Legislature(2009 - 2010)Bethel
05/29/2009 01:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB218|| HB219 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | HB 218 | ||
| *+ | HB 219 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
Bethel, Alaska
May 29, 2009
1:11 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Nancy Dahlstrom
Representative Kyle Johansen
Representative Jay Ramras
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Mike Chenault
Representative Bill Stoltze
Representative Bob Herron
COMMITTEE CALENDAR
HOUSE BILL NO. 218
"An Act establishing and relating to the Department of Energy
and to the board of directors of the Alaska Energy Authority;
transferring the Alaska Energy Authority and the Alaska Natural
Gas Authority to the Department of Energy; and transferring the
home energy and weatherization program to the Department of
Energy."
-HEARD & HELD
HOUSE BILL NO. 219
"An Act relating to the renewable energy grant fund."
-HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 218
SHORT TITLE: CREATING DEPT OF ENERGY/AEA BD
SPONSOR(s): ENERGY
04/06/09 (H) READ THE FIRST TIME - REFERRALS
04/06/09 (H) ENE, FIN
05/29/09 (H) ENE AT 1:00 PM Bethel
BILL: HB 219
SHORT TITLE: RENEWABLE ENERGY GRANT REQUIREMENTS
SPONSOR(s): ENERGY
04/06/09 (H) READ THE FIRST TIME - REFERRALS
04/06/09 (H) ENE, RES, FIN
05/29/09 (H) ENE AT 1:00 PM Bethel
WITNESS REGISTER
BOB CHARLES, Community Development Coordinator
Association of Village Council Presidents (ACVP);
President, Nuvista Light and Electric Cooperative, Inc.
Bethel, Alaska
POSITION STATEMENT: Provided remarks regarding energy in rural
Alaska.
MYRON NANENG, SR, President
Association of Village Council Presidents (ACVP)
Bethel, Alaska
POSITION STATEMENT: Provided testimony on the energy crisis in
rural Alaska.
GENE PETOLA, President/CEO
Yukon-Kuskokwim Health Corporation (YKHC)
Bethel, Alaska
POSITION STATEMENT: Provided testimony on the energy crisis in
rural Alaska.
FELIX HESS, Board Secretary
Calista Corporation
Anchorage, Alaska
POSITION STATEMENT: Provided testimony on the energy crisis in
rural Alaska.
ROBERT NICK, Chairman
AVCP Regional Housing Authority Board
AVCP Regional Housing Authority
Nunapitchuk, Alaska
POSITION STATEMENT: Provided testimony on the energy crisis in
rural Alaska.
RON HOFFMAN, CEO
ACVP Regional Housing Authority
Bethel, Alaska
POSITION STATEMENT: Provided comments during discussion of the
energy problems of the state, particularly in the rural areas.
ELAINE BROWN
NorthStar Gas, LLC
Anchorage, Alaska
POSITION STATEMENT: Provided comments during discussion of the
energy crisis in rural Alaska.
MEERA KOHLER, President/CEO
Alaska Village Electric Cooperative (AVEC)
Anchorage, Alaska
POSITION STATEMENT: Suggested pooling all power and selling it
to utilities at a uniform rate.
DEBORAH VO, Rural Development Specialist
Yukon Delta Fisheries Development Association (YDFDA)
Anchorage, Alaska
POSITION STATEMENT: Testified that affordable energy is an
important part of creating thriving communities.
DENNIS CLINE
Bethel, Alaska
POSITION STATEMENT: Discussed the energy crisis those in rural
Alaska face.
IVAN IVAN
Akiak Native Community
Akiak, Alaska
POSITION STATEMENT: Discussed the energy crisis those in rural
Alaska face.
TIM MEYERS
Myers Farms
Bethel, Alaska
POSITION STATEMENT: Related his success with new farming and
construction methods that can help with the energy crisis in
rural Alaska.
GEORGE GUY, Business Manager
Kwethluk, Incorporated
Kwethluk, Alaska
POSITION STATEMENT: Expressed the need for the state's policies
and procedures to change in order to address energy emergencies
in rural Alaska.
DAVE TRANTHAM
Bethel, Alaska
POSITION STATEMENT: Discussed the energy crisis facing those in
the Bethel region.
WILLIE KEPPEL
Bethel, Alaska
POSITION STATEMENT: Discussed the energy crisis facing those in
the Bethel region.
SUE TRANTHAM
Askinuk Corporation of Scammon Bay
Bethel, Alaska
POSITION STATEMENT: Discussed the energy crisis in rural
Alaska.
DAN LEINBERGER, Vice Mayor
City of Bethel
Bethel, Alaska
POSITION STATEMENT: Discussed the energy crisis in rural
Alaska.
GEORGE LAMONT
Tuluksak, Alaska
POSITION STATEMENT: Discussed the energy crisis in rural
Alaska.
LAUREN WILLIAMS (PH)
Alaska Municipal League
Bethel, Alaska
POSITION STATEMENT: Discussed the energy crisis in rural
Alaska.
NORMAN AYAGALRIA
Bethel, Alaska
POSITION STATEMENT: Discussed the energy conservation methods
he has implemented and the positive results of them.
ERIC MIDDLEBROOK
Bethel, Alaska
POSITION STATEMENT: During discussion of the energy crisis in
rural Alaska, related the possibility of a pilot study for a
natural gas delivery project.
RAYMOND PETE
Bethel, Alaska
POSITION STATEMENT: Discussed the energy crisis in rural
Alaska.
JERRY DRAKE, Executive Director
Bethel Community Services Foundation
Bethel, Alaska
POSITION STATEMENT: Expressed the need to research inexpensive,
reliable, and easily maintained off-the-shelf [alternative
energy].
ACTION NARRATIVE
1:11:56 PM
CO-CHAIR BRYCE EDGMON called the House Special Committee on
Energy meeting to order at 1:11 p.m. Representatives Edgmon,
Millett, Dahlstrom, Johansen, Ramras, Peterson, and Tuck were
present at the call to order. Also in attendance were
Representative Chenault, Stoltze, and Herron.
1:12:59 PM
CO-CHAIR EDGMON reviewed the parameters of the meeting in terms
of protocol and testimony. Members in attendance then
introduced themselves and made brief comments regarding rural
Alaska and energy. Co-Chair Edgmon recognized the presence of
Former Representative Ivan Ivan and Alaska Energy Authority
(AEA) Executive Director Steve Haagenson as well as other AEA
staff.
HB 218-CREATING DEPT OF ENERGY/AEA BD
HB 219-RENEWABLE ENERGY GRANT REQUIREMENTS
1:29:04 PM
CO-CHAIR MILLETT announced that the only order of business would
be HOUSE BILL NO. 218, "An Act establishing and relating to the
Department of Energy and to the board of directors of the Alaska
Energy Authority; transferring the Alaska Energy Authority and
the Alaska Natural Gas Authority to the Department of Energy;
and transferring the home energy and weatherization program to
the Department of Energy." and HOUSE BILL NO. 219, "An Act
relating to the renewable energy grant fund."
CO-CHAIR MILLETT invited comments on the legislation before it
as well as the stimulus funds. She related her understanding,
from comments she has heard, that energy has risen to a level
that it should be a cabinet level position. Therefore, HB 218
was introduced to form a Department of Energy to house a one-
stop shop for energy. The other legislation before the
committee, HB 219, is cleanup legislation that proposes some
parameters to make projects more successful, including hiring an
economist with experience in renewable energy projects. Co-
Chair Millett characterized both pieces of legislation as works
in progress.
CO-CHAIR EDGMON invited written comments and testimony.
1:33:37 PM
BOB CHARLES, Community Development Coordinator, Association of
Village Council Presidents (ACVP); President, Nuvista Light and
Electric Cooperative, Inc., informed the committee that the ACVP
regional energy plan was charged by leadership to develop a
sustainable energy plan by combining resources to review
conventional and nonconventional renewable energy development
and identify planning and deployment strategies. He noted that
during the process, a fuel tank task force was developed. Mr.
Charles related the three goals and deployment objectives
specific to energy. The first goal is to execute economic
stability by developing integrated energy solutions. He
clarified that the desire is not just to meet energy needs, but
to do so in a manner that provides economic development. The
second goal is to find a way to obtain energy security and
stability with heating fuel such that it's affordable and
equitable. He suggested that rural electric utility rates could
be made more affordable through the Alaska Railbelt utility
legislation by making an All-Alaskan Generation and Transmission
Utility (AAG&T). He expressed the desire for the integrated
solution to include expansion of wind energy projects.
Furthermore, the region has hydro power potential. He mentioned
that work with the tribes to acquire funds to expand the wind
projects in the region is occurring.
1:40:16 PM
MYRON NANENG, SR, President, Association of Village Council
Presidents (ACVP), paraphrased from the following written
testimony [original punctuation provided]:
We are pleased to have this Committee formed in
response to the Energy Crisis a large part of the
State experiences. Quyana, thanks to Representative
Co-Chairs, Charisse Millett and Bryce Edgmon for
hosting this hearing, and for bringing such an
important Legislative presence to parts not
traditionally visited in the course of your duties
representing your own districts.
We'd also like to thank the Speaker of the House, Mike
Chenault and Rules Chairman, John Coghill for joining
the other Committee members to hear directly from
Rural Alaska on our lack of energy infrastructure,
consumption, needs, challenges and longterm plans.
Senator Lyman Hoffman has long represented our
interests for the greater parts of Rural Alaska, and
we are glad to have Representative Bob Herron join him
in Juneau.
We continue to present our position in seeking
appropriate and adequate energy relief for rural
regions of this great state outside the railbelt,
natural gas, hydro-electric and roadsystem.
AVCP recognizes the many attempts the State
Legislature has made to address the rural energy
crisis as it loomed in the last session, as well as in
th
the first few weeks of the 26 Legislature. We have
presented supporting comments to many pieces of
legislation like SB 88 (extending the PCE program), 91
(a fuel cap subsidy), 114 (utilizing State
transportation resources for compassionate aid to
Yukon villages) 115 and 116 (to authorize and
appropriate funds for emergency energy relief) and
most recently, for the $28.6 million in federal
stimulus money for weatherization and renewable energy
projects that the Governor has rejected.
I want to make it perfectly clear, that we did not
want to advocate for costly emergency legislation this
winter. Last summer, we wanted very much to be
proactive in addressing the high fuel costs most of
our villages had to lock-in at in order to service
their communities when oil was going for over $140 a
barrel. What may have been good for State coffers was
ironically a debt sentence for our village households,
corporations and services. SB 4002 attempted to
address our concerns in a comprehensive and long-term
manner that were trumped by the well-intentioned but
badly formulated energy rebate. However, we are
grateful for the far-sighted benefits that a fully
funded Renewable Energy Grant program authorized under
the Alaska Energy Authority (AEA) beyond the first
$100 million in FY2009 would provide for areas such as
ours.
When oil prices plummeted, the State went through a
very serious budget shortfall and fears of a
monumental deficit - that affected intended state
capital projects and other appropriated mandates.
Since mid-January, the price of Alaska North Slope
crude oil has rebounded by a third, bringing money
back into the state treasury through taxes and
royalties.
Petroleum Dependency at the YK Level and living in
Disaster Mode
Because we are roadless, all of our villages have to
import fuel by barge or by air in emergencies. In most
cases, we have no choice but to sign no-fault
contracts with fuel vendors if weather or acts of god
prevent a scheduled delivery. Some of our villages,
with human resources turnover or other constraints,
are unable to make their fuel orders in concordance to
State programs such as the bulk fuel loan in time to
lock in at more agreeable rates. Factors such as these
aggravate the already challenging nature of providing
light and heat to our communities with little or no
energy infrastructure.
There have always been constantly expressed concerns
by some of your colleagues within the Senate and your
House counterpart that the subsidy in [Senate Bill] 88
creates an unending entitlement program, that it is an
insufficient one-size-fits-all solution to an enduring
program. Truthfully, it could be that way should the
commercial fisheries continue to collapse; however,
the circumstances that brought about this particular
energy crisis are unusual. The price of oil topping
over $100 a barrel, the commercial salmon fishery on
either river no good, but catastrophic on the Lower
Yukon, the early freeze-up and particularly hard
winter has sopped up whatever energy program and cash
most families need for our sub-arctic winters. Because
of the poor fishing season, the cash usually generated
by that commercial practice was not there to outfit
seal, small whale or moose hunting and gathering
expeditions that make up most of our winter
sustenance.
Frankly, this winter's river break-ups and flooding
that finally prompted a Governor Declared Disaster
also heavily exacerbates our region's economy. By the
time the National Weather Service called off its flood
warning for Emmonak and other Lower Yukon River
villages Tuesday, May 26, breakup flooding had soaked
a total of roughly 40 communities along more than
3,000 miles of rivers, according to the state. There
is no limit to how much federal money Alaska can get
in disaster funding and the state is still assessing
the damages on both rivers even after the letter
requesting aid has gone out to President Obama. Even
with a cap on how much a single family can receive at
$30,300, it is rare for families to get the maximum
amount allowed.
We appreciate the state authorized spending up to $2.5
million on the emergency response to the floods to
cover things like delivering food, testing water and
travel, but we hope that a coordinated response with
the federal government and tribal organizations such
as AVCP, the Housing Authority and the Health
Corporation will maximize the benefits of the effort
and provide for smart, lasting and sustainable
results.
1:47:15 PM
CO-CHAIR EDGMON opined that population trends in Southwest
Alaska can largely be attributed to the high cost of living,
which revolves around the high cost of fuel. Either the
population of these communities are decreasing or are remaining
stagnate with changing demographics such that some communities
are mainly the young and the old. He asked if Mr. Naneng is
observing similar changes in the Bethel area.
MR. NANENG indicated that's the plight in the Bethel region.
1:49:12 PM
REPRESENTATIVE HERRON related his disappointment with Governor
Palin's rejection of the federal stimulus funds for
weatherization and energy. He asked if Mr. Naneng had any
recommendations as to how the legislature should handle that
decision of the governor.
MR. NANENG pointed out that the legislature can find ways to
support the regional nonprofits which can receive those funds
directly. He mentioned hearing that last year Anchorage had to
return over $2 million in home energy [rebates] that rural areas
could've used.
1:51:02 PM
GENE PETOLA, President/CEO, Yukon-Kuskokwim Health Corporation
(YKHC), paraphrased from the following written testimony
[original punctuation provided]:
YKHC is the regional tribal health organization
for the 58 Tribes of the YK Delta, and as the
principal health care provider in the region, we serve
Natives and non-Natives alike. Within a service unit
the size of Oregon, we operate a hospital, 5 sub
regional clinics, 44 village clinics and a variety of
outpatient and inpatient services here in Bethel.
The impact of high energy costs on the delivery
of health care to our residents and its affect on the
Company are staggering and certainly not sustainable.
For village residents, high energy costs effectively
deny access to higher levels of health care. For
example, if a patient in Kotlik was seen at our
village clinic and was referred to the Bethel
hospital, travel costs alone could likely prevent the
visit.
The one-way air fare from Kotlik to St. Mary's is
$125 and $150 from St. Mary's to Bethel. If the
patient was then referred to Anchorage for treatment,
the round-trip Alaska Airlines fare is currently
$542.60. Patients are beginning to forego their
health care visits, simply because patient travel
costs are too expensive as a result of high fuel
costs. This often leads to higher acuity patients not
being seen in a timely manner.
YKHC owns and operates five Sub-Regional Clinics
in Aniak, St. Mary's, Emmonak, Toksook Bay and Hooper
Bay. In 2004 we spent $84,000 and this year we expect
to spend $150,000 on heating fuel and utilities at the
Emmonak Sub-Regional Clinic. We experienced similar
costs and increases at the other Sub-Regional Clinics.
Here in Bethel, the Yukon-Kuskokwim Delta
Regional Hospital consumes approximately 10% of the
local power production and YKHC's total power
consumption for all our Bethel facilities is closer to
15% of local power generation. We are struggling to
manage the steady rise in energy costs. In 2006 the
electric bill for the Hospital alone was $1.19
million. We are projecting electrical costs for 2009
at nearly $2 million. In 2004 YKHC, corporate wide,
spent a total of $3 million on fuel and utilities.
These energy cost increases are not due to any
significant increases in our demand, instead the
substantial rise in fuel costs. Unfortunately, for
every dollar increase, we must decrease health
services that we otherwise would have been able to
provide to the residents of the YK Delta.
A strong and fully funded Power Cost Equalization
(PCE) program is extremely important for residents to
be able to continue living in rural Alaska, and is
necessary for nonprofit businesses operating community
facilities.
Unfortunately, the PCE statutes and regulations
do not differentiate between a small village and a
larger rural hub like Bethel. There is no allowance
for the fact that a hub community will have more and
larger community facilities that in fact serve their
larger regions. The current PCE allocation for
community facilities is 70 KWH per resident per
community. This gives Bethel a community facilities
allocation of about 420 thousand kilowatt hours of
electricity per month. The current community
facilities formula should be revisited. My staff is
prepared to work with your Committee on this important
statewide issue.
We endorse the concept of an All-Alaskan
Generation and Transmission Utility bringing low cost
electricity to every community on our State through
interties and power purchasing agreements. We know
that this is being seriously considered for the road
system and should be extended to all of Rural Alaska.
YKHC has had the benefit of lessons learned from
our Rural Utility Cooperative, or RUC, which provides
a variety of technical assistance and management
services to community water and sewer systems. These
lessons point to two things - economies of scale and
the need for continuity in system components. My
point here is that it should be the policy of the
State, as new energy systems are developed and brought
on line to ensure uniformity of technology and the
provision of technical assistance.
While we encourage the development of new
generating systems, particularly wind systems, we do
not believe it is economical for an organization like
ours to build stand-alone capacity. A 50 KW wind
powered turbine contributing about 1% of the
Hospital's electric needs hardly offsets the high cost
of construction and operation. Aggregated wind
systems like AVECs and Chaninik's make far more sense.
There is no incentive here in Bethel for the
local power utility to explore alternative energy to
reduce energy costs when they can simply pass on fuel
costs to their consumers, including YKHC. Also waste
heat costs from the local power plant per BTU [British
thermal unit] are nearly the same as heating oil costs
per BTU when it seems it should be substantially less.
Thank you, and I will be happy to answer any
questions you might have.
2:01:01 PM
MR. PELTOLA, in response to Representative Ramras, said that
currently the Yukon Kuskokwim Delta region is experiencing a
transfer in population from [the rural areas] to Bethel and
Anchorage. He indicated that villages will scale down to the
point some won't have viable population bases to justify a
school or other services. (Indisc.)
2:05:24 PM
FELIX HESS, Board Secretary, Calista Corporation, began by
welcoming everyone in his Native tongue. He then thanked
Representative Ramras who helped with the food drive for Emmonak
and Kotlik. He also mentioned Senator Hoffman. Mr. Hess
discussed the difference in fuel prices between rural and urban
Alaska. He informed the committee that in his region fuel can
only be delivered once in spring and once in the fall. By the
time fuel reaches the Bethel area, residents pay more than
double for it due to transportation costs. He discussed the
Yukon River area where the economy is very depressed. He
indicated that the bycatch reduction impacted the region, which
can't be taken lightly. He then mentioned that Alaska has an
international treaty that requires allowing the escapement of
Chinook salmon into Canada. Mr. Hess emphasized that those in
the villages have been voicing the difficulties they face for
some time. However, it seems that it's sometimes to a deaf ear.
He then highlighted the tragic reality of the increasing suicide
rate, which he attributed to the loss of hope. He mentioned the
need to provide employment [in rural areas] when possible,
particularly for young people. Mr. Hess charged the committee
to do the best it can with regard to helping people [in rural
areas]. In conclusion, he thanked the committee and noted that
a copy of his testimony has been provided to the committee.
2:14:09 PM
ROBERT NICK, Chairman, AVCP Regional Housing Authority Board,
AVCP Regional Housing Authority, began by thanking
Representative Herron for showing interest in the wind
generation and the intertidal generation. He highlighted the
success story of wind generation in his region, and related that
prior to the wind generation project he paid over $300 per month
for electricity. However, since the wind generation project
came on line, his bill has only once totaled over $100. Mr.
Nick expressed thanks for this opportunity to testify before and
provide input on rural energy issues, which are dramatically
affecting rural areas in many ways. The aforementioned, he
said, has left him very encouraged that the members of the
Alaska State Legislature are willing to come this far and listen
to the concerns.
MR. NICK reminded the committee that in rural Alaska there are
unique challenges. He pointed out that as of today regular gas
in Anchorage costs under $3 while in rural areas such as Bethel
it costs $5.65 and up. The energy prices of the last two years
have been very distressing on rural Alaska residents. In fact,
the aforementioned has resulted in many using all their personal
resources just to stay warm and fed. However, some were forced
to use their resources to purchase fuel rather than food and
instructed their children to eat breakfast and lunch at school.
The parents made do with what they could. Furthermore,
households are getting by on 100 percent subsistence foods,
which becomes difficult to do in late winter. The situation
became so difficult, the crisis in Emmonak occurred.
MR. NICK informed the committee that this past winter it was so
cold residents used various electric appliances to heat their
homes, which created a financial burden itself. He noted that
households heating their homes with electrical appliances had
electric bills as high as $1,000 per month. He highlighted
specific villages in which the increase in electrical costs was
astronomical and many residents fell behind in their monthly
electric payments. Furthermore, it was difficult even in wooded
areas because there was so much snow that it was difficult to
collect firewood. The situation is even more difficult because
many village residents have low paying jobs because of the
depressed economies in their areas. Moreover, grocery items are
very expensive due to the items being flown into these rural
communities. The lack of jobs makes it difficult for village
residents who rely upon store bought foods to supplement
subsistence foods.
2:21:49 PM
MR. NICK pointed out that the Yukon Kuskokwim area consists of
the Bethel and Wade-Hampton census districts, which had
unemployment rates in April 2009 of 16.8 percent and 24.5
percent respectively. In comparison, Alaska's overall
unemployment rate is 8.4 percent while the U.S. unemployment
rate is 8.9 percent. He then related that the poverty rate in
Alaska is 7.8 percent while the poverty rate in the Bethel
census area is 20.7 percent in 2004. The residents of these
areas already lived a tough life prior to the energy crisis, he
noted. These residents rely upon fishing in both the Yukon and
Kuskokwim Rivers to provide cash resources for the summer, fall,
and coming winter. However, the money made from fishing barely
pays for expenses. Furthermore, due to the expected low number
of salmon, the Alaska Department of Fish & Game (ADF&G) has
(indisc.) which means that fishermen in the area won't make the
money they once did to push through the winter slump.
Therefore, bills and loans can't be paid and there won't be much
cash for summer and fall gathering activities. The lack of
bills being paid means that businesses don't have the funds due
them and find themselves in a difficult situation as well. All
of the aforementioned coupled with the lack of fishing
opportunities resulted in some of the [rural] nonprofits calling
on the governor to issue an economic disaster declaration for
the Yukon-Kuskokwim Delta.
MR. NICK, in conclusion, relayed that he wholeheartedly supports
the House Special Committee on Energy's activities and fact-
finding missions throughout the state. He opined that there are
many options that should be considered to combat the high costs
of energy. First, efforts to drill for more oil in Alaska and
environmental safety fines should be pursued. Furthermore,
alternative energy options should be pursued and funded. For
example, harnessing wind energy would seem to be the first
easily available alternative energy technology for rural Alaska
villages. In fact, wind turbines have stabilized energy costs
wherever they have been deployed, and thus some rural village
residents are paying what an average Anchorage resident would
pay for electricity. Still, although energy costs haven't
decreased in the vast majority of villages, those with wind
turbines have kept costs below those in villages without wind
turbines. Since wind projects are expensive to maintain, Mr.
Nick urged the legislature to support and fund wind generation
projects in rural Alaska. Additionally, the state should
support and provide funding for other green projects, such as
geothermal, hydro power, tidal power, acidification, interties,
and biomass projects. Even nuclear energy projects should be
supported and funded by the legislature, he said. He opined
that if the military can safely harness and utilize nuclear
energy in their submarines, then there ought to be a way to
provide energy options to Bush Alaska. Support should also be
given to the governor's idea to merge Railbelt utilities into
one entity. However, rural Alaska should be included in that
merger, he said.
2:28:25 PM
MR. NICK then asked the legislature to request all the economic
stimulus funding slated for Alaska from the American Recovery
and Reinvestment Act of 2009 (ARRA), including that for
weatherization and renewable energy projects. He relayed that
he's deeply disheartened that the governor turned down slated
for the aforementioned. He said that there should also be
support for improvement and expansion of the weatherization
programs by nonprofits, tribes, and local organizations. Mr.
Nick told the committee that ACVP Regional Housing Authority
weatherized 114 homes this past winter and is slated to
weatherize 121 homes this year. Although ACVP is only required
to do 90 homes a year, the organization wants to do more. There
are 6,500-7,000 homes in the Yukon-Kuskokwim Delta, which means
that the ACVP Regional Housing Authority only weatherized fewer
than 2 percent of the homes in the area. The $28.6 million
turned down by the governor could've resulted in the
weatherization of more homes. He noted that the ACVP Regional
Housing Authority and the other 14 housing authorities in the
state are already required to comply with Alaska building energy
efficiency standards in the state, which applies to private,
public, and commercial buildings alike.
MR. NICK encouraged the state to develop a statewide energy
policy, which would be appropriate in helping Alaska have an
energy plan. The energy plan should address strategies on
development of sustainable energy along with funding strategies.
A plan should also assist communities with little expertise to
implement energy options best suited for their area.
2:32:08 PM
REPRESENTATIVE HERRON inquired as to what Mr. Nick would
recommend the legislature do in response to Governor Palin's
rejection of the $28.6 million in stimulus funds.
MR. NICK recommended that the legislature simply needs to
override the governor's vetoes of that funding and use some
mechanism that allows those funds to be available directly to
the housing authority.
REPRESENTATIVE HERRON offered his understanding that even if the
legislature overrides the governor's veto, she wouldn't comply
with taking the funds. He surmised that Mr. Nick was suggesting
that the legislature make a statement on this matter.
MR. NICK offered his belief that Governor Palin needs to accept
all of the stimulus funds being offered to the State of Alaska.
2:34:41 PM
RON HOFFMAN, CEO, ACVP Regional Housing Authority, pointed out
that energy issues have caused great hardship for families,
organizations, and businesses. Ever since the price of oil
skyrocketed last summer, a lot has been learned about various
options to generate energy and electricity. Mr. Hoffman
paraphrased from the following written testimony [original
punctuation provided]:
Wind, hydroelectricity projects, biomass (wood
and organic solid waste), and to some degree solar
energy along with alternative fuels can provide the
AVCP Calista region with energy sustainability,
independence and rural community development. The
recently completed Alaska Energy Authority Energy
guide demonstrates the potential generation capability
for renewable energy based upon location to potential
hydroelectric power and wind class and other available
renewable energy sources.
Wind
There is abundant wind energy resource available
in the AVCP Calista region. The 2002 Nuvista study
evaluated wind generation in those villages where
there is sufficient wind resources to justify
installation of wind turbines. The study assumed wind
generation would be considered in areas where the Wind
Power Class is 4 to 5 or greater as designated in the
Wind Energy Resource Atlas of the United States. 16
villages are rated 7, 3 are rated 6, 5 are rated 5 and
2 are rated class 4.
There are two wind generation projects developed
and managed by the Alaska Village Electric
Cooperative. These are located in the communities of
Toksook Bay on Nelson Island on the Eastern Bering Sea
Coast, and Kasigluk which is 20 miles west of Bethel.
In recent years local utilities have become more
interested in co-generation capabilities based upon
the wind energy potential demonstrated by these
projects. Four villages of the lower Kuskokwim River
Bay area joined together under an organization called
the Chaninik Wind Group whose aim is to develop wind
generation capacity of the four villages in that area
and reduce their dependence on fossil fuel generated
electricity and heating. They are currently engaged in
developing a wind development project to determine the
feasibility of a subregional wind farm project to
serve the four villages and will also determine the
wind resource availability for expansion and possible
build-out to other parts of the region.
Regional Hydroelectric Power
It has been estimated from previous studies
conducted involving a potential Hydroelectric project
in the Kuskokwim region that approximately 24
megawatts of power and roughly 130 million kwh of
energy may be available for nearby Bethel villages
from Tuluksak to Quinhagak located along the Kuskokwim
River. This project has the potential of replacing
diesel as the primary source of energy in this region.
In today's dollars energy costs could equate to
approximately 23¢ per kwh based upon conservative
estimates of inflation costs. PCE reports indicate
costs up to 60¢ per kwh without PCE adjustments for
continued diesel power generation demonstrating
greater potential savings per household with
hydroelectric power. Additional savings to the state
in the form of reduced PCE requirements provide added
cost saving benefit to the state over the long term.
2:42:41 PM
MR. HOFFMAN then turned to biomass projects. The Yukon
Kuskokwim Delta has many biomass resources for energy
generation. Biomass resources available in the region include
wood, plant, and fish waste to some extent. Currently, there
are no biomass fuels for generation for electricity, commercial
heat, and transportation. Wood-fired heaters and stoves are
used in the region as a major source of heat. In fact, wood-
fired steam baths exist in most communities in the region.
Approximately, 36 percent of heat is derived from wood. A 2006
University of Alaska Cooperative Extension Service study for the
Kuskokwim Native Association found that nearly 23 million cubic
feet of commercial stands of spruce and 22.7 million board feet
of noncommercial stands amounts to 45.7 million feet of growth
in the Lower Kuskokwim River area. The study illustrates that
it increases 1.3 feet annually. A similar analysis would be
appropriate for the Lower Yukon River area, he remarked. The
AEA biomass energy program provides practical working examples
in other parts of Alaska that are applicable to Alaska. For
instance, the City of Craig's gasification heater system and the
Interior's wood-fired heating system for community facilities.
Furthermore, the fuel for schools program in the Lower 48
provides a working program model for local school districts.
There are a number of low cost equipment and options that are
available for community and business development consideration.
In conclusion, Mr. Hoffman returned to his written remarks, as
follows:
It is our strong recommendation for an Integrated
Renewable Energy Solutions approach in rural Alaska
for achieving energy sustainability and economic
viability.
In our region we seek to:
„Expand Wind Energy Projects along the eastern Bering
Sea Coast and the Bethel area
determine feasibility for integrated
wind/diesel/solar/biomass heating and electric systems
with community heat storage system.
„Determine feasibility of Regional Hydroelectric
Project (Lake Chikuminuk) to provide region-wide
electricity and heat.
Develop and install Biomass projects: including wood
fired boilers, heaters and wood chippers for community
facilities and buildings.
MR. HOFFMAN then echoed Mr. Nick's testimony regarding the need
for the state to develop a statewide energy policy that works
toward the development of a statewide plan. The plan should
consider sustainability, funding strategies, and relief for all
Alaskan residents. He urged the need to decrease the state's
dependence on fossil fuels and to work toward making energy
prices more affordable for Alaska's residents while implementing
a state saving strategy for them.
2:46:30 PM
REPRESENTATIVE RAMRAS provided his understanding that the Senate
Resources Standing Committee said that it was developing a state
energy plan, but unnamed staff from the administration said the
state already has an energy plan. Noting that representatives
from the administration are present, he questioned what the
administration thinks of Mr. Hoffman's suggestions for the Yukon
Kuskokwim region. Representative Ramras asked if Mr. Hoffman's
plan takes into account the cost of amortizing the initial
capital investment or does the plan call for the state to
provide that at no cost (indisc.).
MR. HOFFMAN replied that many of the projects he mentioned
reduce the high cost of energy. He said that he's requesting
that the state adopts a statewide energy plan so that it can
develop strategies to fund projects throughout the state. He
noted that this morning he met with Mr. Haagenson, who provided
a review of the preliminary information for the Yukon Kuskokwim
Delta region and discuss the aforementioned projects. In
further response to Representative Ramras, Mr. Hoffman opined
that there should be a legislative mandate to direct all
electric utilities to allow [alternative electrical generation]
to be part of the electrical grid.
2:51:27 PM
ELAINE BROWN, NorthStar Gas, LLC, referring to the first slide
of her presentation, explained that NorthStar Gas, LLC, (NSG)
was: "Created to serve the people of Rural Alaska." The
company was formed in July of 1998 to grant Native ownership of
a fuel company, primarily to deliver bulk fuel to rural Alaskan
villages. As a Native-owned petroleum retailer, NSG manages a
gas station in Bethel, delivers heating fuel and unleaded
gasoline in the Yukon Kuskokwim Delta Region, and retails
petroleum products. The company is owned by 18 corporations, of
which 2 are regional corporations and 16 are village
corporations. She reviewed the specific corporations involved,
which are listed on the first slide.
MS. BROWN moved on to the second slide entitled, "Fuel Costs to
Rural Alaska." She explained that fuel prices in rural Alaska
are made up of the following three components: market pricing,
transportation costs, and overhead, maintenance and community
profit margin. The market pricing is determined either by the
Oil Price Information Service (OPIS), Platt's, or Jet A fuel,
and is determined the day the fuel is lifted from the refinery.
The transportation costs vary by location such that the further
one goes up the river, the more expensive the fuel is. The
overhead and maintenance, and community profit margin is the
landed cost of fuel plus overhead and maintenance plus a
percentage for profit margin. She noted that each community's
overhead and maintenance plus the percentage of profit margin
varies, which is why you see the varied prices in neighboring
communities. Furthermore, the number of employees at each
company and the age of the tank farms also contribute to the
varied prices. She then directed attention to slide three
entitled "Fuel Cost Example," which provides an example of a
fuel cost per the applicable fuel index. The example
illustrates that the quantity makes a difference in the price.
MS. BROWN continued with slide four entitled "FUEL PRICE PARITY
- HEATING FUEL." She referred to [the possibility of] a
statewide heating fuel price cap of $3.00 per gallon from
September 1 to March 31. The reimbursement, she explained,
would occur at the rural community fuel distributor level rather
than on an individual basis. She highlighted the formula, which
is as follows: the number of households multiplied by the
gallons allowed per household multiplied by the cost above
$3.00. The responsibility of tracking gallons per household
lies with the fuel distributor.
2:58:03 PM
MS. BROWN, referring to slide five, specified that the chart
illustrates the price of fuel from 2004-2009, which provides an
idea of what people are paying in the various areas of the Yukon
Kuskokwim Delta Region. She highlighted that in the spring of
2004 the heating fuel was more expensive than in the fall. In
the Lower Kuskokwim Region in 2005, the heating fuel for the
fall was more expensive than in the spring. Although NSG has
tried to determine when fuel prices are cheaper for its
customers, there seems to be no rhyme or reason for the prices.
As the chart illustrates pricing from year to year, from spring
to fall, varies drastically. A similar situation exists with
unleaded gas as illustrated by the chart on slide six. She
clarified that the chart only refers to delivered costs and
doesn't include any overhead and maintenance costs or profit.
In response to Chair Edgmon, Ms. Brown confirmed that the chart
specifies the cost to the cooperatives and that the final cost
in any village could be double what's specified on the chart.
Ms. Brown explained that the chart on slide seven specifies the
price per barrel, delivered cost, and the transportation costs.
The transportation costs average $1.25.
3:01:49 PM
MS. BROWN directed the committee's attention to slide eight
entitled "Example on Pricing Your Fuel." The slide details what
the total operating expenses per gallon of $64,000 includes.
The slide also specifies the price of fuel, gas and heating
fuel. The overhead per gallon works out to $1.30. The cost,
including only overhead and maintenance, totals $5.15 for 50,000
gallons of fuel. Therefore, the total cost of 50,000 gallons
would be $256,000, which would only cover the operations and the
cost of (indisc.).
3:04:10 PM
MS. BROWN continued with slide nine entitled "Revision of AEA
Loan Application." She explained that she was tasked with
revising the AEA loan application, which every community has to
complete every year. She suggested making the AEA loan
application valid for five years rather than for a single year.
The aforementioned eliminates annual filing of an 11-page
application and allows the supporting documentation, such as the
letter of intent, promissory note, waivers, and resolutions, to
be valid for five years. The supporting documentation,
especially those requiring signatures, is often difficult to
obtain due to seasonal activities. However, a two-page bulk
fuel loan agreement would need to be filed annually. In order
to expedite the process, Ms. Brown suggested allowing approval
of the AEA loan application from a faxed copy rather than
waiting for the original mailed application. However, the funds
would only be released upon receipt of the original signed
application. She explained that loan approval would be based on
the prior year's payment history. Late payments or questionable
credit would revoke the five-year loan approval and require an
annual application to be filled out until the credit history
improves.
3:06:24 PM
MS. BROWN, upon the request to summarize, said that if a couple
of the suggested changes to the loan application process on
slides nine and ten occurred, it would expedite the process.
She explained that in a situation in which a loan is approved
based on payment history but the community still has outstanding
payments, the approved funds wouldn't be released until the
final prior year's loan payment is received. In an effort to
address some of the difficulties, NSG is working with Alaska
Village Electric Cooperative, Inc. (AVEC) to bring in fuel
together in order to decrease transportation costs.
Furthermore, there are efforts to have multiple communities or
tank farms to purchase fuel in bulk in order to reach the
100,000 gallon break point. Ms. Brown related support for the
merging of tank farms to form regional tank farms.
3:08:53 PM
REPRESENTATIVE RAMRAS said he is not in favor of the $3.00 plan.
He emphasized that the state, rural and urban, is running out of
oil and money. He asked Ms. Brown what plan she would choose if
the choices were the $3.00 plan or capital projects for
alternative energy.
MS. BROWN answered that she would choose alternative energy
because she would like to have economic growth in rural Alaska.
REPRESENTATIVE RAMRAS pointed out that half of the people in
Alaska live in Southcentral, and therefore they are a force at
the ballot box. Although residents in Southcentral Alaska have
the cheapest natural gas prices in the nation, they say their
gas prices have doubled over the last few years and that they
pay more in terms of property taxes. The aforementioned results
in many of these residents saying that if the diesel part of the
economy wants a break, they deserve a break also. He inquired
as to how [rural communities] and their small amount of voters
can respond to such viewpoints.
MS. BROWN expressed the need for a comprehensive statewide
[energy] plan such that power groups are combined and that
there's one large fuel purchasing consortium. She acknowledged
that the cost of living in Anchorage may have doubled, but
pointed out that in rural Alaska the cost of living has tripled
or quadrupled. Therefore, there is no comparison.
CHAIR EDGMON commented that Representative Ramras has identified
the major policy point that will land squarely on the state in a
couple of years. He reminded the committee that when he has
questioned what rural communities will do if there's another
year of high fuel prices, the answer has been that those
residents will move. The aforementioned, he said, is the policy
question [for the state]. He questioned what can be done to
keep rural communities alive, to which he said he didn't believe
anyone has an answer.
MS. BROWN said that programs such as the weatherization program
will help tighten homes. She noted that one of the [goals] of
the Western Fuel Task Force is to reduce fuel consumption by 10
percent in 2009, which is an aggressive goal. Another important
aspect is to educate residents with regard to lowering
thermostats and dressing warmer. She mentioned creating jobs in
rural communities and using tie (ph) lines to connect
communities, which she predicted would ultimately result in
connecting roads. The aforementioned could result in
consolidated community schools. Although such would cause
eliminate jobs in the school district, new jobs would be created
for snow removal and bus drivers.
CO-CHAIR EDGMON emphasized that although the aforementioned may
sound good on paper, it may not work if fuel increases to $130
per barrel next winter.
3:16:22 PM
MEERA KOHLER, President/CEO, Alaska Village Electric Cooperative
(AVEC), paraphrased from the following written testimony
[original punctuation provided]:
We were established 40 years ago to bring "the light"
to Alaska's villages - communities where Alaskans
relied upon kerosene lamps and seal oil for their
modest energy needs.
I'm sure many of you have read Willie Hensley's recent
book - Fifty Years from Tomorrow. Willie was AVEC's
first president. He had the vision that, by
perseverance and dedication, we could make the
impossible happen. That vision led the way to ANCSA
and to AVEC.
But AVEC was not a slam dunk. We teetered on the
brink of bankruptcy for many years. It was not until
the early 80s that we were able to finally collect
enough revenue to pay for our very modest operations
and PCE [power cost equalization] made that possible.
It surprises many to know that AVEC's generation and
distribution assets were not built with state or
federal largesse. We now have more than $114 million
invested in our utility systems, not counting any
grant-funded plant. All we had at the beginning were
REA [Rural Electric Association now know as the Rural
Utility Service] loans that had to be paid back. It
was not until this decade, when we became a Denali
Commission partner, that we were able to start
upgrading our power plants and tank farms to
acceptable utility standards. Our villages are still
the only communities that actually bring a substantial
amount of cash to match our various federal
construction grants. We have almost $100 million of
federally funded plant improvements now and more than
$12 million in AVEC equity match.
This morning, you visited Kasigluk and toured the wind
farm there. Kasigluk is one of our villages. Power
from the diesel and wind generators there serve both
Kasigluk and the nearby village of Nunapitchuk. The
power plant, wind turbines tank farm and intertie cost
some $15 million. 10% came from AVEC's equity - the
rest came from the Denali Commission and the RUS
[Rural Utility Service]. Not a penny of state funds
were used. About 20% of the two communities' power
comes from wind and the fuel cost per kWh [kilowatt
hour] is 12 cents lower than neighboring communities.
But wind is not the answer to reduce the cost of
power. Our average cost of electricity is more than
62 cents a kWh. Fuel alone is 37 cents this year and
non fuel costs are 25 cents. PCE helps make power
affordable for homes and public facilities, but it
does nothing for commerce and schools. We must find a
way to do away with PCE so that electricity can be
affordable for everyone!
The answer is for all Alaskans to be treated the same,
at least as far as electricity is concerned. To that
end, we propose the All Alaska Generation and
Transmission plan. The concept is very simple. The
AAG&T in effect operates all the generation and
transmission assets in the state of Alaska. All the
existing utilities become distrusting utilities only.
Power is sold back from AAG&T at a "postage stamp"
rate and the local utilities add their local
administration, billing and operating costs to achieve
local retail rates, likely ranging from 13 cents to 25
cents a kWh.
Currently, utilities sell some 6.5 billion kWh in the
state. 85% of those sales are in the Railbelt and in
other low-cost areas like Barrow, Juneau and Sitka,
where retail rates average less than 13 cents kWh. Of
the remaining 15%, about 8.5% of sales are in non-PCE
communities like the Four Dam Pool where the cost of
power is now around 30 cents and the last 6.5% covers
the PCE communities where the average retail rate is
around 55 cents.
By pooling all power and selling it to utilities at a
uniform rate, we achieve many purposes:
· Communities outside the Railbelt are no longer second-
class citizens when it comes to reliable electricity.
Even diesel power plants are complicated to operate
and many communities have tenuous generation systems
because of the lack of qualified local personnel.
· Economic development becomes feasible. Unaffordable
electricity is a prime reason why local commerce
cannot develop and flourish.
· The need for PCE goes away, saving the state some $32
million a year.
· The cost of operating rural schools declines
dramatically as electricity cost drop, likely saving
another $20 million annually.
· Similarly, costs to operate other state facilities
decline, estimated to save another $20 million each
year.
· The perennial challenges in keeping the lights on
across the state diminish as a technically competent
operations team will work across the state to address
local generation challenges.
· And of paramount importance, vying for scarce capital
grants disappears. The entire state will unite behind
generation projects that deliver the maximum benefits
to the largest area because reducing the cost of power
in Anchorage, for example, will translate to lower
generation costs for the entire state. Regional
projects that deliver the maximum benefits will not
have to compete for funds because they will naturally
fall into a state-wide priority list.
Honorable legislators, it is time to end the politics
of separation. We are all Alaskans equally. We all
deserve affordable and reliable electricity.
Electricity is the basic underpinning of modern
society. Without it, we would not have schools,
potable water, sewer systems, healthcare or airports.
For too long, electricity for rural Alaskans has been
an almost unaffordable luxury. You can change that
and our children and grandchildren will thank you, as
I do.
3:23:06 PM
MS. KOHLER, in response to Representative Ramras' earlier
question regarding parity, related that she lives in Anchorage
where the cost of natural gas has tripled. She reviewed a
formula that she used to illustrate the high cost of diesel in
rural Alaska as compared to the cost of natural gas [in
Southcentral Alaska].
REPRESENTATIVE RAMRAS, in response, pointed out that
constituents in Anchorage are focused on the fact that their
energy costs have tripled.
REPRESENTATIVE JOHANSEN inquired as to what he tells his
constituents who already pay 9.5 cents kWh when [under a
statewide plan] everyone's rates would increase.
MS. KOHLER clarified that Representative Johansen's
constituents' rates wouldn't necessarily increase. She
projected that the pooled cost of generation would be parsed out
throughout the state. By focusing on specific projects, such as
the Susitna, power costs would decrease for everyone in the
state. The formula can be utilized such that no one faces a
substantial increase in the cost of power.
REPRESENTATIVE JOHANSEN opined that any increase would be a
substantial increase. If there's a solution for rural Alaska,
the rest of Alaska will want such as well.
MS. KOHLER said that's why the plan she proposed has merit. In
Southeast Alaska, she explained, a grid with a cost of almost
$.5 billion is being considered. This proposal would eliminate
the need for the aforementioned because those not connected to
hydroelectric power would experience a decrease in costs and
wouldn't need or want a grid connection. She attributed the
decrease in costs to lowering the cost of power processing in a
virtual manner. This proposal, she clarified, doesn't mean that
physical plants have to be built throughout the state but rather
it would be a virtual connection.
3:27:56 PM
DEBORAH VO, Rural Development Specialist, Yukon Delta Fisheries
Development Association (YDFDA), relayed that YDFDA is one of
the six community development quota (CDQ) organizations in
Western Alaska. She reviewed the communities that she
represents. She then provided the following testimony:
First and foremost, YDFDA supports the goals and
deployment objectives outlined at the AVCP Calista
Regional Energy Plan. These goals and objectives
reduce the cost of generating power by integrating
renewable energy solutions, such as wind, hydro,
biomass, and biomass projects. Secondly, YDFDA
supports bulk fuel purchasing under cooperative
purchase agreements. This will reduce purchasing
costs by our villages by participating in this type of
arrangement.
On the All Alaskan Generation and Transmission Utility
... YDFDA supports the concept as a long-term solution
since the benefits reaped from this arrangement will
be advantageous to all Alaskans. The Power Cost
Equalization subsidy that is necessary to equalize the
cost of generated power across the state will no
longer be needed under this scenario. However, the
high cost of energy must be reduced in rural Alaska to
spark economic development in our communities
immediately. That means right now, especially in the
Lower Yukon Region where we have been very much in the
news these past six months. Until the concept of the
AAG&T is realized, YDFDA recommends and supports
expanding the PCE program to private enterprises and
public facilities, such as schools and clinics, in
rural communities at 50 percent of what is subsidized
to households and other community facilities and
utilities. Currently, our subsidiary, Kwikpak
Fisheries, that operates in Emmonak pays for the full
cost of power, including the fuel surcharge. The
exorbitant cost of power coupled with the high cost of
transportation, transporting our product to market,
which is the fish, makes it extremely difficult to
compete globally and with non-rural communities. The
savings incurred by lowering the cost of power will
allow Kwikpak Fisheries to pay a higher price to the
fishermen and women in our villages for their fish;
therefore contributing more cash to the local economy.
Along the same lines, making PCE available to local
schools and clinics to operate and maintain quality
service at a more reasonable cost contributes to
overall healthy and sustainable villages.
In closing, private investment by local and regional
investment is important to our communities. And for
our communities to thrive, affordable energy must be
an important part of that equation.
3:32:20 PM
REPRESENTATIVE RAMRAS noted that he isn't a big fan of the 500
gallon plan, which he characterized as complex. He questioned
utilizing a regional solution in which the state subsidizes the
price of fish such that cash coming into the community would be
guaranteed. Such a solution would place the onus on the Alaska
Seafood Marketing Institute (ASMI) to increase the value of fish
in the global market.
MS. VO indicated that the region is open to solutions. However,
the key remains rejuvenating and keeping the local economy
going, such that cash stays in and circulates in the local
community. Therefore, any solution is worth discussing, she
opined.
3:34:09 PM
DENNIS CLINE, related that he has lived in Bethel off and on
since 1967 and is a retired school teacher and retired from the
Alaska Army National Guard in 2005. He further related that he
lives in Girdwood, Eagle River, and Bethel, which he said is
exciting. With regard to energy, he characterized it as the
common denominator. Mr. Cline highlighted that while this
discussion occurs, a barge is headed up river with fuel that has
already been purchased. Fuel prices have varied according to
the summer surge, which is what occurred last year. Therefore,
little progress has been made in that area. However, he
applauded the efforts with weatherization programs. Although he
applauded efforts to focus on the problem, he opined that it's
somewhat subverted due to generating revenues within the state
with oil production. Oil is taken from the North Slope and
shipped to the West Coast to be refined and returned the state,
which he estimated results in a transportation factor of $1.5-$2
per gallon. He questioned why the oil can't be refined and have
it near those [in the state] who use it. He then turned to the
royalty oil within the state, which is sold and becomes revenue
within the state. Those revenues are haggled over. He informed
the committee that in his home in Girdwood he pays about $60 per
month for electricity and gas, in Eagle River gas and
electricity totals about $200 per month, and in Bethel in the
month of January his electricity, propane, and oil totaled
$2100. Mr. Cline said that he isn't the person to worry about.
However, he has had discussions with others for which there
should be concern. For instance, he had a discussion with a
village public safety officer (VPSO) staying at his bed and
breakfast. The VPSO related his relationship with subsistence
in which he purchased the fuel for his snow machine and
ammunition for his gun, which totaled in excess of $80. The
VPSO said that he realized he could've purchased a lot of
chicken with that money. The high cost of fuel is changing
things in the lifestyle that once allowed folks to live on
subsistence with part-time employment. Mr. Cline expressed the
need to move on to alternative energy sources, which could've
had a jump start with the federal stimulus funds the governor
rejected. He opined that [the governor's rejection of the
federal stimulus funds] was unconscionable, particularly when no
other plan has been articulated that addresses the issues. A
plan needs to come from the governor and through the
legislature's budget process. Mr. Cline then related his belief
that the oil companies, through an inducement process, would
have some ability to stabilize fuel costs whether that means
building extra refineries in the state or refinery capacity in
the state, or addressing shipping issues, liquefying natural gas
on the North Slope and shipping down the western coast in order
to decrease transportation costs.
3:41:28 PM
IVAN IVAN, Akiak Native Community, described the Yukon Kuskokwim
Delta area, noting the difference in its economy as compared to
other areas. He noted that in his younger days the economy was
based upon fish and wildlife. With regard to a statewide energy
policy, he suggested reviewing the [government] in the villages.
For instance, in Akiak there is an Akiak Tribal Council and the
Akiak Native Community. He remarked that in most cases the
tribal government seems to be invisible in the process.
Therefore, he expressed the need to include them and respect the
region's way of life. He discussed alternative energy options,
including wind energy. He recalled that in the late 1970s or
1980s a study was performed regarding hydro electric power in
the region. He also recalled that recently there was a $250,000
appropriation whereby (indisc.). He told the committee that the
Akiak Tribal Council put forth a resolution that recognizes the
high fuel and electricity costs and the need to pursue
alternative energy opportunities, including wind energy. The
council submitted an application for [hydro power] to the U.S.
Department of Energy and is waiting to hear back. Also, the
regional housing authority is being asked for $120,000 of the
$250,000 appropriation to (indisc.). He concluded by expressing
interest in pursuing alternative energy sources while protecting
the area's natural resources.
3:49:56 PM
REPRESENTATIVE STOLTZE noted his appreciation for Mr. Ivan's
passion. (Indisc.)
3:51:57 PM
TIM MEYERS, Myers Farms, expressed his enthusiasm because he has
learned how to live in the region for about half the cost. He
related that a couple of years ago he started farming and now he
can grow enough food for a family of eight. He is also
supplying produce for 350 people on the WIC program in June.
Mr. Meyers informed the committee of his plan to bury five forty
foot shipping containers underground, which will enable him to
store possibly 200,000 pounds of potatoes, carrots, rutabagas,
cabbage, turnips, collard greens, and kale. Such storage will
be necessary due to his plans to expand his growing capacity.
He opined that if about 15-20 others also grew produce, they
could grow enough food to feed a good portion of the region.
The plan, he related, is to sell 30 pound boxes of this produce
and ship it to the villages for approximately $1 per pound,
which is roughly half the cost of current produce costs.
Furthermore, this produce is 100 percent organic. He then
explained that he composts chum salmon to create dirt; the
aforementioned could establish a market for chum salmon that are
being caught and let go.
MR. MEYERS explained that he has been building homes in the
region for about 30 years. He opined that he has mastered
building small, energy efficient, affordable homes in the region
that beat existing energy specifications. The homes are built
with a completely different building system than that
traditionally used in the region. Once he began farming, he
discovered that he could create rooms underground in which he
could farm and utilize free heat where it's 30 degrees. Mr.
Meyers said, "You cannot afford to live in this region, in this
environment when fuel is $6 a gallon, above ground." Although
he said he was impressed with the state's energy program, he
stressed that above ground houses aren't efficient enough when
heating fuel is $6 per gallon. Therefore, he suggested
reviewing what he's doing and putting 200-300 people to work in
the region to build high quality underground homes that everyone
can afford.
3:57:18 PM
REPRESENTATIVE RAMRAS commented that underground housing is spot
on and expressed his desire to discuss modular heat pumps for
Fairbanks.
3:58:26 PM
MR. MEYERS said he has talked about this for years, but there
hasn't been a lot of interest in homes that don't mimic the
regular construction/housing building system. Therefore, he
suggested following his building methods to produce some totally
different, high quality homes that folks can afford to live in
and then involve the federal government, U.S. Department of
Housing and Urban Development. Cold climate research supports
the notion that stick-frame, foam-panel houses don't work in the
region. He told the committee that he kept chickens in one of
his structures and he burned less than a gallon of fuel a day
and never had frozen water or eggs. Mr. Meyers shared
photographs of his farm with the committee. He then related the
need to get others to follow his method and to set them up with
land that they will help tend for two years. Furthermore, this
food allows folks to eat more healthfully and live sustainably.
4:08:38 PM
GEORGE GUY, Business Manager, Kwethluk, Incorporated, informed
the committee that Kwethluk, Inc., operates its own electric
utility. He then recounted how last fall an early freeze
prohibited the community from receiving fuel for its power plant
and the community. The aforementioned triggered a super energy
crisis for the community during which the generators were low on
fuel and they ran out of stove oil for consumers. At that time,
Mr. Guy activated the strategy plan for the community, which
entailed purchasing stove oil from the local school and the City
of Kwethluk sold five gallons of fuel to each household. The
City of Kwethluk, the Indian Reorganization Act (IRA) Council,
and the Kwethluk, Inc. Board of Directors issued a declaration
of emergency in the hope of activating state agencies. He
mentioned the various agencies and individuals he contacted.
However, no remedies from the State of Alaska have been received
and thus there was no choice other than to fly in fuel at a cost
of $6.09 per gallon. Mr. Guy related the need for the state's
policies and procedures to change in order to address energy
emergencies in rural Alaska. He highlighted that the majority
of rural areas use diesel for heat and [Kwethluk] currently
consumes approximately 108,000 gallons of heating fuel to keep
the generators running. He pointed out that in the rest of the
nation the price of fuel fluctuates, but rural areas such as
Kwethluk are locked into the price at the time of purchase. The
various alternative and renewable energy resources are most
needed in rural Alaska, he opined. He informed the committee
that currently stove oil/ heating fuel costs $7.20 per gallon
and unleaded gas costs $[6].23 per gallon. This past winter
people often had to choose between food and fuel to survive.
4:14:40 PM
DAVE TRANTHAM, told the committee that he has lived in Western
Alaska since 1946, specifically in Bethel for the last 43 years.
He noted that since he retired in 1979 he has been a volunteer
in Bethel. The cost of energy impacts every Alaskan no matter
the locale. However, it impacts some areas greater than others.
Currently, many residents in the Bethel region are in survival
mode due to the high cost of energy. He related that he knows
elders who live in one room in the winter because they can't
afford to heat the entire house. He urged the committee to hear
"It's heat or eat with some people ... in many communities
throughout the state." Mr. Trantham thanked the governor and
the legislature for the $1,200 in energy assistance. He noted
that oftentimes Native people of Bethel wouldn't say thank you
as it's not their cultural way, although they are. Although Mr.
Trantham said that he didn't know what the solutions are, he
encouraged the committee to listen carefully as there's much
wisdom being provided. Furthermore, collectively a solution to
the high cost of energy should be developed.
MR. TRANTHAM related that since he can't pay for electricity, he
doesn't have a television and has no refrigerator but rather
uses a hole in the ground. He further related that he doesn't
have a clothes dryer and thus dries his clothes outside no
matter the season. Methods of the old timers, who were
survivors, should be reviewed. He stressed the need to do
things for oneself and hope a little help comes from the
government as was the case with the $1,200. He reviewed the
various methods of conserving energy and resources, such as
changing light bulbs and building underground. The collective
wisdom of those in the area needs to be used to find solutions.
Mr. Trantham concluded by relating that solutions can be found.
4:22:44 PM
WILLIE KEPPEL, noted that he provided a packet to the committee.
Mr. Keppel stated that the problem is that everything is
connected to Bethel. He identified two monopolies in Bethel:
the Bethel power plant and the Crowley fuel plant. No matter
how hard one tries to regulate Bethel's utilities, it won't work
because a social conscious can't be legislated. He related his
belief that the reason Bethel has the highest cost of diesel
generation in the state is collusion, which he attributed to the
lack of oversight and rules that would make Bethel utilities
operate at a cost efficient rate for the people. He recalled
Representative Herron's and Senator Hoffman's visit to Bethel
this past fall during which there was a discussion regarding the
cost of electricity. During that discussion, Senator Hoffman
said that nothing can be done about Bethel's electricity prices
because the utilities negotiate for the highest price. Senator
Hoffman also brought up the need to purchase fuel together.
However, that's not an option because the two providers are
"Siamese twins," he opined. "There is no competition in
Bethel," he charged. Furthermore, there's no place for a
competitor to haul fuel because the major tank farms are owned
by the two providers. Mr. Keppel opined that there needs to be
an independent tank farm in Bethel that's operated by the most
efficient corporation on the Delta, AVEC. The AVEC has figured
out how to partner with the school districts and village
corporations, and purchase fuel in bulk. He also expressed the
need to allow the Aleuts to come to Bethel with their barges and
totes to sell fuel to the region, which would provide another
option for the villages as well as AVEC. The aforementioned is
how to obtain fair competition.
MR. KEPPEL reminded the committee of what the legislature did in
the 1980s when Bethel utilities couldn't deal with the waste
heap so they allowed radiator waste to be pumped into the
ground, which resulted in a huge environmental problem. In
order to address the aforementioned, the state bought,
purchased, and built all the waste heat lines in the city. He
then informed the committee of the time when it was found that
the city's utilities overcharged its residents by $70,000. In
conclusion, Mr. Keppel said that numerous times the laws have
been violated by Bethel utilities and the only way to cut
electricity costs in Bethel is to revoke the utility's license.
He requested that AVEC be utilized to temporarily run the
utilities. The desire, he related, is to pay the appraised rate
in the tariff. The AVEC will work for the people, and he
suggested that electricity costs will be at least one-third
less.
4:31:53 PM
REPRESENTATIVE RAMRAS said that he shares Mr. Keppel's concerns
regarding Fairbanks Natural Gas as well as the Bethel Utilities
Corporation.
MR. KEPPEL applauded Governor Palin for not taking the stimulus
funds. He said he believes in investing the money in [the
residents]. Therefore, if one is interested in building wind
towers, only the state's constitution has to be consulted and
the legislature merely has to pass a loan that's paid back for
with interest.
4:34:09 PM
SUE TRANTHAM, Askinuk Corporation of Scammon Bay, related that
she has heard that the commercial fishermen, mostly from Scammon
Bay, aren't going to fish in Black River. These commercial
fishermen fish to pay for their electricity, gas, and put away
food for the winter. She noted that most of the residents of
Scammon Bay live at the poverty level. She related that her 93-
year-old mother spends most of her time sewing to pay for her
electricity. Ms. Trantham asked the committee members to try to
get the stimulus funding rejected by the governor in order that
each village has something in the future. With regard to the
legislation before the committee, Ms. Trantham opined that they
should've been worked on 20 years ago.
4:37:09 PM
BOB GRAHAM (ph)* No address provided* Discussed the energy
crisis in rural Alaska.{ told the committee that a multi-pronged
approach to energy is necessary. Addressing energy begins with
individuals, who should conserve, recycle, and use renewable
energy and manual mechanisms such as bicycles. He further
recommended that everyone should turn down the heat, wear more
clothes in the house, and use energy efficient devices. Second,
helpful designs such as LED lights and compact fluorescent
lights should be supported and utilized. Mr. Graham related
that he is going back to the older ways. He indicated support
for the construction of underground houses and using gravity
flow stoves that don't require electricity. Wind, sun,
geothermal, and water flow are [alternative energy
possibilities] that may require help from the government [to
implement].
MR. GRAHAM expressed concern with the things that he doesn't
have control over, such as the prices charged by the electric
and fuel companies. He related that he has considered that it
may be best for him to move where the costs aren't as high. Mr.
Graham opined that government should encourage individuals and
groups to be more efficient and cost effective. Furthermore,
the funds available should be directed to those who really need
it without administrative costs and stretched profits. The
government could provide oversight with the aforementioned.
However, government shouldn't force folks to live a more costly
lifestyle. He told the committee that he has rentals for which
80 percent of the money coming in went toward city services,
electricity, and fuel oil.
4:45:19 PM
DAN LEINBERGER, Vice Mayor, City of Bethel, addressed the
concept of capping $3 heating oil. Under the AAG&T, the best
projects would enjoy the dollars contributed to it. However,
under the existing system it's not the best projects that
receive the funding, but rather which legislator has the most
political clout [to obtain funds for his/her area's projects].
He acknowledged that currently the Bethel region enjoys a very
influential Senator. Therefore, he said that AAG&T does make
sense from a financial standpoint. With regard to an earlier
statement that one can't have alternative energy and $3 heating
fuel, Mr. Leinberger contended that both can be had. He
explained that this winter the City of Bethel reviewed the
possibility of hedging its fuel cost, but since Bethel's fuel
comes from Nikiski rather than Cherry Point, Washington, there
is no direct correlation between the fuel price derived out of
Nikiski and the New York Mercantile Exchange price of heating
oil or gasoline. Therefore, the City of Bethel couldn't, with
any confidence, hedge fuel and guarantee an at least break even
proposition. However, most of the fuel in Alaska is pulled out
of Cherry Point, which does have a direct correlation to the
spot price on the New York Mercantile Exchange. The state
would, therefore, be in a much better position to hedge fuel
throughout the state than a city would. Conceptually, futures
contracts would be purchased at a specific price per gallon
regardless of the oil prices increasing or decreasing, he
explained. He noted that when the City of Bethel first reviewed
hedging fuel oil was $.97 a gallon, whereas now fuel oil costs
about $1.80 a gallon. "The point is," he said, "that I think
the state can pull off alternative energy and a $3 cap via fuel
hedging."
4:50:30 PM
REPRESENTATIVE RAMRAS stated his disagreement with Mr.
Leinberger. He explained that he believes Commissioner Galvin
lost over $1 billion for the state when he tried to aggressively
manage the state's money. He opined that the administration's
staff doesn't have any business trying to sell contracts.
CO-CHAIR EDGMON suggested that Mr. Leinberger may want to speak
with Ms. Kohler regarding what the Alaska Power Association
encountered when it tried to hedge fuel prices.
4:51:24 PM
MR. LEINBERGER then turned to PCE, which was brought about many
years ago during construction of several large projects in order
to lower the cost of electricity to various communities.
Although PCE was a balancing effort to do something for rural
Alaska, it continually remains a challenge to get the
legislature and the governor's office to recognize that
consumers still benefit from the lower power costs of projects
that were funded many years ago. The challenge, he identified,
is that PCE seems to be viewed as a give-away program for rural
Alaska. The legislature has moved toward a $250 million program
for alternative energy, most of which is being spent in rural
Alaska. The aforementioned is a good method to remove some of
the burden of PCE. However, the state does need to go farther,
which comes back to AAG&T and thus the projects that make the
most sense receive the funding, regardless of the location. The
aforementioned, he said, is why he supports AAG&T.
4:54:29 PM
REPRESENTATIVE STOLTZE expressed frustration with (indisc.).
CO-CHAIR EDGMON added (indisc.).
MR. LEINBERGER clarified that he is aware of Representative
Stoltze's support of PCE, but is trying to illustrate that AAG&T
takes away all political argument out of the equation.
4:57:43 PM
CO-CHAIR MILLETT pointed out that PCE isn't a good energy plan
and to expand it isn't appropriate. Although such action might
be a short-term fix, the problem is long term. From an urban
perspective, Co-Chair Millett said that her constituents
understand the issues that rural Alaska faces, particularly when
the prices spiked.
4:58:51 PM
DENNIS MEINERS (PH)* Chaninik Wind Group* Bethel, Alaska*
Discussed the energy crisis in rural Alaska.{ related that the
Chaninik Wind Group started about five years. He opined that
it's inevitable that wind will be used for energy purposes. The
group came together as an effort to lower costs, support each
other, and build capability. The objective of the Chaninik Wind
Group, he related, is to seriously displace fuel with wind for
electrical and heat generation and possibly transportation. A
baseline survey regarding how much energy is being used in the
areas has begun and provided some interesting information with
regard to where the costs are occurring. Mr. Meiners then
related his support of the Renewable Energy Fund, which he
characterized as probably the most important thing the state has
done for rural communities since PCE. He recalled that last
year the legislature provided $150 million to this program,
which is a commitment that no other state has made.
Furthermore, judging from the types of energy problems in the
state, these investments have the potential to create value much
greater than the money invested in the programs. The
aforementioned is what the committee is concerned about, he
opined.
5:01:57 PM
MR. MEINERS specified that the program is important for three
reasons. He explained that a different source of money is being
injected into the utility sector, and it's rearranging the
utility structure by unleashing opportunities for innovation and
competition that didn't exist. The dynamics of innovation and
competition will drive the system to lower costs while creating
new opportunities.
5:02:29 PM
CO-CHAIR MILLETT highlighted that HB 219 adds an economic aspect
to the oversight of [alternative energy] projects in order to
ensure that those projects are successful and don't increase
rural Alaska's energy costs. Recalling when the renewable
energy projects were going through the Legislative Budget and
Audit Committee, there was testimony that the projects had no
accountability. Therefore, the legislation before the committee
attempts to include accountability and an economic aspect into
all the energy projects prior to receipt of funds.
5:03:18 PM
MR. MEINERS said that is exactly what he's addressing. He then
related his belief that there are four strategies that should be
incorporated into the management of the program. These
strategies, he opined, would strengthen the program and create
value for the entire state above and beyond the investment. The
components have to work together to achieve the aforementioned,
he said. He further opined that AEA has good leadership and he
supports Mr. Haagenson's efforts. The first strategy is to pick
the right projects by selecting and evaluating those
technologies that are thought to have the greatest overall
impact, which he indicated can be achieved by utilizing the cost
benefit analysis. The second strategy is to educate and attract
others. The aforementioned draws investors and increases the
pool of money. The third strategy is to move from a funding
agency to a fully engaged partner, which is important. If the
grantees are successful and funds are provided to reach a
specific measurable goal, that success increases the
effectiveness of the investment. Therefore, the value of the
investment is magnified. The fourth strategy, and perhaps the
most important, is to advance the state of the art. This
strategy probably creates the greatest value because there would
be funding of a systematic progression of increasingly more
efficient projects and effective ways in which to address with
the energy problem. The aforementioned pursuit of knowledge
results in breakthroughs that establish new standards, which can
benefit millions of people while creating new jobs and funding
for innovation. Mr. Meiners clarified that he's advocating,
particularly in terms of small villages, [determining] how to
get to the solutions that are necessary while making good
decisions about the renewable energy fund that benefit the
entire state. The aforementioned, he remarked, is an important
obligation of the fund.
5:09:22 PM
REPRESENTATIVE STOLTZE related that he was struck by the
viability of the project because it was tied to the state
maintaining economic development. He indicated the need for
affordable energy for the fisheries industry not just to survive
but to sustain.
5:11:17 PM
GEORGE LAMONT, talked about the rising cost of fuel, which is
over $8.00 a gallon in his village. [Much of the testimony is
inaudible.] He indicated the need for state assistance in the
region. He mentioned that it now costs less to fly from
Tuluksak than it does to take a motorboat. Mr. Lamont told the
committee that in his village two generators run all the time,
one of which is for the school. He indicated that it's a
problematic and costly situation. He requested that the
legislature help the area obtain renewable energy for the school
system. He mentioned flooding in the area that was an emergency
situation. In conclusion, Mr. Lamont maintained the importance
of energy.
5:16:10 PM
LAUREN WILLIAMS (PH), Alaska Municipal League, informed the
committee that his region covers 39 communities from the Bering
Sea to the Canadian Border, which encompasses three Senate and
three House districts. The communities in the region are rural
and isolated, which results in a very high cost of energy. He
acknowledged that transportation costs and the low demand for
each community are contributing factors in the high cost of
energy. Mr. Williams opined that AML wants to work with the
legislature to find energy solutions across the state. In
closing, he expressed the hope that the legislature overturns
the governor's veto on the stimulus money in order to ensure
that residents can better equip their homes to save money on
fuel in the future.
5:18:42 PM
NORMAN AYAGALRIA, reminded the committee that many years ago his
ancestors traveled the Kuskokwim River using a power boat that
harnessed wind and, at times, tidal energy. He recalled being
told stories by the elders regarding travel by sled dogs. Based
on the stories from his elders, Mr. Ayagalria surmised that
energy resources used by his elders required small amounts of
hydrocarbons, such as oil, natural gas, and/or gasoline,
although they required physical and mental work. Since moving
to Bethel, he realized that he uses lots of stove oil to heat
his home. Due to the high energy prices, he and his wife
invested in a wood stove, which has proven to be a positive
investment so far, although it requires many hours of
maintenance and hard work. Instead of paying a $300 heating
bill each month, he is down to at least $150 a month in the
winter. Furthermore, he recently invested in a small wind
energy system capable of delivering 500 watts. When there was
enough wind to turn the turbine, it would charge at least four
batteries. The aforementioned provided enough energy on the
batteries to run his power tools, shed lights, as well as some
[electrical needs] in the house. In terms of finances, he
estimated that he has saved at least $10-$20 a month. He
related that he also replaced his incandescent bulbs with
[compact] fluorescent bulbs, which he estimated has saved at
least $10 a month. Moreover, he and his family turn off and
unplug appliances when not in use, which saves another $5-$10 on
electricity costs. He related that he also rides a bicycle in
the summer, which saves at least $30 a week. His goal, he
relayed, is to ride his bicycle all summer in order to save at
least $1,000. "What does this all mean: it means that
individual energy conservation adds more disposable income to
individual families," he specified. The aforementioned simple
measures allowed his wife and daughter to recently travel to
participate in subsistence activities, which hasn't been
possible in the past. Furthermore, energy conservation provides
a physical benefit, which he said he has experienced in terms of
losing weight, gaining muscle mass, having more energy,
participating in more family activities, and his family's
quality of life has improved. He noted that it took three years
worth of permanent fund dividend checks from himself, his wife,
and daughters to invest in these systems and now they are
finally paying off.
5:24:09 PM
ERIC MIDDLEBROOK, opined that the committee coming out to Bethel
illustrates its willingness to work together with [the rural
communities]. He related that although he is the vice mayor of
Bethel, he is speaking on his own behalf. He first addressed
the issue of the tank farm and opined that there isn't real
competition as the residents are still paying a high price for
fuel because the company says the fuel was delivered last year
and it needs to sell all of it. However, Mr. Middlebrook opined
that if there was competition, a competitor would purchase
cheaper fuel on the world market and sell it to Bethel residents
for less right now. He endorsed regulation of the fuel company
since the Bethel area doesn't have a situation in which free
competition or a free market can be achieved.
MR. MIDDLEBROOK then told the committee that PDC (Indisc.) Group
is seeking a community with which to perform a pilot study for a
natural gas delivery project. The idea is to purchase liquefied
natural gas at market prices at Nikiski or the world market,
deliver it by barge to Bethel where it would be stored as
compressed natural gas, and then it would be delivered to the
community. He informed the committee that liquefied natural gas
is a fraction of the cost of petroleum products in terms of
price per million British thermal units (Btu). The group made a
proposal that was endorsed by the Bethel tribe and a pilot study
grant was submitted to AEA, but AEA turned it down on what was
said to be a technicality in the legislation. The grant funding
for Phase I and Phase II of the project stated that no natural
gas would be done in areas with a renewable resource. The wind
is considered to be a renewable resource for Bethel. Although
Mr. Middlebrook said he endorsed wind projects, he predicted it
would be several years before Bethel would see any real benefit
from something like [wind energy]. The [wind] systems in place
now are achieving 25 percent penetration on electricity alone
and don't really address transportation or home heating issues,
whereas the proposed liquefied natural gas project may be able
to provide cheaper energy across the board for all facets of
energy usage. If the legislation can't be adjusted such that
the pilot study can be performed through AEA with the
endorsement of local communities and leaders, then he expressed
the need to put in place some other mechanism to review such an
energy distribution system. The aforementioned would benefit
all of rural Alaska. At the moment, the price of liquefied
natural gas is low due to a market flooded with it and it's
likely to remain that way for many years. If the price of
petroleum decreases and the price of liquefied natural gas
increases, rural Alaska would still benefit.
CO-CHAIR MILLETT inquired as to the amount of the funding
request.
MR. MIDDLEBROOK specified that it was for $750,000. He offered
to provide the committee with the grant proposal submitted to
AEA. He related his hope to bring it before the Bethel City
Council, who he hopes will pass a resolution to endorse the
project or a project similar in nature.
5:29:45 PM
RAYMOND PETE, informed the committee that he is a volunteer
coordinator for the Berry Very Clean Fish, Moose Harvest, which
is a yearly potluck to show appreciation for all volunteers that
serve the Yukon Kuskokwim Delta. The potluck began in 2007. He
emphasized that he, a legally disabled individual that still
works, made a difference as can anyone. In 2008 donations
decreased, which he attributed to the increased costs of heating
fuel and gas. He stressed the need to place a cap on the cost
of heating oil and fuel because it impacts everyone.
5:32:42 PM
JERRY DRAKE, Executive Director, Bethel Community Services
Foundation, suggested that the way wind and solar energy is
being marketed doesn't work, which he based on the fact that
there aren't systems in (indisc.). An example of this was on
the Anchorage evening news last week, which featured a gentleman
who purchased a $2,000 home solar water heating system. Mr.
Drake opined that only the wealthy will be able to afford
renewable energy for which there's a questionable payback
period. He suggested research into the area of what off-the-
shelf components are available that provide supplemental heat
alone. Supplemental heat wouldn't be intended as a replacement
for the existing heating system in the home. Converting a home
to complete reliance on wind or solar energy is very expensive
and complicated. The aforementioned are project killers in
rural Alaska. Mr. Drake opined that the appropriate
combinations of off-the-shelf wind, solar, and (indisc.) that
are inexpensive, reliable, and easy to maintain would result in
an effective system. The target cost would be in the $3,000-
$7,500 range with (indisc.) payback timeframe. If the state is
unable to conduct such research, perhaps a competition with a
cash prize could be offered. The aforementioned, he said, could
be an excellent use of stimulus funding. (Indisc.)
CO-CHAIR EDGMON thanked everyone for hosting and attending. He
then suggested that those who didn't have the opportunity to
testify should feel free to speak with members after the meeting
and/or submit written comments.
[HB 218 and HB 219 were held over.]
5:37:59 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 5:38 p. m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AVCP Calista Region Energy Plan 2009.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| AVCP Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| Felix Hess Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| Regional Energy Powerpoint.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| NorthStarGas Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| AVEC Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| Jerry Drake Letter.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| Mary Pete Testimony.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| Napaskiak Inc Testimony.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| ONC Letter.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| Richard Robb Letter.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| Robert Nick Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| RonHoffman Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| Willie Keppel Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| YDFDA Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |
|
| YKHC Presentation.pdf |
HENE 5/29/2009 1:00:00 PM |