Legislature(2009 - 2010)Anch LIO Rm 220

07/27/2009 11:30 AM House ENERGY


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Audio Topic
11:36:12 AM Start
11:36:35 AM Overview(s)|| Status of Federal Stimulus Energy Funds
01:21:39 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Joint with Senate Special Committee
on Energy
+ Presentation by House Finance Committee TELECONFERENCED
Aide Larry Persily
Topic: Status of Federal Stimulus
Energy Funds
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
               SENATE SPECIAL COMMITTEE ON ENERGY                                                                             
                       Anchorage, Alaska                                                                                        
                         July 27, 2009                                                                                          
                           11:36 a.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
HOUSE SPECIAL COMMITTEE ON ENERGY                                                                                               
                                                                                                                                
 Representative Bryce Edgmon, Co-Chair                                                                                          
 Representative Charisse Millett, Co-Chair                                                                                      
 Representative Nancy Dahlstrom                                                                                                 
 Representative Kyle Johansen (via teleconference)                                                                              
 Representative Jay Ramras                                                                                                      
 Representative Pete Petersen                                                                                                   
 Representative Chris Tuck                                                                                                      
                                                                                                                                
SENATE SPECIAL COMMITTEE ON ENERGY                                                                                              
                                                                                                                                
 Senator Lesil McGuire, Chair                                                                                                   
 Senator Lyman Hoffman                                                                                                          
 Senator Albert Kookesh (via teleconference)                                                                                    
 Senator Bert Stedman (via teleconference)                                                                                      
 Senator Bill Wielechowski                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
HOUSE SPECIAL COMMITTEE ON ENERGY                                                                                               
                                                                                                                                
 All members present                                                                                                            
                                                                                                                                
SENATE SPECIAL COMMITTEE ON ENERGY                                                                                              
                                                                                                                                
 All members present                                                                                                            
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
 Representative Paul Seaton (via teleconference)                                                                                
 Representative Carl Gatto                                                                                                      
 Representative Bob Buch                                                                                                        
 Representative Kurt Olson (via teleconference)                                                                                 
 Representative Peggy Wilson (via teleconference)                                                                               
 Representative Mike Hawker                                                                                                     
 Representative Bill Stoltze                                                                                                    
 Representative Anna Fairclough                                                                                                 
 Senator Charlie Huggins                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW(S): PRESENTATION REGARDING STATUS OF FEDERAL STIMULUS                                                                  
ENERGY FUNDS                                                                                                                    
     HEARD                                                                                                                      
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LARRY PERSILY                                                                                                                   
Staff to Representative Hawker                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Delineated stimulus funding issues.                                                                       
                                                                                                                                
DAN FAUSKE, CEO                                                                                                                 
Alaska Housing Finance Corporation (AHFC)                                                                                       
Department of Revenue                                                                                                           
POSITION STATEMENT: Commented on how AHFC would use and report                                                                
on stimulus funding.                                                                                                            
                                                                                                                                
BRIAN BUTCHER, Director                                                                                                         
Public Affairs                                                                                                                  
Alaska Housing Finance Corporation (AHFC)                                                                                       
Department of Revenue                                                                                                           
POSITION STATEMENT: Explained current Energy Rebate Program                                                                   
policies and how stimulus funds would affect it.                                                                                
                                                                                                                                
JOSEPH BALASH                                                                                                                   
Office of the Governor                                                                                                          
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on how the new governor would view                                                              
a veto override or concurrent resolution regarding receiving                                                                    
stimulus funds.                                                                                                                 
                                                                                                                                
SARAH FISHER-GOAD                                                                                                               
Alaska Energy Authority (AEA)                                                                                                   
POSITION STATEMENT: Commented on AEA's uses for funding and the                                                               
how the stimulus funds would affect them.                                                                                       
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
11:36:12 AM                                                                                                                   
CO-CHAIR CHARISSE MILLETT  called the joint meeting  of the House                                                             
and Senate  Special Committees on  Energy to order at  11:36 a.m.                                                               
Present at the call to order  from the House Special Committee on                                                               
Energy  were  Representatives  Millett,  Edgmon,  Dahlstrom,  and                                                               
Johansen (via teleconference);  Representatives Ramras, Petersen,                                                               
and Tuck arrived as the meeting  was in progress.  Present at the                                                               
call to  order from  the Senate Special  Committee on  Energy was                                                               
Senator  Wielechowski; Senators  McGuire,  Hoffman, Kookesh  (via                                                               
teleconference), and Stedman (via  teleconference) arrived as the                                                               
meeting   was   in    progress.   Representatives   Seaton   (via                                                               
teleconference), Hawker, Olson  (via teleconference), Fairclough,                                                               
Wilson  (via  teleconference),  Gatto,  Stoltze,  and  Buch,  and                                                               
Senator Huggins were also in attendance.                                                                                        
                                                                                                                                
^Overview(s)                                                                                                                  
^Status of Federal Stimulus Energy Funds                                                                                      
                                                                                                                                
11:36:35 AM                                                                                                                   
CO-CHAIR MILLETT announced that the  only order of business would                                                               
be the presentation regarding the  status of the $28.6 million in                                                               
federal stimulus energy funds that the State of Alaska received.                                                                
                                                                                                                                
11:36:49 AM                                                                                                                   
LARRY  PERSILY,   Staff,  Representative  Hawker,   Alaska  State                                                               
Legislature,  Juneau,  Alaska,  said  that he  would  review  the                                                               
stimulus   funding  that   is   related   to  energy   efficiency                                                               
improvements in Alaska  to clear up what pots of  money the state                                                               
has accepted and  what is left in dispute. He  explained that the                                                               
governor  approved,  in  the  budget,  and  the  legislature  has                                                               
appropriated  stimulus funds  for a  couple of  energy efficiency                                                               
programs:  $18   million  has  been   channeled  into   the  home                                                               
weatherization   program,  which   the  Alaska   Housing  Finance                                                               
Corporation (AHFC)  has successfully run for  years, another $9.6                                                               
million came to the state  for energy efficiency and conservation                                                               
block grants, which can be  utilized for retrofits of commercial,                                                               
public,  and  residential  structures  as  well  as  for  heating                                                               
systems, energy  efficiency audits,  lighting upgrades,  and most                                                               
anything that  is intended to  reduce energy costs. Of  that $9.6                                                               
million, the state can spent 40  percent while 60 percent must be                                                               
distributed to  communities that didn't receive  a direct federal                                                               
allocation. Additionally, the top 10  cities and top 10 boroughs,                                                               
by population,  received direct federal allocations  that totaled                                                               
$4.5 million.                                                                                                                   
                                                                                                                                
He related that he has been  told that AHFC and the Alaska Energy                                                               
Authority (AEA)  are working to  develop criteria for  grants and                                                               
the selection process  for the 60 percent that will  be going out                                                               
to communities.  An additional $12  million of  energy efficiency                                                               
and  conservation  block  grants  went  directly  to  241  tribal                                                               
governments  in  Alaska,  which  is  separate  from  the  state's                                                               
appropriation process.                                                                                                          
                                                                                                                                
MR.  PERSILY  explained  that  when  the  legislature  goes  into                                                               
                         th                                                                                                     
special session August 10,   the State Energy Program is at stake                                                               
in the amount of $28 million.  It  isn't a new program, but it is                                                               
the extension  of the  existing program that  began in  1976. The                                                               
state has  received funds in  the past.  In fact, in  fiscal year                                                               
(FY)  2007, the  state  received  $392,000 while  in  FY 2008  it                                                               
received  $258,000.   Therefore, the  program has  been small  in                                                               
past years.                                                                                                                     
                                                                                                                                
He  explained that  the  State  Energy Program  funds  go to  the                                                               
officially designated  state energy  office in each  state, which                                                               
in  the   case  of   Alaska  is  AHFC.   A  1996   memorandum  of                                                               
understanding (MOU) between  AHFC and AEA was amended  in 2001 to                                                               
share State Energy Program funds fifty-fifty.                                                                                   
                                                                                                                                
The  U.S.  Department  of  Energy's   (DOE)  objectives  for  the                                                               
stimulus  funds  are to  increase  energy  efficiency and  reduce                                                               
costs  for  consumers,  businesses   and  government;  to  reduce                                                               
reliance  on  imported  energy; to  improve  the  reliability  of                                                               
energy sources;  and to reduce  the effects of  energy production                                                               
and use  on the  environment. The  funds can  be spent  on almost                                                               
anything  that  will  be  used  to  create  energy  efficiency  -                                                               
retrofits,   weatherization's,  loans   or   grants  for   energy                                                               
efficiency projects.  It can be distributed  to municipalities or                                                               
used  for promotion  and public  education  of energy  efficiency                                                               
standards, street  lighting upgrades,  but it  cannot go  to land                                                               
purchases or pure research.                                                                                                     
                                                                                                                                
In  the past  the State  Energy Program  had a  20 percent  local                                                               
match, which  was waived for  the $28 million in  stimulus funds.                                                               
He said  the legislature appropriated  the $28 million in  HB 199                                                               
and Governor Palin vetoed that  item. If the legislature does not                                                               
override the veto,  the money would revert to  the U.S. Treasury;                                                               
it does not go to other  states. The application deadline for the                                                               
State Energy  Program funds  was May  12, and  AHFC did  meet the                                                               
deadline  by  turning  in  an  application on  May  12,  but  the                                                               
Governor  did   not  provide  the  required   certification,  the                                                               
assurances that  are required under  the program to  complete the                                                               
application. However, that can be amended.                                                                                      
                                                                                                                                
The DOE  said it knew Alaska  had the deadline coming  up and the                                                               
legislature had already  adjourned. So, they gave  the state more                                                               
time  to resolve  the  issue,  but said  it  couldn't have  until                                                               
January 2010, which  then forced the issue of  a special session.                                                               
Alaska  was given  a  deadline  of September  30  to provide  the                                                               
required  assurances  to complete  the  application  for the  $28                                                               
million.                                                                                                                        
                                                                                                                                
One thing they need to understand  is they can override the veto,                                                               
but  they can't  direct the  funding. Overriding  the veto  would                                                               
allow  the  line item  appropriation  of  $28 million  for  state                                                               
energy programs  to AHFC  to go through,  but then  the executive                                                               
branch would then have to implement it.                                                                                         
                                                                                                                                
11:44:12 AM                                                                                                                   
MR. PERSILY explained that in keeping  with the MOU, the AHFC and                                                               
AEA submitted  proposals to the  Governor's Office  of Management                                                               
and Budget (OMB)  as to how they would spend  their respective 50                                                               
percent  shares in  March. The  Governor's  Office never  adopted                                                               
those  proposals or  presented them  to the  legislature, because                                                               
back then the  Governor was arguing against  accepting the money.                                                               
But to  give them an  idea, he  said AHFC proposed  spending $4.5                                                               
million  on  community-building  weatherization, $2  million  for                                                               
weatherization and  rebate support  that would expand  the energy                                                               
audit  program,  $4 million  for  a  home-based renewable  energy                                                               
program, $1.8 million  for consumer education, and  $2 million to                                                               
write and promote statewide energy  efficiency standards. The AEA                                                               
proposed  adding  $7  million  to   its  renewable  energy  fund,                                                               
assigning $2.5  to research and development  of renewable energy,                                                               
$3.9  million   for  energy   efficient  equipment   rebates  and                                                               
incentives,  $.75  million  for energy  efficiency  training  and                                                               
education, and  $100,000 for  commercial facility  energy audits.                                                               
The DOE  would accept an  amended application if  the legislature                                                               
overrides the  veto, he said,  and the executive branch  wants to                                                               
amend the spending plan for the $28 million.                                                                                    
                                                                                                                                
11:45:50 AM                                                                                                                   
REPRESENTATIVE HAWKER offered his  understanding of Mr. Persily's                                                               
last discussion  that the spending  pattern proposed by  AHFC and                                                               
AEA is  not how  the funding must  be spent, and  now that  a new                                                               
governor is  in office, he would  review and decide how  he would                                                               
choose to allocate the money.                                                                                                   
                                                                                                                                
MR. PERSILY responded  that his discussions with  the director of                                                               
OMB  and  the  new  Governor's   Office  are  such  that  if  the                                                               
legislature  would override  the  veto, they  would be  reviewing                                                               
this and probably  be coming up with a new  spending plan for the                                                               
$28 million.                                                                                                                    
                                                                                                                                
An email from Gill Sperling,  Program Manager, Weatherization and                                                               
Intergovernmental  Programs,  Office  of  Energy  Efficiency  and                                                               
Renewable Energy,  Department of Energy, in  Washington, D.C. the                                                               
DOE indicates that each governor  is required to certify that the                                                               
state will  promote and encourage improved  energy efficiency for                                                               
residential  and commercial  buildings,  but is  not required  to                                                               
establish a  statewide energy efficiency  building code.  The DOE                                                               
is merely looking  for those cities with  building code authority                                                               
to  work  toward  adopting,  promoting,  and  encouraging  higher                                                               
energy efficiency standards for  new and renovated buildings with                                                               
the  state's assistance  and encouragement  as appropriate  under                                                               
state  law.  He  said  he   would  provide  that  email  for  the                                                               
committee.                                                                                                                      
                                                                                                                                
11:48:23 AM                                                                                                                   
He said  the DOE  realized that not  all states  impose statewide                                                               
energy  efficiency building  codes,  but those  states that  have                                                               
taken  over that  authority should  be  treated differently  than                                                               
states that have not taken  on that responsibility, and Alaska is                                                               
one of  those states. The state  is allowing state law  to be the                                                               
controlling   factor   and    would   provide   information   for                                                               
municipalities that want to improve energy efficiency standards.                                                                
                                                                                                                                
11:49:45 AM                                                                                                                   
CO-CHAIR EDGMON said he hoped AHFC  would be able to join them to                                                               
talk about building  codes, but it was his  understanding that in                                                               
rural  Alaska a  lot  of homes  are built  by  housing and  urban                                                               
development  -  homes  that  go   through  USDA  and  the  Denali                                                               
Commission or some  other housing program that  has building code                                                               
requirements built  into the loan  package; maybe  a conventional                                                               
lender like  Wells Fargo would  already have some of  those codes                                                               
in  place.  He asked  whether  Mr.  Persily had  researched  that                                                               
issue.                                                                                                                          
                                                                                                                                
MR. PERSILY surmised  that if one is seeking  AHFC financing, one                                                               
has  to meet  standards  which meet  or exceed  what  the DOE  is                                                               
looking for.  His research  has shown that  no one  would finance                                                               
building  of a  commercial  structure that  leaks  energy and  is                                                               
going to have high operating  costs. Therefore, if one is already                                                               
seeking financing through  the AHFC, then one  is already meeting                                                               
those standards.                                                                                                                
                                                                                                                                
11:51:31 AM                                                                                                                   
REPRESENTATIVE HAWKER asked whether  the target of meeting energy                                                               
efficiency standards by 90 percent  in the original stimulus bill                                                               
applies to  new and remodeled  construction under  2009 standards                                                               
rather than nebulous  2017 standards, and that the  90 percent is                                                               
applied on an  aggregate statewide basis to  both residential and                                                               
commercial   properties.  Realistically   they  are   looking  at                                                               
commercial  construction only  because it  would presumably  meet                                                               
the full 90 percent.                                                                                                            
                                                                                                                                
MR. PERSILY  replied that  a literal reading  of the  section for                                                               
the state  energy program funds  was interpreted by many  to mean                                                               
that states have to show and be  able to prove that 90 percent of                                                               
the  total  square  footage of  new  and  renovated  construction                                                               
between  2009  and  2017 met  energy-efficiency  standards.  That                                                               
worried several states  besides Alaska. The DOE  realized that no                                                               
one was  going out with tape  measurers for the next  eight years                                                               
and measure  new and  renovated buildings and  keep track  of it,                                                               
and explained  it instead as  a compliance  goal. It is  simply a                                                               
worthy goal that  many states will reach by  virtue of commercial                                                               
structures.                                                                                                                     
                                                                                                                                
They  have issued  a  contract to  something  called the  Pacific                                                               
Northwest  National  Laboratory,  which is  developing  voluntary                                                               
guidelines  for  states that  want  to  track their  improvements                                                               
between 2009  and 2017. For  instance, each state could  select a                                                               
random  sampling of  44 residential  buildings and  44 commercial                                                               
buildings and track upgrades to them over the years.                                                                            
                                                                                                                                
11:55:27 AM                                                                                                                   
SENATOR  WIELECHOWSKI offered  his understanding  that Alaska  is                                                               
already   close   to  the   90   percent   already  taking   into                                                               
consideration local codes  and the fact that  structures built in                                                               
the villages typically are built with energy efficiency codes.                                                                  
                                                                                                                                
MR. PERSILY replied his understanding  is that the Denina Center,                                                               
for  instance,  exceeds these  standards,  and  Alaska will  come                                                               
pretty close  by the year  2017 in  terms of having  total square                                                               
footage that  is new or  remodeled. This doesn't  require anybody                                                               
to  do  anything  to  their  property, he  said.  The  intent  of                                                               
Congress and  the DOE is  for states to  use the money  to reduce                                                               
energy  costs and  energy consumption.  It was  simply setting  a                                                               
goal  and having  voluntary ways  to measure  it (that  are being                                                               
developed by the Pacific Northwest Lab).                                                                                        
                                                                                                                                
CO-CHAIR  MILLETT asked  if there  are any  ramifications if  the                                                               
state doesn't  meet the  goal by  2017. Would  the state  have to                                                               
reimburse the money to the federal government?                                                                                  
                                                                                                                                
11:57:41 AM                                                                                                                   
MR.  PERSILY  answered  no;  there   is  no  penalty  or  payback                                                               
provision. DOE officials  bluntly say by 2017 they  will be gone;                                                               
the  energy secretary,  congress and  the president  will all  be                                                               
new.  This  is not  to  say  that  the federal  government  never                                                               
follows through on its word; it does, but not on this one.                                                                      
                                                                                                                                
SENATOR WIELECHOWSKI  said they  have heard  over and  over again                                                               
that strings  are attached  to this  money. Has  he been  able to                                                               
find any strings attached?                                                                                                      
                                                                                                                                
MR.  PERSILY  offered  that the  stimulus  funds  have  reporting                                                               
requirements  -  more  so  than for  other  federal  grants.  The                                                               
federal  government wants  to know  what is  being done  with the                                                               
stimulus funds. They want to know  how many jobs are created with                                                               
it, for  instance. Specific  to the  state energy  programs, they                                                               
want assurances from  each governor that they will  work with the                                                               
legislature and  communities toward  the goal of  improved energy                                                               
efficiency. Different  states respond to that  in different ways.                                                               
Some  say they  will  ask the  legislature  to consider  improved                                                               
energy efficiency  standards; others say  they will work  hard to                                                               
convince the legislature  to pass them. Alaska is  the only state                                                               
that  has not  provided the  certification to  receive the  state                                                               
energy program funds. He thought  they might want to consider the                                                               
Missouri  case  that  doesn't  have  a  statewide  building  code                                                               
enforcement authority either. Missouri's letter says:                                                                           
                                                                                                                                
     The state  is committed to working  with communities to                                                                    
     create model energy efficiency  standards that if local                                                                    
     units of government choose  to implement, should reduce                                                                    
     energy costs for Missourians. I  and my staff will also                                                                    
     work  with the  Missouri  General  Assembly to  provide                                                                    
     incentives  to assist  communities in  promoting energy                                                                    
     efficiency consistent  with the  goals of  the stimulus                                                                    
     act.                                                                                                                       
                                                                                                                                
The DOE  accepted that wording  as a certification, he  said. One                                                               
state,  Wyoming, was  initially rejected  because the  governor's                                                               
letter was  somewhat hostile toward  federal authority.  But then                                                               
the  authors of  the letter  had further  discussions with  their                                                               
supervisors and  had a  change of  heart. Wyoming,  then, revised                                                               
its letter and was ultimately accepted by the DOE.                                                                              
                                                                                                                                
12:00:46 PM                                                                                                                   
REPRESENTATIVE  HAWKER  remarked  that  it's  important  for  the                                                               
legislature to realize that "the  strings" attached to this money                                                               
are   really    accountability   and    reporting   requirements.                                                               
Recognizing that  and being  concerned about  the accountability,                                                               
two full time positions in  the Department of Administration that                                                               
would last only  as long as the  accountability requirements were                                                               
unmet to  do that were  put into  the bill. Those  positions were                                                               
also vetoed  by the Governor  in addition  to the $28  million in                                                               
energy funding. The  legislature needs to make  certain the state                                                               
meets the compliance requirements.                                                                                              
                                                                                                                                
12:03:05 PM                                                                                                                   
MR. PERSILY relayed that he had  asked the DOE if the legislature                                                               
chose  to override  the  veto  and the  Governor  decided not  to                                                               
provide  the  required  certification,  would the  DOE  accept  a                                                               
legislative   resolution    in   lieu   of    the   gubernatorial                                                               
certification. The  letter he  received Friday  from the  DOE did                                                               
confirm  that they  would  accept  a resolution  in  lieu of  the                                                               
assurance  from  the  Governor.   Discussions  he  has  had  with                                                               
Governor  Parnell's  office  indicate  that  if  the  legislature                                                               
overrides the  veto, the  Governor would  be inclined  to provide                                                               
the least-restrictive assurances that he  could get away with and                                                               
still  meet the  requirements to  get the  $28 million.  So, they                                                               
don't need a resolution at this time.                                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI asked if he  recommended a concur resolution                                                               
at the special  session to make sure they are  in compliance with                                                               
the DOE requirements.                                                                                                           
                                                                                                                                
MR. PERSILY  said he was a  little hesitant to speak  for the new                                                               
governor, but  indications were if  the legislature  overrode the                                                               
veto, he would  work with lawmakers to obtain the  funds. The new                                                               
governor would  be looking  for the  least-restrictive assurances                                                               
that  the DOE  would accept.  He would  take them  at their  word                                                               
rather than putting a resolution on the special session agenda.                                                                 
                                                                                                                                
12:05:54 PM                                                                                                                   
CHAIR MCGUIRE  questioned whether he had  recommendations for the                                                               
legislature in going  forward post-September 30 to  work with the                                                               
new administration  to implement  the money. If  they don't  do a                                                               
resolution,  she thought  the state  should preserve  all of  its                                                               
choices and a  resolution would bind them to  their word. Another                                                               
part of  her was concerned  that having  a resolution would  be a                                                               
recipe  for 30-40  more days  of debate  and she  didn't know  if                                                               
people were  up to  that right  now. But there  needs to  be some                                                               
path to  look at  those dollars  and to  interface with  AHFC and                                                               
AEA, particularly for  the rebate program. She  asked Mr. Persily                                                               
to comment on what kind of path the legislature could take.                                                                     
                                                                                                                                
12:07:23 PM                                                                                                                   
MR.  PERSILY offered  his belief  that it  would be  advisable to                                                               
take the governor's  staff at their word that  a resolution isn't                                                               
needed  to  meet DOE  certification.  In  terms  of how  the  $28                                                               
million gets spent,  maybe members could put that in  the form of                                                               
a joint letter, like a  letter of intent, from presiding officers                                                               
to the  administration. He sensed  the administration is  open to                                                               
how the $28 million should be  spent, but that it should be spent                                                               
on quantifiable things so the public  can see where the long term                                                               
savings are from  spending that much money  on energy efficiency.                                                               
Someone suggested a weatherization  fund for public buildings and                                                               
to concentrate  it on  a smaller number  of programs  rather than                                                               
disbursing it out to many. They had not had that discussion yet.                                                                
                                                                                                                                
SENATOR  HOFFMAN  noted  that  as early  as  last  week  Governor                                                               
Parnell  said  he  felt  there   were  strings  attached  and  he                                                               
suggested that the committee should  ask the Governor if he still                                                               
supported not overriding the governor's veto at this point.                                                                     
                                                                                                                                
12:10:00 PM                                                                                                                   
MR. PERSILY  replied that  he sent  copies of  what he  gave them                                                               
today to Karen Rehfeld, director  of OMB, John Katz, the director                                                               
of the  Governor's Washington, D.C. office,  and Jerry Gallagher,                                                               
the Governor's legislative director.                                                                                            
                                                                                                                                
SENATOR HOFFMAN  said this committee  could make  that suggestion                                                               
to him.                                                                                                                         
                                                                                                                                
CO-CHAIR  MILLETT  said  they would  absolutely  do  that.  Also,                                                               
Representative Gatto  asked if the funds  would be reappropriated                                                               
to another state  if they didn't override the veto  or would they                                                               
be used to reduce the tax burden.                                                                                               
                                                                                                                                
12:10:53 PM                                                                                                                   
MR. PERSILY replied  that they would not  be put in a  pool to be                                                               
given  to  other states.  The  law  actually  says if  one  state                                                               
doesn't take  the money,  it gets prorated  to other  states. For                                                               
example,  transportation money  would just  go back  to the  U.S.                                                               
Treasury. "If  you're an optimist  you would say it  would reduce                                                               
the  federal  deficit.  If  you're a  pessimist,  you  would  say                                                               
Congress would  then find something  else to reappropriate  it to                                                               
of equal or lesser value."                                                                                                      
                                                                                                                                
CO-CHAIR  MILLETT said  earlier  that  Representative Hawker  was                                                               
talking about the  two positions they had appropriated  in HB 199                                                               
for   reporting  requirements   and   asked   whether  the   home                                                               
weatherization  stimulus and  energy  efficiency  monies had  the                                                               
same requirements.                                                                                                              
                                                                                                                                
MR. PERSILY  explained that  strict reporting  requirements apply                                                               
to all  stimulus funds. State  agencies are going to  be required                                                               
to post to  a federal website the number  of full-time equivalent                                                               
jobs that are created with stimulus money on a quarterly basis.                                                                 
                                                                                                                                
CO-CHAIR  MILLETT   asked  if  AHFC  was   doing  this  reporting                                                               
requirement at this time.                                                                                                       
                                                                                                                                
MR. PERSILY said he didn't know if that had started yet.                                                                        
                                                                                                                                
SENATOR  WIELECHOWSKI   expressed  a   preference  for   doing  a                                                               
concurrent  resolution,  because  it only  requires  a  50-plus-1                                                               
percent vote whereas a veto override requires 75 percent.                                                                       
                                                                                                                                
MR. PERSILY  said that although  he's had conversations  with the                                                               
Governor's staff about  whether a resolution is  needed, it might                                                               
make  sense  for  legislative  leaders   to  pose  the  questions                                                               
directly to him in advance so  they know whether they need one or                                                               
not. It  would not be appropriate  for a staff member  to contact                                                               
the Governor about it.                                                                                                          
                                                                                                                                
He  noted that  he had  discussions with  Faith Lambert,  the DOE                                                               
official who is head of the  state energy program office, and she                                                               
pointed out  that in addition  to the  DOE wanting each  state to                                                               
work  with  municipalities if  they  haven't  already taken  over                                                               
building  enforcement for  structures,  that it  wants from  each                                                               
state - not at the time of  application, but later on - a general                                                               
plan spelling out  the outreach, the education  efforts, and what                                                               
they  are doing  among home  owners, commercial  property owners,                                                               
builders,  lenders, others  in  the  industry, municipalities  to                                                               
promote energy efficiency and savings.  He would not characterize                                                               
that as a string, but as  something the state is already involved                                                               
in.                                                                                                                             
                                                                                                                                
He said  the question  has come  up several  times of  a national                                                               
standard  rule  of  thumb  on  returns  for  every  dollar  spent                                                               
upgrading  a  home, but  he  couldn't  find  one. It  depends  on                                                               
climate, how old  the house is, how poor it  was before, how good                                                               
of  a  job was  done  afterwards,  the  size  of the  house,  and                                                               
building costs.  He did  find several pieces  of information  - a                                                               
study  in Austin,  Texas, some  work  in Florida,  a home  energy                                                               
saving calculator  put out by  the DOE Department of  Housing and                                                               
Urban Development, work  done in Phoenix, and work  done by Puget                                                               
Sound Energy  - to anecdotally give  them some ideas of  the cost                                                               
benefit of doing  energy efficiency, but he is  unable to predict                                                               
savings with any certainty.                                                                                                     
                                                                                                                                
12:15:44 PM                                                                                                                   
CO-CHAIR  EDGMON asked  if  spending this  money  has a  timeline                                                               
attached.                                                                                                                       
                                                                                                                                
MR. PERSILY said it has to be spent generally by December 2011.                                                                 
                                                                                                                                
REPRESENTATIVE PETERSON  asked if  money would  just be  added to                                                               
the current state weatherization  program, to a different program                                                               
or a combination of the two.                                                                                                    
                                                                                                                                
12:17:05 PM                                                                                                                   
MR. PERSILY  replied that it could  be all or none  of the above;                                                               
it cannot  be used  to purchase  land or  for pure  research, but                                                               
those decisions would be an executive branch function.                                                                          
                                                                                                                                
CO-CHAIR MILLETT  said Representative  Fairclough wanted  to know                                                               
whether the  DOE can  refuse the  state's outreach  to them  - in                                                               
reference to Mr. Persily's bullet 3.                                                                                            
                                                                                                                                
MR. PERSILY said he doesn't  believe so, but he acknowledged that                                                               
if a  state were to  put together a  poor plan, someone  from the                                                               
DOE could  call up  and say  it's not  acceptable, but  given the                                                               
work that AHFC and AEA have done  on this in the past, he thought                                                               
their  plans  would  be  welcomed.  No  other  states  have  been                                                               
rejected.                                                                                                                       
                                                                                                                                
12:18:52 PM                                                                                                                   
DAN  FAUSKE,  CEO,  Alaska Housing  Finance  Corporation  (AHFC),                                                               
Department  of  Revenue,  explained  that  AHFC  has  always  had                                                               
reporting requirements,  but it has  been for smaller  amounts of                                                               
money. Their history  has been to go fifty/fifty with  AEA as per                                                               
an  MOU. Demand  side items  are AHFC  functions and  supply side                                                               
items are AEA's;  this has worked well in the  past.  He surmised                                                               
that  the  same  philosophy  would probably  hold  with  the  $28                                                               
million. He  stressed that they already  have stringent reporting                                                               
requirements.  The best  way to  look at  the "strings"  issue is                                                               
simply that DOE has to approve whatever they do now anyhow.                                                                     
                                                                                                                                
MR. FAUSKE  said that other  states are  just trying to  catch up                                                               
with  Alaska in  terms  of  energy efficiency  plans.  A bill  is                                                               
moving forward in  Congress now that has  realtors scared because                                                               
some want to require that all  houses being sold in the future to                                                               
be retrofitted  to certain energy  standards. Realtors  feel it's                                                               
tough to go  back in time, because people simply  can't afford to                                                               
do improvements whatever the intent is.                                                                                         
                                                                                                                                
He said they  are still working on the  guidelines for reporting.                                                               
They have  not yet heard  an update from the  federal government,                                                               
but will get one soon and then adhere to that.                                                                                  
                                                                                                                                
MR.  FAUSKE said  that  the  issue of  calculating  a return  for                                                               
energy efficiency  expenditures comes down  to how long  it takes                                                               
to recoup  the investment. For  instance, many times  people want                                                               
to replace  their windows,  but the payback  on them,  unless its                                                               
extreme,  doesn't  match  what  one  would  get  by  adding  more                                                               
insulation  in the  attic, caulking  windows, or  putting in  new                                                               
weather stripping on doors. He  likes the rebate program, because                                                               
the homeowner  gets to decide  what to  do based on  the payback,                                                               
and tools are available to help calculate it.                                                                                   
                                                                                                                                
12:23:48 PM                                                                                                                   
CO-CHAIR EDGMON  offered his understanding that  $160 million was                                                               
appropriated  to the  weatherization  program and  asked if  that                                                               
money  is all  spent or  encumbered and  whether AHFC  internally                                                               
might argue  that the  whole $26 million  should go  towards some                                                               
type of weatherization program.                                                                                                 
                                                                                                                                
MR.  FAUSKE answered,  "At the  danger of  appearing greedy  with                                                               
$360 million, I would hate to come  in and say I need another $28                                                               
[million] and leave my friends at AEA out in the cold."                                                                         
                                                                                                                                
He said  the current program  is going  very well, and  they will                                                               
start  regularly  emailing reports  that  show  its status.  Over                                                               
14,000 ratings  have been done at  the rate of about  300-400 per                                                               
week. The  weatherization program  is getting  out more  to rural                                                               
areas and the  feedback is excellent in terms of  what is getting                                                               
done and how many people it's  putting to work. However, they are                                                               
thinking that the 18-months is too long.                                                                                        
                                                                                                                                
MR.  FAUSKE said  Alaska  has  lead the  way  for  many years  in                                                               
building efficient houses,  but they have to  be affordable, too.                                                               
Some federal  "green ideas" are  good, but it hasn't  reached the                                                               
point that  the average homeowner  will make use of  them because                                                               
of their cost.                                                                                                                  
                                                                                                                                
12:27:12 PM                                                                                                                   
BRIAN BUTCHER,  Director, Public Affairs, Alaska  Housing Finance                                                               
Corporation (AHFC), Department of  Revenue, explained in terms of                                                               
the Home Energy Rebate Program,  they obligate the maximum amount                                                               
a person  could get, so it  is available for the  full 18 months.                                                               
Approximately  $124   million  of  the  $160   million  has  been                                                               
encumbered; the average rebate has  been $6,100. So, in trying to                                                               
figure out how long the funds  will last the big variable is what                                                               
percent of  applicants are  actually going  to take  advantage of                                                               
the program,  and this November will  be the end of  the 18-month                                                               
period for the  first month worth of people who  got ratings once                                                               
the program started.  They estimate it will be  under 50 percent.                                                               
Once  the rebate  paperwork  has been  submitted  a person  can't                                                               
amend it; so there is no incentive to rush.                                                                                     
                                                                                                                                
12:29:42 PM                                                                                                                   
CO-CHAIR EDGMON  asked where  the energy raters  are in  terms of                                                               
catching up with the money.                                                                                                     
                                                                                                                                
MR. BUTCHER replied that new  raters are being trained as needed,                                                               
but the problem right now isn't  having enough. The raters in the                                                               
urban areas  are caught up,  so getting them  out to some  of the                                                               
smaller  communities  that  couldn't  afford  a  rater  is  their                                                               
priority now.                                                                                                                   
                                                                                                                                
MR. FAUSKE  said they have 120  raters at this time.  In areas of                                                               
the state  that have  building codes most  buildings meet  a four                                                               
star-plus energy  standard. Outside lenders are  held to building                                                               
codes,  but  not  to  the   state  energy  plan.  This  leads  to                                                               
situations where  outside lenders  lend money, that  money leaves                                                               
the state,  then the  person who borrowed  that money  applies to                                                               
the rebate program to weatherize their  house. "I think that is a                                                               
poor way to run a parade."                                                                                                      
                                                                                                                                
If anything is done on the  energy code, the playing field should                                                               
be level,  because he thought  further more  stringent directives                                                               
would  come from  the federal  government sooner  or later.  It's                                                               
important  to keep  business  at  home, and  now  the program  is                                                               
subsidizing  outside lenders.  AHFC uses  its arbitrage  earnings                                                               
from the interest rate reduction  for energy efficiency, and that                                                               
is  a limited  resource.  He  hoped to  get  the  IRS to  somehow                                                               
recognize energy efficiency.                                                                                                    
                                                                                                                                
12:33:21 PM                                                                                                                   
CO-CHAIR MILLETT asked  how he anticipates the  $28 million would                                                               
be split.                                                                                                                       
                                                                                                                                
MR. FAUSKE  answered that they  have had  preliminary discussions                                                               
with AEA, but nothing has been etched in stone.                                                                                 
                                                                                                                                
MR. BUTCHER  added that  they were  asked to  put the  draft plan                                                               
together, but it will certainly  look different than the existing                                                               
one. As an  example AHFC and AEA have always  split it 50/50, but                                                               
that has  been for small  amounts like $250,000. They  need funds                                                               
to work on the code and  the reporting. The new governor has said                                                               
he supported Governor  Palin's veto; however he  also said should                                                               
the legislature  override it,  he respected  its power  and would                                                               
apply for the funds in the least restrictive way possible.                                                                      
                                                                                                                                
MR.  FAUSKE offered  his interpretation  that the  aforementioned                                                               
DOE  letter  means  adopting  an  energy  code  is  no  longer  a                                                               
requirement as long  as they are working in  that direction. They                                                               
are getting a great deal of  comments from the commercial side to                                                               
see monies made available for commercial enterprises.                                                                           
                                                                                                                                
SENATOR MCGUIRE said  she hoped they considered  keeping the $1.5                                                               
million for  consumer educational  opportunities -  workshops for                                                               
consumers, auditors, contractors  and other housing professionals                                                               
in energy efficiency education.                                                                                                 
                                                                                                                                
12:38:17 PM                                                                                                                   
MR.  BUTCHER added  that from  a  policy standpoint  part of  the                                                               
letter,  letters from  each state  include  language stating  the                                                               
governor  will  say he  will  promote  energy efficiency  and  he                                                               
imagined consumer education would be included.                                                                                  
                                                                                                                                
12:38:59 PM                                                                                                                   
MR. FAUSKE  added that word  of mouth  from people who  have used                                                               
the program works best for promoting use of it.                                                                                 
                                                                                                                                
MR. BUTCHER said  they plan on doing that with  the energy rebate                                                               
program. They will  be able to tell which  communities have taken                                                               
the  most advantage  of  it  and they  will  "get  out there"  to                                                               
encourage people to take more advantage  of the program. A lot of                                                               
that  won't cost  money; it  will  be radio  shows and  community                                                               
meetings.                                                                                                                       
                                                                                                                                
12:41:19 PM                                                                                                                   
REPRESENTATIVE DAHLSTROM  asked if the energy  rating classes are                                                               
on line.                                                                                                                        
                                                                                                                                
MR. FAUSKE indicated yes.                                                                                                       
                                                                                                                                
12:41:48 PM                                                                                                                   
REPRESENTATIVE  RAMRAS  expressed  his hoped  that  energy  funds                                                               
could  be  used for  public  buildings,  so municipalities  could                                                               
benefit. He said  he was troubled that  Alaska was distinguishing                                                               
itself  not  only through  the  former  governor but  potentially                                                               
through  the current  one in  "wanting to  go a  different route"                                                               
than the 49 other states.                                                                                                       
                                                                                                                                
12:43:41 PM                                                                                                                   
MR. FAUSKE said he had a  great meeting with Governor Parnell and                                                               
it was  very obvious that he  had great concern with  the Alaskan                                                               
projects.                                                                                                                       
                                                                                                                                
SENATOR  WIELECHOWSKI asked  if AHFC  receives any  other federal                                                               
funds.                                                                                                                          
                                                                                                                                
MR. FAUSKE replied yes.                                                                                                         
                                                                                                                                
MR.  BUTCHER  added  that  the  weatherization  program  receives                                                               
approximately  $2  -  $2.5  million per  year  from  the  federal                                                               
government that they administer along with the state's funds.                                                                   
                                                                                                                                
12:45:03 PM                                                                                                                   
SENATOR  WIELECHOWSKI  said  he  was  getting  to  the  "strings"                                                               
question  and  asked   if  that  $2.5  million   is  treated  any                                                               
differently than the $28.6 million the state will get.                                                                          
                                                                                                                                
MR. BUTCHER replied  that because they hadn't  received the funds                                                               
yet and gone  through the process, he couldn't  speak directly to                                                               
the  difference.  He  knew  that  Congress  was  concerned  about                                                               
misappropriation of funds because of  the focus on getting it out                                                               
as  quickly as  possible.  He would  get back  to  him with  more                                                               
information.                                                                                                                    
                                                                                                                                
MR.  FAUSKE said  that they  audit themselves  internally on  tax                                                               
credit programs on a regular basis,  so they have a system set up                                                               
to catch compliance issues.                                                                                                     
                                                                                                                                
SENATOR WIELECHOWSKI  asked if they received  other federal funds                                                               
outside of energy.                                                                                                              
                                                                                                                                
MR.  BUTCHER  replied  that  they receive  tens  of  millions  of                                                               
dollars a year from the federal  government, most of it in public                                                               
housing.  They  also  received  stimulus funds  in  five  or  six                                                               
different  programs   that  were   all  approved  in   the  first                                                               
appropriation bill.                                                                                                             
                                                                                                                                
SENATOR  WIELECHOWSKI  asked  if  strings were  attached  to  any                                                               
federal funding they got.                                                                                                       
                                                                                                                                
MR. BUTCHER replied that they  instruct what needs to happen with                                                               
the  funds, but  there hasn't  been anything  like the  SEP where                                                               
they say one  must be at a  certain percent by a  certain year in                                                               
order to  qualify for the funds.  He said they all  believed that                                                               
significant strings were attached because  of the way the law was                                                               
written,  but  then the  DOE  realized  that states  needed  more                                                               
flexibility.                                                                                                                    
                                                                                                                                
SENATOR MCGUIRE said the idea  behind an energy authority concept                                                               
is to  streamline all  the places  that state  government already                                                               
has  to deal  with energy  along with  the stimulus  dollars. She                                                               
asked  that  they  discuss  compliance  issues  if  the  governor                                                               
decides to  go with AHFC and  AEA receiving stimulus money.   She                                                               
felt that promoting energy efficiency  is good and felt comforted                                                               
that the latitude  exists to work with the  government, but those                                                               
understandings  should have  a written  record behind  them. AHFC                                                               
and AEA should  also have a method by which  they both comply and                                                               
report back to the federal government that is consistent.                                                                       
                                                                                                                                
12:50:50 PM                                                                                                                   
MR. FAUSKE repeated  that strings are attached  to everything and                                                               
they already  do this all the  time. His concern is  that changes                                                               
could  occur.   For  example  Hurricane  Katrina   had  stringent                                                               
guidelines,  but  as  they  got   into  the  process  with  their                                                               
governors and representatives, they  learned that some things had                                                               
to be  done differently. He said  the state has 3  years to spend                                                               
the money,  but 8  years to  comply and he  didn't know  how that                                                               
would work, but  he vowed to stay focused on  compliance. That is                                                               
why it's critical to get a good  plan going in. He said Alaska is                                                               
one of 50 states and the federal government will be inundated.                                                                  
                                                                                                                                
12:54:05 PM                                                                                                                   
JOSEPH BALASH, Office of the  Governor, offered his understanding                                                               
that the new  governor respected the previous  governor's veto of                                                               
the funds, but in recognizing  the co-equal and separate branches                                                               
of government  he would  develop the  application and  submit the                                                               
state  energy  plan and  certifications  to  the DOE  should  the                                                               
legislature override the veto.                                                                                                  
                                                                                                                                
REPRESENTATIVE  DAHLSTROM asked  Mr. Balash  whether he  would be                                                               
willing to relay information to the governor on this issue.                                                                     
                                                                                                                                
MR. BALASH indicated that he would do so.                                                                                       
                                                                                                                                
12:56:30 PM                                                                                                                   
SENATOR  WIELECHOWSKI  said  that  the  legislature  had  already                                                               
adopted a  resolution in  support of  accepting all  the stimulus                                                               
funding.  DOE said  it would  accept a  concurrent resolution  or                                                               
equivalent  action  from  the  legislature  providing  assurances                                                               
required under  Section 410  in its July  24 letter.  "Isn't that                                                               
enough of a  voice from the legislature to you?  I think the vote                                                               
was 55 to 4 or something like that."                                                                                            
                                                                                                                                
MR. BALASH  indicated that it  is not  and some form  of separate                                                               
action that  will occur at  the upcoming special session  will be                                                               
necessary.  In  terms of  the  resolution  that was  passed,  the                                                               
question really  is what  is good  enough for  DOE. They  will be                                                               
submitting a  SEP and the  necessary assurances, but there  is no                                                               
guarantee that  they will be  accepted. There might be  some sort                                                               
of back and forth to make  the words in the resolution accomplish                                                               
what it is the DOE is looking for.                                                                                              
                                                                                                                                
SENATOR  WIELECHOWSKI  said  the   legislature  has  spoken  very                                                               
clearly,  and it  has already  voted on  the budgetary  issue. He                                                               
didn't  understand why  the governor  didn't just  send a  letter                                                               
saying he'll comply  with the requirements of  the stimulus fund,                                                               
and to tell him why he still wants them to override the veto.                                                                   
                                                                                                                                
MR.  BALASH  replied  that  he  thought  it  was  the  Governor's                                                               
commitment  to  and the  respect  for  the separate  branches  of                                                               
government.  The  executive  branch  vetoed  the  specific  funds                                                               
identified and if the legislature  acts within its constitutional                                                               
powers to  override that  veto, he would  fully comply  with that                                                               
action and administer and execute  the policy direction expressed                                                               
by the legislature.                                                                                                             
                                                                                                                                
1:01:33 PM                                                                                                                    
REPRESENTATIVE RAMRAS  said it was  very constructive that  he is                                                               
here  and it's  refreshing to  hear  him talk  about the  coequal                                                               
branches of  government. Yesterday the Governor  in his inaugural                                                               
speech wanted to extend the  eight-cent gas tax holiday, which he                                                               
will vote  against because it his  belief that "it was  raked off                                                               
by refineries and  jobbers and the retailers" and  very little of                                                               
it found its way into  the pockets of Alaskan consumers. However,                                                               
he looked forward to having a more conciliatory relationship.                                                                   
                                                                                                                                
REPRESENTATIVE HAWKER  explained that the $28  million was vetoed                                                               
by  a previous  governor  and  this governor  does  not have  the                                                               
authority to  revoke that  veto. To move  the ball  forward, they                                                               
must override the  veto. He has been assured by  the Governor and                                                               
believes him  that he will do  what is necessary to  secure these                                                               
funds.                                                                                                                          
                                                                                                                                
MR. BALASH concurred with that assessment.                                                                                      
                                                                                                                                
SENATOR MCGUIRE mentioned that  what Senator Wielechowski pointed                                                               
out is  interesting. When you  read the specific July  24 letter,                                                               
it  says,  "If funds  are  provided  to  any  state and  are  not                                                               
accepted  by   the  governor,  then   acceptance  by   the  state                                                               
legislature by  means of adopting  a concurrent  resolution shall                                                               
be  sufficient   to  provide  that  funding."   Politically,  she                                                               
understands  the new  governor's desire  to have  the legislature                                                               
weigh in  to override  that veto, but  in terms  of accomplishing                                                               
the  goal of  accepting  the energy  money,  the legislature  has                                                               
spoken in its  resolution. It could speak again in  the form of a                                                               
concurrent  resolution.  But  should   the  legislature  fail  to                                                               
override  the veto  either because  there  aren't enough  members                                                               
present  or if  the members  present don't  equal the  two-thirds                                                               
requirement,  would  this  governor  accept  the  fact  that  the                                                               
legislature has spoken  by virtue of a  resolution already passed                                                               
or would a new concurrent resolution be required?                                                                               
                                                                                                                                
MR. BALASH said he is not  sure how the Governor would view that,                                                               
but  surmised  that  much like  the  appropriations  process  the                                                               
legislature goes through,  there is a vote on  passing the budget                                                               
and then  a vote on  the individual amendments brought  up either                                                               
in committee  or on the  floor, and how  one votes on  the entire                                                               
budget does not  necessarily reflect the wishes of one  or any or                                                               
all of  the legislators on  a specific line item.  The resolution                                                               
that was adopted earlier this year  in much the same way was very                                                               
broad and the question about  these specific programmatic dollars                                                               
has not  been addressed directly  by the legislature to  date. So                                                               
what sort  of gradations or  distinctions there might  be between                                                               
passage  or adoption  of a  concurrent resolution  versus a  veto                                                               
override  is one  he was  willing to  relay to  the Governor  and                                                               
provide some feedback to members.                                                                                               
                                                                                                                                
1:08:30 PM                                                                                                                    
CO-CHAIR MILLETT stated  that the resolution did  not include the                                                               
$28.6 million  language, but rather  it referred to  all stimulus                                                               
monies. They wanted to accept it all.                                                                                           
                                                                                                                                
MR. BALASH remarked  that the question is, "Who is  going to hold                                                               
the hot potato?"                                                                                                                
                                                                                                                                
REPRESENTATIVE  STOLTZE offered  his opinion  that Representative                                                               
Hawker  had pretty  well  outlined the  procedure,  and that  the                                                               
Governor would support a veto override  because he said so. If he                                                               
didn't follow  through, that would  also send a clear  message to                                                               
the legislature.                                                                                                                
                                                                                                                                
1:10:47 PM                                                                                                                    
CO-CHAIR  MILLETT  noted that  she  received  a phone  call  from                                                               
Governor Parnell and he was  open to discussing energy issues; so                                                               
she doesn't see an adversarial relationship forming at all.                                                                     
                                                                                                                                
1:12:03 PM                                                                                                                    
SENATOR  MCGUIRE  said that  Governor  Parnell  has a  particular                                                               
interest in energy  and nothing about this  conversation is meant                                                               
to be  confrontational, but it  is important for  the legislature                                                               
to  interpret things  clearly. This  letter is  the first  formal                                                               
communication they have  had about what steps could  be deemed by                                                               
the  federal  government  to  meet  the  letter  of  the  law  of                                                               
compliance. So,  her question  was really more  of now  that they                                                               
have received  the letter from  the Governor, would he  also deem                                                               
that  a concurrent  resolution would  meet  the guidelines  under                                                               
Section  410.  She  is  merely  asking if  the  new  governor  is                                                               
interpreting that letter in a similar fashion.                                                                                  
                                                                                                                                
1:13:35 PM                                                                                                                    
MR. BALASH said  he didn't talk about the specific  scenario of a                                                               
concurrent resolution  and no  override. So  he can't  commit the                                                               
Governor to a  particular course of action, but he  would be able                                                               
to provide an indication before action on August 10.                                                                            
                                                                                                                                
1:14:04 PM                                                                                                                    
SENATOR  HOFFMAN   noted  that  he   didn't  plan  on   having  a                                                               
confrontation with the Governor. He  already met with him and has                                                               
an excellent  working relationship  with him.  Last week  he made                                                               
statements that  he supported the governor's  position because of                                                               
the  strings that  are attached,  but Mr.  Persily has  indicated                                                               
that  there are  no strings  attached. The  people of  Alaska are                                                               
really interested in  receiving those funds. His  question to the                                                               
committee is  in light  of this new  information that  no strings                                                               
are attached  and the fact  that Alaska  is the coldest  state in                                                               
the country and  the only state that did not  accept those funds,                                                               
will  the  Governor  review  that   information  and  support  an                                                               
override so that Alaskans can become more energy efficient.                                                                     
                                                                                                                                
1:15:38 PM                                                                                                                    
MR. BALASH surmised  that the new governor  will be investigating                                                               
that issue further very soon.                                                                                                   
                                                                                                                                
CO-CHAIR MILLETT said both energy  committees would be willing to                                                               
talk to  Governor Parnell  about some of  the things  Mr. Persily                                                               
has talked about.                                                                                                               
                                                                                                                                
REPRESENTATIVE  HAWKER  indicated  that   Mr.  Persily  would  be                                                               
available in  Juneau should the governor  need to talk to  him at                                                               
any time.                                                                                                                       
                                                                                                                                
1:17:23 PM                                                                                                                    
SARAH  FISHER-GOAD, Alaska  Energy Authority  (AEA), said  if the                                                               
funding is  accepted, then AEA  would have a discussion  with the                                                               
new governor regarding priorities and  allowable uses - uses such                                                               
as  end use  efficiency  programs for  commercial and  industrial                                                               
use, renewable  energy efforts through the  Renewable Energy Fund                                                               
Program,  emerging  energy  efficiency technologies,  and  energy                                                               
efficient  equipment   rebates  and   incentives.  AHFC   is  the                                                               
residential  expert  and AEA  is  on  the commercial  and  public                                                               
facilities and the renewable energy program side.                                                                               
                                                                                                                                
1:19:16 PM                                                                                                                    
CO-CHAIR EDGMON questioned whether  the playing field had shifted                                                               
based in terms of where AEA might allocate the funding.                                                                         
                                                                                                                                
MS.  GOAD offered  that  their cornerstone  has  been the  energy                                                               
efficiency   program  and   it   supports   the  program   policy                                                               
recommendations done  by Cold Climate  Research Center  for AHFC,                                                               
but  they might  need some  adjustments.  Those will  be open  to                                                               
discussion and debate.                                                                                                          
                                                                                                                                
1:21:39 PM                                                                                                                    
CO-CHAIR MILLETT  thanked everyone for their  comments and wished                                                               
Representative  Buch   a  happy  birthday.  Finding   no  further                                                               
business before the committee, she  adjourned the meeting between                                                               
the  House Special  Committee on  Energy and  the Senate  Special                                                               
Committee on Energy at 1:21 p.m.                                                                                                

Document Name Date/Time Subjects
AARP Letter FSEF.pdf HENE 7/27/2009 11:30:00 AM
AHFC Energy document.pdf HENE 7/27/2009 11:30:00 AM
Energy Committee July 27 meeting agenda.doc HENE 7/27/2009 11:30:00 AM
Commonwealth North Energy Efficiency Funding Resolution.pdf HENE 7/27/2009 11:30:00 AM
Persily testimony July 27.doc HENE 7/27/2009 11:30:00 AM
Draft AEA Projects List.xlsx HENE 7/27/2009 11:30:00 AM