Legislature(2009 - 2010)Dutch Harbor
08/26/2009 05:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB218|| HB219 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 218 | TELECONFERENCED | |
| += | HB 219 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
Unalaska, Alaska
August 26, 2009
5:12 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Kyle Johansen
Representative Jay Ramras (via teleconference)
Representative Chris Tuck
MEMBERS ABSENT
Representative Nancy Dahlstrom
Representative Pete Petersen
COMMITTEE CALENDAR
HOUSE BILL NO. 218
"An Act establishing and relating to the Department of Energy
and to the board of directors of the Alaska Energy Authority;
transferring the Alaska Energy Authority and the Alaska Natural
Gas Authority to the Department of Energy; and transferring the
home energy and weatherization program to the Department of
Energy."
-HEARD & HELD
HOUSE BILL NO. 219
"An Act relating to the renewable energy grant fund."
-HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 218
SHORT TITLE: CREATING DEPT OF ENERGY/AEA BD
SPONSOR(s): ENERGY
04/06/09 (H) READ THE FIRST TIME - REFERRALS
04/06/09 (H) ENE, FIN
05/29/09 (H) ENE AT 1:00 PM Bethel
05/29/09 (H) Heard & Held
05/29/09 (H) MINUTE(ENE)
06/17/09 (H) ENE AT 5:00 PM Fairbanks
06/17/09 (H) Heard & Held
06/17/09 (H) MINUTE(ENE)
08/07/09 (H) ENE AT 2:00 PM Kenai
08/26/09 (H) Heard & Held
08/26/09 (H) MINUTE(ENE)
08/26/09 (H) ENE AT 5:00 PM Dutch Harbor
BILL: HB 219
SHORT TITLE: RENEWABLE ENERGY GRANT REQUIREMENTS
SPONSOR(s): ENERGY
04/06/09 (H) READ THE FIRST TIME - REFERRALS
04/06/09 (H) ENE, RES, FIN
05/29/09 (H) ENE AT 1:00 PM Bethel
05/29/09 (H) Heard & Held
05/29/09 (H) MINUTE(ENE)
06/17/09 (H) ENE AT 5:00 PM Fairbanks
06/17/09 (H) Heard & Held
06/17/09 (H) MINUTE(ENE)
08/07/09 (H) ENE AT 2:00 PM Kenai
08/26/09 (H) Heard & Held
08/26/09 (H) MINUTE(ENE)
08/26/09 (H) ENE AT 5:00 PM Dutch Harbor
WITNESS REGISTER
SHIRLEY MARQUARDT, Mayor
City of Unalaska
Unalaska, Alaska
POSITION STATEMENT: During hearing of HB 218 and HB 219,
expressed the need to continue to include local input and
control with any proposed energy plans.
JOHN CONWELL, Superintendant
City of Unalaska School District
City of Unalaska
Unalaska, Alaska
POSITION STATEMENT: During hearing of HB 218 and HB 219,
outlined the progress of the City of Unalaska's school
renovations.
JOE BERESKIN, SR., Mayor
City of Akutan
Akutan, Alaska
POSITION STATEMENT: Provided comments during discussion of HB
218 and HB 219.
WENDY HAWTHORNE, Chief Executive Officer
Ounalashka Corporation
Unalaska, Alaska
POSITION STATEMENT: During hearing of HB 218 and HB 219, noted
her agreement with Mayor Marquardt's comments regarding the need
to continue to fund nonrenewable energy projects.
DON GRAVES, Production Manager
UniSea
Dutch Harbor, Alaska
POSITION STATEMENT: During hearing of HB 218 and HB 219,
suggested broadening the legislation to allow communities as
well as industry to take advantage of energy efficient projects.
KATHERINE McGLASHAN
Dutch Harbor, Alaska
POSITION STATEMENT: During hearing of HB 218 and HB 219,
expressed frustration with the length of time it takes to go
through the process of the home energy conservation and
weatherization programs.
RICHARD PECK, Owner
Utility Innovations Plus
Unalaska, Alaska
POSITION STATEMENT: During discussion of HB 218 and HB 219,
expressed his favor with the proposal for a Department of
Energy.
FRANK KELTY
Unalaska, Alaska
POSITION STATEMENT: During discussion of HB 218 and HB 219,
specified that more programs dealing with various energy issues
would be helpful.
CHRIS HLADICK, City Manager
City of Unalaska
Unalaska, Alaska
POSITION STATEMENT: Provided comments during discussion of HB
218 and HB 219, and opined that it's important for the
legislature to have someone independent of AEA review the
various projects that come forward for funding.
SINCLAIR WILT, Vice President
Alyeska Seafoods, Inc.
Unalaska, Alaska
POSITION STATEMENT: During discussion of HB 218 and HB 219,
discussed the air quality permit process.
SKIP SOUTHWORTH, Member
Unalaska City Council
City of Unalaska
Unalaska, Alaska
POSITION STATEMENT: Posed a question and provided comments
during discussion of HB 218 and HB 219.
ACTION NARRATIVE
5:12:11 PM
CO-CHAIR BRYCE EDGMON called the House Special Committee on
Energy meeting to order at 5:12 p.m. Representatives Edgmon,
Millett, Johansen, Ramras (via teleconference), and Tuck were
present at the call to order. Also in attendance was
Representative Mike Chenault.
HB 218-CREATING DEPT OF ENERGY/AEA BD
HB 219-RENEWABLE ENERGY GRANT REQUIREMENTS
5:12:30 PM
CO-CHAIR BRYCE EDGMON announced that the only order of business
would be HOUSE BILL NO. 218, "An Act establishing and relating
to the Department of Energy and to the board of directors of the
Alaska Energy Authority; transferring the Alaska Energy
Authority and the Alaska Natural Gas Authority to the Department
of Energy; and transferring the home energy and weatherization
program to the Department of Energy."; and HOUSE BILL NO. 219,
"An Act relating to the renewable energy grant fund."
CO-CHAIR EDGMON noted that there is draft legislation that is
the result of a working group of legislators who hope to develop
a statewide energy plan that can be introduced next session.
5:18:46 PM
SHIRLEY MARQUARDT, Mayor, City of Unalaska, thanked the
committee for its interest in the region. She remarked that the
committee is likely to hear testimony similar to that given at
prior meetings in rural Alaska; that is that the cost to provide
energy in communities in rural Alaska is expensive and that
there aren't many good solutions. With regard to the state's
energy plan, she acknowledged the desire for 50 percent of power
production to be from renewable resources by 2025. However, she
opined that although the aforementioned isn't a bad goal, it
probably isn't possible. She expressed the need for any plan to
recognize that existing facilities in the state could be
upgraded with newer technologies that continue to use diesel but
burn 30 percent less fuel. Such savings could be passed on to
consumers. Mayor Marquardt further expressed the need for there
to be local input and control on all of these projects as it has
been illustrated that monies given to a municipality or
community for a specific project has saved money and time.
Therefore, local input and control with a statewide energy plan
is important.
MAYOR MARQUARDT, regarding the provisions in HB 219 that speak
to hiring an economist with experience in the area of renewable
energy, expressed concern with "forensic economists" who utilize
the information before them to come up with a product to suit
the client. Therefore, she encouraged the committee to obtain
independent economists or financial engineers who have a
background in renewable energy as well as in power production
and financial feasibility of various types of projects. She
pointed out that renewable energy is new and although there are
a lot of ideas, there aren't many [systems] actually in place
and working. She further encouraged the committee not to allow
the proposed Department of Energy to become the only grantor of
funds for projects. She related that the City of Unalaska would
rather approach its legislators, who understand the community
and its goal, for help on construction costs rather than going
through a grant program. The aforementioned may be simpler in a
case in which a community is merely seeking an upgrade to
existing diesel technology. Mayor Marquardt opined that
Unalaska has challenges with renewable energy sources. For
instance, the area has a lot of wind, but it's problematic
because it comes from all directions at once. Furthermore, the
tides in the area are only 2.5 to 3 feet. She specified that
the risks are large for the area because it isn't on a grid.
Therefore, Mayor Marquardt expressed concern that communities
such as Unalaska would have difficulty obtaining grant funding
for projects that aren't renewable energy sources, although the
proposal may reduce the carbon footprint, reduce dependency on
fuel, and reduce costs for the local consumers. The concern,
she further articulated, is that a department may not see the
differences in communities throughout the state as well as
legislators would.
CO-CHAIR EDGMON noted his appreciation of Mayor Marquardt's
comments regarding the capital budget process and the need to
avoid sideboards when a local government/community works for
funding that has to flow from the federal government through
state government to the local government.
CO-CHAIR MILLETT noted that Governor Parnell recently appointed
cabinet-level energy positions, which had been proposed in HB
218. The aforementioned recognizes that energy issues are of
high importance.
5:27:40 PM
JOHN CONWELL, Superintendant, City of Unalaska School District,
City of Unalaska, said that although he hadn't planned on
testifying today, he would relate the school's debt
reimbursement program. The large renovation project of the
city's 5th through 12th grade facility is nearly complete. Much
of the renovation included energy efficiency changes, from which
the school expects to garner huge cost savings. For example,
all exterior and interior lights and all exterior doors and
windows were replaced with energy efficient models.
Furthermore, about half of the roof was repaired as was a large
section of the building's leaking exterior. Large renovations
in the building's kitchen also occurred. Mr. Conwell expressed
the hope that in about six months he will be able to report much
lower utility bills. In conclusion, Mr. Conwell encouraged the
legislature to continue the 70 percent debt reimbursement
program for school districts as it has enabled the City of
Unalaska to provide a much better learning environment for
students.
5:29:45 PM
JOE BERESKIN, SR., Mayor, City of Akutan, expressed concern with
HB 218 and its attempt to combine many [services] in one
department because often things fall to the wayside. He noted
that the City of Akutan has been fortunate in that it has three
energy projects funded through the existing program in AEA.
Mayor Bereskin acknowledged that people may wonder how a small
city such as Akutan could tap into the funds it has. To that,
he related the need to understand the process and get a good
group together to promote projects. He mentioned that the
funding from the state is allowing a geothermal project and two
hydro projects. In response to Co-Chair Edgmon, Mayor Bereskin
informed the committee that for the geothermal project, soil and
gas sampling occurred a couple of months ago and a group is
trying to determine the best location to drill. He expressed
his hope that they would be able to drill next fall or spring.
He noted that the City of Akutan filled out grant applications
for drilling, which is the next step.
5:33:56 PM
CO-CHAIR MILLETT mentioned that the committee has noticed that
groups that deal with energy matters are scattered throughout
different state departments. The aforementioned is difficult to
navigate. Therefore, HB 218 was designed to propose a
Department of Energy that consolidated energy programs in one
department and offered some changes to some of the existing
organizations. However, HB 219 is clean-up legislation in
response to the belief of some legislators that there isn't
enough oversight and that there [was approval of funds] for some
research and development projects and technologies that weren't
proven. The aforementioned resulted in an audit report that
offered recommendations that have been incorporated in the
legislation, such as the need to hold project completion at a
high level. Co-Chair Millett said that the committee has also
provided copies of the committee's first draft of a proposed
energy policy, which is the product of a stakeholders' group
that has been meeting. She characterized this draft policy as a
work in progress.
5:40:00 PM
WENDY HAWTHORNE, Chief Executive Officer, Ounalashka
Corporation, began by informing the committee that the
Ounalashka Corporation represents about 420 shareholders. Most
of the business conducted by Ounalashka Corporation is land
leasing and development. The high energy costs for tenants have
become very apparent. In fact, areas for which the corporation
pays the energy costs may face an increase in rent. Ms.
Hawthorne noted her agreement with Mayor Marquardt's comments
regarding Unalaska not losing [funding/approval] for upgrading
nonrenewable energy projects in favor of only renewable energy
projects. There has been difficulty getting renewable energy
projects going in Unalaska.
5:42:11 PM
DON GRAVES, Production Manager, UniSea, explained that UniSea
generates power and is the largest manufacturer of power in
Unalaska. He related that Unalaska is different than other
communities in the state in that the city has had to generate
its own power and ensure stable supplies for the plants. He
encouraged the committee to be in contact with programs and
facilities that fall outside the City of Unalaska's purview.
Since UniSea sells some power to the community, it would be nice
to receive some assistance with the facilities in town and
review available alternative energy sources such as fish oil
from the production facilities. For example, 25 percent of the
power UniSea produces is from fish oil, which is renewable. He
suggested that the legislation be broadened such that
communities as well as industry can take advantage of their
potential.
5:45:03 PM
KATHERINE McGLASHAN, speaking as a single mother of five living
in a home with little insulation, expressed frustration with the
paperwork requirements for the home energy conservation and
weatherization program. She opined that the process is very
slow, and therefore she would support assistance to shorten the
process. She related that she filled out the form last year,
but received no response even after email and phone messages.
MS. McGLASHAN, in response to Representative Chenault, specified
that she has had her home energy rated. However, she noted that
her home falls under the Aleutian Housing Authority, and thus
she isn't sure where her forms are in the process.
CO-CHAIR EDGMON reminded everyone that the legislature recently
overrode former Governor Palin's veto of $28.6 million in
federal stimulus funds for energy. Originally, there was
discussion that AEA and AHFC would come forward with a plan
regarding how to spend the $28.6 million. Part of that plan
would have been to strengthen the energy rating program and the
education aspect regarding the benefits of weatherization. He
asked if there is any update as to what Governor Parnell might
do with the $28.6 million.
REPRESENTATIVE CHENAULT replied no, but added that Governor
Parnell has been asked to utilize the funds in public building
renewal as well as school districts, and opined that the
stimulus funds should be used to help all Alaskans, not just
"the state." However, he said he expects the funds to be
available shortly. With regard to Ms. McGlashan's specific
situation, he suggested she contact her legislator.
5:50:48 PM
RICHARD PECK, Owner, Utility Innovations Plus, after relaying
that he'd been working in the electric utility industry for 40
years and started his energy consulting firm 14 years ago,
commented on the need for clear direction, and the lack of
information forthcoming from the agencies with which he's
spoken. He opined that centralizing all the agencies that deal
with energy would be a worthy endeavor, and suggested that the
Regulatory Commission of Alaska (RCA) be placed under the
purview of the proposed Department of Energy to avoid conflict
between the two entities' efforts. He mentioned that with the
help of AEA, he's just completed a wind assessment in "Pyramid
Valley," and expressed his hope that such AEA programs will
continue. He then questioned what the makeup of any new AEA
board of directors would be and what recommendations the
committee would have for the board.
5:54:31 PM
CO-CHAIR EDGMON indicated that the concept is for AEA to have
autonomy, and that according to HB 218, its [new] board would be
made up of the commissioner of the Department of Revenue (DOR),
the commissioner of the proposed Department of Energy, one other
head of a principal department of the executive branch, and two
public members, with the latter three being appointed by the
governor. He noted that the RCA just held a meeting in
Anchorage regarding the "rolling blackouts that might occur" in
Southcentral Alaska due to shortages in natural gas supplies,
and expressed favor with Mr. Peck's suggestion regarding placing
the RCA under the purview of the proposed Department of Energy.
MR. PECK mentioned that AEA was very helpful to him when he was
working with a client on Umnak Island until AEA determined that
the client was neither an electric utility nor an independent
power producer and thus wasn't eligible for AEA's help. He
surmised that there are probably other similar, small, private
enterprises that need assistance developing their own power
supply in order to meet their own energy needs but have no place
to turn at this time because they are neither an electric
utility nor an independent power producer. Therefore, he
suggested that such statutory definitions need to be reviewed.
In conclusion, he said, "We don't want to disenfranchise any
business interest that's trying to develop the resources of this
great state."
6:00:00 PM
FRANK KELTY, noting that energy issues are now at the forefront
of things the state must consider and surmising that
establishing a Department of Energy to consolidate services and
work with various programs in a more efficient manner is
something that the majority of people could support, he then
listed current fuel prices compared to what they were a year
ago: number 2 diesel at the dock is now $2.75/gallon, but was
$4.45/gallon a year ago; delivered home heating fuel is now
$3.18/gallon, but was $4.98/gallon a year ago; and gasoline is
now $3.34/gallon, but was approximately $4.99/gallon a year ago.
He mentioned that many of the buildings in town are not energy
efficient or weatherized, and surmised that energy costs for the
seafood industry are probably some of the highest expenses that
the industry has to face, and that this probably has a
tremendous impact on the harvesters and processers in the area.
In conclusion, he ventured that more programs dealing with
various energy issues would be helpful.
6:05:20 PM
CHRIS HLADICK, City Manager, City of Unalaska, opined that it's
important for the legislature to have someone independent of AEA
review the various projects that come forward for funding; such
a person ought to have power-project experience. He also opined
that AEA needs clear direction from and oversight by both the
governor and the legislature - recalling that in the past, AEA
has had problems and received complaints. He acknowledged that
it is probably not a bad idea to have a single department
dealing with all energy-related issues. He, too, expressed
favor with the concept of having the RCA placed under the
purview of the proposed Department of Energy. With regard to
developing an energy policy, he posited that it's important for
that policy to have obtainable goals, and for research regarding
the cost of obtaining those goals to be conducted so as to
determine, on a case-by-case basis, what funding mechanisms
would be most appropriate.
MR. HLADICK then mentioned that [Unalaska] has four power plants
as well as a powerhouse project estimated to cost $48 million,
and that the cost of air quality permitting has gone through the
roof, and will only increase, particularly if, at the federal
level, "we end up going to cap-and-trade", or if silicon-
controlled rectifiers (SCRs) start being required at every
"powerhouse" in rural Alaska; capital costs for "installation at
capacity" is also very high. Conversion to ultra-low-sulfur
diesel will also have a huge impact on rural Alaska. In
response to questions, he informed the committee that the
Makushin Geothermal project began around 1982/1983 when a well
was drilled to about 1,800 feet where 380 degree Fahrenheit
water was found. The three-inch hole was modeled to about a
million pounds of steam per hour. [The City of Unalaska] had
been in the process of negotiating with the landowner for the
fluid, but that fell apart. At this point, [the City of
Unalaska] has $4 million for exploratory drilling. He
highlighted that Makushin isn't the only place on the island
where geothermal exists, and therefore the city will work with
OESI Power Corporation and the Aleut Corporation for drill sites
on their property. The city will also approach the federal
government regarding a drill site that's located in the Glacier
River Valley. The hope is that between the aforementioned three
options, the city can obtain an agreement for the fluid. The
landowner [at Makushin] wanted to charge a sliding scale for the
fluid such that the cost was just below that of diesel, which
isn't "something you can spend $150 million on." Mr. Hladick
noted that this will be a very expensive and high risk project
that will take a minimum of 10 years. For instance, just
developing the well field could total well over $50 million.
Therefore, the city is taking a cautious approach and
acknowledges that the project will have to rely on bonding. He
relayed that the high cost of the air quality permits that
Alyeska Seafoods, Inc., Western Seafoods, City of Unalaska, and
UniSea Inc. have paid for has made them reluctant to disregard
those and go with geothermal that may not work. Therefore, the
geothermal project has to be taken to a certain point before the
aforementioned entities will give up their air quality permits.
Although the geothermal project is complicated, the volatility
of the price of fuel illustrates that work on the project must
continue because no one knows what the future holds. He told
the committee that the hope is to drill exploratory wells next
summer. The next step would be to develop the well fields,
which is where the costs really add up. With regard to the
length of the transmission lines, he specified that there's four
miles of water and about eight miles to the current site,
including crossing four bridges and rough terrain.
MR. HLADICK told the committee that the city had performed some
research regarding wind power. There have been two studies with
initial findings that the wind in the Unalaska area has violent
changes. To develop a commercial level of wind power could
total about $20 million and achieve a savings of about $225,000
in fuel; and therefore, it amounts to about $1 million in
depreciation not including maintenance [costs]. The level of
useable wind in the Unalaska area doesn't make wind power a good
investment. Furthermore, it was doubtful that a manufacturer
would provide a warranty for the level of the wind in Unalaska.
The aforementioned makes it difficult to spend that amount of
public funds with no manufacturer warranty.
6:15:00 PM
CO-CHAIR EDGMON discussed Nome's wind turbine project in which
18 wind turbines with 100 foot towers are used to capture wind
from whatever direction it blows. The wind turbine project in
Nome cost $7 million that [Sitnasuak Native Corporation] and the
Bering Straits Corporation funded because AEA didn't believe
there was viable wind power in Nome. However, there wasn't a
comprehensive enough of a study regarding the best technology
for far north climates. One of the towers broke, which required
the entire system to be shut down. The point, Co-Chair Edgmon
said is that although wind technology is probably the most
proven renewable energy technology, it's still in the
developmental stage. He predicted that future dollars for any
type of energy projects will be very competitive, and therefore
Unalaska's cautious approach will likely be rewarded in the
future. Furthermore, the legislature is at a point at which it
wants to allocate the scarce funds toward projects that will
provide cheaper energy prices and technology that actually
works.
6:19:16 PM
MR. HLADICK pointed out that if the gas pipeline is built, the
propane by-product could be used if it could be delivered to
tidewater for $.70 per gallon. In fact, Unalaska could convert
its power plant to propane as could snow machines and vehicles;
the conversion could be done simply by following information on
the Internet. He recalled a cursory review of the $150 million
geothermal project, which found that in order for such a
project, with no grants, to break even oil would have to cost
$130 per barrel.
6:20:21 PM
SINCLAIR WILT, Vice President, Alyeska Seafoods, Inc., returned
to the issue of air permits. He related that Alyeska Seafoods,
Inc., is in the process of trying to replace a small older
generator with a new generator in order to conserve fuel by 10-
15 percent in the powerhouse. If the aforementioned proves to
be successful, there are several more [generators] that the
company would like to switch. Although the generator has tier 2
certification, the Department of Environmental Conservation
(DEC) has said that it doesn't meet tier 2 requirements for this
application. This generator is tier 2 certified by Caterpillar
and is being used in other states, including California, for the
same application. Mr. Wilt said that the situation is reaching
the point at which the company will have to refuse delivery of
the new [generator] and rebuild the old [generator].
6:22:49 PM
MR. HLADICK, in response to Co-Chair Edgmon, noted that the city
went through the air permitting process with the city's
powerhouse. The process took four years and cost close to $1.1
million to obtain the air permit. He explained that an
Environmental Protection Agency (EPA) accepted air quality model
has to be run, which includes inputs such as the size of the
engines and the length of run time. The process also takes into
account the amount of power plants in the community. When the
model is run, it's done with all the power plants in the area
running at full capacity in order to determine where nitrous
oxides and sulfur dioxides hit the land. The model is run with
various inputs per the EPA. This is an expensive process and is
dependent upon how many times the regulator wants the model to
be run, he said. He further explained that the model doesn't
really show what's happening on the property seeking a permit,
but rather it shows what happens on everyone else's property.
Mr. Hladick opined that the model doesn't really have anything
to do with the complex terrain and winds of the area. In
response to Co-Chair Edgmon, Mr. Hladick confirmed that it's
essentially a federally driven process that deals with the air
shed in the area. He noted that Unalaska has a fairly small air
shed, but there's a lot of industrial use.
6:27:01 PM
CO-CHAIR EDGMON, upon determining no one else wished to testify,
asked Mayor Marquardt to discuss energy consumption in Unalaska,
a substantial port with only 4,000-5,000 residents.
6:27:45 PM
MAYOR MARQUARDT opined that there is no reason for the City of
Unalaska to construct a $48 million power plant for 4,000
residents. However, the city does need to construct a power
plant to address the energy needs of the number one port in the
U.S. in terms of quantity of fish landed. Mayor Marquardt
recalled when she arrived in Unalaska about 30 years ago when it
was a nice quiet small town with two fish processing plants and
a newly constructed bridge. However, in 1988-89 the Magnusson-
Stevens Act was enacted and the pollock fishery was born. The
pollock fishery was the largest fishery in the state. Unalaska,
the only ice free port in the Bering Sea and near some of the
richest fishing in the world, was a natural fit for vessels to
unload. Therefore, the processing plants grew, which in turn
caused support sector services to change and many people to
converge on the city. In a very short time, Unalaska grew
quickly as did the city's power needs.
6:31:12 PM
MAYOR MARQUARDT explained that the City of Unalaska is trying to
supply a dependable, fuel efficient, clean source of power to
the community as well as existing and future industries. The
city chose to work with Wartsila, a company in Finland, which is
the green standard in Europe. The Wartsila engine is a heavy-
built slower turning machine that likes to run at 100 percent
and is only torn down once a year or year-and-a-half. She
characterized the Wartsila engine as extremely dependable and
efficient. The city was lucky to obtain assistance from U.S.
Senator Stevens through a grant to purchase two engines that are
5.2 megawatts each. Eventually, the city will replace the
existing nine inefficient older Cat engines with three Wartsila
engines. The third engine had to be ordered in order to support
the increasing power needs of Unalaska. Mayor Marquardt
acknowledged that it costs a lot to live in rural Alaska, but
many people still choose to live in rural Alaska because there
are benefits that outweigh the negatives. She said that the
city has put all of its "eggs in the geothermal basket," which
she acknowledged is a risky situation. Furthermore, even if
geothermal will provide base power in the amount of close to 10
megawatts, diesel generation will still be necessary for the
swings when up to 20 megawatts of power are needed. Therefore,
the fixed costs of diesel generation will always have to be
applied to the rate, plus the cost of geothermal. The
aforementioned means that if the city council chooses to go this
route, it will be an incredibly expensive venture and the city
will need help. She acknowledged the earlier question regarding
how much help a community of 4,000 can receive, but pointed out
that the community provides critical support for a fishing
industry that supports the entire state. Unalaska's fishing
industry provides tax revenue to the state, funding for 63
coastal villages in Western Alaska through the community
development quota (CDQ) program. The City of Unalaska is going
to need help to continue to support the fishing industry in the
future, regardless of going with geothermal or expanding the
existing powerhouse.
6:35:02 PM
CO-CHAIR MILLETT said that Dutch Harbor is not unique in that it
will always need diesel and may not be able to reach the stated
goal of 50 percent renewable energy. Furthermore, she related
her understanding that Alaska will always be a fossil fuel
state, and those communities that don't have renewable energy
resources shouldn't face opposition to necessary upgrades to
fossil fuel power sources. Therefore, the [state's energy plan]
needs to recognize the uniqueness of all the regions.
6:36:39 PM
CO-CHAIR EDGMON commented that the notion with a statewide
energy plan is to create an overarching vision in state statute
to address the supply and demand side. He then asked if Mayor
Marquardt had any comments on the committee's statewide energy
plan proposal.
MAYOR MARQUARDT responded that she needs more time to review and
understand the plan. However, she cautioned the committee
against making a plan that tries to address too much and ends up
not accomplishing very much. She opined that simpler plans seem
to work better.
6:39:46 PM
REPRESENTATIVE TUCK opined that conservation efforts can only go
so far, although it's cheaper to save energy than produce it.
However, when industries are expanding as they are in Dutch
Harbor, one can only conserve so much. He then noted his
appreciation of the comments relating that wind energy isn't the
solution for every community, as well as the other costs
associated with wind energy.
6:41:40 PM
REPRESENTATIVE JOHANSEN encouraged Mayor Marquardt to continue
to pursue geothermal energy while working with the major
industries, such as the fishing industry. He acknowledged the
city's efforts using fish oil.
6:43:33 PM
REPRESENTATIVE CHENAULT opined that it's important to visit
communities throughout the state because the energy issues in
each community are different. Furthermore, it's important to
see those differences and completed projects first-hand as well
as receive feedback first-hand.
6:46:47 PM
SKIP SOUTHWORTH, Member, Unalaska City Council, City of
Unalaska, said that should an energy rebate become a possibility
again, he asked if there is any way to give an energy credit
rather than money. Taxes wouldn't have to be paid on an energy
credit. For communities such as Bethel who faced very cold
temperatures last year, having the fuel rather than the money
would've provided more bang for the buck.
6:49:05 PM
REPRESENTATIVE RAMRAS noticed that the message throughout the
state has been fairly similar in that communities face energy
and financial constraints and that the future is perilous for
all as the price of oil continues to rise. He related that he
is delighted with the draft legislation the stakeholder group
has produced.
CO-CHAIRS MILLETT and EDGMON thanked everyone for participating.
[HB 218 and HB 219 were held over.]
6:54:38 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 6:5% p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB0218A.PDF |
HENE 6/17/2009 5:00:00 PM HENE 8/26/2009 5:00:00 PM HENE 9/16/2009 1:30:00 PM |
HB 218 |
| Draft_Energy_Policy_Bill[1].pdf |
HENE 8/26/2009 5:00:00 PM HENE 9/16/2009 1:30:00 PM |
|
| HB0219A.PDF |
HENE 6/17/2009 5:00:00 PM HENE 8/24/2009 1:00:00 PM HENE 8/26/2009 5:00:00 PM HENE 9/16/2009 1:30:00 PM |
HB 219 |
| Utilities Emergency Response Overview.pdf |
HENE 8/26/2009 5:00:00 PM HENE 9/1/2009 2:00:00 PM |