Legislature(2011 - 2012)BARNES 124

02/21/2012 08:00 AM COMMUNITY & REGIONAL AFFAIRS


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 312 NATURAL GAS CONVERSION PROGRAM/FUND TELECONFERENCED
Moved CSHB 312(CRA) Out of Committee
+ HCR 10 ENCOURAGING WASTE-TO-ENERGY TECHNOLOGY TELECONFERENCED
Moved CSHCR 10(ENE) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                       February 21, 2012                                                                                        
                           8:04 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Cathy Engstrom Munoz, Chair                                                                                      
Representative Neal Foster, Vice Chair                                                                                          
Representative Alan Austerman                                                                                                   
Representative Alan Dick                                                                                                        
Representative Dan Saddler                                                                                                      
Representative Sharon Cissna                                                                                                    
Representative Berta Gardner                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 312                                                                                                              
"An Act creating  a low-interest loan program  for homeowners who                                                               
convert their  homes to natural  gas-fired heating;  and creating                                                               
the natural gas home heating conversion loan fund."                                                                             
                                                                                                                                
     - MOVED CSHB 312(CRA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE CONCURRENT RESOLUTION NO. 10                                                                                              
Encouraging the  state, municipalities of the  state, and private                                                               
organizations in  the state  to weigh the  benefits and  costs of                                                               
waste-to-energy  technology  and  to  consider  waste-to-  energy                                                               
technology to help meet the  energy and waste management needs of                                                               
the   state,   municipalities   of   the   state,   and   private                                                               
organizations in the state.                                                                                                     
                                                                                                                                
     - MOVED CSHCR 10(ENE) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 312                                                                                                                  
SHORT TITLE: NATURAL GAS CONVERSION PROGRAM/FUND                                                                                
SPONSOR(s): REPRESENTATIVE(s) T.WILSON                                                                                          
                                                                                                                                
02/03/12       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/03/12       (H)       CRA, FIN                                                                                               
02/14/12       (H)       CRA AT 8:00 AM BARNES 124                                                                              
02/14/12       (H)       Heard & Held                                                                                           
02/14/12       (H)       MINUTE(CRA)                                                                                            
02/21/12       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
BILL: HCR 10                                                                                                                  
SHORT TITLE: ENCOURAGING WASTE-TO-ENERGY TECHNOLOGY                                                                             
SPONSOR(s): REPRESENTATIVE(s) PETERSEN                                                                                          
                                                                                                                                
03/18/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/11       (H)       ENE, CRA                                                                                               
04/05/11       (H)       ENE AT 3:00 PM BARNES 124                                                                              
04/05/11       (H)       Heard & Held                                                                                           
04/05/11       (H)       MINUTE(ENE)                                                                                            
02/07/12       (H)       ENE AT 3:00 PM BARNES 124                                                                              
02/07/12       (H)       Moved CSHCR 10(ENE) Out of Committee                                                                   
02/07/12       (H)       MINUTE(ENE)                                                                                            
02/10/12       (H)       ENE RPT CS(ENE) 3DP 2NR                                                                                
02/10/12       (H)       DP: PETERSEN, SADDLER, FOSTER                                                                          
02/10/12       (H)       NR: OLSON, PRUITT                                                                                      
02/21/12       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE TAMMIE WILSON                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the sponsor of HB 312.                                                                          
                                                                                                                                
BRANDON BREFCZYNSKI, Staff                                                                                                      
Representative T. Wilson                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During hearing of HB 312, answered                                                                       
questions on behalf of the sponsor, Representative T. Wilson.                                                                   
                                                                                                                                
STACY SCHUBERT, Director                                                                                                        
Governmental Affairs & Public Relations                                                                                         
Alaska Housing Finance Corporation (AHFC)                                                                                       
Department of Revenue                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During hearing of HB 312, answered                                                                       
questions.                                                                                                                      
                                                                                                                                
JOHN ANDERSON, Weatherization Officer                                                                                           
Alaska Housing Finance Corporation                                                                                              
Department of Revenue                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     During  hearing  of   HB  312,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
KATIE KOESTER, Community & Economic Development Coordinator                                                                     
City of Homer                                                                                                                   
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HB 312.                                                                          
                                                                                                                                
REPRESENTATIVE PETE PETERSEN                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the sponsor of HCR 10.                                                                          
                                                                                                                                
DAVID DUNSMORE, Staff                                                                                                           
Representative Pete Petersen                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     During  hearing  of   HCR  10,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
TED MICHAELS, President                                                                                                         
Energy Recovery Council                                                                                                         
Washington, DC                                                                                                                  
POSITION  STATEMENT:     During  hearing  of   HCR  10,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:04:28 AM                                                                                                                    
                                                                                                                                
CHAIR  CATHY  ENGSTROM  MUNOZ  called  the  House  Community  and                                                             
Regional  Affairs Standing  Committee  meeting to  order at  8:04                                                               
a.m.   Representatives  Austerman,  Dick,  Saddler, Gardner,  and                                                               
Munoz were present at the  call to order.  Representatives Foster                                                               
and Cissna arrived as the meeting was in progress.                                                                              
                                                                                                                                
           HB 312-NATURAL GAS CONVERSION PROGRAM/FUND                                                                       
                                                                                                                                
8:04:53 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ announced  that the first order of  business would be                                                               
HOUSE BILL NO. 312, "An  Act creating a low-interest loan program                                                               
for  homeowners  who convert  their  homes  to natural  gas-fired                                                               
heating;  and creating  the natural  gas home  heating conversion                                                               
loan fund."                                                                                                                     
                                                                                                                                
8:05:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN moved that the committee adopt                                                                         
Amendment 1, labeled 27-LS1301\A.5, Nauman, 2/20/12, which read:                                                                
                                                                                                                                
     Page 1, line 2:                                                                                                            
          Following "gas-fired":                                                                                              
         Insert ", propane-fired, biomass, or electric"                                                                       
          Following "the":                                                                                                    
          Delete "natural gas"                                                                                                
                                                                                                                                
     Page 1, line 6:                                                                                                            
          Delete "Natural Gas"                                                                                                
                                                                                                                                
     Page 1, line 7:                                                                                                            
          Delete "Natural gas home"                                                                                           
          Insert "Home"                                                                                                       
                                                                                                                                
     Page 1, line 10:                                                                                                           
         Delete "wood, or other non-natural gas-fired"                                                                          
          Insert "or wood"                                                                                                      
                                                                                                                                
     Page 1, line 11:                                                                                                           
          Delete "heating device"                                                                                               
          Insert ", propane-fired, biomass, or electric                                                                         
     heating device or district heat"                                                                                           
                                                                                                                                
     Page 2, line 4:                                                                                                            
          Delete "heating device"                                                                                               
          Insert ", propane-fired, biomass, or electric                                                                         
     heating device or district heat"                                                                                           
                                                                                                                                
     Page 2, line 6:                                                                                                            
          Delete "heating device"                                                                                               
          Insert ", propane-fired, biomass, or electric                                                                         
     heating device or district heat"                                                                                           
                                                                                                                                
     Page 2, line 16:                                                                                                           
          Delete "natural gas"                                                                                                  
          Insert "the energy source fueling or powering the                                                                     
     new heating device"                                                                                                        
                                                                                                                                
     Page 2, line 18:                                                                                                           
          Delete "Natural gas home"                                                                                           
          Insert "Home"                                                                                                       
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "natural gas"                                                                                                  
                                                                                                                                
     Page 2, line 20:                                                                                                           
          Delete "natural gas"                                                                                                  
                                                                                                                                
     Page 2, line 27:                                                                                                           
          Delete "a natural gas-fired heating device"                                                                           
          Insert "the new natural gas-fired, propane-fired,                                                                     
     biomass, or electric heating device or district heat"                                                                      
                                                                                                                                
     Page 2, line 31:                                                                                                           
          Delete "natural gas"                                                                                                  
                                                                                                                                
     Page 3, line 2:                                                                                                            
          Delete "heating device"                                                                                               
          Insert ", propane-fired, biomass, or electric                                                                         
     heating device or district heat"                                                                                           
                                                                                                                                
8:05:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER objected for the purposes of discussion.                                                                 
                                                                                                                                
8:06:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TAMMIE WILSON,  Alaska State Legislature, speaking                                                               
as the sponsor of HB 312,  explained that in discussions with the                                                               
Alaska Housing Finance Corporation  (AHFC) she understood that it                                                               
wanted  the legislation  to be  more  specific in  regard to  the                                                               
sources  of energy.   Being  more specific  should allow  for the                                                               
regulations to  be written in  an easier fashion and  the program                                                               
to  come online  in  a quicker  fashion.   In  response to  Chair                                                               
Munoz, Representative T. Wilson  confirmed that this loan program                                                               
would be  for homes that  convert from diesel generation  to gas-                                                               
fired,  propane-fired, biomass,  an electric  heating device,  or                                                               
district heat.   She clarified that Fairbanks  has district heat,                                                               
which is heat  [generated] by hot water.  If  a homeowner changes                                                               
from diesel to district heat, the  result is zero emissions.  She                                                               
stated that district  heat is the cleanest  energy available, but                                                               
it's only available to those  residents within the city limits of                                                               
Fairbanks.                                                                                                                      
                                                                                                                                
8:07:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER requested  further explanation of district                                                               
heat,  particularly  in   terms  of  how  it   is  generated  and                                                               
distributed.                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  surmised that  it's called  district heat                                                               
because a  massive boiler is  being used to  heat the water  in a                                                               
central location and piped to homes.                                                                                            
                                                                                                                                
8:08:30 AM                                                                                                                    
                                                                                                                                
BRANDON  BREFCZYNSKI,  Staff,  Representative T.  Wilson,  Alaska                                                               
State Legislature,  explained that  district heat is  a byproduct                                                               
of the coal power plant and  the hot water is piped to individual                                                               
residences.     The  individual  residences  must   have  a  heat                                                               
exchanger, which  converts the hot  water into heat and  pumps it                                                               
through  baseboard units  to  provide  heat in  the  home.     In                                                               
further  response  to  Representative  Saddler,  Mr.  Brefczynski                                                               
confirmed that it's centrally generated and distributed.                                                                        
                                                                                                                                
8:09:21 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ inquired as to  the anticipated beginning fund amount                                                               
if HB 312 becomes law.                                                                                                          
                                                                                                                                
8:09:40 AM                                                                                                                    
                                                                                                                                
STACY   SCHUBERT,  Director,   Governmental   Affairs  &   Public                                                               
Relations, Alaska Housing  Finance Corporation (AHFC), Department                                                               
of Revenue, answered that at this  point AHFC doesn't have a good                                                               
feel for  the amount of participation  there will be in  the loan                                                               
program.   Therefore, AHFC isn't  comfortable making  an estimate                                                               
of the expenditure at this time.                                                                                                
                                                                                                                                
8:10:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN inquired  as  to why  district heat  is                                                               
noted only once in the legislation.                                                                                             
                                                                                                                                
REPRESENTATIVE T. WILSON pointed  out that the legislation refers                                                               
to  "district heat"  on  page 2,  lines  5 and  23.   In  further                                                               
response  to Representative  Austerman, Representative  T. Wilson                                                               
noted her agreement that the  reference to "district heat" should                                                               
be in the title as well.                                                                                                        
                                                                                                                                
8:11:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN  moved  that  the  committee  adopt  an                                                               
amendment to  Amendment 1 such  that the language  being inserted                                                               
by  Amendment  1  on  page  1, line  2,  includes  the  following                                                               
language:  ",  district heat".  He noted that  the drafter should                                                             
work it  in correctly.   There being no objection,  the amendment                                                               
to Amendment 1 was adopted.                                                                                                     
                                                                                                                                
8:12:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK  questioned  whether  the use  of  the  term                                                               
"biomass" is creating confusion because wood is biomass.                                                                        
                                                                                                                                
REPRESENTATIVE T. WILSON clarified  that biomass encompasses more                                                               
than just wood heat.                                                                                                            
                                                                                                                                
REPRESENTATIVE  DICK  expressed  the   need  to  ensure  that  an                                                               
individual can't merely trade out one wood stove for another.                                                                   
                                                                                                                                
REPRESENTATIVE T.  WILSON indicated that  can't occur as  it will                                                               
be  specified  in the  AHFC  regulations  that specify  that  the                                                               
conversion would  have to  be a unit  that's more  economical and                                                               
efficient.   In  fact, by  the way  the Environmental  Protection                                                               
Agency (EPA)  does its  certification one  is almost  required to                                                               
convert to something more economical.                                                                                           
                                                                                                                                
8:14:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  asked  if  the   intent  of  HB  312  is                                                               
primarily cost  savings for consumers  or to address  air quality                                                               
issues.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  T.  WILSON  opined  that Amendment  1  makes  the                                                               
program  more  of  a  statewide  program,  although  the  program                                                               
originally targeted Fairbanks to address its air quality issues.                                                                
                                                                                                                                
8:15:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  returned to  the  question  of how  wood                                                               
isn't biomass, and  asked whether a homeowner  could convert from                                                               
a wood stove to a wood pellet stove.                                                                                            
                                                                                                                                
REPRESENTATIVE T.  WILSON emphasized  that the  main goal  of the                                                               
program  is to  convert from  oil.   She reiterated  that biomass                                                               
encompasses more  than just wood  as it now includes  wood chips,                                                               
wood  pellets,  and  compressed  logs.     She  opined  that  the                                                               
definition of biomass is continually changing.                                                                                  
                                                                                                                                
8:16:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER asked  if the  sponsor considered  having                                                               
the legislation target [conversions] from  wood and oil and leave                                                               
it to the  consumer to determine what kind  of alternative energy                                                               
is utilized.   He asked  why the sponsor  specified [conversions]                                                               
from oil to specific [alternative energies].                                                                                    
                                                                                                                                
REPRESENTATIVE T. WILSON  mentioned that she had  an amendment to                                                               
open the program to everything,  but she was concerned that would                                                               
cause other  problems.  With regard  to the lack of  reference to                                                               
solar  energy,  she  pointed  out that  it  isn't  affordable  to                                                               
convert  to   for  residential  areas,  which   this  legislation                                                               
targets.    If other  alternative  energy  not specified  in  the                                                               
legislation becomes  affordable over  time, the statute  could be                                                               
amended to address it at that time.                                                                                             
                                                                                                                                
REPRESENTATIVE  SADDLER  encouraged  the sponsor  to  place  some                                                               
sideboards on the definition of biomass.                                                                                        
                                                                                                                                
8:18:45 AM                                                                                                                    
                                                                                                                                
JOHN  ANDERSON, Weatherization  Officer,  Alaska Housing  Finance                                                               
Corporation,  Department of  Revenue, explained  that biomass  is                                                               
simply  a   larger  outdoor  unit  that   usually  serves  larger                                                               
buildings, such  as a school.   He clarified, "You wouldn't  do a                                                               
swap of a biomass for a residential unit."                                                                                      
                                                                                                                                
8:19:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER asked  if  the sponsor  has any  evidence                                                               
that there  would be any  net increase  in air quality  by moving                                                               
from oil or wood-fired to electric [heating].                                                                                   
                                                                                                                                
REPRESENTATIVE T.  WILSON said that Fairbanks  residents wouldn't                                                               
change to  electric any  time soon  because of  the high  cost of                                                               
electricity  in   Fairbanks.    Electricity  was   added  to  the                                                               
legislation in order to encompass  those areas in the state where                                                               
electricity is more affordable.                                                                                                 
                                                                                                                                
CHAIR  MUNOZ   acknowledged  that   biomass  technology   is  now                                                               
typically used  for larger commercial buildings,  but pointed out                                                               
that  the  Southeast  Integrated  Resource  Plan  energy  adviser                                                               
discussed  the opportunity  to  use biomass  in  home heating  in                                                               
Southeast Alaska.   Therefore, the sponsor was  asked to consider                                                               
incorporating that  into the legislation  as it was  broadened to                                                               
be applicable statewide.                                                                                                        
                                                                                                                                
8:20:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA, drawing  from  several conferences  she's                                                               
attended, related  that biomass  was discussed  in terms  of peat                                                               
and other products  that don't have to be from  a tree.  Although                                                               
she said she was  happy to see the amendments to  HB 312, she had                                                               
the  impression  the discussion  centers  on  switching from  one                                                               
[energy source]  to another.   She opined  that it would  be nice                                                               
for a homeowner  to have a burner that can  be converted from one                                                               
kind of fuel to another while still using the same equipment.                                                                   
                                                                                                                                
REPRESENTATIVE T. WILSON said that  would be for the homeowner to                                                               
decide.  The intent  of HB 312 is to acknowledge  that oil is one                                                               
of the dirtiest ways to heat a  home and the cost of it continues                                                               
to increase.   The desire, she opined, is  to encourage residents                                                               
to consider  alternative energy sources  for air  quality reasons                                                               
as  well as  to achieve  affordability  for the  homeowner.   She                                                               
highlighted  that the  rater is  involved  in order  to help  the                                                               
homeowner make decisions  based on what would work  best in their                                                               
particular case.                                                                                                                
                                                                                                                                
8:23:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER asked  if the  proposed program  would be                                                               
able to use the existing home  energy raters, or would there have                                                               
to be a new training program for raters.                                                                                        
                                                                                                                                
MR. ANDERSON  answered that  he would  anticipate using  the same                                                               
rater  pool  and AkWarm  energy  rater  software to  run  various                                                               
scenarios on  the energy  source in  the community  and recommend                                                               
the most efficient unit.   He characterized this proposed program                                                               
as a conversion program.                                                                                                        
                                                                                                                                
8:24:45 AM                                                                                                                    
                                                                                                                                
KATIE  KOESTER,  Community  & Economic  Development  Coordinator,                                                               
City of Homer, related support for HB  312.  The City of Homer is                                                               
expecting to bring  natural gas to Homer as it's  located only 14                                                               
miles  away.   While  conversion to  natural  gas would  generate                                                               
large  savings to  residents, businesses,  and public  buildings,                                                               
there will  be significant upfront  costs for those in  the Homer                                                               
area.   The upfront costs  would include  the tariff to  help pay                                                               
for  the  transmission  line,  distribution  system  within  city                                                               
limits that is  estimated to be over $20 million,  and the hookup                                                               
fee from  the main line  to the residence/business that  is about                                                               
$1,000, and  the cost of  converting home appliances  and heating                                                               
to natural gas.  She  opined that this proposed low-interest loan                                                               
program would help individuals to  be able to access the benefits                                                               
of natural gas, which could generate savings in the long term.                                                                  
                                                                                                                                
8:26:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER asked whether having  this type of fund in                                                               
place is premature  since there is no secured  supply for natural                                                               
gas in Fairbanks.                                                                                                               
                                                                                                                                
REPRESENTATIVE  T. WILSON  characterized the  program as  another                                                               
tool  that's available.   She  said she  couldn't imagine  anyone                                                               
putting out  the significant cost  for natural gas at  this point                                                               
when the  discussion has been that  it won't be available  for 30                                                               
years.   Therefore, the legislation  includes other  options that                                                               
are currently  available as well  as natural gas that  is already                                                               
available in  certain parts of the  state.  She noted  that there                                                               
are still discussions about trucking,  which would make it to the                                                               
consumer sooner.  In further  response to Representative Saddler,                                                               
she clarified that it's a one-time loan per customer.                                                                           
                                                                                                                                
8:27:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER recalled that  the one-time loan amount is                                                               
$7,500,  and asked  if  that amount  would  cover the  conversion                                                               
cost.                                                                                                                           
                                                                                                                                
REPRESENTATIVE T.  WILSON responded  that the $7,500  would cover                                                               
the actual  furnace/appliance, although  there may  be additional                                                               
costs to run the line to the residence.                                                                                         
                                                                                                                                
8:28:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FOSTER  posed a  scenario  in  which a  homeowner                                                               
utilizes the  loan program  for a conversion  and then  sells the                                                               
home one  year after the conversion.   He asked if  the homeowner                                                               
will have to  pay back the loan right away.   Taking the scenario                                                               
further, he  asked if  a homeowner who  does a  conversion, sells                                                               
the home with the conversion,  can then purchase another home and                                                               
perform another conversion  on a different house  if the original                                                               
loan was paid off.                                                                                                              
                                                                                                                                
REPRESENTATIVE T. WILSON acknowledged  that would be addressed in                                                               
regulation.  However, she related her  desire for it to be a one-                                                               
time loan to  the individual, just as is the  case for other AHFC                                                               
loan   programs.      Representative  T.   Wilson   related   her                                                               
understanding  that a  homeowner  would have  to  specify in  the                                                               
contract to sell the house that he/she has paid off the loan.                                                                   
                                                                                                                                
8:29:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER withdrew her objection to Amendment 1.                                                                   
                                                                                                                                
8:29:55 AM                                                                                                                    
                                                                                                                                
There being  no further objection,  Amendment 1, as  amended, was                                                               
adopted.                                                                                                                        
                                                                                                                                
8:30:10 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN moved to report  HB 312, as amended, out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
REPRESENTATIVE GARDNER  objected for  discussion.   She explained                                                               
that although  she is  anxious about  moving legislation  such as                                                               
this with an indeterminate fiscal  note that could become a large                                                               
fiscal  note, she  understands the  urgency of  the situation  in                                                               
Fairbanks  because  of  the  air  quality  issues  and  in  other                                                               
communities  because  of the  price  of  energy.   Representative                                                               
Gardner then withdrew her objection.                                                                                            
                                                                                                                                
8:31:42 AM                                                                                                                    
                                                                                                                                
There  being no  further  objection, CSHB  312(CRA) was  reported                                                               
from   the  House   Community  and   Regional  Affairs   Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
8:32:02 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:32 a.m. to 8:34 a.m.                                                                       
                                                                                                                                
         HCR 10-ENCOURAGING WASTE-TO-ENERGY TECHNOLOGY                                                                      
                                                                                                                                
8:34:38 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ announced  that the final order of  business would be                                                               
HOUSE  CONCURRENT  RESOLUTION  NO.  10,  Encouraging  the  state,                                                               
municipalities  of the  state, and  private organizations  in the                                                               
state  to  weigh  the  benefits   and  costs  of  waste-to-energy                                                               
technology and  to consider waste-to-  energy technology  to help                                                               
meet  the  energy  and  waste  management  needs  of  the  state,                                                               
municipalities  of the  state, and  private organizations  in the                                                               
state.  [Before the committee was CSHCR 10(ENE).]                                                                               
                                                                                                                                
8:34:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETE PETERSEN, Alaska State Legislature, speaking                                                                
as the sponsor of HCR 10, provided the following testimony:                                                                     
                                                                                                                                
     Waste-to-energy is  a class of technologies  that turns                                                                    
     garbage  into  energy  while  reducing  the  amount  of                                                                    
     landfill space needed.   Waste-to-energy is a renewable                                                                    
     energy  source  that  generates  between  500  and  600                                                                    
     kilowatt hours of electricity for  every ton of garbage                                                                    
     burned  and  with  the  use  of  district  heating,  an                                                                    
     additional 2  megawatt hours of  heat can  be captured.                                                                    
     That's from  each ton.   Waste-to-energy  technology is                                                                    
     being used around  the world and in at  least 24 states                                                                    
     across the  nation.  According  to the  Energy Recovery                                                                    
     Council, there  are at least 86  waste-to-energy plants                                                                    
     in  the  United  States.     This  technology  is  also                                                                    
     utilized  currently  at  Eielson   Air  Force  Base  in                                                                    
     Alaska,  where garbage  is burned  in conjunction  with                                                                    
     coal.    In  Anchorage  they  are  in  the  process  of                                                                    
     building  a generator  to  harness  the methane  that's                                                                    
     being created from the Anchorage landfill.                                                                                 
                                                                                                                                
     There  are several  different ways  of creating  energy                                                                    
     from garbage.   The waste can be burned  directly or it                                                                    
     can  be processed  into  other combustible  substances,                                                                    
     like ethanol or biodiesel.   Waste-to-energy plants are                                                                    
     being used  to provide  power to  major urban  areas in                                                                    
     the  U.S. and  Europe  and also  in small  communities.                                                                    
     Waste-to-energy plants have  been successfully built in                                                                    
     Arctic   and  sub-Arctic   climates,  including   small                                                                    
     communities.   There  are also  much smaller  waste-to-                                                                    
     energy generators  in the process of  development.  For                                                                    
     example, one  company is trying to  develop a generator                                                                    
     about the  size of a  large dumpster that  will produce                                                                    
     120 kilowatts of  electricity.  And also  the U.S. Army                                                                    
     has been  testing smaller sized  generators in  Iraq to                                                                    
     provide  an alternative  form  of  energy for  military                                                                    
     operations.                                                                                                                
                                                                                                                                
     As  advances continue  to  be  made in  waste-to-energy                                                                    
     technology, the  number of communities in  Alaska where                                                                    
     this  technology can  be employed  in a  cost efficient                                                                    
     manner  will  only  increase.     As  you  know,  rural                                                                    
     communities are  working to replace the  most expensive                                                                    
     diesel   fuel  and   the   waste-to-energy  offers   an                                                                    
     opportunity  for larger  communities as  well.   As the                                                                    
     technology  improves, smaller  communities will  likely                                                                    
     be  able to  benefit.   Waste-to-energy technology  has                                                                    
     been  shown to  produce fewer  emissions than  would be                                                                    
     created by just dumping it  into the landfill.  The EPA                                                                    
     has   determined   that    waste-to-energy   has   less                                                                    
     environmental impact  than almost  any other  source of                                                                    
     electricity generation.   Another benefit  of waste-to-                                                                    
     energy  technology is  that with  the  use of  magnetic                                                                    
     sorting  after combustion,  every year  American waste-                                                                    
     to-energy  plants recover  770,000  tons of  recyclable                                                                    
     scrap metal that would otherwise  have just been dumped                                                                    
     into landfills.   Waste-to-energy has the  potential to                                                                    
     be  a  piece  of  our statewide  energy  puzzle  and  I                                                                    
     encourage the  committee to support this  resolution to                                                                    
     encourage  the   state,  municipalities,   and  private                                                                    
     sector   organizations  to   consider  the   costs  and                                                                    
     benefits of waste-to-energy technology.                                                                                    
                                                                                                                                
8:38:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER, referring to  the second "WHEREAS" in HCR                                                             
10, asked whether trash is considered a renewable resource.                                                                     
                                                                                                                                
REPRESENTATIVE  PETERSEN  pointed out  that  one  of the  reasons                                                               
there is  a steady stream  of garbage in  Alaska is that  over 95                                                               
percent of what's  consumed in Alaska is shipped  into the state.                                                               
In fact, Alaska  has more garbage per capita  than anywhere else.                                                               
He  highlighted that  waste-to-energy technology  would slow  the                                                               
filling of the state's landfills and would generate electricity.                                                                
                                                                                                                                
8:40:04 AM                                                                                                                    
                                                                                                                                
DAVID  DUNSMORE,  Staff,  Representative  Pete  Petersen,  Alaska                                                               
State Legislature,  explained that waste-to-energy  is considered                                                               
renewable because a large portion  of it was originally a biomass                                                               
source.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  PETERSEN informed  the committee  that after  the                                                               
waste is  burned, the ashes  are buried  in the landfill.   Since                                                               
the  ashes  are biodegradable,  the  landfill  will likely  never                                                               
reach capacity and have to be  moved.  He told the committee that                                                               
30 years  ago garbage in  Anchorage was dumped at  Merrill Field,                                                               
but once it was full a new disposal  site 15 miles away had to be                                                               
utilized.   Therefore, an additional  cost for fuel  to transport                                                               
the garbage to  the new landfill site is incurred  as well as the                                                               
time it takes to do so.                                                                                                         
                                                                                                                                
8:41:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA remarked  that partnerships,  such as  the                                                               
military and rural  Alaska, are important with  [waste and energy                                                               
management].  She asked if that's part of this resolution.                                                                      
                                                                                                                                
REPRESENTATIVE  PETERSEN  told  the committee  that  Eielson  Air                                                               
Force  Base has  been using  this waste-to-energy  technology for                                                               
some time.   He  suggested that  other military  facilities would                                                               
utilize   waste-to-energy   technology   when  it   made   sense,                                                               
particularly since the military is  also facing federal cuts.  He                                                               
opined  that with  the  state's renewable  energy  grant fund,  a                                                               
community could  apply for a  grant to start  a [waste-to-energy]                                                               
plant.   He has heard that  some rural Alaska communities  may be                                                               
barging their  garbage down the  river for disposal.   Therefore,                                                               
there might a  situation in which a larger  rural community could                                                               
build  a  waste-to-energy  plant and  other  smaller  communities                                                               
could barge their waste to it in the summer.                                                                                    
                                                                                                                                
8:44:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER inquired  as  to the  costs of  waste-to-                                                               
energy technology  per British thermal unit  (Btu) versus natural                                                               
gas, coal, or hydro power.                                                                                                      
                                                                                                                                
REPRESENTATIVE  PETERSEN  said that  there  are  lots of  upfront                                                               
costs for  waste-to-energy technology.   He pointed out  that the                                                               
garbage would be  low cost and possibly free,  depending upon the                                                               
arrangement.   He also pointed  out that a  waste-to-energy plant                                                               
would face  the same  process for permits  that is  necessary for                                                               
coal or  natural gas.   Still, since  the fuel, that  is garbage,                                                               
would be very low cost or  free, it would actually cost less than                                                               
purchasing coal  or natural gas.   Therefore, the costs  would be                                                               
upfront and  the company would  bond for it  and pay it  off over                                                               
the course of [a specified time].                                                                                               
                                                                                                                                
MR.  DUNSMORE  interjected that  the  largely  upfront costs  are                                                               
capital  intensive  because  to  meet the  EPA  requirements  for                                                               
reduced  emissions, one  has to  be using  a fairly  cutting edge                                                               
technology.  Since this technology  is deployed in various sizes,                                                               
the U.S.  Department of Energy  doesn't have a  specific estimate                                                               
for  waste-to-energy.   However,  the U.S.  Department of  Energy                                                               
does have  an estimate for  biomass, of which  waste-to-energy is                                                               
considered to be a form.   He then related the U.S. Department of                                                               
Energy's estimates for the levelized  cost of power for a biomass                                                               
plant, which  included a waste-to-energy plant,  in 2016 averaged                                                               
$112.15 per megawatt hour.   In contrast, hydropower costs $86.40                                                               
per megawatt  hour while combustion turbine  natural gas averages                                                               
$124.50  per  megawatt  hour and  carbon  capture  coal  averages                                                               
$136.20   per   megawatt   hour.     In   further   response   to                                                               
Representative Saddler, Mr. Dunsmore  reminded the committee that                                                               
the cost  of a  waste-to-energy plant is  highly variable  due to                                                               
the size  of the plant  and the technology deployed.   Therefore,                                                               
it has to be assessed on a case-by-case basis.                                                                                  
                                                                                                                                
8:49:36 AM                                                                                                                    
                                                                                                                                
MR.  DUNSMORE,  in response  to  Representative  Dick, agreed  to                                                               
provide the committee with those numbers                                                                                        
                                                                                                                                
REPRESENTATIVE  PETERSEN,  for  clarity, informed  the  committee                                                               
that the  $112.50 is about  $.11 per kWh, which  is comparatively                                                               
in  the range  of  and for  some  lower than  what  those in  the                                                               
Railbelt are paying now.                                                                                                        
                                                                                                                                
MR.  DUNSMORE directed  attention  to the  White  Paper from  the                                                               
Solid  Waste  Association  of   North  America  (SWANA)  entitled                                                               
"Waste-to-Energy   Facilities    Provide   Significant   Economic                                                               
Benefits"  in the  committee  packet.   The  paper discusses  the                                                               
particulars  of several  [waste-to-energy]  plants  in the  U.S.,                                                               
including the specific costs of those plants.                                                                                   
                                                                                                                                
8:51:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER restated  his earlier  question regarding                                                               
the  costs of  waste-to-energy  technology  versus its  benefits,                                                               
specifically in terms of environmental,  permitting costs as well                                                               
as  the  relative   cost  of  this  technology   per  Btu  versus                                                               
hydropower, coal, and natural gas.                                                                                              
                                                                                                                                
8:51:45 AM                                                                                                                    
                                                                                                                                
TED  MICHAELS, President,  Energy  Recovery  Council, echoed  Mr.                                                               
Dunsmore's  testimony   that  the  costs  are   highly  variable,                                                               
depending upon the technology used  and the location of the site.                                                               
Another difficulty in specifying the  price is that there haven't                                                               
been a great number of  facilities being constructed recently, in                                                               
the  last 15  years, because  of capacity  issues.   However, the                                                               
first trend toward  growth of this sector has  been the expansion                                                               
of  existing  facilities  in  the  last couple  of  years.    For                                                               
instance, Florida  has increased  capacity by  50 percent  at its                                                               
existing  facility for  a cost  of just  over $100  million.   He                                                               
acknowledged that the aforementioned is  a large number and there                                                               
will be even  larger numbers because this is  a capital intensive                                                               
technology.  These are sophisticated  power plants with state-of-                                                               
the-art emission  control technologies  as required by  the Clean                                                               
Air  Act.    He  noted   that  these  facilities  have  excellent                                                               
environmental  records  because they  are  required  to meet  the                                                               
maximum  (indisc.) technology  standards and  are among  the most                                                               
heavily  regulated facilities  in the  U.S.   With regard  to the                                                               
cost of  waste-to-energy relative  to other  electricity sources,                                                               
Mr. Michaels  said that  will be difficult  to compare  because a                                                               
coal-fired  power  plant  is designed  specifically  to  generate                                                               
electricity.  Therefore,  the Btu profile of coal  is denser than                                                               
the Btu profile of municipal solid  waste.  Although no one would                                                               
use municipal solid waste as a fuel  if they had to dig it out of                                                               
the earth  as is done with  coal because of the  low Btu profile,                                                               
solid waste  is something that  exists in every community  in the                                                               
U.S.  He said the  primary purpose of all these [waste-to-energy]                                                               
facilities is as a solid waste  disposal unit, but the benefit of                                                               
electricity is  that this form  of management of  municipal solid                                                               
waste is more attractive than  a landfill. Additionally, there is                                                               
the benefit  of environmental  controls and  land sustainability.                                                               
Mr. Michaels summarized that compared  to a coal-fired facility a                                                               
waste-to-energy   facility  will   be   more   expensive  on   an                                                               
electricity basis.   He  opined that  in order  to obtain  a true                                                               
cost  comparison  one would  have  to  compare a  waste-to-energy                                                               
facility to a  coal-fired facility and a landfill.   These waste-                                                               
to-energy  facilities   are  under  constant  evolution   as  the                                                               
controls and  the combustion  engineering are  more sophisticated                                                               
and the  materials and labor  will be  more costly.   Hundreds of                                                               
companies in the  U.S. are trying to develop new  and better ways                                                               
to  convert waste  into energy,  which will  drive the  cost down                                                               
over time, he opined.                                                                                                           
                                                                                                                                
8:56:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA posed  the question:   How  much would  it                                                               
cost  not  to  do  this?    Once  waste  is  present  it  becomes                                                               
extraordinarily expensive to  get rid of it,  which often results                                                               
in large  amounts of waste  staying around in  rural communities.                                                               
She  expressed hope  that this  resolution results  in developing                                                               
local jobs.   She then inquired as to the  subsidies available to                                                               
get the original energy and various products to Alaska.                                                                         
                                                                                                                                
MR. MICHAELS  said he isn't  aware of any federal  subsidies that                                                               
are available for those types of purposes.                                                                                      
                                                                                                                                
9:00:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER   related  his  understanding   that  the                                                               
implication of HCR 10 is that  the benefits outweigh the costs of                                                               
waste-to-energy technology.  However, the cost of waste-to-                                                                     
energy technology seems to be  vague.  He recalled Mr. Dunsmore's                                                               
testimony  that [the  levelized]  cost of  power  [for a  biomass                                                               
plant, which included a waste-to-energy  plant, in 2016] averaged                                                               
$112.15  per  megawatt   hour.    He  asked  if   that's  a  fair                                                               
equivalent.  He  expressed interest in Mr.  Michaels' estimate of                                                               
the relative costs of energy from waste-to-energy technology.                                                                   
                                                                                                                                
MR. MICHAELS recalled  that Mr. Dunsmore's numbers  were in terms                                                               
of  the  cost of  electricity  versus  constructing the  facility                                                               
upfront.   In  further  response to  Representative Saddler,  Mr.                                                               
Michaels said that the cost of generating energy from a waste-                                                                  
to-energy  facility  would,  depending   upon  the  size  of  the                                                               
facility, be in the millions.   He told the committee he has seen                                                               
promises  to  deliver   waste-to-energy  facilities  for  $10-$20                                                               
million.  He  related that he has  also seen a 3,000  ton per day                                                               
waste-to-energy facility  in a large,  densely populated  area in                                                               
Florida be constructed for $650 million.                                                                                        
                                                                                                                                
CHAIR MUNOZ pointed  out that the committee  packet includes cost                                                               
estimates from various areas in the country.                                                                                    
                                                                                                                                
9:02:05 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ asked  if there is an economy of  scale for waste-to-                                                               
energy technology that works for  larger population areas, but is                                                               
not as effective for smaller rural communities.                                                                                 
                                                                                                                                
MR. MICHAELS,  drawing from discussions with  developers, related                                                               
his understanding that  there is a "sweet spot"  such that larger                                                               
waste-to-energy  facilities that  [process] 1,000-1,500  tons per                                                               
day result in a good balance  of cost for the investment.  Still,                                                               
there are  a significant number of  waste-to-energy facilities in                                                               
the U.S.  and the world  that are  much smaller facilities.   For                                                               
instance, in  the 1980s Minnesota  directed local  communities to                                                               
develop  waste-to-energy facilities.   Therefore,  there are  now                                                               
nine facilities  operating in Minnesota that  generally [process]                                                               
80-100 tons per day.   For example, in the 1980s  the city of Red                                                               
Wing invested $2.5 million [for  a waste-to-energy facility], but                                                               
he didn't know what that  facility would cost in today's dollars.                                                               
He  opined  that  as  time   passes,  there  will  be  technology                                                               
improvements   to  construct   smaller   modular  facilities   in                                                               
communities with small amounts of  waste for an economical value.                                                               
The aforementioned is  how it has worked in Europe.   Denmark has                                                               
28  facilities, many  of which  are small  facilities that  serve                                                               
smaller  communities  and  provide   district  heating  to  local                                                               
communities.    Waste-to-energy  technology   has  had  a  strong                                                               
presence  in  Europe in  terms  of  waste management  and  saving                                                               
landfill  space as  well as  getting as  much energy  out of  the                                                               
waste as possible.                                                                                                              
                                                                                                                                
9:05:33 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ asked  if the waste-to-energy technology  can be used                                                               
to convert existing landfills into energy.                                                                                      
                                                                                                                                
MR. MICHAELS surmised that Chair  Munoz is referring to mining an                                                               
existing  landfill.   Although mining  an  existing landfill  has                                                               
been done, it hasn't been done  well and isn't the model followed                                                               
now.   He recalled  that when  the waste  stream decreased  for a                                                               
waste-to-energy facility  in a community  in Portland,  Maine, it                                                               
mined its  landfill and ran  the product through the  facility in                                                               
order to maintain the energy levels  from the facility.  He noted                                                               
that [the ability to mine  an existing landfill] depends upon the                                                               
climate   such  that   a  moist   environment  results   in  more                                                               
decomposition  whereas   a  dry   environment  results   in  less                                                               
decomposition.    Therefore, whether  waste-to-energy  technology                                                               
can be used to convert  existing landfills into energy would have                                                               
to  be  determined  on  a  case-by-case  basis.    Although  it's                                                               
possible, he  said he  wouldn't rely  on it  as the  primary fuel                                                               
source.                                                                                                                         
                                                                                                                                
9:07:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  pointed out that there  hasn't been much                                                               
discussion regarding the space  heating aspect of waste-to-energy                                                               
technology.  He  explained that depending upon the  location of a                                                               
waste-to-energy plant  relative to  a population center  the heat                                                               
could   be   transferred  to   heat   other   facilities.     The                                                               
aforementioned would  provide additional efficiencies.   In areas                                                               
where  there is  curbside recycling  that separates  aluminum and                                                               
glass, this [waste-to-energy technology] works very well.                                                                       
                                                                                                                                
9:08:22 AM                                                                                                                    
                                                                                                                                
MR.  DUNSMORE returned  to Chair  Munoz's question  regarding the                                                               
use  of waste-to-energy  technology  in smaller  areas.   As  Mr.                                                               
Michaels discussed there  are economies of scale  and the smaller                                                               
[the facility] the  more expensive it is to  construct.  However,                                                               
the waste-to-energy technology has  been successfully deployed in                                                               
Scandinavian countries  on a  small level;  these are  areas that                                                               
have similar challenges to those  faced in rural areas in Alaska.                                                               
He directed  the committee's attention  to the  committee packet,                                                               
which  includes information  regarding three  Scandinavian waste-                                                               
to-energy plants.   One of the plants is located  in Iceland just                                                               
south  of the  Arctic Circle  and serves  a metropolitan  area of                                                               
2,867  people.   As  a  point  of reference,  the  aforementioned                                                               
community in  Iceland is just  a little  smaller than Nome  and a                                                               
little   larger  than   Dillingham.     He  reviewed   the  other                                                               
Scandinavian  waste-to-energy plants  that  are  reviewed in  the                                                               
committee packet.                                                                                                               
                                                                                                                                
9:10:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA emphasized  that economic  costs in  rural                                                               
remote areas of  Alaska don't work the same  [as hub communities]                                                               
because of the lack of jobs  and cash economy.  She then recalled                                                               
the community of Nikolski in  the Aleutians, which because of its                                                               
strategic  position  has  a clinic,  telemedicine,  and  lots  of                                                               
technology.   She  estimated that  there  are 80-100  communities                                                               
like that in  Alaska, and thus it's not  comparable to Minnesota.                                                               
She stressed  that waste-to-energy technology in  Alaska could be                                                               
significant, if done correctly.                                                                                                 
                                                                                                                                
9:13:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  moved to  report  CSHCR  10(ENE) out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.   There being no objection, it was so ordered.                                                                    
                                                                                                                                
9:14:01 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 9:14 a.m.