Legislature(2011 - 2012)BARNES 124
02/21/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB312 | |
| HCR10 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 312 | TELECONFERENCED | |
| + | HCR 10 | TELECONFERENCED | |
| + | 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.