Legislature(2009 - 2010)BARNES 124
04/09/2009 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB163 | |
| HB182 | |
| HB191 | |
| HB148 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 191 | TELECONFERENCED | |
| *+ | HB 148 | TELECONFERENCED | |
| += | HB 163 | TELECONFERENCED | |
| += | HB 182 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
April 9, 2009
3:06 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Nancy Dahlstrom
Representative Kyle Johansen
Representative Jay Ramras
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
Representative Charisse Millett, Co-Chair
OTHER LEGISLATORS PRESENT
Representative Berta Gardner
COMMITTEE CALENDAR
HOUSE BILL NO. 163
"An Act clarifying the purpose of the Alaska Natural Gas
Development Authority; and relating to definitions of certain
terms in AS 41.41."
- MOVED HB 163 OUT OF COMMITTEE
HOUSE BILL NO. 182
"An Act establishing the Greater Railbelt Energy and
Transmission Corporation and relating to the corporation;
relating to transition, financial plan, and reporting
requirements regarding planning for the initial business
operations of the Greater Railbelt Energy and Transmission
Corporation; relating to a report on legislation regarding the
Regulatory Commission of Alaska and the Greater Railbelt Energy
and Transmission Corporation; authorizing the Alaska Energy
Authority to convey the Bradley Lake Hydroelectric Project and
the Alaska Intertie to the Greater Railbelt Energy and
Transmission Corporation; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 191
"An Act relating to nuclear energy production and transportation
of nuclear waste material; amending the definition of 'power
project' or 'project' as it relates to rural and statewide
energy programs and the Alaska Energy Authority; relating to the
alternative energy revolving loan fund and amending the
definition of 'alternative energy system' as it relates to that
fund and to the conservation of energy and materials; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 148
"An Act relating to a state energy use reduction plan and energy
efficiency improvement contracts and to energy audits of public
buildings conducted by the Department of Transportation and
Public Facilities; relating to agency capital budget requests;
establishing an energy efficiency grant fund in the Alaska
Housing Finance Corporation; and providing for an effective
date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 163
SHORT TITLE: ALASKA NATURAL GAS DEVELOPMENT AUTHORITY
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/02/09 (H) READ THE FIRST TIME - REFERRALS
03/02/09 (H) ENE, RES, FIN
03/28/09 (H) ENE AT 10:00 AM BARNES 124
03/28/09 (H) Heard & Held
03/28/09 (H) MINUTE(ENE)
04/09/09 (H) ENE AT 3:00 PM BARNES 124
BILL: HB 182
SHORT TITLE: RAILBELT ENERGY & TRANSMISSION CORP.
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/12/09 (H) READ THE FIRST TIME - REFERRALS
03/12/09 (H) ENE, L&C, FIN
03/26/09 (H) ENE AT 3:00 PM BARNES 124
03/26/09 (H) Heard & Held
03/26/09 (H) MINUTE(ENE)
04/09/09 (H) ENE AT 3:00 PM BARNES 124
BILL: HB 191
SHORT TITLE: NUCLEAR POWER PRODUCTION/WASTE TRANSPORT.
SPONSOR(s): REPRESENTATIVE(s) JOHNSON
03/18/09 (H) READ THE FIRST TIME - REFERRALS
03/18/09 (H) ENE, RES
04/09/09 (H) ENE AT 3:00 PM BARNES 124
BILL: HB 148
SHORT TITLE: ENERGY EFFICIENCY PLAN AND GRANT FUND
SPONSOR(s): REPRESENTATIVE(s) GARA
02/23/09 (H) READ THE FIRST TIME - REFERRALS
02/23/09 (H) ENE, STA, FIN
04/09/09 (H) ENE AT 3:00 PM BARNES 124
JOE BALASH, Special Staff Assistant
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 163 and
HB 182.
BOB FAVRETTO, Member
Alaska Natural Gas Development Authority (ANGDA)
Board of Directors
Department of Revenue (DOR)
Kenai, Alaska
POSITION STATEMENT: Testified on HB 163.
HAROLD HEINZE, Chief Executive Officer
Alaska Natural Gas Development Authority (ANGDA)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Provided testimony and answered questions
on HB 163.
TOM LAKOSH
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 163.
PAUL D. KENDALL
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 163.
PAUL FUHS
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 163.
JEANNE OSTNES, Staff
Representative Craig Johnson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 191 on behalf of the prime
sponsor of HB 191.
DONALD ANDERSON, Ph.D.
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 191.
MARVIN YODER
Palmer, Alaska
POSITION STATEMENT: Testified on HB 191.
REPRESENTATIVE LES GARA
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as the prime sponsor of HB 148.
JOEL ST. AUBIN, Engineer
Chief
Statewide Facilities
Office of the Commissioner
Department of Transportation & Public Facilities (DOT/PF
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
148.
ACTION NARRATIVE
3:06:56 PM
CO-CHAIR BRYCE EDGMON called the House Special Committee on
Energy meeting to order at 3:06 p.m. Representatives Dahlstrom,
Petersen, Tuck, Ramras, and Edgmon were present at the call to
order. Representative Johansen arrived as the meeting was in
progress. Also present was Representative Gardner.
HB 163-ALASKA NATURAL GAS DEVELOPMENT AUTHORITY
CO-CHAIR EDGMON announced that the first order of business would
be HOUSE BILL NO. 163, "An Act clarifying the purpose of the
Alaska Natural Gas Development Authority; and relating to
definitions of certain terms in AS 41.41."
3:08:23 PM
JOE BALASH, Special Staff Assistant, Office of the Governor,
informed the committee the governor introduced HB 163 to broaden
the authority of the Alaska Natural Gas Development Authority
(ANGDA). The authority originally was created with statutory
authority to take North Slope gas to tidewater. Previous
changes to the statutes in 2004 were made in order to also
review Cook Inlet in addition to Prince William Sound as a
tidewater destination. This bill would allow ANGDA to consider
gas supplies other than the North Slope for destinations in
Southcentral Alaska.
The committee took an at-ease from 3:10 p.m. to 3:11 p.m.
3:11:44 PM
CO-CHAIR EDGMON asked Representative Ramras to introduce his
amendment.
REPRESENTATIVE RAMRAS made a motion to adopt Amendment 1, as
follows:
Page 1, line 1, following "Authority;":
Insert "relating to prior approval by the
governor or the commissioner of revenue before the
exercise of certain powers of the Alaska Natural Gas
Development Authority;"
Page 2, following line 7:
Insert new bill sections to read:
"* Sec. 3. AS 41.41.200 is amended to read:
Sec. 41.41.200. Powers of the authority. In
furtherance of its corporate purposes, in addition to
its other powers, and subject to the approval by the
governor under AS 41.41.210, the authority may
(1) sue and be sued;
(2) adopt a seal;
(3) adopt, amend, and repeal bylaws and
regulations;
(4) make and execute contracts and other
instruments;
(5) in its own name acquire property,
lease, rent, convey, or acquire real and personal
property; a project site or part of a project site may
be acquired by eminent domain;
(6) acquire natural gas supplies;
(7) issue bonds and otherwise incur
indebtedness in accordance with AS 41.41.300 -
41.41.410 in order to pay the cost of a project;
(8) accept gifts, grants, or loans from and
enter into contracts or other transactions regarding
gifts, grants, or loans with a federal agency or an
agency or instrumentality of the state, a
municipality, private organization, or other source;
(9) enter into contracts or agreements with
a federal agency, agency or instrumentality of the
state, municipality, or public or private individual
or entity, with respect to the exercise of its powers;
(10) charge fees or other forms of
remuneration for the use of authority properties and
facilities;
(11) defend and indemnify a current or
former member of the board or an employee or agent of
the authority against the costs, expenses, judgments,
and liabilities as a result of actions taken in good
faith on behalf of the authority; and
(12) purchase insurance to protect its
assets, services, and employees against liabilities
that may arise from authority operations and
activities.
* Sec. 4. AS 41.41 is amended by adding a new
section to article 2 to read:
Sec. 41.41.210. Required approval. (a) The
authority may not exercise the power in
AS 41.41.200(5), (6), (7), (8), or (9) without the
prior written approval of the governor after the
governor finds that the project proposed or being
developed by the authority is in the best interest of
the state. The governor shall give written notice to
the authority of the approval or denial of approval.
(b) The authority may not exercise the power in
AS 41.41.200(4) without the prior written approval of
the commissioner of revenue after the commissioner of
revenue finds that the execution of the contract or
other instrument is in the best interest of the state.
The commissioner of revenue shall give written notice
to the authority of the approval or denial of
approval.
(c) The written approval or denial of approval
in (a) or (b) of this section is a final
administrative action for purposes of appeal to the
superior court."
Renumber the following bill sections accordingly.
CO-CHAIR EDGMON objected for the purpose of discussion.
3:11:58 PM
REPRESENTATIVE RAMRAS expressed increasing alarm at ANGDA's
recklessness and inability to "play well with others." He
offered his support for Governor Palin's efforts for an in-state
bullet line. He opined the state faces a unique situation, in
which the governor's project manager, Harry Noah, and the chief
executive officer of ANGDA, Harold Heinz, seem to disagree since
Harold Heinze seems to want to "pull the state in another
direction." He explained that HB 163 clarifies the purpose of
ANGDA, but also expands its authority. He referred members to
proposed section 4 of Amendment 1, and read:
The authority may not exercise the power in AS
41.41.200(5),(6),(7),(8), or (9) without the prior
written approval of the governor after the governor
finds that the project proposed or being developed by
the authority is in the best interest of the state.
The governor shall give written notice to the
authority of the approval or denial of approval.
REPRESENTATIVE RAMRAS described ANGDA as a dysfunctional group,
and one that is not following the instructions of the state. He
opined ANGDA has a spotty record of following its specific
instructions in the past six months. He suggested that this
amendment would give more control to the governor and represents
good public policy. With respect to other sections of Amendment
1, section 3 would address the Beluga to Fairbanks (B2F)
project. He recalled hearing pipeline safety staff's concern at
a recent energy convention over proposed black plastic pipe
being buried in the ground from Glenallen to Beluga. Thus, this
amendment will prevent the state from taking responsibility for
that project. He reiterated that proposed section 4 will place
ANGDA under the governor, at least during a period of time until
the state has more clarity of how ANGDA will function as a
productive quasi-entity within the state.
3:15:47 PM
MR. BALASH reviewed the amendment. He cautioned that he would
not speak for the administration or the governor on Amendment 1.
He pointed out that rarely does the governor make a finding in
statute, that those are typically duties assigned to a
commissioner with expertise in the matters at hand.
3:16:43 PM
REPRESENTATIVE RAMRAS stressed that in this instance it is in
the best interest of the state for the governor to have more
authority in this regard. He recalled a news report that ANGDA
failed to recognize the direction the state is headed on this
issue. He feared that ANGDA was trying to set energy policy for
the state. He preferred the governor provide leadership on the
issue of an in-state gas pipeline and not a committee.
3:17:45 PM
CO-CHAIR EDGMON pointed out that HB 163 has two more committees
of referral. He stated that he allowed Representative Ramras to
introduce Amendment 1 as a concept. He then asked
Representative Ramras to withdraw the amendment.
3:18:19 PM
REPRESENTATIVE RAMRAS withdrew Amendment 1.
CO-CHAIR EDGMON withdrew his objection.
3:18:38 PM
BOB FAVRETTO, Member, Alaska Natural Gas Development Authority
(ANGDA) Board of Directors, Department of Revenue (DOR), related
that he felt somewhat disturbed by Representative Ramras
comments. He stressed the importance of recent dialogue at the
ANGDA board meetings. He wished Representative Ramras had heard
dialogue the ANGDA board had at those recent meetings.
Additionally he suggested that Mr. Heinze could echo comments to
the board.
3:19:38 PM
MR. FAVRETTO, in response to Representative Ramras, answered
that the statutes clearly state that ANGDA has the authority
over the proposed in-state natural gas pipeline and not Harry
Noah, who is a representative appointed by the governor. He
explained that it was somewhat unclear initially at the meetings
as to the authority, but by the end of the meeting it was clear
that moving the pipeline forward is a shared goal of both Mr.
Heinze and Mr. Noah.
3:20:32 PM
HAROLD HEINZE, Chief Executive Officer, Alaska Natural Gas
Development Authority (ANGDA), Department of Revenue (DOR),
stated that he has not seen Amendment 1. He said that he takes
exception to the characterization by Representative Ramras with
respect to ANGDA. He offered that the past several months have
been difficult due to a number of restrictions made by the
administration. He explained that ANGDA has evolved from 2003,
and especially last year with the governor's challenge to
provide energy relief to communities in the Interior. Thus,
ANGDA's efforts to modify the spur line to Fairbanks using Cook
Inlet natural gas. Additionally, ANGDA revisited its long-term
plan with respect to propane, in an effort to develop an
opportunity to transport North Slope gas in the form of propane
from the Beaufort Sea to western Alaska, and along the highway
system to Fairbanks. Additionally, ANGDA's main focus has been
to continue to work with Denali and TransCanada on the proposed
gas pipeline. He expressed ANGDA's focus and emphasis on
capturing the benefits of the intrastate commerce and for the
state achieve the best consumer terms for intrastate commerce
requires the ANGDA participate in the open season. Further, he
opined that the routes under consideration for natural gas would
require intermediate steps to bridge the gap until the
availability of North Slope gas. He characterized ANGDA's
efforts as being on target with the governor's program. He said
he found it difficult to understand how ANGDA could be
considered unresponsive to the needs of the governor.
3:24:33 PM
MR. HEINZE stated the purpose of HB 163 is to clarify ANGDA's
long-term broad authority. He specified that many people
believe ANGDA's purpose is to build a project. However,
although it has that ability, ANGDA's emphasis is to move the
project forward in the early stages, reduce risk for the private
sector, and provide opportunities for financing so that the
ultimate consumer receives the benefit.
3:25:18 PM
REPRESENTATIVE RAMRAS asked Mr. Heinze to define ANGDA's
relationship with the governor's in-state gas pipeline chief,
Harry Noah.
MR. HEINZE answered that Mr. Noah has been charged to work on a
project for the governor that links the North Slope directly to
areas inside the state without any dependence on gas from a
large pipeline. He underscored ANGDA's cooperation and support
for the in-state gas pipeline chief.
3:26:50 PM
REPRESENTATIVE RAMRAS refined his question and specifically
asked whether he was "working with Mr. Noah" or if he was
"deferential to Mr. Noah and the governor" with respect to
building the proposed in-state gas bullet line.
MR. HEINZE answered that ANGDA has not been working on a bullet
line or a line directly to the North Slope, but ANGDA supports
that effort. He offered that the bullet line is one of several
important options for the state. At the same time, ANGDA will
pursue on a parallel track other efforts it has begun, such as
to pursue the spur line, which would tap into a main line to
Canada to bring some of the North Slope gas to markets in
Southcentral Alaska. He conceded that a spur line may not
benefit communities such as Fairbanks but will benefit other
communities in the Cook Inlet area providing significant
advantages over a bullet line. In further response to
Representative Ramras, Mr. Heinze said it seems that AS 41.41 is
clear on authority. He referred to a memorandum dated April 7,
2009 from Lisa Weissler and Larry Ostrovsky, Department of Law,
that clarifies the actions ANGDA has taken are well within the
statutory authority. He said he was not aware of any
instructions from the governor that are counter to anything in
the statutes.
3:28:12 PM
REPRESENTATIVE RAMRAS repeated his question, and asked whether
Mr. Heinze is deferential to Mr. Noah.
3:29:33 PM
MR. HEINZE, in further response to Representative Ramras,
explained he personally reports to the Board of Directors of
ANGDA. He highlighted that the board has been very clear that
ANGDA is to work in full cooperation with the governor's chief
of the in-state pipeline. He understood that Mr. Noah
represents the project to go to the North Slope directly for
gas. At the same time, the board has not accepted that Mr. Noah
has authority over matters that are prescribed in statute for
ANGDA's authority. He offered his belief that AS 41.41 is
clear, that he also submitted a memorandum (memo) from the
attorney general that ascertains that ANGDA actions are within
its authority.
3:30:24 PM
MR. HEINZE then drew attention to the previously mentioned
memorandum from the assistant attorneys general dated April 7,
2009. He offered his belief that the memo makes it clear that
ANGDA has operated within its statutory authority and will
continue to do so. He said in the long run that the bill will
be helpful with respect to the bonding and banking instruments.
He asked members to consider passing HB 163.
3:31:41 PM
TOM LAKOSH began his testimony by first qualifying that he is
representing himself and is not an attorney. He understood that
ANGDA has determined it is an undue burden for ratepayers in
Southcentral Alaska to build a bullet line. He also understood
that Representative Ramras is interested in a subsidy for his
constituents prior to building the main gas pipeline. He opined
that the public interest and ratepayers would be better served
to stop the export of natural gas and developing the rest of the
gas from Cook Inlet and still provide free propane to Fairbanks.
He suggested state exploration and production in Cook Inlet
would be much cheaper than a spur line or a bullet line. He
further suggested exploring other options for Fairbanks for
heating and gas supply.
3:35:23 PM
PAUL D. KENDALL commented that all Alaskans seem to talk about
is natural gas. He said he thinks that Anchorage and the
Matanuska-Susitna area could be converted to electric by using
water and wind technology. He offered that if the state is
going to propose a gas pipeline that he would like to see the
specific proposal. He stated he would like to see an
itemization of the name of each user, the amount of the use, and
certify the use, such as a list of schools and the amount of
usage. This would show the public who is using the gas and then
the entities can pay for it. If school districts want to use
fossil fuels, then he should not have to pay for their use of
outdated technology, he opined. Additionally, he further stated
he would like to see the total revenue and itemized expenditures
for the costs of securing natural or piped gas. In closing, he
said he thinks the overall problem stems from not having a
defined energy policy. He recommended a four to five day forum
to assess wind, electric, and solar energy. He stressed the
importance of an open process and not to allow proprietary or
secret information.
3:40:39 PM
PAUL FUHS stated that he is representing himself, as a consumer
of gas in Southcentral. He presented written information from
the Western Alaska Energy Corridor, which was presented as the
reason for the drafting of HB 163. He related that he had
discussed an idea with some people at the Donlin Creek LLC, a
Barrick NovaGold company with respect to running a spur line to
pick up the big mines. [The Donlin Creek LLC proposes to work
with the residents of the Yukon Kuskokwim to develop a gold mine
13 miles north of the Middle Kuskokwim River village of Crooked
Creek.] He expanded by explaining this was a potential means of
supplying villages in Western Alaska with energy. He opined
that ANGDA's authority was limited geographically. Thus, HB 163
was drafted to remedy that issue. He stated that this bill
would allow ANGDA to work in other parts of the state outside of
the main pipeline corridor. He opined that another instance
might be if a gas pipeline goes through Canada that a smaller
pipeline could be built to Haines or down the Taku River to
Southeast Alaska. He noted that the statutes provide that the
board is appointed by the governor. He also offered his belief
that a problem of cooperation between ANGDA and the in-state
pipeline does not exist.
3:42:44 PM
MR. FUHS, in response to Representative Johansen, stated he
supports HB 163 to allow ANGDA to work in other areas of the
state. He pointed out that the letter on the back of his
handout is from Senator Lyman Hoffman asking ANGDA to analyze
this proposal and perform a baseline analysis for feasibility.
He stated that the Department of Law answered that the statutes
do not allow ANGDA to operate outside the pipeline corridor.
3:43:10 PM
REPRESENTATIVE JOHANSEN stated he thought Mr. Fuhs should have
provided the information sooner to allow members to digest new
information.
MR FUHS apologized.
3:44:02 PM
CO-CHAIR EDGMON, after first determining no one else wished to
testify, closed public testimony on HB 163.
3:44:12 PM
REPRESENTATIVE RAMRAS commented that he did not hear an answer
from Mr. Heinze. He stated that it was unclear how ANGDA
operates, but the bill expands the authority of ANGDA. He said
that he would not support HB 163. He opined that the bill gives
more authority to ANGDA, when ANGDA has not currently
demonstrated it can move responsibly with the administration.
3:45:53 PM
REPRESENTATIVE DAHLSTROM moved to report HB 163, Version 26-
GH1057\A out of committee with individual recommendations and
the accompanying fiscal notes.
3:46:10 PM
REPRESENTATIVE RAMRAS objected.
A roll call vote was taken. Representatives Johansen, Tuck,
Dahlstrom, and Edgmon voted in favor of HB 163. Representatives
Ramras and Petersen voted against it. Therefore, HB 163 was
reported out of the House Special Committee on Energy by a vote
of 4-2.
3:47:19 PM
The committee took an at-ease from 3:46 p.m. to 3:48 p.m.
HB 182-RAILBELT ENERGY & TRANSMISSION CORP.
3:48:39 PM
CO-CHAIR EDGMON called the meeting back to order.
CO-CHAIR EDGMON announced that the next order of business would
be HOUSE BILL NO. 182, "An Act establishing the Greater Railbelt
Energy and Transmission Corporation and relating to the
corporation; relating to transition, financial plan, and
reporting requirements regarding planning for the initial
business operations of the Greater Railbelt Energy and
Transmission Corporation; relating to a report on legislation
regarding the Regulatory Commission of Alaska and the Greater
Railbelt Energy and Transmission Corporation; authorizing the
Alaska Energy Authority to convey the Bradley Lake Hydroelectric
Project and the Alaska Intertie to the Greater Railbelt Energy
and Transmission Corporation; and providing for an effective
date."
3:48:47 PM
MR. BALASH presented HB 182. He explained that HB 182 is the
result of a joint effort by the governor, the utilities, and
Alaska Energy Authority (AEA) to bring joint planning,
operation, and investment for the Railbelt electric grid. He
offered that this effort has spanned the past year and a half
with ongoing discussions being held with the utilities. He
explained the proposed bill creates a two-step process, such
that the corporate governance structure would continue during
the legislative interim, while an integrated resource plan is
being undertaken by the AEA. He highlighted that the utilities'
corporate board would develop a transition plan and finance plan
for the next legislative session. He stated the purpose of the
bill is to move the Railbelt forward to the next generation. He
remarked that the boards of all six utilities met last week and
decided they wanted to participate in developing the governance
structure, as well as the outcome of the integrated resource
plan (IRP). Thus, the boards request to have HB 182 set aside
this year, to form a task force, and put together a plan. He
anticipated the board would hold several meetings and make
recommendations on the corporate governance structure by October
1. This timeline would allow the administration to continue to
work on the IRP and to work on the transition and finance plan,
culminating in a single step plan next January. He said he
hoped to furnish a letter signed by the chairs of all six
Railbelt utility boards soon supporting this change. He offered
to provide it to the committee co-chairs.
3:52:16 PM
CO-CHAIR EDGMON announced HB 182 would be held over.
HB 191-NUCLEAR POWER PRODUCTION/WASTE TRANSPORT.
3:53:15 PM
CO-CHAIR EDGMON announced that the next order of business would
be HOUSE BILL NO. 191, "An Act relating to nuclear energy
production and transportation of nuclear waste material;
amending the definition of 'power project' or 'project' as it
relates to rural and statewide energy programs and the Alaska
Energy Authority; relating to the alternative energy revolving
loan fund and amending the definition of 'alternative energy
system' as it relates to that fund and to the conservation of
energy and materials; and providing for an effective date."
3:53:22 PM
JEANNE OSTNES, Staff, to Representative Craig Johnson, Alaska
State Legislature, Presented HB 191 on behalf of Representative
Craig Johnson, prime sponsor of HB 191. She explained that HB
191 would update statutes and level the playing field for all
types of energy, including nuclear energy. She stated that the
Alaska statutes and regulations do not address alternative fuel
sources. She referred to the dictionary definition of
alternative fuel, which includes energy types that are
unconventional and non-traditional such as nuclear energy. She
noted items in members' packets, including reports prepared by
Donald Anderson, Ph.D., and information related to the current
statutes, as well as comparisons between the bill and the
proposed committee substitute. She explained that the Division
of Investments indicates that Alternative Energy loans range up
to 15 percent for those loans. Thus, the rate is capped at 8
percent, similar to HB 196. Additionally, she indicated that
the sweep has been removed.
3:55:44 PM
REPRESENTATIVE JOHANSEN moved to adopt the proposed committee
substitute (CS) for HB 191, Version 25-LS0185\E, Kane, 4/07/09,
as the work draft. There being no objection, Version E was
before the committee.
3:55:59 PM
CO-CHAIR EDGMON objected for the purpose of discussion.
3:56:08 PM
MS. OSTNES stated that the energy guide prepared by the AEA
lists nuclear energy as one of the technologies that is good for
the state, with Galena listed as a community that is closest to
having a "suitcase" nuclear reactor for energy. She further
stated that Dittman Research Association of Alaska, in
Anchorage, conducted a poll in March 2009, and reported that
respondents indicated a preference for nuclear energy over oil,
coal, and tidal power. She mentioned that nuclear energy is
also becoming safer. She opined that Galena is targeting 2015
as the earliest date for completing the Nuclear Energy
Regulatory Committee process. She reiterated that HB 191 would
amend the statute so nuclear energy can be considered.
3:57:42 PM
REPRESENTATIVE PETERSEN asked if nuclear energy is considered an
alternative form of energy, whether Galena or other areas would
be able to apply for state loans and grants.
3:58:14 PM
MS. OSTNES answered yes.
3:58:22 PM
REPRESENTATIVE PETERSEN asked what size is the plant and cost
under consideration in Galena.
MS. OSTNES answered that the plant would be 10 megawatts, but
she was not certain of the cost.
DONALD ANDERSON, Ph.D., read a prepared statement:
I am testifying today as a citizen interested in
energy production, but with no fiduciary interest
beyond that of the regular household consumer. I am
not a nuclear engineer, although my education included
some coursework in that area. I am here to ask you to
support HB 191. I consider this bill a cleanup of
state statutes, and it is designed to level the energy
production playing field. We badly need to allow
Alaskans to choose their generating technology based
on economic, safety, health, and reliability criteria.
Under current law what may be the best technology in
some cases is not under active consideration.
Specifically, use of nuclear energy as the heat source
to drive generating turbines has some specific
advantages for locations where fuel transportation is
costly or sporadic. It also provides a steady,
reliable source of baseload power, unlike wind, or
tides, or the sun. Nuclear power plants cost a great
deal, but fuel costs are very low. The energy density
of the fuel is 2.7 million times as much as coal. The
resulting overall costs are about the same as coal.
The resulting overall costs are about the same as coal
fired power, and much lower than liquid fuel or
natural gas, although these are location dependent.
At present the smallest reactor design being prepared
for licensing is the 10 megawatt unit proposed for
Galena. This is far larger than needed by the smaller
Alaskan villages, but these small units may be
appropriate in many locations around the state such
as: Bethel or Copper Valley, Cordova, Dillingham,
Galena, Kodiak, Kotzebue, Naknek, Nome, Tok,
Unalakleet, Unalaska, and Yakatat.
Jeanne Ostnes has been kind enough to duplicate some
material I have written, so it could be included in
your packets. Although I doubt you have time to read
much before the end of the session, you might put a
check mark on the paper I prepared for the board of
Chugach Electric giving some history and background on
nuclear power and a paper I prepared on the disposal
of high-level nuclear waste.
I hope you will promptly move HB 191 forward. The
lack of a full range of energy options means plans may
be delayed, unnecessarily expensive, or less safe than
they otherwise would be. Thanks for your attention.
I'll answer any questions to the extent I can do so.
4:02:21 PM
MARVIN YODER, stated that he previously lived in Galena, and
requested the bill in order to add options for Alaska. He
characterized Alaska as a diverse state and noted that Galena
looked at options, but cannot use wind or hydroelectric power.
He explained that the U.S. Department of Energy prepared a study
that evaluated options and suggested nuclear power as a cost
effective measure for Galena. He related the purpose of the
bill is to level the playing field and make sure all options are
available. He clarified that other options may be available to
other communities. He provided details, such that three
companies offer small nuclear reactors. He compared the main
nuclear plants being built in the U.S. which are about 15
megawatts, with the current Railbelt needs at only 800
megawatts. He offered that Galena is not considering a large
scale nuclear project but rather the projects would be small
regional ones that may connect some villages to small grids. He
reiterated the purpose is to reduce energy costs to small
villages and as an alternative.
4:04:27 PM
REPRESENTATIVE DAHLSTROM asked for clarification that this bill
was at his request.
MR. YODER answered that last year he reviewed the statutes that
pertained to nuclear energy. He discovered Representative
Johnson introduced a bill and joined his efforts in progress.
In further response to Representative Dahlstrom, Mr. Yoder
explained that Mr. Don Anderson and he had worked on this issue.
4:05:30 PM
CO-CHAIR EDGMON asked for capital costs for smaller nuclear
facilities that range approximately 10 megawatts.
4:05:38 PM
MR. YODER answered that Toshiba is currently revising cost
estimates, but he recalled some years ago that a 10 or 50
megawatt facility would be amortized over 30 years for a cost of
6 or 7 cents a kilowatt. He projected the costs for a 10
megawatt facility would be about three times that due to the
economies of scale. He advised he requested an update on the
two year old figures, but estimated that amortizing the
operating and capital costs over 30 years would be 20 cents and
the 50 megawatt under 10 cents per kilowatt hour (Kwh).
4:06:49 PM
CO-CHAIR EDGMON further asked for the bricks and mortar capital
costs associated with the 10 megawatt facility.
4:06:55 PM
MR. YODER answered the original estimate came in at $2,500 per
kilowatt for the 50 megawatt unit, calculated as part of the
whole project. In further response to Co-Chair Edgmon, Mr.
Yoder clarified that a 50 megawatt unit at $2,500 per kilowatt
would cost $125 million. He speculated the overall costs would
probably range from $150 to $200 million by project completion.
4:07:24 PM
MS. OSTNES offered that Galena currently pays about 70 cents per
Kwh. She explained that the federal stimulus funds may be
available for alternative energy, and Alaska could qualify if
nuclear is identified as an alternative fuel. She referred to a
letter of support in members' packets from the Alaska Power
Association (APA), which is the statewide trade association for
the electric utilities that supply power to many communities.
She mentioned that APA outlined that the statutes need to be
updated or "contemporized," and it recognizes that communities
need to have flexibility to choose what works best for them.
4:08:44 PM
REPRESENTATIVE PETERSEN asked what the plan is for the spent
nuclear waste or rods.
MR. YODER answered that according to Toshiba, the nuclear
component and sodium coolant would be sealed in a container.
Thus, the plan would be to send the sealed container outside
Alaska at the end of 30 years.
4:09:58 PM
REPRESENTATIVE PETERSEN pointed out that he was not aware of any
location currently for disposal of nuclear waste. He expressed
concern that if the facility was built and at the end of the 30
year period no disposal site was identified, that Alaska would
have to dispose of the nuclear waste in-state.
4:10:14 PM
MR. YODER agreed. He understood that nuclear waste disposal
presents a problem. He further understood that a program has
been initiated to recycle nuclear waste, which he supports. He
opined that such a program would reduce the volume and
radioactivity by 90 percent. He pointed out that the proposed
nuclear facility would have the capacity to burn recycled
nuclear fuel. He offered his belief that some other countries
currently are successfully reducing waste. He acknowledged that
the United States has a problem, but the U.S. has been charging
each nuclear plant "backend" fees so the federal government has
$5 billion to sort out the issue of nuclear waste disposal, but
has not done so due to political reasons.
4:11:10 PM
CO-CHAIR EDGMON held over HB 191 for further discussion. He
reiterated that he previously removed his objection and the CS
Version 25-LS0185\E, Kane, 4/07/09, is before the committee.
HB 148-ENERGY EFFICIENCY PLAN AND GRANT FUND
4:12:15 PM
CO-CHAIR EDGMON announced that the final order of business would
be HOUSE BILL NO. 148, "An Act relating to a state energy use
reduction plan and energy efficiency improvement contracts and
to energy audits of public buildings conducted by the Department
of Transportation and Public Facilities; relating to agency
capital budget requests; establishing an energy efficiency grant
fund in the Alaska Housing Finance Corporation; and providing
for an effective date."
4:12:39 PM
REPRESENTATIVE LES GARA, Alaska State Legislature, prime
sponsor, introduced HB 148. He explained that he has worked
with Representative Thomas to put together an energy efficiency
bill. He pointed out that most states have a statewide energy
plan, but Alaska does not. He pointed out an energy plan is not
just a piece of paper. He recalled that alternative energy
includes solar, wind, and nuclear power, which are alternatives
to fossil fuels. However, the best way to reduce emissions is
to reduce overall energy usage. He stated that energy
efficiency is considered the fifth fuel, is termed "negawatts,"
and saves money. He pointed out that a pilot project in
Anchorage estimates it will save $1 million per year through
energy use by changing its lighting. He pointed out changing
lighting is the fastest way to reduce energy costs.
REPRESENTATIVE GARA explained that HB 148 has two main
components. One is to create a grant fund, similar to the
Renewable Energy Fund, to fund construction and renovation
projects for non-state entities, such as municipalities. The
grant fund would be targeted to those projects that will provide
the greatest benefit per dollar spent. He also recognized the
legislature would need to decide the appropriate funding level
for the grant fund. Additionally, another component requires
the state to prepare and adopt an energy plan. The bill
requires departments to focus on projects that will pay for
themselves within 15 years, and requires the Department of
Transportation & Public Facilities (DOT/PF) to manage public
facilities using standards. He pointed out that one applicable
standard is the International Energy Conservation Code (IECC).
He offered that the bill encourages the use of performance
contracting, which is a way for state agencies to realize cost
savings without having to pay for them in advance. He explained
performance contracting such that the state would hire a private
contractor, who is then paid from a portion of the energy
savings. He provided an example, such as has been done in a
pilot program at the Dimond Courthouse, as well as three other
locations in the state.
REPRESENTATIVE GARA opined that committee members are aware of
the need for a plan, and that other side benefits exist. He
highlighted that the construction industry is moving toward
using the IECC; AHFC has adopted the IECC code for residential
properties, although he admitted this bill does not apply to
residential properties. He offered other support for the IECC,
such as the Alaska Homebuilders Association's support, that the
Alaska Housing Finance Corporation (AHFC) is also using the IECC
on construction it finances. He reiterated the components: the
grant fund and the energy plan to require energy efficiency
construction and retrofits. He opined that in the long run the
bill's fiscal note is a negative. However, these changes will
not happen without requirements in statute. He suggested the
legislature's focus is on the current cost, while this bill is
geared to look at the state's cost in 10 or 15 years. He
remarked that he worked closely with DOT&PF on the bill, but
that he is unsure who will administer the grant fund since the
state does not currently have an energy agency. He noted that
the Alaska Energy Authority (AEA) has held a limited role but it
has been expanding its role, and that AHFC has performed energy
efficiencies in residences, but does not perform energy
efficiencies in commercial buildings. He offered that several
knowledgeable agencies have experts, such as the DOT/PF, but at
this time the key agency has not identified. He offered his
view that HB 148 would force the state to plan and it would save
money.
4:20:34 PM
REPRESENTATIVE TUCK asked how the pilot program is functioning
for the Dimond Courthouse.
REPRESENTATIVE GARA deferred to DOT/PF to address the Dimond
Courthouse. However, he explained that part of the proposed
energy plan will ask the state to use performance contracting if
cost-effective.
4:21:23 PM
REPRESENTATIVE RAMRAS inquired as to whether Representative Gara
is also working with co-chairs of the House Special Committee on
Energy.
REPRESENTATIVE GARA answered that he has been working with
Representative Thomas and with Senator Wielechowski's office.
4:21:55 PM
REPRESENTATIVE JOHANSEN referred to page 3, lines 4-5, of the
bill which would give a priority to projects that serve
municipalities or unincorporated communities with a population
of less than 15,000. He asked whether greater cost savings
could be had in larger communities.
REPRESENTATIVE GARA offered that the grants would be awarded by
considering three factors: the highest level of energy savings,
priority to small communities since the cost of energy is
generally much higher than in large communities, and encourage
communities to seek funding from other sources. He elaborated
that larger communities also have larger tax bases than smaller
communities.
4:24:03 PM
REPRESENTATIVE JOHANSEN referred to page 2, lines 27-28, and to
page 4, line 18, of the bill which lists standards. He asked
for clarification on the various standards in HB 148.
REPRESENTATIVE GARA referred to the first option on page 2, for
new construction projects to qualify lists an option to the IECC
or to the Leadership in Energy and Environmental Design (LEED)
standards. He explained that both building standards are listed
because some agencies, such as the university, or municipalities
currently use one or the other standard. He opined that both
standards are highly regarded energy efficiency standards and if
a local government has already adopted one, that the bill would
recognize that standard can be used. However, the IECC is only
mentioned in proposed section 44.42.067 which is the energy plan
portion of the bill. Thus, if the state will undergo a large
construction project, it must pick one or the other. He opined
that the IECC is the more widely accepted.
4:25:59 PM
JOEL ST. AUBIN, Engineer, Chief, Statewide Facilities,
Department of Transportation & Public Facilities (DOT/PF, stated
he was available for questions.
4:26:27 PM
REPRESENTATIVE RAMRAS asked how much more it would cost to
construct a building using LEED standards and if this bill
requires the LEED standard be used to retrofit a building.
MR. ST. AUBIN answered that he would need to look at a specific
project to determine the cost estimate. However, to meet the
LEED certification on a current project in Bethel, Alaska will
cost the DOT&PF an additional $250,000. He stated that the cost
is less than a 1 percent increase.
4:27:17 PM
CO-CHAIR EDGMON asked for the size of the building in the
specified project.
MR. ST. AUBIN responded that it the project is roughly a 20,000
square foot building, with a budget of $16 million.
REPRESENTATIVE GARA reiterated that the bill does not apply to
private buildings. He added that unless a municipality has
preferred the LEED over the IECC standard that it can choose to
follow LEED. He added that it would be a local decision and
that retrofitting is not covered under HB 148, except for state
buildings that estimate cost savings over 15 years garner
savings more than the cost of the retrofit.
4:28:19 PM
REPRESENTATIVE PETERSEN asked for the average pay back time if
standards are increased to LEED standards.
REPRESENTATIVE GARA stated he was unsure of the average cost.
He opined that often LEED considers insulation such as windows.
However, he remarked that the lighting efficiency is generally
about two years. Thus, the bill is important just in terms of
lighting.
4:30:02 PM
REPRESENTATIVE GARA, in response to Co-Chair Edgmon, suggested
that during an expanded hearing that it would be useful to bring
in cold climate experts for future testimony. He offered his
belief that they do support IECC standards. However, he agreed
some minor elements of the codes do not make sense, such as the
preference for white, which is more energy efficient in warmer
climates, but it does not make sense. He remarked that the bill
addresses aspects of the code that do not make sense.
4:30:58 PM
REPRESENTATIVE GARA concluded that the bill represents a lot of
work, but is comprehensive. He encouraged committee to at least
consider working on the lighting aspect.
4:32:28 PM
CO-CHAIR EDGMON requested further information and any back-up.
REPRESENTATIVE TUCK related that he serves on the Anchorage
School District School Board, which had six schools in its pilot
program. He offered the results were amazing savings. He
commented that if the state can make it easier for schools that
it could free up some money for other educational purposes.
CO-CHAIR EDGMON announced that HB 148 would be held over for
further consideration.
4:33:59 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 4:33 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSHB182(ENE) Legal Memo.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 182 |
| Changes from HB191 to CS.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| CSHB182(ENE).pdf |
HENE 4/9/2009 3:00:00 PM |
HB 182 |
| HB148 Leg Reseaarch Dec 2008.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 148 |
| HB148 Leg Research Feb 2009.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 148 |
| HB148 Sectional.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 148 |
| HB148 Sponsor Statement.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 148 |
| HB148 Fiscal Note.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 148 |
| HB163 Fiscal Note 1.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 163 |
| HB163 Fiscal Note 2.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 163 |
| HB148 Fiscal Note2.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 148 |
| HB191 Anchorage.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| HB191 CS.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| HB191 Fiscal Note.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| HB191 Fiscal Note2.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| Hb191 Generation Reactors.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| Hb191 Licensing.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| HB191 Power Point.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| HB191 Nuclear Waste.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |
| HB191 Sponsor Statement.pdf |
HENE 4/9/2009 3:00:00 PM |
HB 191 |