcoming to reduce home heating
fuel costs, it will be necessary to airlift emergency shipments
into small communities at an enormous cost to the state. She
offered that HB 4002 and HB 4003 are bills that recognize that
an "economic train wreck" is coming and will help Alaskans. She
offered her belief that everyone agrees that no one solution
exists for Alaska's energy problems since Alaska is the largest
and most geographically diverse state in the United States.
Thus, Alaska's transportation corridors and infrastructure are
unique and underdeveloped. She stated that delivering fuel in a
timely and economical fashion requires a massive and cumbersome
distribution network.
MS. FERGUSON said:
The fact is our state has become diesel dependent. I
spoke to a resident of South Naknek yesterday and he
told me that 40 years ago every household had a wind
charger and a set of battery banks. Then, diesel came
along and everything changed. So change is coming and
we are willing to change. All the communities in
Bristol Bay are preparing for a lean winter. The
magnitude and speed of this change, however, is
unprecedented. I'm asking the legislature to come
together on this issue and reach out and grab their
neighbors by the hand. We have to help each other and
we have to do it quickly. The dramatic increases in
oil prices over the past two years could not have been
predicted. Recent studies by the University of Alaska
in 2007 show that some households are paying as much
as 47 percent of their income for home energy costs
and that was last year. What do we expect them to do
this winter? And where do we think the prices are
going to go? We have no idea.
MS. FERGUSON continued. She opined that the dramatic increase
in oil prices over the past two years have had a devastating
economic effect on all Alaskans. However, state revenues are
increasing due to oil prices. She asked legislators to use
Alaska's natural resources to address the immediate energy needs
of its citizens and establish long-term plans to reduce
dependence on fossil fuels. Additionally, rising energy costs
have had a debilitating effect on small businesses, schools,
water and waste facilities, airports, ports, ferry systems,
processors and fishermen, she stated. She urged the legislature
to investment and maintain infrastructure across the state. She
opined that it takes community to "take care of our own."
MS. FERGUSON further stated that the BBNC strongly supports HB
4002 and HB 4003. She opined that the $1,200 rebate and the
provisions protects low-income citizens and represents good
public policy during a time of economic conditions and state
revenue surplus. The supplemental appropriations will cover
funding shortfalls for the Power Cost Equalization program
(PCE), which is essential to offset the effect of higher fuel
costs on electric power in all "off road" areas of the state.
Furthermore, the BBNC supports consideration of developing a
"life line" by supplying family fuel payments to ensure that
adequate supplies of heating fuel are affordable for all
households, perhaps "along the lines of the PCE program."
Additionally, the BBNC respectfully requests consideration for
increases to PCE that would recognize the dramatic effect higher
oil prices have on electricity costs in areas dependent on
diesel fuel. She suggested that the 52 percent per kilowatt
hour (kWh) in the payment calculation be indexed to fluctuations
in the average ANS West Coast oil price. She highlighted that
the average fiscal year 2007 price of oil is $61.63 per barrel
as reported by the Alaska Department of Revenue (DOR). She
maintained that the legislature must develop a long-term energy
strategy. Finally, she offered that the BBNC also supports the
Alaska Federation of Natives' (AFN) resolution that would
establish the basics for a long-term energy policy and would
provide for the equalization of energy costs for all Alaskans
while providing significant funding for long-term development of
alternative energy resources and conservation measures. She
thanked members and emphasized that action taken now will save
"money, embarrassment, and heartache later." She concluded by
stating, "Imagine, if you will, a headline that will advertise
that Alaskan communities fragmenting, in migration,
infrastructure failing, in a state with a multi-billion dollar
surplus. It doesn't make sense."
4:11:07 PM
CO-CHAIR FAIRCLOUGH inquired as to how Dillingham is preparing
for the upcoming winter. She recalled testimony in Barrow that
some communities were still using oil or diesel that was
purchased under last year's shipment. She further recalled that
communities were anticipating dramatic increases in fuel costs
when communities would use this summer's bulk fuel at higher
prices.
MS. FERGUSON agreed that the situation is very much the same in
Dillingham. She offered that the community and many agencies
currently are attempting to address fuel costs through
discussions with distributors and reviewing the tank situation.
She noted that the BBNC is working to develop a policy paper on
issues such as the bulk fuel storage, but that it takes time to
reach consensus.
CO-CHAIR FAIRCLOUGH recalled testimony that indicated that
enough funding was invested in the loan guarantee program. She
inquired as to whether other members recalled this and opined
that it was not necessary to address increased funding for the
bulk fuel loan guarantee program during the special session.
4:13:34 PM
REPRESENTATIVE NEUMAN offered his understanding that the BBNC
has been "doing fairly well." He inquired as to whether the
BBNC is offering any cash contributions to its members to assist
them with energy costs.
MS. FERGUSON clarified that she is speaking on behalf of the
BBNC, which is a "for-profit" corporation. She explained that
the BBNC issues dividends on a quarterly basis. She noted about
40 percent of the BBNC's shareholders reside in the region. She
further clarified that she is not speaking only about the BBNC's
shareholders, but is speaking on behalf of all Alaskans in all
areas of the state. She maintained that rural Alaskans in "off
road" communities are in grave danger.
REPRESENTATIVE NEUMAN inquired as to any of BBNC's internal
programs to reduce energy costs such as providing investments in
alternatives means of power such as solar power or wind power to
reduce energy costs.
MS. FERGUSON offered her belief that all of the rural
communities are interested in alternative energy solutions. She
explained that funding for programs such as weatherization will
be available for residents throughout the state and opined that
the BBNC will certainly make use of energy programs. She said,
"I would make a pitch for 'regional power authority' to enable
remote areas of the state access to some of the funds." She
spoke in favor of allocating funds for alternative energy fuels
currently being considered by the legislature. In further
response to Representative Neuman, Ms. Ferguson answered that
BBNC is a for-profit corporation that would be interested in
investing in alternative energy sources. She related her
understanding that Representative Neuman's question is whether
BBNC is purchasing wind energy programs for residents. She
opined that residents in the region are exploring as many
alternative energy sources as possible. She noted that in a
recent visit she observed alternative energy "springing up" in
Dillingham such as use of external wood boiler stoves that
reduce dependence on diesel to zero. However, she noted that
limited wood supplies are available in the region.
4:18:11 PM
REPRESENTATIVE OLSON asked how many bulk fuel dealers operate in
Dillingham and about fuel prices.
MS. FERGUSON stated that she thought there were two dealers and
home heating fuel costs are currently set at $5.60 per gallon.
However, she pointed out that the community is still utilizing
fuel bought at a cheaper rate. She, noting that she is not an
expert in this area, offered her belief that fuel prices will
reach $8.00-$8.50 per gallon.
REPRESENTATIVE SALMON related his understanding of the issues in
the Dillingham area. He noted that in his legislative district
the current fuel cost in one village has already reached $8 per
gallon. He offered that 150 gallons of heating fuel costs
$1,200. He expressed concern about the impact on rural
residents facing winter temperatures of 60 degrees below zero.
He highlighted that HB 4002 will provide relief for only this
year. He predicted that the cost of fuel issues will continue.
He inquired as to whether Ms. Ferguson could offer any long-
range solutions.
MS. FERGUSON surmised that the whole state is "grappling" for
solutions. She acknowledged that a $1,200 fuel rebate would be
"a drop in the bucket." She urged the legislature to take
immediate action, followed by seeking long-term solutions for
fuel costs. She opined that the cost of fuel is a statewide
issue that she does not want to turn into an urban-rural
discussion.
4:21:59 PM
REPRESENTATIVE CISSNA suggested that the committee should be
briefed on the rural funding mechanisms to better understand
rural Alaskan issues. She asked whether Ms. Ferguson could
comment.
MS. FERGUSON stated that many experts will provide assistance to
help the BBNC develop policy papers to ensure that the
legislature has enough information during its deliberations.
She maintained the far reaching implications of fuel costs on
businesses, schools, stores, and wastewater facilities. She
expressed concern that communities need to have sufficient fuel
to support the infrastructure or the communities will die. She
pointed out that mining and fishing in rural Alaska helps
support the economies in urban communities such as Anchorage and
Fairbanks. She surmised that it will be difficult to continue
with resource development in Alaska without maintaining
sufficient infrastructure and port facilities in the state.
CO-CHAIR FAIRCLOUGH reminded members that the issues before the
committee are HB 4002 and HB 4003. She highlighted that while
the issues raised are important, the committee should not
consider those concepts at the expense of the legislation
currently before it. She pointed out that the committee is
scheduled to hear testimony from the Alaska Energy Authority
(AEA) next week.
4:26:11 PM
REPRESENTATIVE CISSNA posited that an understanding of the
dynamics of some of the community and regional affairs issues
will also provide an understanding of the overall energy impact
for individuals.
CO-CHAIR FAIRCLOUGH noted that Mr. Steve Haagenson, Executive
Director, AEA, has prepared a district-cost factor analysis by
region, which was recently presented to the Alaska State Chamber
of Commerce. She surmised that a rough draft of the analysis
would soon be available for the committee to consider.
4:27:09 PM
ANDREA VEATCH stated that she opposes "the possible
indiscriminate squandering of $1.2 billion dollars." She
offered her support for "targeting needs and providing
assistance," but she said that she did not think that all needs
are equal. She recalled when President Bush decided to send
everyone in the United States a check, but a few months later
[the terrorist attacks of September 11, 2001] occurred. She
opined that the aforementioned scenario illustrates that no one
can predict what lies ahead. She spoke in favor of "targeting"
needs not only for energy, but for public safety. She expressed
concern over the budget reductions to the Department of Public
Safety's (DPS) budget, which are small compared to the proposed
energy rebates. She noted that Alaska has the highest incidence
of rape in the nation. She suggested that the energy rebate
funds under consideration could better be used to address public
safety issues. She reiterated that her point is that some
functions only government can address and that the legislature
must determine how to "handle the public problems" such as
providing adequate law enforcement for citizens. She maintained
her concern that the state needs to address problems such as the
high incidence of rape.
MS. VEATCH recalled editorials that addressed issues such as
rape, murder, and food banks, regardless of the resident's
location. She expressed concern that the [resource rebate]
would be issued to all Alaskans and not based on need. She
opined that the current proposal needs to be "well-thought out,"
targeted to those who need relief, and limited to "arenas that
only government can serve.
REPRESENTATIVE SALMON inquired as to whether she could offer any
solutions since she is opposing the $1,200 proposed resource
rebate program.
MS. VEATCH answered that the needs in rural communities are
"dire" and "real" and that the legislature should help them.
However, she characterized providing $1,200 to all residents in
Anchorage regardless of their circumstances as ridiculous.
4:31:56 PM
DARYL NELSON stated that the proposed $1,200 rebate will not
solve the problem or even "scratch the surface." He suggested
that the state should invest in its own oil wealth and hire its
own producers. He pointed out that in Venezuela gas costs
approximately $.30 per gallon since the country owns the wells
and the producers do not receive "a big profit." He urged
legislators to consider three things: one, to ensure that
health care is a right for all Alaskans; secondly, the state
should invest in its own oil wells, and, thirdly, the state
should invest in mass transit solutions for the entire state.
4:35:51 PM
BONNIE NELSON agreed with the comments of Mr. Daryl Nelson. She
opined that the state is in a statewide emergency situation and
the $1,200 rebate being considered does not represent the best
management of the state's resources. She surmised that with
citizen involvement at the local level government can perform
well. She offered her belief that government should be held
accountable and should provide public safety, transit, and
medical care first. She opined that local government should be
empowered to re-direct state and federal funds that are
collected from its citizens. She favored distributing rebate
funds to local government such as the Matanuska-Susitna Borough,
rather than to individuals. She opined that rural communities
are affected most and should obtain the greatest share. She
wondered if this program is being considered since it "looks
good" and may "get votes." She suggested that instead, the
funding should be used for investments. With regard to the
Alaska Gasline Inducement Act (AGIA) process, she said she does
not trust the producers and offered that she agrees with former
Governor Hickel that Alaska is an owner state. She opined that
Port MacKenzie is a better location than Valdez [for the
terminus of an in-state gas line.] She thanked legislators and
Governor Palin for their work.
4:40:23 PM
REPRESENTATIVE NEUMAN offered his understanding that the Nelsons
are stating that it is better to take the $1,200 and re-invest
it in the state to assist the communities as a whole.
MS. NELSON concurred, adding her preference for state revenue
sharing rather than distributions to individuals.
4:41:22 PM
PAUL D. KENDALL directed attention to Popular Science magazine
pictures of what he called "the house of the future," which he
stated is an all-fuel cell based house. He then said that he
has been involved in energy activism for a long time. He opined
that Alaska doesn't have an energy problem since plenty of
energy is available. Instead, he opined, what is lacking is "a
leadership vision." He further opined that leadership could
"command the wellhead and stop the plundering of our homes." He
offered his belief that it is our homes that hold us together,
allow us to be individuals, and to form societies. Absent
societies, "free enterprise" could not exist.
MR. KENDALL characterized the current situation as "a perfect
storm" heading Alaska's way. He said: "The one thing I think
we have learned is this: we will never be a free people until
we secure the energy." He offered to donate his $1,200 to a
collective cause that would ensure electrical generation - based
on water, not on fossil fuels - for one village to enable that
village to be "all electric" with "electric vehicles." He
highlighted that the state has hydroelectric potential. He
concluded by opining that one missing element in our "societies"
is the "element of time" such that people could converse without
having "a sense of urgency."
4:47:12 PM
MARGARETT MANOUSOFF stated that she wished to submit for the
record some analytical papers that discuss the following three
topics: why a resource rebate is not in the state's best
interest; why motor fuel taxes should not be suspended; and
alternative approaches to address Alaska's energy needs. She
highlighted some of the most compelling reasons against the
$1,200 rebate, including that the resource rebate is not a
viable solution since it will be politically impossible to end
the rebate program so long as energy prices remain high. Since
the rebates are subject to federal taxes, 10 to 35 percent of
the rebate will be remitted to the federal government, she
opined. Finally, the program is not targeted to those "most in
need" nor does the program require that the resource rebate
funds be spent on energy expenses. She noted that Alaskans will
soon receive their permanent fund dividend (PFD) checks, which
could be applied to energy expenditures, particularly given that
the amount of the PFD is expected to increase and will arrive
prior to winter. She opined that the distribution of two checks
- the PFD and the resource rebate - may result in undesirable
social repercussions such as attracting people to the state who
are only interested in the checks and are not interested in
establishing residency. She further opined that the resource
rebate would be negatively perceived in Washington, D.C., which
could have serious consequences in terms of future federal
funding for Alaska.
MS. MANOUSOFF opined that common resources should be invested
for the common good and should be used for community projects
rather than as a windfall to individual citizens. She stated
that the Alaska Conservation Solutions believes better ways
exist to address the critical problems of soaring energy costs.
She referred to a document titled "Energy Relief Savings and
Efficiency Plan," which provides suggestions for energy
conservation and efficiencies that will benefit Alaskans both
now and for decades to come.
MS. MANOUSOFF, with regard to the appropriation bill, noted that
the governor has actively sought help. She opined that Alaska
is at a "critical crossroads" and could implement a thoughtful
and comprehensive strategy that would have immediate and long-
term benefits, or it could simply apply "aspirin and band-aids"
that will alleviate and mask symptoms, but do little to treat
the disease. She stated that if the state simply subsidizes
fossil fuel consumption by all Alaskans, it will increase our
dependence on foreign supplies of oil, create inequities, fail
to address the root causes of the problem, and establish a
massive subsidy that will be nearly impossible to undo in the
future. She offered that numerous responsible strategies exist
that would provide immediate and long-term relief to high energy
prices and reduce the state's demand on fossil fuel. She
suggested that if the state is prepared to spend over $800
million for resource rebates, it can use those funds to make
"smart, equitable, long-lasting investments" that will benefit
the state for years to come - to lower our carbon footprint,
make Alaska a model for others, and provide critical relief for
people throughout the state, particularly those most in need.
In conclusion, she offered Alaska Conservation Solutions'
commitment to assist in finding the best ways to address soaring
energy costs in Alaska. She urged the committee to incorporate
the proposals in the "Energy Relief Savings and Commitment Plan"
into the dialogue as the committee works to address the energy
issues that currently face Alaskans.
4:53:12 PM
MARYANNE PEASE, MAP Consulting, stated she is working to assist
the BBNC on behalf of energy-related issues. She noted that as
winter approaches, Alaskans are facing the economic prospect of
unprecedented costs for energy, particularly for heating their
homes and businesses. She related that she attended a recent
energy summit in Dillingham in which local villages discussed
the impending crisis. She related that elders, health clinic
officials, and school officials consistently pointed out that
the last barge arrives in Dillingham in September, fuel costs
are at an unprecedented high, and people are leaving the
community. She opined that this crisis isn't occurring in
Anchorage, and relayed her belief that the state needs an
immediate measure to assist rural Alaskans in a timely manner.
She further opined that the PFD will arrive too late to provide
the needed relief. She stated that citizens in Western Alaska
are dependent on local electric and fuel sources and are
burdened by the high cost of the product, particularly due to
the enormous transportation costs for fuel. She urged passage
of HB 4002 and HB 4003 in an expeditious manner to provide a
small measure of assistance to rural residents faced with the
economic dilemma of buying energy or other necessities.
MS. PEASE noted that barge costs are escalating and appear to
track oil prices. She characterized the resource rebate as a
"short-term band-aid on a very large wound that needs much more
serious attention." She suggested that the legislature work
toward a comprehensive and long-term solution to rural energy
costs. She offered that economy of scales associated with
energy production and distribution exist, but Alaska's energy
costs are disproportionate to the rest of the country,
particularly in rural Alaska. She further noted that energy
reserves and potential in-state - developed and undeveloped -
economic activity continues to be hamstrung by the high energy
costs. She said, "Our state has tons of money thanks to record
high oil prices, but many of our citizens are bleeding
economically for the same exact reason. We need a concerted
effort to promote small scale, self-sustaining energy options in
rural areas." She pointed out that some people are installing
wind-powered turbines. Furthermore, it is not a foregone
conclusion that people will use the resource rebate to continue
dependence on fossil fuels, she stated. Instead, the resource
rebate can be better used to develop wind, hydroelectric, and
wood burning alternatives.
MS. PEASE related that regional centers such as Dillingham,
Bethel, and Nome are facing the same crises as the outlying
villages. She expressed concern that without viable
alternatives to the present situation, entire regions of the
state will cease to function economically. She highlighted that
renewable energy needs to be part of the strategic plan for
energy solutions. However, many projects may take years to
implement, she lamented. She concluded by stating that the
short-term solution is improved by HB 4002 and HB 4003. She
urged members to invest in infrastructure and mandate a
"renewable mix with fossil fuels" for our electric utilities as
part of the overall state energy plan. She said, "The key
message is that the current reliance on fuel oil must be
diversified." She urged the committee to provide assistance and
leadership, which is critical to the economic survival of rural
Alaska. She offered to provide the committee with information
on home heating oil equivalents and PCE.
4:58:54 PM
RAY WARD stated that he is pleased that the governor is "guiding
the state." He thanked the committee for working with Governor
Palin. While he stated that the intent of HB 4002 and HB 4003
is good; he expressed concern over some "loopholes" such as
providing $1,200 for all Alaskans - even children - instead of
allocating the resource rebate to the people who need it the
most. He recalled the discussion about the dire need in rural
Alaska. He acknowledged that some urban citizens also have dire
needs. He offered himself as an example since he is the head of
the household, lives alone, and cannot obtain employment due to
a chronic debilitating visual condition. He opined that
programs offered in HB 4002 and HB 4003 will provide assistance
to people to cover their utility bills. He suggested
eliminating the resource rebate for children. He said he thinks
that the resource rebate funding should be spent to enhance
existing energy assistance programs such as weatherization or
temporary public assistance for heating costs and should be
needs based. He thanked the committee and Governor Palin for
their leadership and consideration of the resource rebate and
energy issues.
5:03:44 PM
JODI KAREZ stated, after noting that she has 24 years of
transit experience with the Municipality of Anchorage, that
she is testifying on behalf of herself. She expressed
concern that HB 4002 and HB 4003 won't actually enact
change. She remarked, "I think what we need within the
state are ways to look at energy use, make our systems
'well enough' so people can change their transportation
patterns. I think we need long- and short-term strategies
as far as handling the energy issue." She recalled that
Representative Salmon was wondering about long-term
strategies beyond this year. She offered several solutions
for the committee to consider. She said:
We operate a van pool program within the municipality
that takes 600 people a day - which is about 60,000
miles that we reduce per day in our van pool program -
people commuting from the [Matanuska-Susitna] Mat-Su
Valley into Anchorage. We have a waiting list of 700
people. In order to double our van pool fleet, it
would cost about $1.7 million. At that amount, we
would be reducing travel for people in van pools by
120,000 miles per day. I'd also like to point out
that our public transportation system is seeing a 10
percent increase in ridership. We have buses that
need to be replaced; buses statewide need to be
replaced. And public transportation is a very
important component to energy relief. I would like to
see support for a transit trust fund, funding that
could be put into transit systems statewide that are a
little more guaranteed. For many years our funding
has fluctuated based on a number of factors. I think
it would be very helpful statewide for all the systems
to know that there is a dedicated source - there is a
growth source for funds - and this is not just as an
Anchorage issue ... again, it is a statewide issue.
Finally, I would like to talk about perhaps, funding
for transit fuel. Every time that fuel tank pulls up
to our parking lot, I get "a few gray hairs" as I'm
thinking of what it's going to cost us and all the
transit systems are feeling that pinch as well. I
guess I would like to throw up some solutions to HB
4002 and HB 4003 that would again give some long-term
impacts.
5:07:02 PM
SARA SCANLAN, Deputy Director, Rural Alaska Community Action
Program, Inc. (RurAL CAP), thanked members for their efforts.
She related that RurAL CAP is a statewide organization. She
noted that RurAL CAP primarily provides low-income customers
with services that allow them to "pull themselves up by their
bootstraps" and become self-sufficient. She offered her
appreciation for comments made by those who testified such as
the BBNC, who are working on an energy plan and are discussing
the "bigger picture." She opined that Alaska is in a crisis and
rural Alaska, the state's economic engine, currently faces
"tough times." The Department of Commerce, Community, &
Economic Development (DCCED) expects the price of heating fuel
in remote Alaska villages to rise 30 to 50 percent this winter,
she offered. She noted that the Institute of Social and
Economic Research (ISER) recently reported that residents in
rural communities spend about 41 percent of their income on home
energy use while those in Anchorage spend about 4 percent. She
further noted that the CITGO's [Petroleum Corporation]
Venezuela-owned program may not serve rural Alaska this year.
She related that people throughout Alaska are facing choices
between purchasing fuel and other necessities such as
electricity. She offered that while it seems like a short-term
fix, the resource rebate can help families in rural Alaska. Ms.
Scanlan offered that PCE has been a mainstay by allowing people
to have benefits that all Alaskans should enjoy. She thanked
members for the "tough work" they have been charged with and the
"good work" they are doing to develop an energy bill that
provides short- and long-term solutions. She opined that this
crisis will encourage all Alaskans to work together and develop
an energy plan.
5:11:10 PM
SALLY SPIEKER stated that she rides her bicycle and the "People
Mover" bus in Anchorage. She noted that today she stood on the
bus along with 10 other people, which indicates that the bus was
totally full. She offered that a need and demand exists. She
thanked the committee and the governor for seeking solutions for
Alaskans. She urged members to seek solutions that are
sustainable, such as renewable fuel and wind power, and to
coordinate a public transportation system throughout the state.
She related that she has lived in rural Alaska in Nome and that
most people did not own vehicles, but used shared vans. She
offered carpooling such as the vans as one solution that reduces
fuel consumption. She opined that the state has the opportunity
and resources to lead the nation and to plan for long-term
solutions for heating, electrical, and transportation needs.
PATRICK LUBY, Advocacy Director, AARP, stated that the AARP has
not taken a position on HB 4002 and HB 4003 since the AARP is
not sure whether the bills are related to energy costs or if
they provide "a second PFD" based on the state's income from
natural resources. He opined that if the resource rebate is
related to energy costs, that AARP asks the committee to
consider several things because the resource rebate program
represents "a lot of money." He then questioned whether the
state should invest the funds in ways that can reduce future
energy costs and usage such as alternative energy research and
development, as well as for mass transit. He offered that
Anchorage has some of the lowest fuel costs and according to the
ISER study, Fairbanks suffered a 13 percent increase in one
year. He said, "The Bush Alaska situation, as you well know, is
outrageous compared to what most of us are paying for energy."
He questioned whether all citizens should receive the same
rebate or if the resource rebate should be allocated based on
who has the highest costs; and whether the rebate should be
given to households or be based on the number of occupants per
household. He posed a scenario in which a single elderly woman
lives alone in a house, and next door resides a retired couple
whose energy costs are relatively the same. He asked, "Should
one household receive twice as much resource rebate as the
single person?" He answered, "We don't think so - if it is
based on households."
MR. LUBY opined that the state will "never have as much revenue
as it would like" and the state "can never do as much for its
citizens as it would like to do." He suggested that the
legislature may wish to base the resource rebate only on
"needs."
CO-CHAIR FAIRCLOUGH commented that the resource rebate may be a
bit confusing to citizens. She noted that the program is a
resource rebate and since Alaska's state constitution provides
Alaskans ownership of the state resources, the administration is
advocating the rebate should be distributed equally to all
residents. Recalling an earlier reference to the energy crisis
as "a perfect storm," she opined that "the storm" is causing
Alaska to examine whether it should empower its citizens through
a resource rebate. She noted that the energy portion of the
rebate is in response to a crisis that the administration
observes in Alaska and throughout the nation. She offered that
the [Community and Regional Affairs Standing] committee has
asked the same questions as Mr. Luby.
REPRESENTATIVE CISSNA concurred with Co-Chair Fairclough
regarding the administration's stance on the resource rebate
issue. She added that she is seeking feedback from citizens as
to the benefits they desire.
MR. LUBY offered his understanding that the governor is also
seeking the legislature's review. He said, "We're relying on
you."
5:18:44 PM
DIANE HOLMES stated that due to the oil windfall the state has
an opportunity to develop long-term solutions for this energy
crisis. She remarked:
We have funds to construct renewable energy facilities
across the state - wind, tidal power, ... geothermal
.... But, in addition, we can do something
immediately to benefit our towns by creating a large
endowment for transportation options like mass transit
and commuter rail, and this isn't just for
Southcentral, this is for all over [Alaska.]. ... The
time has come for better options than just paving our
way out of the energy crisis. To help our towns and
our villages, we need to consider this: Don't rescind
the gas tax - use it to support transportation options
such as a mass transit commuter rail across the state.
Do not give individuals the energy credit check - give
the funds to electric, oil and natural gas companies
to reduce our heating and electric bills because if
you give it only to individuals, you are not
benefitting businesses, schools, health clinics, fire
departments, or anyone else - those entities still
have a lot of needs and yet you are thinking of only
giving it to individuals; that is not equitable. But
if you do give it to individuals, don't just use the
PFD. My neighbor does not get it for philosophical
reasons, but that person drives and votes. The best
long-term solutions would be for ... wind, solar,
geothermal. We have the ability to do so much. We
already do not have to do too much research ... we can
put them in place almost tomorrow, but we could be the
leader instead of selling our oil and gas, we could be
selling our research ... on say tidal and wave power.
Thank you.
5:21:28 PM
TOM KAKOSH stated that he suffered a disability and has been
provided assistance by state agencies. He noted that the
state's generosity sometimes may "backfire" and cost the state
much more than its expenditures. He opined that the resource
rebate is not the proper mechanism to help people that are "in
dire straits" due to energy costs. He explained that he found
the administration's testimony at a prior hearing frustrating to
understand since the rationale "did not match the language in
the bill." He offered that the solution to assist Alaskans
burdened by energy costs is not to provide "$1,200 to someone
who owns a fleet of 'hummers'" because in doing so the state
would be rewarding those people who created the crisis. He
suggested that some people may need to sleep in sleeping bags in
frozen homes in rural communities. He characterized the
situation as an "emergent need that should be funded through an
extension of the existing adult public assistance and energy
assistance programs. He expressed concern over creating a new
bureaucracy to dispense resource rebate funds, and suggested
that the administrative costs to run such a program could
provide funds for 800 more people who need them. He related
that if the state is truly trying to help Alaskans affected [by
the energy crisis,] the state could base it on needs and double
the resource rebate for those below the median income. He
maintained that there is no correlation between issuing resource
rebates to everyone and solving a problem of "people being hurt
by the energy costs today."
MR. KAKOSH opined that even if homes are well insulated, the
income might not be available to buy the fuel to heat it. He
stated that the immediate needs of Alaskans should be met by
providing additional funding to existing programs - to offer a
one-time extension for emergency needs to supplement programs.
He related that the state programs cannot "keep up with the
price of oil" which creates a special case in Alaska.
MR. KAKOSH offered his belief that the legislation is poorly
written and should be rejected and the "tax suspension" should
be voted down. He urged legislators not to reward those who
purchased "hummers." He offered to answer questions about the
negative impact on those receiving public assistance.
REPRESENTATIVE CISSNA recalled a conversation with Mr. Kakosh.
She offered her understanding that the bill does contain
provisions to ensure that people aren't disadvantaged such as
seniors.
MR. KAKOSH surmised that he wouldn't be adversely affected,
given his disability status. He offered his understanding that
the resource rebate is a one-time allocation. He noted that the
hold-harmless provisions are only extended for four months which
could result in the loss of benefits. He posed a scenario in
which a person has a subsidy. He asked:
Why wouldn't you just fund the mechanism that gave
them the subsidy in the first place - the adult public
assistance - so you would not need to pay the hold-
harmless costs? If you funded [the resource rebate]
through Alaska Housing Finance Corporation, adult
public assistance, or energy assistance programs
directly, that would not count as income for those
people; you would not have to hold them harmless for a
loss. By putting in a hold-harmless clause [the
state] increases the burden to the fund and ... likely
[will] create a situation [in which] the money isn't
there to pay the hold-harmless clause because [the
state] sent out the checks too quickly and there ...
wasn't a reserve left to pay for the hold-harmless;
the hold-harmless may not extend to the full harm that
is created. It's so silly to cost [the state] more
money when all you have to do is fund it through that
aid program in the first place.
5:29:51 PM
REPRESENTATIVE CISSNA agreed to research those issues further.
She offered that her suspicion is that it would require
substantial time to determine how to add the resource rebate to
the other programs - which will simply add to the costs, she
opined. She offered her belief that "what we all want to do is
make sure we're putting the maximum amount of money in the
communities, either through individuals ... or through the
programs that will really solve the problem in the end."
MR. KAKOSH suggested speaking to the heads of the respective
agencies to find out what changes would be needed to provide
supplemental funding of the programs. He opined that the
resource rebate should be needs based or people who need the
relief most will suffer. He suggested that some of the funds be
held to address long-term solutions such as using ceramic paint
for insulation. He further suggested that consideration could
be given to the simple solutions that exist to reduce energy
bills.
5:33:01 PM
JEFF STEVEN, United Fisherman's Marketing Association (UFMA),
explained that the UFMA is a trade association that represents
commercial harvesters who fish in the Gulf of Alaska, Bering
Sea, and Aleutian Islands. He stated that the UFMA supports
both HB 4002 and HB 4003 as currently written. He further
related his support and the support of UFMA for the information
and rationale contained in Governor Palin's transmittal letter.
He noted his support of PCE. He stated that the UFMA believes
that the equal distribution to all residents in the context of
surplus revenues from resource extraction "is the right way to
go here" and to do it any other way wouldn't be right.
MR. STEVEN offered that the fishing industry will be assisted
through the motor fuel tax suspension that is proposed in HB
4004. Although this is not a tremendous amount of money, it is
important nonetheless because of the need and crisis, and will
make the difference to offset fuel costs. He opined that there
is a very significant issue represented by the current trend in
fuel prices, which impacts fuel intensive industries such as
fishing and the communities that rely on those industries.
Thus, the coastal communities are impacted. He offered his
belief that the distribution should be made equally to the rural
and urban areas. He opined that other ways exist to address
alternative energy and energy conservation incentives and
initiatives. He noted that he is a member of the school board
in Kodiak and although he is not speaking on behalf of the
school board, he offered the following comments. He recalled
testimony that fuel costs may affect migration from the
villages, and agreed that is "a real problem that we're going to
have to face." He offered that some of Kodiak's rural schools
only have 12-14 students and if one family leaves due to fuel
costs, the school may need to close. He opined that HB 4002 and
HB 4003 offer relief that might make the difference. He
concluded by thanking the committee.
5:38:09 PM
ROCHELLE VAN DEN BROEK, Executive Director, Cordova District
Fishermen United, stated that fishermen and businesses rely on
fuel to perform their jobs. She offered that the high fuel
costs are crippling the fishing industry and small rural
communities. She noted that due to the unusually cold summer in
Cordova people have had to heat their homes. She expressed
concern about winter fuel costs that she speculated could reach
over $1,000 per month. She pointed out that rural [residents]
struggle to upgrade their homes due to high transportation costs
to ship construction materials. She offered her support for
both HB 4002 and HB 4003 as written. She stressed that the
resource rebate should be allocated to individuals and not
households since the high cost of fuel affects clothing, food
and other consumer goods.
5:41:05 PM
DEBORAH TEMMERMAN offered her support for HB 4002 and HB 4003.
She said, "I strongly believe that we need to have this help
with all of the increases in fuel. Last month, I just got 50
gallons and the cost was normally more than I paid last winter.
I'm just really afraid to see the costs and so many people are
leaving."
5:41:48 PM
KEITH VAN DEN BROEK surmised that not many rural residents are
against receiving some financial assistance to "get through the
winter here." He acknowledged that it is "a band-aid; it's
temporary," but it will assist people. He suggested that the
funds should be accompanied with education so people can spend
the resource rebate wisely. He opined that the resource rebate
should be spent on energy home improvements and people should
find ways that will help reduce dependence on oil in the future.
He commented that if he receives a resource rebate that he will
replace windows and siding on his home to make energy
improvements.
5:43:54 PM
GARY HAY commented that he noted that older vehicles can consume
more gasoline than "hummers" since the vehicles do not use fuel
efficiently. He offered that the energy crisis exists outside
the Anchorage area. He noted that he spent 5 years in
Anchorage, followed by 10 years in Tok. He opined that everyone
is affected and that Alaskan's wages have not kept pace with
rising fuel costs. For example, he related that home fuel costs
have risen for diesel fuel by 500 percent in 6 years whereas his
wages have risen only 20 percent during that same timeframe. He
acknowledged that people are leaving the state or are relocating
to Anchorage where the cost of electricity is $.08 or $.12 per
kWh. He noted that energy costs have affected rents. He
further noted that the legislature passed the weatherization
program. However, of the five energy raters contacted in
Fairbanks, only two responded and only one was willing to travel
to Tok but not until October 7, 2008. He commented that Tok
residents will need to make all weatherization improvements
"out-of-pocket" and will not be able to take advantage of the
state's program. He opined that the resource rebate in HB 4002
is "a great idea" and the sooner it can be distributed, the
sooner residents can pay outstanding fuel bills. He commented
that fuel distributers are "on the verge of bankruptcy" since
they have carried outstanding accounts past the normal
timeframe. He pointed out that people have been receiving
notices that the companies cannot deliver any more fuel until
the outstanding fuel bills are paid. He further opined that
most people in rural Alaska favor HB 4002 and that most people
will spend resource rebate checks for fuel costs.
MR. HAY offered, with regard to PCE, that the state should
create a subsistence power program, in which the state
determines a "subsistence amount of monthly power" and a
"statewide kWh cost" such that all Alaskan citizens would
receive a subsistence amount of electricity at the subsidized
cost. He stated that the program would not be needs based and
would encourage conservation since the rate beyond the
subsistence monthly allowance would be based on the higher local
rate.
5:48:42 PM
SHEILA HOWE stated that she is a "house-bound" citizen.
Further, she stated that she and her husband are senior citizens
on a fixed income. While the [resource rebate] "would come in
handy" she noted that she has been able to cut her power bills
by $200 per month through home improvements such as replacing
windows, insulating her home, and replacing appliances with
energy efficient appliances. She opined that rural Alaskans'
needs are "so much more critical" due to transportation costs.
She expressed her concern that transportation costs will "kill
the villages." She suggested that the resource rebate should be
needs-based. She further suggested that rural Alaskans need
immediate relief since the barges cannot travel during the
winter. She opined that alternate energy sources need to be
implemented next year that are not based on fossil fuels. She
thanked the committee for allowing her to participate and hear
testimony from citizens throughout the state. She noted a
community in the Hebrides Islands, located at the same latitude
as Anchorage, is "off the grid" and totally sustainable.
5:51:23 PM
GARY HART stated, after relating that rural Alaskans need help
immediately, that the intent of HB 4002 and HB 4003 is good, but
if the funds were provided to municipalities for energy that the
funding would be applied to where it's needed. He recalled a
plan proposed by Bernie Karl, in which the state would create a
"state fuel cooperative" to be funded by PFDs of interested
individuals who sought to join the coop. Thus, the gas and fuel
prices would be obtained at a set rate. He stated that Mr.
Karl's figure showed gas rates at $1 per gallon. He offered his
support for this common sense program that could be implemented
in 90 days. He stated that landlords are raising rents by $200
to $300 per month in Nome and urged legislators to provide
relief. He opined that fuel costs are "not going to get any
better soon."
5:53:05 PM
BARBARA MADISON stated her support for HB 4002 and HB 4003. She
further stated that she is especially interested in the PCE
since costs have risen dramatically. She noted that her region
pays $.32 per kWh and a surcharge of $.52 per kWh since barges
have not been able to reach the area. She pointed out that city
services for water and sewer costs have also risen. She
characterized HB 4002 as a "good short-term solution" since fuel
costs are $8.40 per gallon, which may increase to over $10 per
gallon. Noting that she paid $10 for one cabbage, she related
that residents struggle to put food on the table. Thus, fuel
costs affect all products that go to rural Alaska, she further
noted. She explained that citizens are investigating
alternative energy sources and are applying for grants to make
their homes energy efficient. She suggested that one option may
be to provide assistance directly to utility companies and
individual villages rather than providing funds directly to
individuals. She noted her agreement with many others who've
testified on this issue.
5:57:10 PM
GEORGE GUY offered his support for PCE and the resource rebate
program to provide rural residents supplemental income. He
noted that fuel prices are at an "all-time high" and electric
rates are increasing. He opined that people are making "hard
choices" between fuel and utility costs. He stated that rural
Alaskans may need to "shut off generators" this winter. He
stated that rural Alaska is in "dire need of assistance." He
noted that the proposed energy rebate will help pay for costs to
heat homes and pay for electrical costs. He asked the committee
to support HB 4002 and HB 4003.
5:59:23 PM
ALVERN CLEVELAND stated that Noorvik is in the Northwest Arctic
Borough. He stated that the resource rebate of $1,200 may be
worth more in urban communities, but will not last long in
Northwest Alaska. He noted that fuel prices are so high in
rural Alaska that some residents can't afford to live in the
area and might have to move to an urban area. He asked
legislators to help support rural Alaska and to take actions
that will help those in the villages. He thanked legislators
for their help.
6:00:49 PM
JAMES HOTAI opined that the $1,200 resource rebate "won't make a
dent in the cost of trying to survive in the winter of Alaska."
He stated that the Alaska State Constitution mandates that the
resources of the state shall be used to the benefit of all
Alaskans. He said:
Currently, all Alaskans are not enjoying any benefit
from the mineral resources of the state. The state
has a coffer brimming with money. The oil companies
have coffers brimming with money. The rest of us are
looking for coffins 'cause we're going to die of
starvation in this state or freeze to death. We need
to take the state's royalty oil and turn some of it
over to the local refiner at $15 a barrel - at cost -
with instructions to the refiners ... to pass savings
on to the consumers of the state.
MR. HOTAI opined that people cannot survive in the state unless
the cost of heating oil is reduced. He stressed that the
legislature needs to realize that time is short, winter is
impending, and the cost of oil must be reduced. He stated his
support for the resource rebate, perhaps dispensing $1,200 every
two months until the state can find solutions to the energy
crisis. He further stated that $1,200 will only purchase 200
gallons of gasoline or diesel in Valdez, which will not heat the
average home for a month. He characterized the $1,200 as a
"pitiful attempt to placate the masses." He related that the
"people who live in the Bush" are the people everyone is proud
of - of the lifestyle in Alaska - that's a dream. However,
right now, he stressed that it is a "nightmare." He stated that
the only option that exists is to find ways to reduce fuel
costs. Otherwise, "you pour money, good after bad, into the
pockets of the refiners." He said, "We own the oil, every
individual Alaskan owns the oil, the royalty; we are a partner
in the mineral industry in Alaska. It's a business; it's not
socialism - it's a business." He remarked, "We are getting very
little dividend, if any, from our business." He offered his
concern for his neighbors, friends, and relatives, and others
across the state. He stated that the cost of food is
astronomical due to transportations costs. He maintained the
solution lies in reducing diesel costs. He suggested that the
state should buy the refineries and run them. He urged
legislators to work with refineries to provide reasonable diesel
costs instead of offering resource rebates. He said, "We have
no other way of surviving unless we jointly reduce the cost of
fuel." He thanked legislators for their time.
6:06:16 PM
JAMES FLOYD inquired as to whether the state has considered the
devaluation of the U.S. dollar, which has fallen even against
the peso in Mexico, he stated. He related that the cost of oil
was at $137 with speculation that it could rise to $200 or
possibly higher depending on world events. He maintained his
concern over the devaluation of the dollar, since the resource
rebate is based on dollars. He wondered if the legislature
would consider rebating gallons of [diesel] or cords of wood
instead of dollars.
CO-CHAIR LeDOUX noted that the bill before the legislature is
based on dollars. After first determining that no one else
wished to testify, Co-Chair LeDoux related that the next hearing
is scheduled for July 22, 2008, in Juneau and that the agenda
would include testimony by various state agencies. She related
that the committee will take continue public testimony on July
23, 2008.
[HB 4002 and HB 4003 were held over.]
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 6:09 p.m.
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