Legislature(2009 - 2010)DILLINGHAM

03/01/2009 01:00 PM House ENERGY


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01:31:42 PM Start
01:33:38 PM Alaska Energy Authority Statewide Energy Report
04:26:54 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Held in DILLINGHAM Elementary School Gym
711 Seward Street
+ AEA Statewide Energy Report TELECONFERENCED
-- Public Testimony on Energy Plan --
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                       Dillingham, Alaska                                                                                       
                         March 1, 2009                                                                                          
                           1:31 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bryce Edgmon, Co-Chair                                                                                           
Representative Charisse Millett, Co-Chair                                                                                       
Representative Kyle Johansen                                                                                                    
Representative Jay Ramras                                                                                                       
Representative Pete Petersen                                                                                                    
Representative Chris Tuck                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Nancy Dahlstrom                                                                                                  
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Representative John Coghill                                                                                                     
Representative Mike Chenault                                                                                                    
Representative Bob Herron                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Alaska Energy Authority Statewide Energy Report                                                                                 
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to report                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
REPRESENTATIVE JOHN COGHILL                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Asked questions during the discussion of                                                                 
the Statewide Energy Report.                                                                                                    
                                                                                                                              
REPRESENTATIVE MIKE CHENAULT                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Welcomed local participants to the                                                                       
discussion of the Statewide Energy Report.                                                                                      
                                                                                                                                
REPRESENTATIVE BOB HERRON                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Asked questions  during the  discussion of                                                             
the Statewide Energy Report.                                                                                                    
                                                                                                                                
ALICE RUBY, Mayor                                                                                                               
City of Dillingham                                                                                                              
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
DONNA VUKICH, General Manager                                                                                                   
Naknek Electric Association, Inc.                                                                                               
Naknek, Alaska                                                                                                                  
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
JASON METROKIN, President/CEO                                                                                                   
Bristol Bay Native Corporation (BBNC)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
THOMAS TILDEN, Tribal Chief                                                                                                     
Curyung Tribal Council                                                                                                          
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
DAVE MCCLURE, Executive Director                                                                                                
Bristol Bay Housing Authority; Chairman                                                                                         
Southwest Alaska Vocational Education Center; Director                                                                          
Nushagak Electric & Telephone Cooperative                                                                                       
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
FRANK CORBIN, General Manager                                                                                                   
Nushagak  Electric and Telephone Cooperative; President                                                                         
Dillingham Chamber of Commerce                                                                                                  
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
ROBIN SAMUELSEN, President/CEO                                                                                                  
Bristol Bay Economic Development Corporation (BBEDC)                                                                            
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
PETER CHRISTOPHER SR.                                                                                                           
New Stuyahok, Alaska                                                                                                            
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
RALPH ANDERSEN, Chief Executive Officer                                                                                         
Bristol Bay Native Association (BBNA)                                                                                           
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
ROBERT CLARK, PRESIDENT/CEO                                                                                                     
Bristol Bay Area Health Corporation (BBAHC)                                                                                     
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
CAROLYN SMITH, MAYOR                                                                                                            
Aleknagik, Alaska                                                                                                               
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
JON CORBETT, Businessman                                                                                                        
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
RUSSELL NELSON, Director of Facilities                                                                                          
Dillingham School District                                                                                                      
Dillingham, Alaska                                                                                                              
POSITION STATEMENT:   Testified  on behalf of  the superintendent                                                             
of the Dillingham School District.                                                                                              
                                                                                                                                
HJALMAR OLSON                                                                                                                   
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
KAREN DEARLOVE                                                                                                                  
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT  Testified  during   the  discussion  of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
BOB HIMSCHOOT                                                                                                                   
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
GUSTY CHYTHLOOK                                                                                                                 
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy report.                                                                                                        
                                                                                                                                
MARILYN ROSENE, Principal                                                                                                       
Dillingham Elementary School                                                                                                    
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
JUNE INGRAM                                                                                                                     
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:     Testified   during  the   discussion  of                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
KYLE BELLEQUE                                                                                                                   
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:     Testified   during  the   discussion  of                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
LUCY WEEDMAN                                                                                                                    
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
MARK NEWSON                                                                                                                     
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
KIMBERLY WILLIAMS                                                                                                               
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
JOE FAITH                                                                                                                       
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
JIMMY HURLEY                                                                                                                    
Ekwok, Alaska                                                                                                                   
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
DON FORD                                                                                                                        
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
FRANK WOODS                                                                                                                     
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
WENDELL DOWNS, Pastor                                                                                                           
Seventh-Day Adventist Church                                                                                                    
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
BRIAN PAULING, Businessman                                                                                                      
Dillingham, Alaska                                                                                                              
POSITION  STATEMENT:   Testified  during  the  discussion on  the                                                             
Statewide Energy Report.                                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:31:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  BRYCE  EDGMON called  the  House  Special Committee  on                                                             
Energy meeting  to order  at 1:31  p.m.   Representatives Ramras,                                                               
Johansen,  Petersen, Tuck,  Millett, and  Edgmon were  present at                                                               
the  call to  order.   Also  in  attendance were  Representatives                                                               
Coghill, Chenault, and Herron.                                                                                                  
                                                                                                                                
^ALASKA ENERGY AUTHORITY STATEWIDE ENERGY REPORT                                                                              
                                                                                                                                
CO-CHAIR EDGMON announced  that the only order  of business would                                                               
be  discussion of  the Alaska  Energy  Authority (AEA)  Statewide                                                               
Energy Report.   He  invited the  committee members  to introduce                                                               
themselves.                                                                                                                     
                                                                                                                                
1:33:38 PM                                                                                                                    
                                                                                                                                
Introductions  were  made  by  Representatives  Ramras,  Coghill,                                                               
Petersen,   Chenault,  Millett,   Herron,  Johansen,   and  Tuck.                                                               
Several  speakers thanked  the community  of  Dillingham for  its                                                               
hospitality.                                                                                                                    
                                                                                                                                
1:38:29 PM                                                                                                                    
                                                                                                                                
CO-CHAIR MILLETT  said the meeting  in Dillingham was  the second                                                               
part of the energy committee's  trip after travelling to Nome and                                                               
Kotzebue.  She  expressed her interest in  listening to residents                                                               
as they  participate in the  development of the  statewide energy                                                               
policy for Alaska.                                                                                                              
                                                                                                                                
REPRESENTATIVE CHENAULT  said he was  glad to see the  high local                                                               
turnout for the  hearing.  He recalled some of  the activities of                                                               
the day and expressed his interest in listening to testimony.                                                                   
                                                                                                                                
1:40:23 PM                                                                                                                    
                                                                                                                                
ALICE RUBY, Mayor, City of  Dillingham, preceded her testimony by                                                               
thanking the  committee for visiting  the region  and recognizing                                                               
the  various  groups that  facilitated  the  activities over  the                                                               
week-end and at  the hearing today.  She  related that Dillingham                                                               
is a 1st  class city that provides K-12  schools, police service,                                                               
water and sewer services, a  landfill, street maintenance, a boat                                                               
harbor, a library, a museum,  fire and ambulance services, senior                                                               
citizens programs,  and planning.   These services  are supported                                                               
by a 13 millage rate real  and personal property tax, a 6 percent                                                               
sales tax,  a 10 percent  bed and  alcohol tax, and  various user                                                               
fees.   According to  statistics by  the Department  of Commerce,                                                               
Community,  &  Economic  Development  (DCCED),  Dillingham's  per                                                               
capita tax  rate of $1,894  is higher than  the tax rate  of some                                                               
larger communities  in the state.   Mayor Ruby  said Dillingham's                                                               
general fund budget for fiscal year  2009 (FY 09) is $6.7 million                                                               
and a  large part  of that  budget is  $1.2 million  for schools,                                                               
with a bond obligation of $15  million for school renovation.  As                                                               
the state can contribute to  the bond payment through the general                                                               
obligation  (GO)  bond  program,   she  strongly  encouraged  the                                                               
legislators to continue  the GO bond program.   Mayor Ruby stated                                                               
that citizens  and municipal operations  are "buckling  under the                                                               
strain" of  energy costs; in  fact, the city's energy  costs have                                                               
increased 30 percent over the past five years.                                                                                  
                                                                                                                                
1:44:06 PM                                                                                                                    
                                                                                                                                
MAYOR  RUBY  further explained  increased  energy  costs must  be                                                               
added to a  50 percent increase in the cost  of health insurance,                                                               
and increased demand for services.   She encouraged the committee                                                               
consider the  following:  continued long-term  investment in ways                                                               
to reduce the  cost of energy; transitional  solutions to address                                                               
the  present  crisis;  continuing   support  of  the  Power  Cost                                                               
Equalization  (PCE)   program    for  citizens   and  for  public                                                               
entities;    continued  support   of    municipalities  that  are                                                               
suffering from  high prices for heating  fuel and gas.   In fact,                                                               
in FY 09, Dillingham will  invest $250,000 in heating fuel, which                                                               
is an  increase of $100,000  in one  year.  She  opined consumers                                                               
are  concerned about  an increase  in sales  taxes, although  the                                                               
city council  enacted a  waiver from sales  tax for  one-half the                                                               
cost of  home heating fuel  from January  to April.   This waiver                                                               
will cost the city $116,000 in lost revenue.                                                                                    
                                                                                                                                
1:46:05 PM                                                                                                                    
                                                                                                                                
MAYOR RUBY further  encouraged the committee to  provide funds to                                                               
weatherize existing  buildings owned  by municipalities  in order                                                               
to   reduce  energy   consumption.     She  voiced   support  for                                                               
researching  the rural  fuel pricing  structure  and pointed  out                                                               
that the price  of fuel in Dillingham is more  than the price for                                                               
the same  product in Nome or  King Salmon; moreover, as  the cost                                                               
of  delivery  is  an  element of  that  fuel  structure,  perhaps                                                               
regulation  is in  order.   The  city  is also  in  support of  a                                                               
revision  of  the  home  energy  rebate  program  to  allow  more                                                               
participation.   Furthermore,  she  encouraged  the committee  to                                                               
review  the Low  Income Home  Energy Assistance  Program (LIHEAP)                                                               
and   the  Alaska   Heating   Assistance   Program  (AKHAP)   for                                                               
improvements to  the application  processing time.   Finally, she                                                               
encouraged the  state to target  Dillingham as a  resource center                                                               
for technology  and the distribution  of energy  related products                                                               
to  regional   residents.    Every  citizen   needs  information,                                                               
assistance, and a  source for [energy related]  products, and the                                                               
city has  an excellent college campus  and regional organizations                                                               
willing to contribute time and effort.                                                                                          
                                                                                                                                
1:48:56 PM                                                                                                                    
                                                                                                                                
DONNA VUKICH, General Manager,  Naknek Electric Association Inc.,                                                               
welcomed the  committee to the  region and provided an  update of                                                               
the Proposed Regional Geothermal  Generation Project developed by                                                               
the Naknek Electric Association, Inc.,  (NEA).  She explained NEA                                                               
just completed the latest geophysical  work to verify some of the                                                               
previous work  done by  aeromagnetic studies.   Ms.  Vukich noted                                                               
the work  has been  favorable; in fact,  NEA has  contracted with                                                               
GeothermEx  [Richmond,  California]  and Alaska  Earth  Sciences,                                                               
Inc., [Anchorage]  as project managers.   In addition,  a request                                                               
for proposal (RFP) for a drill  rig has been issued and plans are                                                               
to  begin drilling  this  summer.   She stressed  the  work is  a                                                               
regional plan  that complements the  state's longer visions  of a                                                               
regional  energy facility  that  will  "intertie" 25  communities                                                               
together to reduce the cost  of fuel in the smallest communities.                                                               
At this  time, utility rates  are ranging from $.43  per kilowatt                                                               
hour to over  $1 per kilowatt hour in Egegik  and Aleknagik.  She                                                               
opined the high costs of  energy are destroying the villages; for                                                               
example,  the  Bristol  Bay  Borough   School  District  lost  45                                                               
students in one  year.  Ms. Vukic disputed the  conclusion of the                                                               
Institute  of Social  and Economic  Research (ISER)  [Fuel Costs,                                                               
Migration and  Community Viability May  2008] report and  said if                                                               
the  study  had gone  back  20  years,  the decrease  in  village                                                               
population  would  have  been  evident.    In  fact,  the  school                                                               
population in Bristol Bay has fallen  from 300 to 137 students in                                                               
the past 10  years.  She pointed out the  utilities have spent 10                                                               
years  working  toward  the  geothermal  project  and  she  spoke                                                               
favorably of  the renewable  energy fund  and the  proactive work                                                               
done by the legislature.                                                                                                        
                                                                                                                                
1:52:17 PM                                                                                                                    
                                                                                                                                
MS.  VUKICH,  in  response  to  Co-Chair  Edgmon,  indicated  the                                                               
geothermal project would produce 25  megawatts (MW) of power that                                                               
could be  expanded to  50 megawatts, which  is the  ultimate load                                                               
desired.    She  expressed  optimism about  the  success  of  the                                                               
project  through  the  processes  and  equipment  available  from                                                               
GeothermEx.   At this time, peak  use for the region  is about 18                                                               
MW and she said producing  hydrogen and supplying heating for the                                                               
district and several nearby villages  will eliminate the need for                                                               
diesel power.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  RAMRAS observed  the cost  estimate from  NEA for                                                               
the project  is $200  million, but  the estimate  from GeothermEx                                                               
and Alaska  Earth Sciences is  for $96 million in  capital costs.                                                               
He asked about the difference in estimates.                                                                                     
                                                                                                                                
MS. VUKICH  explained the higher  estimate includes  the possible                                                               
need for an enhanced geothermal  system that would raise the cost                                                               
of  the  power  plant  and collection  facility,  and  that  also                                                               
includes [construction of] interties.   Alaska Earth Sciences and                                                               
GeothermEx  are  only looking  at  generation.   In  response  to                                                               
Representative Petersen, she  said NEA was hopeful  that it would                                                               
receive a match  from the state for $5 million.   The utility has                                                               
$3 million  from the federal  government; in addition,  the co-op                                                               
has spent $2 million and has  pledged to borrow the amount needed                                                               
to finish drilling the test well.                                                                                               
                                                                                                                                
1:55:17 PM                                                                                                                    
                                                                                                                                
JASON  METROKIN, President/CEO,  Bristol  Bay Native  Corporation                                                               
(BBNC), thanked Hjalmar Olson for  his service to the Bristol Bay                                                               
Native  Corporation and  then read  from  the following  prepared                                                               
statement [original punctuation provided]:                                                                                      
                                                                                                                                
     I  am  pleased to  address  the  members of  the  State                                                                    
     Legislature as  well as  those in  attendance regarding                                                                    
     the  Energy Crisis  facing the  Bristol Bay  region and                                                                    
     its residents.                                                                                                             
                                                                                                                                
     There should be  no question that our  region has faced                                                                    
     abnormally  high  energy  costs as  compared  to  other                                                                    
     geographic regions  of Alaska.   I appreciate  the work                                                                    
     of the  Legislature and the Alaska  Energy Authority to                                                                    
     address  future  energy  needs in  Bristol  Bay.    The                                                                    
     $5million in  renewable energy grants  recently awarded                                                                    
     may be helpful in ultimately  lower energy costs in the                                                                    
     region.   My concern is  that this  is only the  tip of                                                                    
     the  iceberg  when  it  comes   to  the  needs  of  our                                                                    
     villages.   What we need  is support for  projects that                                                                    
     will  address energy  costs today,  next week  and next                                                                    
     year.  While  I support the notion  of long-term energy                                                                    
     solutions  and the  need  for  studies and  sustainable                                                                    
     funding streams.   We cannot wait  5 or 10 or  20 years                                                                    
     for mega-project solutions to address this crisis.                                                                         
                                                                                                                                
     I urge  you as  I urge all  of our  regional leadership                                                                    
     and local  community members to  focus on the  costs of                                                                    
     energy and  their impacts on  the region today.   Small                                                                    
     demonstration  projects, while  they  may only  benefit                                                                    
     the  few, are  affordable,  sustainable and  ultimately                                                                    
     lead  to long-term  and large-scale  solutions for  the                                                                    
     greater good.                                                                                                              
                                                                                                                                
     Bristol  Bay  Native  Corporation supports  all  energy                                                                    
     solutions for the region as  long as they are realistic                                                                    
     and affordable.   We will consider  investing in energy                                                                    
     projects  if  they  bring a  financial  return  to  the                                                                    
     corporation.     To  contribute  monetary   support  of                                                                    
     individual   energy    projects   without    a   return                                                                    
     expectation  takes  away  from   our  ability  to  fund                                                                    
     increasing  shareholder  dividends, something  we  have                                                                    
     done for 30 consecutive years.                                                                                             
                                                                                                                                
     Having  said   that,  we  are  open   to  new  business                                                                    
     opportunities  in  the  region, especially  those  that                                                                    
     address lower cost energy.   BBNC is also supportive of                                                                    
     appropriately increasing  PCE funding  to keep  up with                                                                    
     high  rural  electricity costs.    We  have explored  a                                                                    
     similar  program for  home heating  oil and  would urge                                                                    
     the Legislature to consider  opening discussions on how                                                                    
     to equalize expenses for those  heating their homes who                                                                    
     do not live  on the electrical grid - many  of whom are                                                                    
     not  only village  residents but  on the  rail belt  as                                                                    
     well.                                                                                                                      
                                                                                                                                
     Again, BBNC is  appreciative of the work  that has been                                                                    
     done thus far.  We are  all partners in this matter and                                                                    
     I hope  you share the  same opinion that no  one single                                                                    
     solution  will address  this crisis.   It  will take  a                                                                    
     balanced  approach  of renewables  and  non-renewables.                                                                    
     Residential  and  commercial.     Wind,  solar,  hydro.                                                                    
     Efficient  and reliable  transportation of  fuel and  a                                                                    
     breakup of any fuel monopolies.                                                                                            
                                                                                                                                
     Local ingenuity can  get us through these  times but it                                                                    
     takes  resources to  apply good  ideas.   Grant funding                                                                    
     alone cannot  pave the way.   Private funding  from all                                                                    
     available  sources must  come to  the table  to address                                                                    
     the needs of today.                                                                                                        
                                                                                                                                
     I  appreciate the  opportunity to  speak  on behalf  of                                                                    
     Bristol Bay Native Corporation.  Thank you.                                                                                
                                                                                                                                
1:59:36 PM                                                                                                                    
                                                                                                                                
THOMAS  TILDEN, Tribal  Chief, Curyung  Tribal Council,  informed                                                               
the committee  the Curyung Tribe  has 2,400 hundred members.   He                                                               
welcomed the committee to the region  and said he was a fisherman                                                               
who also works  part-time.  He observed the fuel  crisis is not a                                                               
surprise, but  was foreseen by  those who experienced  a previous                                                               
economic crisis  years ago.   He  urged the  state to  expand its                                                               
"price-fixing" investigation  to include Southwestern  Alaska and                                                               
related  the price  of  gas  in Anchorage  is  $2.37 per  gallon,                                                               
compared  to  $6.31 in  Dillingham  and  $11 in  Kanakanak;  this                                                               
difference warrants investigation.   He said he  is paying $1,200                                                               
a month for fuel to heat  his well-insulated home.  He encouraged                                                               
the state to  look for short- and long-term goals  and stated his                                                               
support for Naknek Electric in  its search for thermal energy; in                                                               
fact,  all renewable  energy projects  that serve  more than  one                                                               
community with long-term benefits need  to be funded.  Mr. Tilden                                                               
also  encouraged  the  governor   to  accept  [federal]  stimulus                                                               
package money  because the money and  the work are needed  by all                                                               
Alaskans.   He opined the  people of the  region are a  proud and                                                               
independent people, but  they must break the silence  now and say                                                               
that people  are suffering; as  a matter  of fact, Bethel  is far                                                               
worse  off  than Dillingham,  because  Dillingham  has a  fishing                                                               
economy.  He  also encouraged legislators to  consider the impact                                                               
of the  cost of  fuel on  subsistence [users],  as the  number of                                                               
residents dependent  upon subsistence is  rising.  The  state has                                                               
taken a hard stand against  rural preference; however, it is time                                                               
to re-examine  its stand in  the light  of hard times  like this.                                                               
He said, "I don't  know how many of you have  ever put a sandwich                                                               
into your  mouth and  decided ...  whether to  eat or  whether to                                                               
heat your homes."   Subsistence can cure some  of these problems,                                                               
but there  are too  many regulations that  are required  in order                                                               
for folks to  subsist naturally.  He  also encouraged legislators                                                               
to study the  situation that allows millions of  dollars worth of                                                               
salmon to "go by" because there are not enough processors.                                                                      
                                                                                                                                
2:05:23 PM                                                                                                                    
                                                                                                                                
MR.  TILDEN  then expressed  his  support  for Senator  Hoffman's                                                               
proposed  legislation  to "cap"  the  price  of  fuel at  $3  per                                                               
gallon.  He said this is  a necessary step in order for residents                                                               
to survive.   In  addition, he called  for an  investigation into                                                               
the purchase of  Yukon Fuels by the Crowley Company.   On another                                                               
subject, he  pointed out that  the Board  of Fish should  meet in                                                               
Dillingham, because  the only interested  parties who  can afford                                                               
to go to  Anchorage to testify are from  California, Seattle, and                                                               
Oregon.   He cautioned about  the damaging impact to  the fishery                                                               
if  there  is  insufficient  testimony   from  the  residents  of                                                               
Dillingham.  Mr.  Tilden concluded by asking  legislators to look                                                               
again at subsistence;  to fund the Nushagak  Electric & Telephone                                                               
Cooperative  hydroelectric project;  to  fund  the [NEA]  thermal                                                               
energy project;  and to strengthen the  weatherization program by                                                               
putting   local   residents   to   work   installing   efficiency                                                               
improvements to  state buildings.   He reminded  legislators that                                                               
"What some  of the folks  here are  thinking about, and  that is,                                                               
'Should I eat or should I heat my home?'"                                                                                       
                                                                                                                                
2:09:25 PM                                                                                                                    
                                                                                                                                
DAVE MCCLURE read from the  following written statement [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     My  name is  Dave  McClure, and  I  serve as  Executive                                                                    
     Director  of the  Bristol  Bay  housing Authority,  and                                                                    
     serve  as   the  Chairman   of  the   Southwest  Alaska                                                                    
     Vocational Education Center In King  Salmon.  I also am                                                                    
     a   director   of   Nushagak   Cooperatives   here   in                                                                    
     Dillingham,  and  have  lived  in Bristol  Bay  for  30                                                                    
     years.                                                                                                                     
                                                                                                                                
     I  wish  to thank  you  and  the full  legislature  for                                                                    
     energy legislation adopted  last year, specifically the                                                                    
     weatherization and alternative energy  funding.  We all                                                                    
     appreciate the effort you folks  have taken to come out                                                                    
     and see our challenges firsthand.                                                                                          
                                                                                                                                
     Let  me   stress  that   the  Alaska   Housing  Finance                                                                    
     Corporation  has done  an excellent  job of  mobilizing                                                                    
     the  weatherization program  in an  expeditious manner,                                                                    
     and they work well with  BBHA to accomplish the efforts                                                                    
     to weatherize homes in our region.                                                                                         
                                                                                                                                
     My main point  today is to convey the  extreme scope of                                                                    
     the need  in our  region.   Please see  the spreadsheet                                                                    
     provided which  indicates that even  at the  80% income                                                                    
     level of  median income, there  are over 1200  homes in                                                                    
     the  thirty  one  villages that  are  eligible  for  Wx                                                                    
     assistance, which drives a total  of approximately $ 42                                                                    
     million in need.   The amount allocated  to the Bristol                                                                    
     Bay Region  is less than  $ 6  million.  To  extend the                                                                    
     resources, BBHA has  used an average of  about $ 24,000                                                                    
     per home, which will allow  us to stretch the funds and                                                                    
     weatherize  additional  homes.    At  that  expenditure                                                                    
     level, payback  is accomplished  within 10  years, with                                                                    
     the important  benefit of  reducing the  necessary cash                                                                    
     flow in  the interim for  the potential 40%  savings in                                                                    
     fuel consumption.  At $ 7  per gallon, this is almost $                                                                    
     3K per household in a winter.                                                                                              
                                                                                                                                
     Please know  that the training dollars  associated with                                                                    
     these  funds  are well  spent.    We partner  with  the                                                                    
     Denali  Commission, Alaska  Works Partnership,  and our                                                                    
     Voc   Ed  Center   in  King   Salmon  to   train  local                                                                    
     individuals in  becoming raters, but  more importantly,                                                                    
     workers  who  understand  building science.    We  have                                                                    
     trained over 25 individuals  to date in various courses                                                                    
     of components of building science  and OSHA training in                                                                    
     order to maximize local hire.                                                                                              
                                                                                                                                
     With  the  rebate program,  we  are  talking with  AHFC                                                                    
     about folks  who fall just  above the  income threshold                                                                    
     for weatherization,  but do  no have  the funds  to pay                                                                    
     for a  rater.   AHFC has  agreed to  look at  coming up                                                                    
     with  a system  to  have these  folks  rated, and  take                                                                    
     advantage of their improvement  loan program to interim                                                                    
     fund  the rebate  upgrades  to their  home.   BBHA  can                                                                    
     assist with  these ratings from our  folks trained with                                                                    
     weatherization funds.                                                                                                      
                                                                                                                                
     BBHA also  supports the efforts  of Senator  Hoffman to                                                                    
     reduce the  cost of fuel oil  in the region.   While we                                                                    
     support the  current effort to assist  communities with                                                                    
     the  purchase  of  fuel, and  to  insure  everyone  had                                                                    
     adequate funds  in a community  to provide fuel  to all                                                                    
     homes, we also  support reduction at the  point of sale                                                                    
     to the  cost of fuel from  State funds.  This  could be                                                                    
     done with an means-test methodology  such as is used by                                                                    
     the  Lifeline federal  telephone subsidy,  that is,  if                                                                    
     you  can show  you  have been  income  screened in  any                                                                    
     number of  federal programs, you would  be eligible for                                                                    
     this program  without further  verification.   As Robin                                                                    
     Samuelson stated last night,  we have several instances                                                                    
     of  people  turning  to electrical  heat  because  they                                                                    
     cannot afford oil,  even though they then  have a large                                                                    
     electrical bill to pay.                                                                                                    
                                                                                                                                
     BBHA and  the village  have used  Federal HUD  funds to                                                                    
     react to  the high  costs of  fuel by  providing energy                                                                    
     vouchers  to  homeowners;  approximately  $300,000  per                                                                    
     year is used  in this fashion over the  past two years.                                                                    
     The Federal  stimulus funding  will provide  by formula                                                                    
     an additional $ 2.4 million  to our region thru HUD for                                                                    
     construction  activities   such  as  weather-stripping,                                                                    
     window insulation, and other rehab type work.                                                                              
                                                                                                                                
     It is important  for the committee to  continue to fund                                                                    
     the  Weatherization  program,   as  even  with  federal                                                                    
     stimulus funding, the  need in the region  is six times                                                                    
     the available funding.                                                                                                     
                                                                                                                                
     BBHA   also  supports   the  Power   Cost  Equalization                                                                    
     program.   In  many of  our villages,  electrical costs                                                                    
     have  increased  dramatically,  due  to  spreading  the                                                                    
     increased cost by  fewer consumer.  PCE  is an absolute                                                                    
     necessity for residential customers.                                                                                       
                                                                                                                                
     The hardest  job all of  us have is  managing realistic                                                                    
     expectations of  our residents.  However,  by continued                                                                    
     funding, with accountability  of the resources expended                                                                    
       and effective and efficient use of the funds will                                                                        
     allow our scarce resource to go further.                                                                                   
                                                                                                                                
     I have asked Val Angasan, our weatherization director                                                                      
     to testify to specifics of our effort, and am happy to                                                                     
     answer any questions.  Thank you.                                                                                          
                                                                                                                                
2:14:50 PM                                                                                                                    
                                                                                                                                
FRANK CORBIN,  General Manager, Nushagak   Electric and Telephone                                                               
Cooperative; President, Dillingham  Chamber of Commerce, informed                                                               
the committee that  the cooperative is a  consolidated utility in                                                               
that it  provides cable  TV, internet, and  telephone as  well as                                                               
electricity,  and   its  resources   are  balanced   between  the                                                               
different services.   Last year,  the cooperative  borrowed about                                                               
$1  million to  comply with  a  federal mandate  to "change  out"                                                               
telephone  equipment.   In  addition,  it is  in  the process  of                                                               
bringing broadband  bandwidth to  its service area  by microwave.                                                               
This improvement  will bring  internet services  to at  least six                                                               
more villages  and, because there  is no use for  satellite, will                                                               
lower  cost.    Addressing  the  energy  crisis,  he  stated  the                                                               
cooperative  has been  involved  in a  generator  upgrade to  the                                                               
powerhouse  and  has  installed the  newest  and  most  efficient                                                               
generators to  save fuel.   Additionally,  with support  from the                                                               
Denali  Commission, the  state,  and the  federal government  the                                                               
upgrades  have been  funded  with grant  money  to keep  overhead                                                               
costs down  and "we  don't have  to charge  that directly  to the                                                               
rate  base ...  our rates  could be  higher if  we had  to borrow                                                               
money  to  put those  generators  in."    He explained  once  the                                                               
powerhouse upgrade is complete, the  cooperative has a plan for a                                                               
hydro project to move the  base power source into something other                                                               
than diesel  generation.  Then,  diesel generation would  only be                                                               
needed for back-up and periods  of maintenance.  Mc Corbin opined                                                               
when  there  is  potential  for  hydro power,  there  is  also  a                                                               
potential to lower  the rates to consumers.  Again,  the rates to                                                               
consumers  are  dependent on  financing  and  grants for  capital                                                               
expenses mean lower  debt and lower rates.   Mr. Corbin concluded                                                               
that hydro generation is a very  good project because, as a small                                                               
cooperative, Nushagak Electric and  Telephone could trade some of                                                               
the [revenue paid toward] debt service instead of fuel expense.                                                                 
                                                                                                                                
2:18:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL  asked for  an estimate of  the completion                                                               
date of the hydro project.                                                                                                      
                                                                                                                                
MR. CORBIN  said the project  is viable with  current technology.                                                               
The  course of  the project  depends on  the point  at which  the                                                               
utility has enough  funds promised that it can  "put ourselves up                                                               
as collateral  for the  balance."   He predicted  the cooperative                                                               
would need to be beginning work  at the site within two years and                                                               
construction  completed  three  years  after that.    In  further                                                               
response  to  Representative  Coghill,   he  explained  that  the                                                               
cooperative applied  for funds from  the Alaska  Energy Authority                                                               
(AEA) renewable  energy grants  program and  has been  awarded $4                                                               
million for the  project, thus the project  has been investigated                                                               
and vetted by AEA and is going forward.                                                                                         
                                                                                                                                
2:21:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  asked for a comparison  of rates between                                                               
last year and this year.                                                                                                        
                                                                                                                                
MR. CORBIN  estimated the  residential rate  was around  33 cents                                                               
per kilowatt  last year  and was 46.3  cents beginning  last fall                                                               
and continuing  through the  next delivery.   Of the  46.3 cents,                                                               
about  17.5 cents  is overhead  and the  rest is  fuel cost.   He                                                               
pointed out that  the overhead cost has not  increased because of                                                               
the  grant   funds  available   during  the   generator  upgrade.                                                               
Wholesale diesel in  Seattle is $1.25 per gallon  and the utility                                                               
paid $4.25  per gallon last  summer.  Also,  transportation costs                                                               
are increasing;  in fact, transportation cost  estimates for next                                                               
summer  indicate  that  25  percent  of fuel  cost  will  be  for                                                               
transportation.                                                                                                                 
                                                                                                                                
2:23:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT  asked for  details  on  the grant  money                                                               
received from the Denali Commission.                                                                                            
                                                                                                                                
MR. CORBIN  explained the upgrade  project received a  $1 million                                                               
grant from the federal government,  a $1.3 million grant from the                                                               
Denali Commission,  a $1 million  grant from the state,  and $1.6                                                               
million from the  Rural Utilities Service of  the U.S. Department                                                               
of Agriculture (RUS/USDA).   He clarified that the  upgrade was a                                                               
separate project from  the $4 million renewable  energy grant for                                                               
the [Elva Lake] hydro project.                                                                                                  
                                                                                                                                
2:23:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS  requested   the  committee  hear  further                                                               
discussion  on   this  project  at   the  conclusion   of  public                                                               
testimony.                                                                                                                      
                                                                                                                                
2:24:18 PM                                                                                                                    
                                                                                                                                
ROBIN SAMUELSEN, President/CEO,  Bristol Bay Economic Development                                                               
Corporation (BBEDC), opined the cost  of energy is the number one                                                               
issue  facing the  Bristol Bay  region  today.   The elderly  and                                                               
disabled are  most vulnerable, but  no one  can keep up  with the                                                               
problems that  the cost of  energy is creating such  as expensive                                                               
electricity, groceries,  and services.   The situation  demands a                                                               
radical  change from  the present  dependence on  oil that  makes                                                               
everyone vulnerable  to [shortages]  from the  Middle East.   Mr.                                                               
Samuelsen said  he was born and  raised in Dillingham and  has no                                                               
desire to  live anywhere else, although  a lot of folks  in rural                                                               
Alaska have  been forced to  move out.   The BBEDC  represents 17                                                               
villages and is very aware of  the problems there.  Residents are                                                               
looking for answers and for  short-, medium-, and long-term goals                                                               
of  an energy  plan  for Alaska,  regardless of  the  price of  a                                                               
barrel  of  oil.    He  stated the  BBEDC  is  very  involved  in                                                               
education and  the fishing industry;   in fact,  scholarships are                                                               
provided for  kids to go  outside for  school, but there  is very                                                               
little  reason for  them  to  come back.    His organization  has                                                               
included a "forgiveness" clause in  the scholarships in an effort                                                               
to prevent "brain drain in the region."                                                                                         
                                                                                                                                
2:29:39 PM                                                                                                                    
                                                                                                                                
MR. SAMUELSEN encouraged the committee  to consider various power                                                               
sources  including  wind,  solar,   tidal,  and  geothermal,  and                                                               
described  several  advantages  to  nuclear reactors.    He  also                                                               
mentioned  consideration  must  be   taken  for  the  new  carbon                                                               
footprint  of  products.   Mr.  Samuelsen  recalled  the  fishing                                                               
industry  in the  region supported  the commercial  fisherman for                                                               
125 years  and subsistence users  for time immemorial;   however,                                                               
as fish  prices began to rise,  the community is faced  with $5 a                                                               
gallon  diesel  fuel.    "It basically  wiped  out  our  shoulder                                                               
seasons," he  said.  One  solution suggested  by the BBEDC  is to                                                               
put in  processing plants in  villages to provide  employment and                                                               
extend  opportunities for  fishermen,  but there  needs  to be  a                                                               
source  of  cheap  power  for   ice,  refrigeration,  and  longer                                                               
[airport runways.]   With the help  of the state and  the federal                                                               
government and  with long-term  plans, he  said the  region "will                                                               
get over this impasse that we're in."                                                                                           
                                                                                                                                
2:33:59 PM                                                                                                                    
                                                                                                                                
MR.  SAMUELSON  opined Alaskans  must  change  their mindset  and                                                               
encouraged the  committee to  quit funding  entitlement programs.                                                               
He gave  a personal story of  his work ethic and  said the $1,200                                                               
given last  year was  helpful but  was soon  forgotten; moreover,                                                               
that money  would have been  better invested in  local, long-term                                                               
solutions to rural  energy problem.  Rural areas do  not have the                                                               
expertise  or financial  backing to  solve the  energy crisis  on                                                               
their own and need the state's  help.  He called attention to the                                                               
Foregone Harvest  Survey and  pointed out  that between  2003 and                                                               
2008, fishermen lost $131 million  in foregone harvest in Bristol                                                               
Bay; with the  wholesale value added, the total  is $360 million.                                                               
He  listed  losses for  other  communities  and emphasized  those                                                               
dollars  are needed  in order  to  keep communities  alive.   Mr.                                                               
Samuelsen concluded  the solutions  may start with  the windmills                                                               
and solar installations that can  minimize the state's dependence                                                               
on fossil fuels and keep residents in their rural homes.                                                                        
                                                                                                                                
2:37:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  described the costs of  possible solutions                                                               
to the  energy crisis for  several different parts of  the state.                                                               
Referring to the state's limited  resources, he asked, "How would                                                               
you allocate  the money, where  do you  see sending it  first, to                                                               
the  little villages  that are  hurting the  worst, the  regional                                                               
hubs  like  your  community  that  are  as  you  say,  relatively                                                               
healthy,  the  urban centers  where  the  ... largest  amount  of                                                               
people in the state live.  What do you think?"                                                                                  
                                                                                                                                
2:39:35 PM                                                                                                                    
                                                                                                                                
MR. SAMUELSEN  disagreed that most  of his community  is healthy.                                                               
For example,  the village of Emmonak  is just "hanging on."   The                                                               
solution is  not how much money  is thrown at a  problem, but the                                                               
criteria  used  to find  a  solution  such as  long-range  goals,                                                               
energy  audits  of each  community,  and  collaboration with  the                                                               
tribes - that  are a major economic force -  and city government.                                                               
Working together, the state, the  tribes, and the city government                                                               
can  change the  dynamics of  the region.   He  said, "As  policy                                                               
setters, you  guys got to set  the goals and objectives  that you                                                               
... want to  achieve, and then go  out with an RFP to  all of the                                                               
communities, all the  regions, all the city  governments, all the                                                               
tribes, and  force everybody to the  table ... to come  up with a                                                               
comprehensive plan for Bristol Bay."   He also suggested the "due                                                               
diligence"  use   of  federal   stimulus  money  that   may  come                                                               
available.                                                                                                                      
                                                                                                                                
2:42:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  related  a  personal story  of  his  warm                                                               
relationship with Mr. Samuelsen and his father.                                                                                 
                                                                                                                                
2:44:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON   noted  that  the  committee   will  honor  its                                                               
commitment to travel to Bethel.                                                                                                 
                                                                                                                                
2:44:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK referred  to  the handout  presented by  Mr.                                                               
Samuelsen and remarked:                                                                                                         
                                                                                                                                
      Take a look at Aleknagik; 34 cents and then 19 cents                                                                      
     with the Power Cost Equalization.  Does that 34 cents                                                                      
     include the 19 cents, or is that already deducted?                                                                         
                                                                                                                                
MR. SAMUELSON surmised the 19 cents was already deducted.                                                                       
                                                                                                                                
REPRESENTATIVE TUCK then asked:                                                                                                 
                                                                                                                                
      We see ... Portage Creek and Clark's Point that have                                                                      
     flat rates.  How did those come about?                                                                                     
                                                                                                                                
MR. SAMUELSEN  explained most  of the  residents have  moved from                                                               
Portage Creek and the school is  closed.  He was unsure about the                                                               
situation at Clark's Point.                                                                                                     
                                                                                                                                
2:45:41 PM                                                                                                                    
                                                                                                                                
PETER  CHRISTOPHER SR.  informed  the committee  New Stuyahok  is                                                               
located  52  northeast  miles from  Dillingham  on  the  Nushagak                                                               
River.  It  is a rural village  in Bristol Bay where  the cost of                                                               
fuel was  unbelievable last fall.   The village  corporate entity                                                               
was  forced to  pay almost  half  a million  dollars to  purchase                                                               
heating fuel and  gas to service the community.   The only profit                                                               
made  went to  employees; for  example, the  fuel cost  $6.64 per                                                               
gallon  if picked  up  at  the tank  farm  and  $7.14 per  gallon                                                               
delivered.   He stressed that  the village must pay  whatever the                                                               
fuel  company  charges  as  there  are no  other  choices.    Mr.                                                               
Christopher related  a conversation  he had  in Anchorage  with a                                                               
representative  from NorthStar  Gas  Company who  was planning  a                                                               
meeting in Dillingham to discuss  the possibility of reducing the                                                               
cost of  fuel.   He encouraged the  [officials of]  Dillingham to                                                               
welcome  the NorthStar  company to  the region  in order  to have                                                               
competition and reduce the cost.                                                                                                
                                                                                                                                
2:49:43 PM                                                                                                                    
                                                                                                                                
MR.  CHRISTOPHER  turned  the  subject   to  the  Alaska  Village                                                               
Electrical  Cooperative (AVEC)  and  its  plan to  put  in a  new                                                               
electrical plant  with service to  New Stuyahok and  Ekwok, which                                                               
is the next village down.   He suggested Koliganek should also be                                                               
included so that  there would be one plant for  three villages to                                                               
save fuel  and energy.   The AVEC has  also put in  wind turbines                                                               
for a test,  although reductions in the cost of  kilowatts due to                                                               
wind generation  would not be  seen for two  to three years.   He                                                               
pointed out that many people are using wood for heat.                                                                           
                                                                                                                                
2:52:18 PM                                                                                                                    
                                                                                                                                
MR.  CHRISTOPHER expressed  his  hope that  AEA  and the  federal                                                               
stimulus  money will  be available  to fund  the plan  to provide                                                               
power to three villages from one  new plant.  The corporation has                                                               
been  waiting  for  "Denali"  to   approve  the  plan  and  state                                                               
assistance from the  legislature would also be  appreciated.  Mr.                                                               
Christopher  pointed out  that New  Stuyahok is  not part  of the                                                               
DCCED  Community Development  Quota (CDQ)  program; however,  the                                                               
corporate entity in the village  has established a scholarship in                                                               
the  name  of  Chief  Ivan  Blunka  for  shareholders  and  their                                                               
descendents.  He said the major  concerns of the residents in the                                                               
region are about  the future for the younger  generation and [the                                                               
cost  of] fuel  and  electricity.   Mr.  Christopher thanked  the                                                               
committee  for "hearing  my words  ...  that are  coming from  my                                                               
heart."   He mentioned his service  to his country and  said, "We                                                               
are all  citizens of Alaska."   He  asked the legislature  to let                                                               
the communities know "when that funding becomes available."                                                                     
                                                                                                                                
MR.   CHRISTOPHER,  in   response  to   Representative  Petersen,                                                               
explained  each of  the  three villages  has  its own  electrical                                                               
generation  plant and  supplies  electricity, thus  there are  no                                                               
existing  transmission lines  between  them.   The distance  from                                                               
Ekwok to  Stuyahok is  about 12  miles, and  on from  Stuyahok to                                                               
Koliganek is about 24 miles.                                                                                                    
                                                                                                                                
2:58:44 PM                                                                                                                    
                                                                                                                                
RALPH  ANDERSEN,  Chief  Executive Officer,  Bristol  Bay  Native                                                               
Association (BBNA),  informed the  committee BBNA is  a nonprofit                                                               
corporation  of  31  tribes,  organized   under  state  law,  and                                                               
encompasses  a region  of about  40,000 square  miles.   The BBNA                                                               
provides a  wide range of  public assistance,  education, social,                                                               
economic,  community,  natural   resource,  and  land  management                                                               
services to tribes through funding  agreements with the state and                                                               
federal agencies.   Mr. Andersen said he is also  chairman of the                                                               
Bristol Bay Partnership, composed of  the chief executives of the                                                               
regional organizations, and co-chair  of the Alaska Federation of                                                               
Natives  (AFN)  Human Resources  Committee  and  chairman of  its                                                               
Energy Working  Group.  He  pointed out  that the common  goal of                                                               
these organizations  is to help  find answers to  lowering energy                                                               
costs in the  region and in rural Alaska.   Residents are dealing                                                               
with high costs  in innovative ways, but there  is still evidence                                                               
of hardship  and it is  clear that residents  need help now.   He                                                               
expressed his  hope that  fuel prices will  drop; however,  it is                                                               
important  to  take  action  to prevent  this  situation  in  the                                                               
future.  He  opined every part of the economy  is affected by the                                                               
cost of  fuel; in fact, the  employment rate in some  villages is                                                               
at  80  percent or  more.    Furthermore,  high fuel  costs  have                                                               
reduced  the profits  for commercial  fishermen  and limited  the                                                               
activities of subsistence hunters and  fishers.  The final result                                                               
of  the special  session last  summer fell  short of  meeting the                                                               
needs   and  expectations   of   rural  areas.     Mr.   Andersen                                                               
acknowledged expanding  PCE funding, the suspension  of municipal                                                               
fuel  taxes,  and  the  $1,200   energy  assistance  payment  was                                                               
helpful;  however, these  actions did  not lower  the [long-term]                                                               
cost  of  energy.    These  hearings  are  also  helpful  and  he                                                               
encouraged the state to adopt  an energy policy that covers every                                                               
region  of the  state with  the  goal of  lowering or  equalizing                                                               
energy costs for all Alaskans.   The energy policy should contain                                                               
a  specific plan  with milestones,  and  should be  more than  an                                                               
index  listing potential  energy sources.   He  said, "We  need a                                                               
policy directive, and more importantly  a commitment of funds, to                                                               
help  develop those  potential  energy  sources," and  encouraged                                                               
state  help  as  rural  areas   transition  to  renewable  energy                                                               
sources.  Bristol  Bay has many sources of  renewable energy such                                                               
as  geothermal, solar,  wood,  wind, tidal,  and  hydro, as  many                                                               
residents have demonstrated.                                                                                                    
                                                                                                                                
3:03:24 PM                                                                                                                    
                                                                                                                                
MR.  ANDERSEN  related economies  of  scale  indicate that  power                                                               
grids between villages will reduce  the cost of power production;                                                               
in fact,  the governor is  proposing a  Railbelt power grid.   He                                                               
asked, "Why is rural Alaska being  left out?"  Rural areas do not                                                               
have  natural gas  fields or  a pipeline  planned to  power their                                                               
generators.   His organization supports  buying down the  debt of                                                               
rural utilities to  reduce the cost to consumers,  and he pointed                                                               
out  some  village   members  are  still  paying   the  costs  of                                                               
improvements   to   power   plants  and   systems   even   though                                                               
improvements  were  supposed to  reduce  their  rates.   He  also                                                               
expressed support  for strengthening the PEC  program by "raising                                                               
the  ceiling"   and  expanding   coverage  for   schools,  health                                                               
facilities,  businesses, and  community buildings,  and continued                                                               
funding of  LIHEAP and AKHAP.   Senator Lisa Murkowski  added $30                                                               
million to the  federal share of LIHEAP and he  said [BBNA] hopes                                                               
the state will  do the same.  His organization  also supports the                                                               
AHFC weatherization  and home energy rebate  program, and Senator                                                               
Lyman  Hoffman's efforts  to cap  fuel costs  and to  deliver 100                                                               
gallons  of fuel  to  rural households.    Finally, he  expressed                                                               
support for fully  funding the bulk fuel revolving  loan fund and                                                               
encouraged  the governor  and legislature  to accept  all federal                                                               
economic stimulus funds, especially for energy projects.                                                                        
                                                                                                                                
3:06:25 PM                                                                                                                    
                                                                                                                                
MR. ANDERSEN continued to describe  BBNA's work related to energy                                                               
such  as  plans  to  operate   the  LIHEAP  program,  to  educate                                                               
residents  through the  Temporary Assistance  for Needy  Families                                                               
(TANF) program, and to coordinate  delivery of the free fuel from                                                               
the "CITGO offer."   Furthermore, BBNA established  a new program                                                               
to  assist   tribes  with   energy  projects,   initiatives,  and                                                               
opportunities;  this program  will  be funded  by  the Bureau  of                                                               
Indian Affairs Compact.   The BBNA is united  with other regional                                                               
institutions  to address  the crisis  in a  coordinated way;  for                                                               
example,  the  Bristol  Bay Partnership  adopted  a  Bristol  Bay                                                               
recovery  plan  that  describes short-,  medium-,  and  long-term                                                               
goals to wean the region from  fossil fuels as the only source of                                                               
energy.  He advised copies of  the plan have been provided to the                                                               
committee.   Finally, he recommended the  committee hold hearings                                                               
to explain  the pricing of  fuel delivery in Western  Alaska, and                                                               
to  explore regulation  by  the RCA  of  fuel transportation  and                                                               
delivery to  rural Alaska, similar  to the regulation  of natural                                                               
gas in Anchorage.                                                                                                               
                                                                                                                                
3:09:16 PM                                                                                                                    
                                                                                                                                
ROBERT   CLARK,   PRESIDENT/CEO,    Bristol   Bay   Area   Health                                                               
Corporation,  said  the  Bristol   Bay  Area  Health  Corporation                                                               
(BBAHC) operates  the hospital compound in  Dillingham and serves                                                               
thirty-four  villages  including  two from  neighboring  regions.                                                               
The service population  is about 6,000 today, which  is down from                                                               
8,000 residents who  once lived in the area.   He noted that one-                                                               
third  of BBAHC's  consumers live  in  villages and  300 live  in                                                               
Dillingham.  Except for Dillingham,  King Salmon, and Naknek, all                                                               
transportation is  by air;   in fact,  BBAHC spent $1  million on                                                               
patient travel and  about $1 million on Medivac  costs last year.                                                               
Mr. Clark  explained each village of  20 or more residents  has a                                                               
clinic of health aides that  provide services, and there are four                                                               
regional health centers at Togiak,  Chignik, Naknek, and Iliamna.                                                               
Service to patients  has been impacted by  operating costs during                                                               
the last  year that increased  by 43 percent for  electricity and                                                               
by 88 percent for heating fuel  for a total estimated increase of                                                               
$1  million.   This increase  will not  be made  up by  increased                                                               
funding from  the federal government  or by $3 million  in grants                                                               
from the state  as many of the grants do  not pay overhead costs.                                                               
He  stressed that  BBAHC operates  as a  community hospital  even                                                               
though the  facility is an  Indian Health Service facility  and a                                                               
critical access hospital.                                                                                                       
                                                                                                                                
3:13:52 PM                                                                                                                    
                                                                                                                                
MR.  CLARK continued  to explain,  like most  small hospitals  in                                                               
Alaska,  BBAHC relies  on  Medicare and  Medicaid  payments.   He                                                               
remarked:                                                                                                                       
                                                                                                                                
     My understanding  is with the stimulus  increase of the                                                                    
     federal  share, the  governor is  going to  be trimming                                                                    
     some  $47  million from  the  state  share of  Medicaid                                                                    
     cost, but we'll  be able to re-invest and  build up the                                                                    
     tribal health providers which would  then allow you 100                                                                    
     percent  federal  Medicaid  dollars.   Again,  [it  is]                                                                    
     very,   very,   much   needed.     Unfortunately,   our                                                                    
     facilities in town don't  accept the Medicare Medicaid,                                                                    
     so we're  having to,  on a  limited basis,  account for                                                                    
     that at  the hospital.   In the stimulus  package which                                                                    
     ... we  provide input on,  we're hoping to  receive ...                                                                    
     an expansion of our out-patient program.                                                                                   
                                                                                                                                
MR.  CLARK expressed  his  hope  the hospital  can  obtain a  "CT                                                               
scanner"  as  this   program  is  "shovel  ready."     He  listed                                                               
additional  needs such  as prenatal  quarters, a  water treatment                                                               
plant,  a  new  dental  clinic,  a system  for  the  transfer  of                                                               
electronic  records,  and video  imaging  that  is critical  when                                                               
there are transportation  problems.   He re-stated fuel costs are                                                               
beyond  his  organization's  control,  although there  may  be  a                                                               
possibility of assistance through the PCE program.                                                                              
                                                                                                                                
3:17:43 PM                                                                                                                    
                                                                                                                                
MR.  CLARK expressed  BBAHC's support  of all  renewable programs                                                               
and nuclear  power that can  provide electricity for 12  cents to                                                               
15 cents  per kilowatt hour.   He said his organization  has been                                                               
forced to downsize some clinics; in  fact, the BBAHC is almost $1                                                               
million  dollars in  the hole  for the  first time  in 36  years.                                                               
Furthermore,  several new  health  clinics can  not follow  their                                                               
business  plans  and  local  governments   can  not  continue  to                                                               
subsidize those  programs.   He stressed  the BBAHC  is searching                                                               
for "any  and all" private  and state  grants and funds  from the                                                               
federal stimulus package  to try to cover its costs.   It is also                                                               
beneficial to  provide health care  locally, so that  patients do                                                               
not have  to travel to  Anchorage.   The BBAHC is  also exploring                                                               
the  possibility  of [obtaining]  bulk  fuel  either through  the                                                               
cooperative in town  or independently.  In  fact, the possibility                                                               
of  obtaining  its  own  fuel,    storing  it,  and  adding  wind                                                               
generation may stabilize the cost.   He assured the committee his                                                               
organization  was pursuing  every possibility  because it  has no                                                               
choice.   Further  needs of  the villages  include water,  sewer,                                                               
erosion control, fire trucks, the  meeting of codes, and building                                                               
clinics.                                                                                                                        
                                                                                                                                
3:22:01 PM                                                                                                                    
                                                                                                                                
MR. CLARK  called attention to the  written information submitted                                                               
from  the  Alaska Primary  Care  Association  and other  regional                                                               
organizations.   He  stated his  appreciation of  the committee's                                                               
visit to  the region and said  that his frustration is  with "too                                                               
much reliance  on ... federal when  the state needs to  step up a                                                               
little more  to help,  because we serve  everybody and  we're the                                                               
first citizens of the state."  He  said, "All this stuff is a no-                                                               
brainer to get,  except for unemployment insurance,  and you guys                                                               
are too  darn cheap."   For example,  many fishermen do  not have                                                               
work over  the winter months and  have to rely on  "some of these                                                               
things."   Mr.  Clark  concluded the  resources  come from  rural                                                               
areas; however, it  appears that urban areas get  more than their                                                               
just desserts and  some equity is needed.  He  then asked for the                                                               
committee to review  the information he provided  on the proposed                                                               
Transportation  Security  Administration (TSA)  regulations  that                                                               
would hamper the fishing season for  all of Bristol Bay and rural                                                               
Alaska.                                                                                                                         
                                                                                                                                
3:23:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON  noted  that  the   House  passed  a  resolution                                                               
opposing the TSA recommendations.                                                                                               
                                                                                                                                
3:24:23 PM                                                                                                                    
                                                                                                                                
CAROLYN SMITH, Mayor  of the City of  Aleknagik, stated Aleknagik                                                               
was  lucky  because of  its  connection  by road  to  Dillingham;                                                               
however, beginning  next year,  only the  residents on  the south                                                               
shore  will have  fuel  delivery.   She noted  that  the road  to                                                               
Aleknagik  [from Dillingham]  was started  in 1959  so that  Lake                                                               
Elva could  be developed  for hydroelectric  power and  today the                                                               
utility  is again  looking at  the feasibility  of this  project.                                                               
Mayor Smith informed  the committee the city  operating budget is                                                               
$150,000 and fuel  costs total $36,000 so far,  making fuel costs                                                               
more than twice  what they were last year.   For income, the city                                                               
collects a  5 percent  sales tax and  a 5 percent  bed tax.   She                                                               
said the city collaborates with  the Aleknagik Tribal Council and                                                               
"ANL" to work together as a  community to get projects done.  She                                                               
supported   the  investigation   by   a   regulatory  body   into                                                               
standardizing   fuel  costs   and  opined   there  is   no  "true                                                               
capitalism" in this  market.  In addition,  Mayor Smith supported                                                               
expanding the PCE program to public entities.                                                                                   
                                                                                                                                
3:27:18 PM                                                                                                                    
                                                                                                                                
JON CORBETT  thanked the committee  for its visit  to Dillingham.                                                               
He said  it is difficult  to understand  why Alaska, as  a energy                                                               
state,  is  becoming  a  slave  to the  needs  of  other  states;                                                               
instead,   residents in  Western Alaska  should benefit  from the                                                               
use  of  Alaska's  resources.   Mr.  Corbett  opined  small-scale                                                               
nuclear energy  is an excellent  option because it can  be funded                                                               
through public  education money, perhaps through  a University of                                                               
Alaska   arctic   research  center.      He   said  funding   for                                                               
infrastructure   is  neither   cheap  nor   easy,  however,   the                                                               
Department of  Energy (DOE) has  $40 billion in the  new stimulus                                                               
package that has to  be spent in the next two  to three years for                                                               
capital   projects.     Unless  something   is  done   soon,  the                                                               
municipalities  and  government  entities in  rural  Alaska  will                                                               
decay due  to the loss of  private business.  Mr.  Corbett agreed                                                               
with  Representative  Ramras  that  the state  must  control  the                                                               
amount of  money spent for  large projects; in fact,  $10 million                                                               
to $15  million worth  of wind turbines  would be  more effective                                                               
than a multi-billion dollar project  and would provide jobs right                                                               
away.                                                                                                                           
3:31:25 PM                                                                                                                    
                                                                                                                                
RUSSELL NELSON,  Director of  Facilities, Dillingham  City School                                                               
District, testified  on behalf of the  superintendent of schools.                                                               
He said the school district in  Dillingham is aware of the energy                                                               
crisis;   in  fact,  school facilities  encompass 130,000  square                                                               
feet  of   space  to  heat,   and  the  district   has  purchased                                                               
supplemental  heat from  Nushagak Cooperative  for 50  percent of                                                               
the  cost of  heating with  oil.   He  pointed out  the need  for                                                               
innovative ways to produce energy.   Referring to the bond passed                                                               
for renovation of  the Dillingham schools, he  said that portions                                                               
of the bond will be used  to improve the energy efficiency of the                                                               
school  buildings.    Additionally,  the school  board  passed  a                                                               
resolution  requesting  energy  relief  through  the  Power  Cost                                                               
Equalization  program  for  electrical   costs  incurred  by  the                                                               
Dillingham School  District during the  school year.   Mr. Nelson                                                               
stressed  the need  for short-term  help and  long-term solutions                                                               
for the  energy crisis in  rural Alaska so that  school districts                                                               
can put more money into classrooms.                                                                                             
                                                                                                                                
3:33:29 PM                                                                                                                    
                                                                                                                                
HJALMAR OLSON expressed his pride  that state government agencies                                                               
and  the   legislature  are  coming   out  to  listen   to  rural                                                               
communities.  He  re-stated the high energy costs  are the number                                                               
one priority for the residents in  rural Alaska.  He talked about                                                               
helping the  fishery support  the Bristol  Bay area  and allowing                                                               
the fishermen  to "harvest  what we're  supposed to  harvest," by                                                               
easing the red tape on foreign processors.                                                                                      
                                                                                                                                
3:35:36 PM                                                                                                                    
                                                                                                                                
KAREN DEARLOVE  thanked the committee  members for  their service                                                               
to Alaska.  She stated the  recent visit of a representative from                                                               
AHFC had  been enlightening and  she anticipated  working closely                                                               
with AHFC staff.   Ms. Dearlove, an Alaskan  resident since 2005,                                                               
encouraged the  legislature, when  prioritizing funds  for energy                                                               
programs, to  consider the  tax burden paid  by 1st  class cities                                                               
and the  promises made at  incorporation that are no  longer kept                                                               
by  the  state.    She  referred the  committee  to  her  written                                                               
comments  about improvements  to the  weatherization program  and                                                               
agreed with  Mr. Corbett  that small  businesses in  rural Alaska                                                               
are not  benefitting from Power  Cost Equalization, yet  they pay                                                               
the  full tax  burden.   She  further emphasized  that the  state                                                               
should partner with small business  and the University of Alaska,                                                               
Bristol  Bay Campus,  to implement  pilot  projects in  renewable                                                               
energy systems.   She acknowledged  that the Cold  Climate Energy                                                               
Center in  Fairbanks is excellent  for those on the  road system,                                                               
better suited to residents living in remote areas.                                                                              
                                                                                                                                
3:38:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON remarked:                                                                                                 
                                                                                                                                
     ...  people  need  PCE  help  for  schools,  and  small                                                                    
     businesses.  But, my question  to you is that, USDA, in                                                                    
     my experience, is not very  nimble.  Are you optimistic                                                                    
     with the new state director?                                                                                               
                                                                                                                                
MS. DEARLOVE  said she was not  speaking on behalf of  the agency                                                               
for  which she  works; however,  she said  her implementation  of                                                               
federal  programming is  appreciated.   In fact,  she is  working                                                               
with statewide  non-profits and the  University of  Alaska campus                                                               
on  two USDA  Rural  Development planning  programs  that can  be                                                               
brought to  bear for a  small business  benefit to the  region of                                                               
Bristol Bay, the Pribilof Islands, and the Aleutian Chain.                                                                      
                                                                                                                                
3:39:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  expressed his  wish  that  the USDA  were                                                               
"more nimble."                                                                                                                  
                                                                                                                                
3:40:23 PM                                                                                                                    
                                                                                                                                
BOB  HIMSCHOOT addressed  the  [AHFC]  weatherization and  energy                                                               
rebate program.   Mr.  Himschoot said the  program does  not work                                                               
well  in rural  Alaska because  most  of the  remodel and  energy                                                               
efficiency work  on residents'  homes is  done by  the homeowner.                                                               
He  suggested  that   the  program  should  accept   a  proof  of                                                               
performance  that  does  not  require a  pre-audit.    For  rural                                                               
Alaska,  a post-audit  and before  and after  photographs of  the                                                               
project  should  suffice.    This  would get  the  money  out  to                                                               
Alaskans who  do not qualify for  the [low-income] weatherization                                                               
program  but went  ahead  with projects.    Although more  energy                                                               
auditors are  on the  way, rural  Alaskans could  effectively use                                                               
that money now.   Regarding how the money  should be distributed,                                                               
Mr. Himschoot pointed out that the  money is an investment by the                                                               
state and said, "The largest return  on that money is going to be                                                               
the place  it does the  most good,  and mitigates the  most cost,                                                               
and  I believe  that is  rural Alaska.   I  think that  should be                                                               
considered when  you're looking  at funding  for things  like the                                                               
rebate program and for the alternative energy fund."                                                                            
                                                                                                                                
3:44:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HERRON  expressed   his  appreciation   for  Mr.                                                               
Himschoot's community service.                                                                                                  
                                                                                                                                
3:45:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK asked  for the amount of  power generation of                                                               
each of the turbines.                                                                                                           
                                                                                                                                
MR. HIMSCHOOT said  they were 2.4 maxed, and  .4 kilowatts maxed,                                                               
for a total of 4.8 [kw].                                                                                                        
                                                                                                                                
3:45:26 PM                                                                                                                    
                                                                                                                                
GUSTY CHYTHLOOK  said he was  a lifetime resident of  Bristol Bay                                                               
and  stated his  concern  with the  ever-rising  cost of  energy.                                                               
Many  years ago,  when  gas was  $.50 per  gallon,  he could  not                                                               
imagine  paying up  to  $6.31  per gallon  for  fuel.   He  asked                                                               
whether there  were alternative sources  of energy.   The Bristol                                                               
Bay area is not privileged with  natural gas like the Cook Inlet;                                                               
however,  it would  be good  to  be connected  to the  [proposed]                                                               
natural gas pipeline.                                                                                                           
                                                                                                                                
3:47:50 PM                                                                                                                    
                                                                                                                                
MARILYN  ROSENE, principal,  Dillingham  Elementary School,  said                                                               
she has been a resident of  Dillingham since 1982.  Speaking as a                                                               
parent and a  resident, she noted that the school  will get a new                                                               
roof in  2009, and  new windows  and doors in  2010.   She opined                                                               
there  should be  discussions about  PCE  and the  cost of  fuel;                                                               
however,  she recommended  an emergency  team come  to Dillingham                                                               
and go  through all  of the  buildings, schools,  apartments, and                                                               
homes to find  leaks and to caulk and insulate  homes.  Using the                                                               
energy money this way would  help residents stay in the community                                                               
by saving them money and creating jobs.                                                                                         
                                                                                                                                
3:49:59 PM                                                                                                                    
                                                                                                                                
JUNE INGRAM  said she was  speaking on  behalf of her  family and                                                               
her husband.  They are both fishers  and it is their way of life.                                                               
To supplement  their fishing  income they  both work  winter jobs                                                               
and during  the cold spell they  used 164 gallons of  fuel in one                                                               
month,  not including  gas.    She related  a  personal story  of                                                               
better days  in the  past and the  financial difficulties  of the                                                               
present.  From her work  experience, Ms. Ingram related that from                                                               
October 2007,  to October  2008, 1,000  people left  Bristol Bay.                                                               
She said,  "I am  asking you, our  representatives that  we voted                                                               
for, please help  the rural area, and I thank  you for your time,                                                               
and you'll be in my prayers."                                                                                                   
                                                                                                                                
3:52:23 PM                                                                                                                    
                                                                                                                                
KYLE  BELLEQUE  expressed his  belief  that  every crisis  is  an                                                               
opportunity for change and that  the energy crisis is basically a                                                               
housing  crisis.   This is  because houses  throughout the  state                                                               
were built  when oil was cheap  and are not designed  to conserve                                                               
heating oil.   He proposed the state design a  program similar to                                                               
the federal Housing and Urban  Development (HUD) Indian Home Loan                                                               
Guarantee  Program (Section  184), that  specifically allows  for                                                               
owner construction.   He opined the state should use  some of its                                                               
money to  guarantee loans  for young families  so they  may build                                                               
their  own homes.   Mr.  Belleque acknowledged  a problem  may be                                                               
that  the state  may  require inspectors,  but  the state  should                                                               
design a program so that residents can take care of themselves.                                                                 
                                                                                                                                
3:56:00 PM                                                                                                                    
                                                                                                                                
LUCY WEEDMAN informed the committee  that she has been a resident                                                               
of Dillingham  for five months.   Her  family moved here  to find                                                               
employment, although  she has  worked for the  BBNA for  27 years                                                               
and has never applied for assistance.   However, the high cost of                                                               
oil forced  her into  applying for  assistance and  she expressed                                                               
her worry  about the well-being  of her nine  year old son.   She                                                               
said she  has been forced  to rely on  family and friends  to pay                                                               
for  oil because  her  income is  just $100  over  the limit  for                                                               
energy  assistance.   Ms.  Weedman  talked  about the  choice  of                                                               
heating the  house to  keep her  son warm  or to  buy food.   Two                                                               
weeks ago she  said she thought about giving up,  packing up, and                                                               
going home and  living off welfare, but she has  always been able                                                               
to  provide for  her family.   She  presented the  committee with                                                               
letters  from her  co-workers  describing the  hard  life in  the                                                               
villages.   Ms. Weedman said,  "The middle class, who  have never                                                               
had to apply for assistance before,  I think are taking it harder                                                               
than  most of  the people  that are  already getting  assistance.                                                               
But thank you for listening."                                                                                                   
                                                                                                                                
4:00:08 PM                                                                                                                    
                                                                                                                                
MARK NEWSON said  the nature of his job includes  a great deal of                                                               
research in the area of development.   He has found that the high                                                               
cost  of  energy has  greatly  impacted  the community  in  three                                                               
areas:   transportation;  the ability  to gain  independence from                                                               
non-renewable energy;  and industry.   Although residents  do not                                                               
complain, his research indicates families  are moving in with one                                                               
another and people  are unable to afford travel  to Anchorage for                                                               
health care; in fact,  Bristol  Bay has a high rate of fatalities                                                               
from cancer.   Mr. Newson urged the committee to  find a solution                                                               
to help  Bristol Bay residents  gain access  to health care.   In                                                               
response to what should be done  with the state money for energy,                                                               
he said the money should  be invested into infrastructure such as                                                               
the $200 million Bristol Bay intertie.                                                                                          
                                                                                                                                
4:03:18 PM                                                                                                                    
                                                                                                                                
KIMBERLY WILLIAMS said she was  born and raised in Dillingham and                                                               
returned  after  obtaining her  education.    She listed  several                                                               
positions  she holds,  her community  service on  various boards,                                                               
and said she was speaking as  a community member.  She stated the                                                               
BBEDC  provided  money  through   her  tribe  for  assistance  to                                                               
families to pay electric bills.  During the first three and one-                                                                
half days  of the application  period, the tribe  received ninety                                                               
applications for a  $700 rebate.  The applications  were based on                                                               
"poverty  guidelines."   In fact,    69.7 percent  of the  school                                                               
children  in  the Dillingham  School  District  qualify for  free                                                               
breakfast and  lunch.   Ms. Williams  described how  support from                                                               
the  community  made a  middle  school  basketball tournament  in                                                               
Dillingham possible.  The FY  10 school budget set aside $500,000                                                               
for heating and electricity, which  is money taken away from kids                                                               
for their education.   She opined whatever  the legislature does,                                                               
there needs to be short-term  solutions for the immediate crisis.                                                               
Ms.  Williams related  the steps  her  family has  taken to  stop                                                               
spending money and  pointed out that where she  stops spending to                                                               
save,  the  loss of  revenue  hurts  community businesses.    She                                                               
strongly urged immediate action by the legislative.                                                                             
                                                                                                                                
4:08:00 PM                                                                                                                    
                                                                                                                                
JOE  FAITH  opined hydro  power  has  potential in  Bristol  Bay,                                                               
because the  bay has  the third  largest tide in  the world.   He                                                               
suggested the small  barge power generators working  on the Yukon                                                               
River could also work in  Dillingham.  Wind power generation also                                                               
has potential  in this area as  wind levels are similar  to those                                                               
in  Kotzebue and  Pilot  Point;  in fact,  the  Bristol Bay  Area                                                               
Health Corporation is working on a  wind project.  Mr. Faith said                                                               
he would also  like to see North Slope oil,  natural gas, and by-                                                               
products brought to a fuel station  on the Yukon River and barged                                                               
down to  Western Alaska.   He said,  "It makes little  sense that                                                               
the oil  is being shipped  3,000 miles down  to the Lower  48 and                                                               
then shipped  back to Western Alaska."   He gave his  support for                                                               
onshore  oil  development,  but   not  offshore  oil  development                                                               
because all of the fisheries of  the Bering Sea are worth over $1                                                               
billion per year, and  it is not worth the risk of  the loss of a                                                               
$1  billion  sustainable  industry.   Mr.  Faith  concluded  that                                                               
President Obama  has made renewable  energy an important  part of                                                               
his plan  to help restore  the economy and Alaska  should support                                                               
this effort as well.                                                                                                            
                                                                                                                                
4:10:28 PM                                                                                                                    
                                                                                                                                
JIMMY HURLEY  stated residents had  to "team  up" to save  gas so                                                               
they could  participate in  the fall moose  hunt; this  has meant                                                               
that some have no  moose.  In his work for  BBEDC he learned that                                                               
the number one thing  in Bristol Bay is fish and  they have to be                                                               
utilized.  In the long term,  he asked whether the salmon that go                                                               
to China could go to the villages.   Mr. Hurley said he was happy                                                               
to  see  a  movement  supporting   the  construction  of  [energy                                                               
generation] plants  in communities.   The  villages need  jobs or                                                               
residents will have to move to  Anchorage whether they want to or                                                               
not.                                                                                                                            
                                                                                                                                
4:13:06 PM                                                                                                                    
                                                                                                                                
DON  FORD stated  he has  lived in  Dillingham for  20 years  and                                                               
hopes  to stay  but  "right  now that's  debatable."   He  opined                                                               
short-term help  would be  to have  PEC available  to businesses,                                                               
schools,  the   hospital,  and   other  entities   necessary  for                                                               
existence in the  region.  For long-term  solutions, he suggested                                                               
[hydroelectric  power from]  Lake  Elba, wind  generation, and  a                                                               
combination of all  of the other sources discussed.   Although he                                                               
said he considers  himself middle income, he noted  80 percent of                                                               
residents are  at the poverty  level and both lower-  and middle-                                                               
income people are  really hurting now.  He re-stated  many of his                                                               
friends and  acquaintances are  leaving, but not  by choice.   On                                                               
the subject of  weatherization, he said his home is  15 years old                                                               
and is  considered to be  of good  construction, but while  he is                                                               
paying  the equivalent  of his  mortgage  just to  keep the  home                                                               
heated, he  can't pay  the up-front money  to replace  windows or                                                               
add  insulation.   Mr. Faith  stressed weatherization  would save                                                               
his family  money in  the long  term if  he could  participate in                                                               
this program.                                                                                                                   
                                                                                                                                
4:17:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON agreed  with Mr.  Ford's point  about home                                                               
energy building standards  that were based on $1  per gallon oil.                                                               
He said  this point is  also applicable to income  guidelines for                                                               
assistance to people in need.                                                                                                   
                                                                                                                                
4:18:25 PM                                                                                                                    
                                                                                                                                
FRANK  WOODS  pointed out  Alaska  is  an  urban state,  and  the                                                               
majority of the  population lives in urban Alaska.   However, the                                                               
rural areas are  the bread winners of the  state through tourism,                                                               
fisheries, oil and gas development,  and mineral development.  He                                                               
stated  there  is a  shortage  of  manpower, infrastructure,  and                                                               
resources  to manage  the existing  lands and  the use  of lands.                                                               
Decisions made for rural Alaska are  made in the urban centers of                                                               
Juneau,   Anchorage,  Fairbanks,   and   the  Railbelt,   without                                                               
representation from  rural areas.   He  said, "During  these hard                                                               
times,  it's time  to engage  ... and  its time  for us  to start                                                               
acting and  getting involved in  all that's happening  in Bristol                                                               
Bay."   Mr.  Woods cautioned  that, with  a population  of 6,000,                                                               
there  was not  enough manpower  and resources  in the  region to                                                               
manage existing  resources, let alone  any more development.   He                                                               
urged  legislators to  consider that  every dollar  spent now  is                                                               
going to be worth one thousand dollars twenty years from now.                                                                   
                                                                                                                                
4:20:40 PM                                                                                                                    
                                                                                                                                
WENDELL DOWNS, Pastor, Seventh-Day  Adventist Church, told of his                                                               
experience serving  all over the  state.   He said he  thinks the                                                               
pain is  felt in  many places,  such as  the [Mat-Su]  valley and                                                               
Wasilla,  but  in different  ways.    He suggested  a  short-term                                                               
solution is  to create legislation  to subsidize the cost  of gas                                                               
at  the pump.   This  would place  the state  in the  position of                                                               
"negotiator" with the different suppliers.   Contrary to this, if                                                               
the state  caps the price,  that may  limit the supply  and cause                                                               
problems in rural  areas.  However, if the gas  is subsidized and                                                               
the  state  is  negotiating  the  prices,  this  would  help  the                                                               
Railbelt communities,  as well  as the  residents of  Bristol Bay                                                               
and Kotzebue.   This would also  place the state in  the position                                                               
to work  on other issues,  such as  supply and demand,  and would                                                               
stimulate  the economy  across the  state by  stabilizing prices.                                                               
Pastor Downs stated  his preference that the state  just send the                                                               
oil to the rural communities.                                                                                                   
                                                                                                                                
4:23:26 PM                                                                                                                    
                                                                                                                                
BRIAN PAULING informed  the committee he spent  $12,000 since the                                                               
first of November on fuel.   Instead of sending this money out of                                                               
the community, residents need to  invest in renewable energy, and                                                               
have  training  about renewable  energy  available  at the  local                                                               
college.  He  listed his personal plans  for installing renewable                                                               
energy generators.   Mr. Pauling  stressed that  local investment                                                               
is critical  to keeping  businesses in  the community.   Further,                                                               
there  is no  point in  bringing in  outside technologies  unless                                                               
there is  a trained work force  to maintain them, thus  the "key"                                                               
is expanding the courses available at the college.                                                                              
                                                                                                                                
4:25:54 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  EDGMON  thanked  everyone  for  his/her  testimony  and                                                               
acknowledged the members in attendance,  and his staff, for their                                                               
work.                                                                                                                           
                                                                                                                                
4:26:54 PM                                                                                                                    
                                                                                                                              
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Energy meeting was adjourned at [4:27] p.m.                                                                

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