Legislature(2009 - 2010)Anch LIO Rm 220

09/01/2009 02:00 PM House ENERGY


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02:13:58 PM Start
02:15:12 PM Cook Inlet Natural Gas Contingency Plans
05:03:00 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Cook Inlet Natural Gas Contingency Plans TELECONFERENCED
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
                                                                                                                                
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                                                                                                                                
                       Anchorage, Alaska                                                                                        
                                                                                                                                
                       September 1, 2009                                                                                        
                                                                                                                                
                           2:13 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
                                                                                                                                
Representative Bryce Edgmon, Co-Chair                                                                                           
                                                                                                                                
Representative Charisse Millett, Co-Chair                                                                                       
                                                                                                                                
Representative Nancy Dahlstrom                                                                                                  
                                                                                                                                
Representative Kyle Johansen                                                                                                    
                                                                                                                                
Representative Jay Ramras                                                                                                       
                                                                                                                                
Representative Pete Petersen                                                                                                    
                                                                                                                                
Representative Chris Tuck                                                                                                       
                                                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
                                                                                                                                
COOK INLET NATURAL GAS CONTINGENCY PLANS                                                                                        
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
                                                                                                                                
MARK SLAUGHTER, Manager                                                                                                         
                                                                                                                                
Gas and Supply                                                                                                                  
                                                                                                                                
ENSTAR Natural Gas Company                                                                                                      
                                                                                                                                
Anchorage, Alaska                                                                                                               
                                                                                                                                
POSITION STATEMENT:  Gave a slide presentation dated 9/1/2009                                                                 
and answered questions regarding Cook Inlet Natural Gas                                                                         
Contingency Plans.                                                                                                              
                                                                                                                                
                                                                                                                                
REPRESENTATIVE LES GARA                                                                                                         
                                                                                                                                
Alaska State Legislature                                                                                                        
                                                                                                                                
Juneau, Alaska                                                                                                                  
                                                                                                                                
POSITION STATEMENT:  Asked questions during testimony on Cook                                                               
Inlet Natural Gas Contingency Plans.                                                                                          
                                                                                                                                
                                                                                                                              
                                                                                                                                
SENATOR GENE THERRIAULT                                                                                                         
                                                                                                                                
Alaska State Legislature                                                                                                        
                                                                                                                                
Juneau, Alaska                                                                                                                  
                                                                                                                                
POSITION STATEMENT:  Asked questions during testimony on Cook                                                               
Inlet Natural Gas Contingency Plans.                                                                                            
                                                                                                                                
                                                                                                                                
GEORGE VAKALIS, Municipal Manager                                                                                               
                                                                                                                                
Municipality of Anchorage                                                                                                       
                                                                                                                                
Anchorage, Alaska                                                                                                               
                                                                                                                                
POSITION STATEMENT:   Testified during the hearing  on Cook Inlet                                                           
Emergency Contingency Plans.                                                                                                    
                                                                                                                                
                                                                                                                                
BRADLEY EVANS, CEO                                                                                                              
                                                                                                                                
Chugach Electric Association (CEA)                                                                                              
                                                                                                                                
Anchorage, Alaska                                                                                                               
                                                                                                                                
POSITION STATEMENT:   Gave a slide  presentation titled "Incident                                                             
Management  Gas  Supply   Interruption"  and  answered  questions                                                               
during  the  hearing  on Cook  Inlet  Gas  Emergency  Contingency                                                               
Plans.  Offered his personal opinion in response to a question.                                                                 
                                                                                                                                
                                                                                                                                
PHIL STEYER, Director                                                                                                           
                                                                                                                                
Government Relations & Corporate Communications                                                                                 
                                                                                                                                
Chugach Electric Association (CEA)                                                                                              
                                                                                                                                
Anchorage, Alaska                                                                                                               
                                                                                                                                
POSITION STATEMENT:  Testified during  the hearing on  Cook Inlet                                                             
Emergency Contingency Plans.                                                                                                    
                                                                                                                                
                                                                                                                                
CHRIS ROSE, Executive Director                                                                                                  
                                                                                                                                
Renewable Energy Alaska Project (REAP)                                                                                          
                                                                                                                                
Anchorage, Alaska                                                                                                               
                                                                                                                                
POSITION   STATEMENT:   Gave    a   slide   presentation   titled                                                           
"Diminishing   Gas   Deliverability   &  Energy   Efficiency   in                                                               
Anchorage"  and answered  questions  during the  hearing on  Cook                                                               
Inlet Gas Emergency Contingency Plans.                                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
CO-CHAIR CHARISSE  MILLETT called the House  Special Committee on                                                             
Energy  meeting to  order  at 2:13  p.m.   Representatives  Tuck,                                                               
Dahlstrom, Ramras,  Johansen, Petersen, Edgmon, and  Millett were                                                               
present at  the call to  order.   Also in attendance  was Senator                                                               
Therriault (via teleconference).   Representative Gara arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
                                                                                                                                
2:13:58 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
^Cook Inlet Natural Gas Contingency Plans                                                                                     
                                                                                                                                
Cook Inlet Natural Gas Contingency Plans                                                                                    
                                                                                                                                
CO-CHAIR MILLETT announced that the committee would hear                                                                        
presentations regarding Cook Inlet Natural Gas Contingency                                                                      
Plans.                                                                                                                          
                                                                                                                                
                                                                                                                                
2:15:12 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MARK  SLAUGHTER,  Manager, Gas  and  Supply,  ENSTAR Natural  Gas                                                               
Company, directed  the committee's  attention to slide  2, titled                                                               
"Cook  Inlet Gas  Infrastructure."   He indicated  that the  blue                                                               
lines on  the map were ENSTAR  gas pipelines; the red  lines were                                                               
Marathon  Oil   Corporation  (Marathon)  or   Unocal  Corporation                                                               
(Unocal)   pipelines;   and   the  yellow   lines   were   either                                                               
ConocoPhillips  Company   (ConocoPhillips)  or  Cook   Inlet  Gas                                                               
Gathering System (CIGGS)  pipelines.  The map  also indicated the                                                               
location of  power plants and  natural gas storage  reservoirs in                                                               
Cook Inlet.   Mr. Slaughter  noted that ENSTAR's  pipeline system                                                               
includes the following:  the Beluga pipeline that  is a 100-mile,                                                               
20-inch  diameter  pipeline  that   moves  ENSTAR  and  Anchorage                                                               
Municipal Light  & Power (ML&P)  gas to Anchorage; the  Kenai "A"                                                               
and  "B"  pipelines that  are  75  mile, 12-inch  pipelines  that                                                               
travel  from  Soldotna  to  Anchorage;   and  a  22-mile,  8-inch                                                               
pipeline that connects  to the A and B pipelines.   He showed the                                                               
committee  the location  of  the  Kenai-Kachemak Pipeline  (KKPL)                                                               
that is  owned by Marathon  and Unocal and operated  by Marathon;                                                               
the location of  the Kenai Nikiski Pipeline (KNPL) that  is a 20-                                                               
inch line from  the Kenai gas fields to Nikiski;  the location of                                                               
the CIGGS  undersea pipeline;  and the  location of  the Marathon                                                               
Beluga Pipeline.   Mr. Slaughter  recalled that last  year ENSTAR                                                               
had  two  contracts that  were  not  approved by  the  Regulatory                                                               
Commission  of Alaska  (RCA).   In  order to  replace the  denied                                                               
contracts,  ENSTAR subsequently  secured two,  two-year contracts                                                               
with Marathon and  Conoco to meet the remainder of  its gas needs                                                               
through December  31, 2010.   He presented  slide 3,  titled "Gas                                                               
Supply-Winter 2009/2010  Outlook," and said beginning  January 1,                                                               
2011, approximately one-third of ENSTAR's  gas supply will not be                                                               
under  contract.   Initially,  ENSTAR had  its  gas supply  under                                                               
contract through 2013,  but those contracts were  not approved by                                                               
the  RCA.    At  this  time  ENSTAR  is  buying  gas  under  five                                                               
contracts; however,  in January,  the small Beluga  contract will                                                               
end.                                                                                                                            
                                                                                                                                
                                                                                                                                
2:19:26 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAMRAS referred  to  slide 3  and  asked for  the                                                               
anticipated  percentage of  growth  for  the Southcentral  region                                                               
from 2009 through 2018.                                                                                                         
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER responded  that ENSTAR projects a  steady growth of                                                               
1-1.5  percent.    The  dynamic  of  forecasting  gas  supply  is                                                               
uncertain  partly because  of the  effect of  third parties  that                                                               
market gas and  ship on ENSTAR's pipeline, and  partly because of                                                               
the effect of the military  base contracts.  Currently, loads are                                                               
projected  at a  lower increase  than  the historical  high of  3                                                               
percent per year.  In  further response to Representative Ramras,                                                               
he said when  customers convert from gas to  alternative fuels it                                                               
is  called "curtailment."   Mr.  Slaughter  continued to  explain                                                               
that ENSTAR is seeking additional  gas volumes that are needed to                                                               
meet its  customers' needs beyond  2010.  Moreover,  ENSTAR faces                                                               
curtailment if  the company  does not  have sufficient  gas under                                                               
contract  because  customers  who  convert to  other  sources  of                                                               
energy will be lost.                                                                                                            
                                                                                                                                
                                                                                                                                
2:23:18 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CO-CHAIR  MILLETT  asked  for  the  number  of  customers  ENSTAR                                                               
anticipates will  be lost by  curtailment if  it does not  find a                                                               
gas supply.                                                                                                                     
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER  stated that ENSTAR  is missing contracts  for one-                                                               
third of  its portfolio;  in fact, ENSTAR  would lose  its entire                                                               
commercial  base  without  additional   contracts.    In  further                                                               
response to  Co-Chair Millett, he  explained that because  of the                                                               
priority listing,  large and small commercial  customers are lost                                                               
first  and then  it  is  determined by  "ageing."   For  example,                                                               
customers returned  to ENSTAR in  2009, 2008, and 2006,  with the                                                               
exception of  buildings such  as schools  and churches,  would be                                                               
lost next.  In further response,  he noted that customers need as                                                               
much  notice as  possible before  they are  taken off  of natural                                                               
gas; a lack of notice last December led to very irate customers.                                                                
                                                                                                                                
                                                                                                                                
2:25:59 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER presented  slide 4,  titled "Cook  Inlet Peak  Day                                                               
Comparison."   The  chart indicated  that the  last significantly                                                               
cold day  was 2/3/99,  with an average  daily temperature  of -19                                                               
degrees F, and  ENSTAR moved about 272 million  cubic feet (mmcf)                                                               
of gas in one day.   On 1/3/09, the average daily temperature was                                                               
-11 degrees  F; however, 314  [mmcf/d] was required.   He pointed                                                               
out that in  1999, the Nikiski liquefied natural  gas plant (LNG)                                                               
and  the  Agrium, Inc.  fertilizer  plants  were operational  and                                                               
there  was  plenty of  gas  available.    However, by  2009,  the                                                               
fertilizer plant  was closed  and the LNG  plant had  reduced its                                                               
need from 224  [mmcf/d] to 40 [mmcf/d] of gas.   In addition, the                                                               
source  of the  gas  had changed  to a  combination  of gas  from                                                               
storage  volumes  and from  well  supplies.   The  Department  of                                                               
Natural Resources  (DNR) estimated  there is  380 mmcf/d  of well                                                               
deliverability from  the Cook Inlet  this year and  Mr. Slaughter                                                               
concluded  that in  two years  120 mmcf/d  of deliverability  was                                                               
lost.                                                                                                                           
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER  returned  to  the  subject  of  ENSTAR's  present                                                               
situation.   Slide 5, titled "ENSTAR  2009/2010 Supply Portfolio"                                                               
indicated that  the peak for 2009  is forecast at 270  mmcf/d and                                                               
that the  peak forecast for  2010 is  282 mmcf/d.   ENSTAR's 2009                                                               
suppliers  are:   Beluga  River  Unit Producers,  ConocoPhillips,                                                               
Marathon APL-4,  Marathon APL-7,  and Union.   In 2010,  the four                                                               
suppliers  will be:    ConocoPhillips,  Marathon APL-4,  Marathon                                                               
APL-7,  and Union.   He  reminded the  committee that  ENSTAR has                                                               
been  investing  in  its  infrastructure  since  2007;  in  fact,                                                               
these investments have been designed  to increase the flow of gas                                                               
from wherever it  is available to the areas that  need it on peak                                                               
days.   Mr.  Slaughter  then presented  slide  7, titled  "ENSTAR                                                               
Operations."   Regarding emergency interruptions, he  assured the                                                               
committee that  ENSTAR is staffed  24 hours  per day, 7  days per                                                               
week, 365  days per  year, and its  central operations  center in                                                               
Anchorage responds  to gas emergencies.   In addition,  there are                                                               
regional offices  in Soldotna and Wasilla,  and emergency control                                                               
locations  in   Wasilla  and  Sterling.     ENSTAR   maintains  a                                                               
proprietary  communications  network  with  equipment  staged  in                                                               
various  locations in  the state,  and thus  is not  dependent on                                                               
other communications companies in the event of an emergency.                                                                    
                                                                                                                                
                                                                                                                                
2:32:12 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  asked   whether  ENSTAR's  proprietary                                                               
communications network  is tied  in with  the U.S.  Department of                                                               
Homeland Security (USDHS).                                                                                                      
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER responded  that ENSTAR  participates in  emergency                                                               
preparedness  with  the  Alaska  Partnership  for  Infrastructure                                                               
Protection  (APIP); however,  ENSTAR  manages  its own  microwave                                                               
communication system  that is  also used by  AT&T.   In addition,                                                               
ENSTAR leases  lines through GCI  for other  communication needs.                                                               
In  further  response,  he noted  that  the  statewide  emergency                                                               
organizations have not been meeting as often this year.                                                                         
                                                                                                                                
                                                                                                                                
2:34:06 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER   presented  slide  8,  titled   "ENSTAR  Standard                                                               
Operation Procedures"  and said that  ENSTAR is regulated  by the                                                               
U.S.   Department  of   Transportation  Pipeline   and  Hazardous                                                               
Materials   Safety  Administration   (PHMSA)  which   audits  its                                                               
standard  operating procedures  annually.   The operations  plans                                                               
are  designed   to  cover  operator  qualification   programs,  a                                                               
disruption in gas supply, gas  leaks, damages, natural disasters,                                                               
and fires.   Slide 10 was a chart of  ENSTAR's emergency response                                                               
call-tree.                                                                                                                      
                                                                                                                                
                                                                                                                                
2:35:25 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAMRAS asked  whether  residential or  commercial                                                               
gas heat customers can restart their heat plants on their own.                                                                  
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER informed the committee  that when ENSTAR receives a                                                               
call that an appliance is out,  it sends a serviceman to check on                                                               
the  gas  supply,  but  then  advises  the  customer  to  call  a                                                               
contractor to relight the appliance.   Relighting an appliance is                                                               
simple, unless there  is some sort of disruption or  limit on the                                                               
flow of gas.                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAMRAS   gave  the  example  of   an  involuntary                                                               
curtailment of the  system, affecting more than  1,000 homes, and                                                               
asked if each home would have to be manually lit.                                                                               
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER replied  yes, but  steps  would occur  prior to  a                                                               
curtailment  of service  of that  degree.   Last week,  testimony                                                               
before the  RCA from  the electric  utilities indicated  that the                                                               
utilities  "believe  that  they  could shed,  we  could  stop  75                                                               
percent of their load and send  that to ENSTAR."  He continued to                                                               
explain that  ENSTAR has no  back-up and it cannot  build diesel-                                                               
fired  plants.     However,  during  an  extreme   case  such  as                                                               
Representative  Ramras' example,  ENSTAR can  call on  its mutual                                                               
aid  assistance  agreements  with   the  Western  Energy  Utility                                                               
Institute  (WEI) and  its sister  companies in  Michigan and  New                                                               
Mexico.                                                                                                                         
                                                                                                                                
                                                                                                                                
2:40:12 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER clarified  that the 2009 gas  supply is contracted;                                                               
however, there  is always the possibility  of equipment failures.                                                               
He  then  presented  slide  11, titled  "Cook  Inlet  Gas  Supply                                                               
Coordination" that  indicated the three  primary users of  gas in                                                               
Cook Inlet  are Chugach Electric  Association (CEA),  ENSTAR, and                                                               
Anchorage  Municipal  Light  &   Power  (ML&P).    To  facilitate                                                               
coordination of the  gas supply, ENSTAR normally  hosts an annual                                                               
shippers/producers  meeting; shippers  issue forecast  demands on                                                               
an  annual,  monthly,   and  daily  basis;  and   gas  flows  are                                                               
coordinated  on ENSTAR  pipelines  and on  the Marathon  pipeline                                                               
system.    Mr.  Slaughter  presented  slide  12,  titled  "ENSTAR                                                               
Contingencies" and  displayed the Gas Emergency  Agreement Letter                                                               
that  was recently  executed  by ENSTAR,  CEA,  ML&P, and  Golden                                                               
Valley Electric  Association (GVEA).  The  agreement outlines the                                                               
steps the  utilities will take  in the  event of a  disruption of                                                               
gas supply.   These steps  include: curtailment  of interruptible                                                               
deliveries;  rerouting;  the  use   of  back-up  agreements;  the                                                               
importation of  electricity; and  conservation by consumers.   He                                                               
discussed other contingencies that  are part of ENSTAR's delivery                                                               
contracts.                                                                                                                      
                                                                                                                                
                                                                                                                                
2:44:00 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE DAHLSTROM  asked for  information about  any other                                                               
agreements to  help provide gas to  health facilities, hospitals,                                                               
treatment  homes,  schools,  or   residences  with  24-hour  home                                                               
medical care.                                                                                                                   
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER  answered that  the  tariff  [agreement] is  clear                                                               
regarding the  priority of  delivery during  a disruption  to the                                                               
gas supply.   For those on the  ENSTAR system at the  time of the                                                               
disruption,  industrial  customers  are turned  off  first,  then                                                               
commercial   customers,   and   lastly   hospitals,   residences,                                                               
churches,  and schools.   In  further response  to Representative                                                               
Dahlstrom, he  clarified that all  residential homes are  part of                                                               
the  final  protected class  of  customer.   Furthermore,  ENSTAR                                                               
Tariff Section 1200 directs how  additional costs associated with                                                               
a disruption are paid as approved by the RCA.                                                                                   
                                                                                                                                
                                                                                                                                
2:46:00 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER  added  that  the   final  contingency  under  the                                                               
transportation  shipping  agreement  allows that  a  third  party                                                               
shipper can  be penalized 2.5  times the most expensive  price of                                                               
gas if  they do not  provide an  appropriate quantity of  gas for                                                               
their own  customers.   He then presented  slide 13,  "Gas Supply                                                               
Interruption Incident Response Overview."   The overview is being                                                               
developed with  the goal  of putting in  place short-,  mid-, and                                                               
long-term response plans for the  electric utilities in the event                                                               
of a  disruption in the gas  supply.  He stressed  that the long-                                                               
term responses  also need  the participation  of state  and local                                                               
governments.  Slide 14, titled  "Actions & Next Steps" listed the                                                               
following deadlines:   utilities update  RCA on 8/26/09;  gas and                                                               
electric system  operator tabletop scheduled for  9/10/09; ENSTAR                                                               
annual  shippers/producer  meeting  scheduled  for  9/17/09;  and                                                               
coordination with the Municipality  of Anchorage beginning 9/1/09                                                               
and  continuing  to  11/13/09.     Mr.  Slaughter  concluded  the                                                               
following:  Cook  Inlet   deliverability  continues  to  decline;                                                               
mutual  aid   planning  and  coordination  is   not  a  long-term                                                               
solution;  coordinated customer  awareness and  education efforts                                                               
are   ongoing;  utilities,   producers,  and   local  and   state                                                               
governments  must  work  together for  long-term  solutions;  and                                                               
regulatory  and fiscal  certainty are  required to  achieve long-                                                               
term solutions.                                                                                                                 
                                                                                                                                
                                                                                                                                
2:50:34 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  asked whether Senator Therriault  would be                                                               
able to  speak about these  issues to the energy  committee after                                                               
assuming his new position with the administration.                                                                              
                                                                                                                                
                                                                                                                                
SENATOR THERRIAULT answered that he was not sure at this point.                                                                 
                                                                                                                                
                                                                                                                                
2:51:19 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS then referred to  slide 3 and asked whether                                                               
the "undesignated" gas was going to  come from new sources in the                                                               
inlet or imports.                                                                                                               
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER informed the committee  that ENSTAR is working with                                                               
DNR to  reevaluate the gas supply  in Southcentral; nevertheless,                                                               
gas is  available in  the near-term  if ENSTAR  is able  to enter                                                               
contracts.  If ENSTAR is  unsuccessful in entering contracts, the                                                               
needed  investments  in infrastructure  will  not  be made.    He                                                               
opined  that  entities  were  opposed   to  the  proposed  ENSTAR                                                               
contracts that would have guaranteed  the availability of gas for                                                               
the next  five years at low  prices.  When it  becomes necessary,                                                               
ENSTAR will import LNG.                                                                                                         
                                                                                                                                
                                                                                                                                
2:53:03 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  asked for  further details about  the plan                                                               
for  a  supply  of  gas  in 2013-2014,  and  the  source  of  the                                                               
aforementioned LNG.                                                                                                             
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER explained  that ENSTAR  will contract  for gas  in                                                               
2011-2012;  however, according  to  DNR the  total production  in                                                               
Cook Inlet in 2013-2014 will not  meet the estimated demand of 87                                                               
BCF/d.     Therefore,  ENSTAR  has   to  make   some  significant                                                               
investments in  the near  future for storage  to ease  "swing" in                                                               
deliverability requirements.   He opined  it is too early  to say                                                               
where  imported gas  will come  from.   In  further response,  he                                                               
said, "The inexpensive options have  basically been presented and                                                               
rejected.  Where that gas [comes  from] will all depend on, as we                                                               
move down  that path,  and evaluate  it, but  there's significant                                                               
investment that  has to  be made  in order  to have,  ... storage                                                               
facilities that can  receive gas, have to contract  for that gas,                                                               
you have  to evaluate [and] make  sure the docks can  receive the                                                               
gas, and where it comes from [is] the free market."                                                                             
                                                                                                                                
                                                                                                                                
2:57:19 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  asked when  ENSTAR will  have to  begin to                                                               
commit capital,  and to make  plans, in order to  deliver foreign                                                               
LNG to Southcentral by 2014.                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER  advised that  ENSTAR  is  now developing  storage                                                               
because  storage   is  necessary  whether  there   is  additional                                                               
production  in Cook  Inlet, or  there is  a bullet  line, a  spur                                                               
line,  or a  big line.   Frankly,  significant decisions  will be                                                               
made this year  as ENSTAR contracts for gas.   Because Cook Inlet                                                               
is a  small market,  without a  spur line, a  bullet line,  or an                                                               
industrial  anchor  tenant,  there  is basically  no  reason  for                                                               
producers to look for gas.                                                                                                      
                                                                                                                                
                                                                                                                                
2:59:05 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE DAHLSTROM asked where the gas will be stored.                                                                    
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER  said  ENSTAR  is   working  with  the  owners  of                                                               
identified storage reservoirs in Cook Inlet.                                                                                    
                                                                                                                                
                                                                                                                                
3:00:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK asked  how soon pipeline storage can  be at a                                                               
comfortable capacity.                                                                                                           
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER  advised that ENSTAR  is working with  ANR Pipeline                                                               
Company (ANR)  to have a  storage system  up and running  for the                                                               
2011-12 system.  However, there  are many issues to overcome such                                                               
as securing a field and obtaining regulatory approvals.                                                                         
                                                                                                                                
                                                                                                                                
3:01:52 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  TUCK then  asked  how the  cost  of storage  will                                                               
affect rate-payers.                                                                                                             
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER  advised that ENSTAR  does not have the  costs yet.                                                               
He assumed  that gas would be  less expensive in the  summer, but                                                               
warned that the cost of storing  gas is not cheap, and costs will                                                               
not return to the "days of 2000, when we were in $2 gas."                                                                       
                                                                                                                                
                                                                                                                                
3:03:26 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  TUCK   asked  for  the  reasons   that  the  2013                                                               
contracts were not approved.                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER explained  that ENSTAR  was unlucky  in that  when                                                               
presenting the  contracts, gas prices were  at unprecedented high                                                               
levels.   In  the summer  of 2008,  some thought  ENSTAR was  the                                                               
market price-setter for gas and  parties intervened to oppose the                                                               
contracts for  their own  advantage in  negotiations.   He opined                                                               
that if ENSTAR  had those contracts, it would be  paying $4.36 in                                                               
2010 for ConocoPhillips Alaska,  Inc. (ConocoPhillips), and $5.02                                                               
for the Marathon Oil Corporation (Marathon) contract.                                                                           
                                                                                                                                
                                                                                                                                
3:05:17 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  PETERSEN referred  back  to ENSTAR's  contingency                                                               
plans.   He  observed that  the plan  calls for  consumers to  be                                                               
educated  on conservation  measures and  asked how  this will  be                                                               
done, and whether similar plans elsewhere have been successful.                                                                 
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER explained  that the  education methods  will be  a                                                               
joint  effort between  the utilities.   In  the 1980s  there were                                                               
joint communication  actions which  will be revamped  for present                                                               
day  use.    Information  will be  made  public  about  voluntary                                                               
curtailments-like what happened in Juneau-when  rates went up and                                                               
people consumed less power.                                                                                                     
                                                                                                                                
                                                                                                                                
3:07:06 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  asked whether  the first calendar  year of                                                               
gas supply problems is anticipated to be 2013 or 2014.                                                                          
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER   predicted  if  storage  is   on-line  for  2011,                                                               
sufficient  gas   supply  will  probably  extend   through  2012;                                                               
however,  his expectation  is  dependent upon  how  much gas  the                                                               
producers make available.   Undoubtedly, there is more  gas to be                                                               
found in Cook Inlet, albeit at  a [higher] free market price.  In                                                               
further response to Representative  Ramras, Mr. Slaughter advised                                                               
that ENSTAR  is currently working  on a contingency plan  for the                                                               
importation of foreign  LNG because of the  significant time that                                                               
will be  required to negotiate  delivery and to educate  the RCA,                                                               
the state, and the community, as to what is involved.                                                                           
                                                                                                                                
                                                                                                                                
3:09:27 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAMRAS expressed  his  interest  in learning  the                                                               
source of the imported gas.                                                                                                     
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER said  areas  of British  Columbia,  the Lower  48,                                                               
Sakhalin [Russia], Australia, and Indonesia, have gas.                                                                          
                                                                                                                                
                                                                                                                                
3:10:36 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
SENATOR THERRIAULT  asked whether the contracts  that were denied                                                               
would  have  locked  ENSTAR  into  deliverability  for  the  "out                                                               
years," but at more of a market price.                                                                                          
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER further explained that  the contracts were based on                                                               
various trading indices, but were  not full deliverability on the                                                               
out  years.    Therefore,  the  producers  were  not  willing  to                                                               
contract for  ENSTAR's entire  1:12 summer  to winter  peak swing                                                               
ratio.   If the contracts  had been approved, ENSTAR  would still                                                               
have  to develop  storage,  but  not under  the  timeline it  now                                                               
faces.   In further response  to Senator Therriault, he  said the                                                               
proposed  contract  with  ConocoPhillips limited  ENSTAR  at  the                                                               
first quarter  of 2011, and  the Marathon contract  proposed full                                                               
deliverability through the  first quarter of 2011.   Beyond that,                                                               
the  proposed   contracts  gave  ENSTAR  the   responsibility  to                                                               
"flatten  our profile"  by developing  storage for  the 2011-2012                                                               
season.                                                                                                                         
                                                                                                                                
                                                                                                                                
3:12:56 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE DAHLSTROM asked whether  Mr. Slaughter would agree                                                               
that cheap  gas is  gone and  only expensive gas  is left,  or if                                                               
there is no more gas.                                                                                                           
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER  agreed that easy,  less expensive gas is  gone; in                                                               
fact, given the  present cost of drilling, the easy  gas has been                                                               
found and the cheap options are "off the table."                                                                                
                                                                                                                                
                                                                                                                                
3:14:44 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS observed that  ENSTAR was previously moving                                                               
forward  on  building a  bullet  line  independently.   He  asked                                                               
whether  ENSTAR  was  still  prepared-in  its  strategic  plan-to                                                               
pursue  a bullet  line  after it  invests  in the  infrastructure                                                               
necessary for gas storage.                                                                                                      
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER  stressed  that  importing  gas  into  Cook  Inlet                                                               
includes gas  from a bullet  line or a  spur line from  the North                                                               
Slope, and/or  LNG imports.   ENSTAR is working with  Harry Noah,                                                               
the governor's advisor on the  in-state gas pipeline project, who                                                               
is taking  the lead on the  in-state gas pipeline.   He expressed                                                               
indifference as  to where the gas  comes from, as long  as ENSTAR                                                               
can execute a contract with a producer.                                                                                         
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS remarked:                                                                                                 
                                                                                                                                
                                                                                                                                
     Quite frankly, I do care where  gas comes from.  I have                                                                    
     100,000  people  that  I  and  some  of  my  colleagues                                                                    
     represent  ...  and so  it's  a  big  darn deal  to  me                                                                    
     whether that gas  comes from the North  Slope of Alaska                                                                    
     or  whether  it's  foreign  LNG  that's  imported  from                                                                    
     Australia,  ...  Russia,  or  Indonesia....  I  have  a                                                                    
     community that's  been tied to  diesel for  decades and                                                                    
     decades since  we converted from  coal in the '50s.   I                                                                    
     have  a community  that is  struggling under  the [Fine                                                                    
     Particulate Matter]  Pm 2.5  mandate that's  imposed by                                                                    
     the  [Environmental Protection  Agency  (EPA)] that  is                                                                    
     resulting in a constrained economy....                                                                                     
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  further described  how the  limited supply                                                               
of natural  gas has  cost his constituents  800 new  service jobs                                                               
and prevented  over $50 million  in property tax revenue  and new                                                               
economic growth  in the Fairbanks area.   He said, "I  would like                                                               
to be on record  as saying  ... those folks  in the interior, and                                                               
... in  Western Alaska,  and ...  along the  road system  do care                                                               
where  that gas  is going  to  come from."   He  pointed out  the                                                               
divergent interests  between the industry that  is concerned with                                                               
supplying  gas to  its customers,  and the  residents and  policy                                                               
makers of  Alaska who ought  to be  concerned with where  the gas                                                               
comes from  and how  each community in  Alaska moves  forward for                                                               
the next 50 years.                                                                                                              
                                                                                                                                
                                                                                                                                
3:20:05 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE GARA  informed the committee  of the need  for the                                                               
state to  have a  plan in  place to reduce  energy use  and avoid                                                               
rolling black-outs this  winter.  He asked whether  the state has                                                               
a plan for safely reducing the  use of energy in state buildings,                                                               
facilities,  and schools,  rather  than "cutting  people off"  on                                                               
cold, high demand days.                                                                                                         
                                                                                                                                
                                                                                                                                
MR. SLAUGHTER deferred  the question to Phil  Steyer, Director of                                                               
Government Relations and Corporate Communications, CEA.                                                                         
                                                                                                                                
                                                                                                                                
3:22:26 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CO-CHAIR  MILLETT   asked  Senator   Therriault  to   inform  the                                                               
administration of  the committee's interest  in a plan  to reduce                                                               
energy use in state facilities during peak demand.                                                                              
                                                                                                                                
                                                                                                                                
SENATOR  THERRIAULT  surmised  when  the RCA  denied  the  ENSTAR                                                               
contracts, it  seemed that the commission  went beyond regulating                                                               
what  the   utility  was  charging  for   transportation  of  the                                                               
resource,  to regulating  the commodity  price  for the  resource                                                               
that was being  delivered.  He asked if ENSTAR  has an opinion on                                                               
whether the statutes or regulations  need to be modified in order                                                               
to prevent this situation.                                                                                                      
                                                                                                                                
                                                                                                                                
MR.  SLAUGHTER advised  that a  review  of past  RCA rulings  has                                                               
revealed a "shifting  of standards as to how  they have evaluated                                                               
the  contracts."   ENSTAR would  like the  RCA to  return to  the                                                               
previous  standard that  was applied  and "leave  a reliable  gas                                                               
supply at  a reasonable  price that's  available in  the market."                                                               
He  acknowledged  that  the  RCA   had  recently  approved  CEA's                                                               
contract with ConocoPhillips  and ENSTAR is hopeful  that this is                                                               
an  indicator  for future  contracts.    In further  response  to                                                               
Senator  Therriault, he  said  that  the burden  of  proof is  on                                                               
ENSTAR to  supply sufficient information to  support its proposed                                                               
contracts.   Referring to the  Department of Law  (DOL), Division                                                               
of Regulatory Affairs & Public  Advocacy (RAPA), he said RAPA did                                                               
not  oppose  the  CEA/ConocoPhillips contract,  although  it  did                                                               
present testimony  at the ENSTAR  hearings in opposition  to some                                                               
of the terms and conditions.                                                                                                    
                                                                                                                                
                                                                                                                                
3:26:53 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
GEORGE  VAKALIS, Municipal  Manager,  Municipality of  Anchorage,                                                               
informed  the committee  that the  Municipality  of Anchorage  is                                                               
looking at solutions to a  possible interruption in its supply of                                                               
natural gas with a three-pronged  approach: a long-range solution                                                               
that includes  the alternatives discussed  today, and study  by a                                                               
mayor's task  force; intermediate solutions such  as gas storage,                                                               
propane,   and  LNG;   and  an   immediate  short-term   fix  for                                                               
occurrences this  winter.   During a recent  meeting with  all of                                                               
the utilities supplying Anchorage,  the utilities agreed that the                                                               
most likely  scenario this  winter would be  a disruption  in the                                                               
flow of natural gas due to  equipment failure.  He explained that                                                               
emergency  management by  the municipality  falls under  either a                                                               
short-term solution to a temporary  equipment failure, or a long-                                                               
term  solution  to address  a  major  disruption that  cannot  be                                                               
quickly repaired.   Mr. Vakalis  said one obvious solution  for a                                                               
short period  of time is  the use  of conservation measures.   In                                                               
fact, the  utilities have provided  suggestions to  reduce energy                                                               
consumption  by  residents,  businesses,  and  industrial  users.                                                               
These measures  could help  to mitigate  the problem  for awhile;                                                               
therefore,  the municipality  will release  an education  plan in                                                               
October informing  consumers of  measures they  can take  in this                                                               
event.  Also, the educational  materials will include information                                                               
about the effects  of lower pressures should the  shortage of gas                                                               
continue.    Mr.   Vakalis  stressed  that  the   first  step  is                                                               
conservation, and  the "alert notification  system" will  be used                                                               
in October to notify residents  to begin to take the conservation                                                               
measures.   The success of  these measures will be  an indication                                                               
to the utilities  of the effect of conservation on  the amount of                                                               
energy needed.   He  continued to explain  that in  November, the                                                               
municipality  will  hold a  tabletop  exercise  with all  of  the                                                               
utilities to determine  how well they are able to  handle such an                                                               
emergency.    He concluded  that  Anchorage  is doing  everything                                                               
possible to encourage conservation and  to develop a plan through                                                               
the  tabletop exercise.   More  importantly, the  municipality is                                                               
looking  at a  plan  to  address a  major  disruption during  the                                                               
winter months.                                                                                                                  
                                                                                                                                
                                                                                                                                
3:34:13 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
[CO-CHAIR Millett handed the gavel to Representative Dahlstrom.]                                                                
                                                                                                                                
                                                                                                                                
REPRESENTATIVE TUCK  asked how  the educational  information will                                                               
be communicated to the public.                                                                                                  
                                                                                                                                
                                                                                                                                
MR. VAKALIS responded  that the municipality is coming  up with a                                                               
plan to  use the  media, the  municipality, the  school district,                                                               
and the  University of Alaska  (UA) television channels,  as well                                                               
as internet  and other electronic  means of communication.   This                                                               
plan will be  used to educate and to alert  residents of the need                                                               
to start conserving.  The  municipality will also monitor weather                                                               
conditions and  will determine the  best way to  communicate with                                                               
the utilities  regarding pressure readings.   In further response                                                               
to Representative Tuck, he said  that the municipality will alert                                                               
the  entire  city  of  Anchorage   and  areas  in  the  Railbelt.                                                               
Additionally,  Anchorage   will  share  with  Kenai   and  Mat-Su                                                               
emergency  management organizations  information about  the alert                                                               
program and  the best  methods to conserve  and will  also invite                                                               
their participation in the tabletop exercise.                                                                                   
                                                                                                                                
                                                                                                                                
3:37:38 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAMRAS  applauded  Mr.  Vakalis  for  encouraging                                                               
conservation  efforts  and  mentioned the  effectiveness  of  the                                                               
"green star" program for businesses.                                                                                            
                                                                                                                                
                                                                                                                                
[Representative   Dahlstrom  returned   the  gavel   to  Co-Chair                                                               
Millett.]                                                                                                                       
                                                                                                                                
                                                                                                                                
3:39:09 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CO-CHAIR  MILLETT  asked for  the  best  way  the state  and  the                                                               
legislature  could  help  the   municipality  with  its  tabletop                                                               
exercise.                                                                                                                       
                                                                                                                                
                                                                                                                                
MR. VAKALIS  observed that the  municipality has a  great working                                                               
relationship  with the  Alaska Division  of  Homeland Security  &                                                               
Emergency Management  (DHS&EM).  However,  it may be the  role of                                                               
the  state and  legislature  to develop  the long-term  solution,                                                               
whether   the  solution   is  hydroelectric,   tidal,  wind,   or                                                               
conversion  to  coal.    In the  short-term,  he  encouraged  the                                                               
committee  to  support  the  development  of  gas  and  the  most                                                               
feasible alternatives.  In further  response to Co-Chair Millett,                                                               
he  said  that  after  educating the  residents  on  conservation                                                               
measures, he plans to ask the  major users of energy, such as the                                                               
Ted  Stevens  Anchorage  International  Airport,  hospitals,  and                                                               
large facilities to develop their own conservation measures.                                                                    
                                                                                                                                
                                                                                                                                
3:42:42 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  observed that Cook  Inlet gas will  not be                                                               
sufficient to  provide natural  gas to  Anchorage in  the future.                                                               
He asked whether the municipality  will develop a policy position                                                               
regarding  where it  intends  to  obtain its  gas  supply in  the                                                               
future.                                                                                                                         
                                                                                                                                
                                                                                                                                
MR. VAKALIS  opined it is  inconceivable that Alaska  cannot draw                                                               
from its own resources to provide energy for the state.                                                                         
                                                                                                                                
                                                                                                                                
3:43:55 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE    GARA   suggested    that   community    service                                                               
announcements and  direct notification  to industrial  users will                                                               
be more  effective than posting flyers  to encourage conservation                                                               
measures.   He  expressed  his  concern that  the  media plan  to                                                               
encourage  conservation  measures  will not  include  the  entire                                                               
Railbelt.   Furthermore, there should  be actual  agreements with                                                               
the large commercial users and the nonresidential users.                                                                        
                                                                                                                                
                                                                                                                                
MR. VAKALIS  stressed that "the  plan is  to get 'buy-in'."   The                                                               
municipality will  pay for advertisements to  educate the public,                                                               
in addition to posting flyers  and producing radio announcements.                                                               
He assured Representative Gara that  whatever goes over the media                                                               
waves  in  Anchorage will  be  seen  and  heard  in most  of  the                                                               
Railbelt.    Furthermore,  the  municipality  will  be  providing                                                               
information  to the  emergency management  agencies of  the Kenai                                                               
and Mat-Su Boroughs.                                                                                                            
                                                                                                                                
                                                                                                                                
3:46:31 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
BRADLEY EVANS, CEO, Chugach  Electric Association (CEA), informed                                                               
the  committee that  CEA  plans for  many  emergency events  from                                                               
weather incidents  to volcano activity, and  including gas supply                                                               
interruption.   Chugach  Electric  Association  also maintains  a                                                               
trained  staff that  is available  24/7, and  has redundancy  and                                                               
backup systems to  call on during emergencies.   System operating                                                               
rules   would   provide   flexibility   during   a   gas   supply                                                               
interruption,  and the  coordination between  utilities regarding                                                               
risk management has resulted in  planning for other contingencies                                                               
also.     He  displayed  slide  5,   titled  "Corporate  Incident                                                               
Management Plan  Provides Incident Response Oversight"  and noted                                                               
that  CEA's corporate  incident management  plan is  a management                                                               
document  that  includes   notification  procedures,  call-trees,                                                               
situation assessments,  return to  normal transitions,  and other                                                               
information.   Slide  6, titled  "Additional  Chugach and  Inter-                                                               
Utility  Plans" listed  additional  CEA  and inter-utility  plans                                                               
ranging  from business  continuity  to  strategic alliances  with                                                               
petroleum  providers.   Inter-utility plans  include an  intertie                                                               
operating  agreement,  joint  planning,  gas  coordination,  cost                                                               
sharing,  and   participation  in  the  Alaska   Partnership  for                                                               
Infrastructure Protection.   Mr. Evans presented  slide 7, titled                                                               
"Gas  Supply   Interruption  Incident  Response   Overview"  that                                                               
identified  the   responses  of  systems   operations,  voluntary                                                               
consumer  response,  and  short-, mid-,  and  long-term  consumer                                                               
interruptions.                                                                                                                  
                                                                                                                                
3:51:45 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CO-CHAIR  MILLETT  asked  about  the  possibility  of  increasing                                                               
hydroelectric  power  (hydro) generation  in  response  to a  gas                                                               
supply interruption.                                                                                                            
                                                                                                                                
                                                                                                                                
MR. EVANS explained  that the hydro generation  from Bradley Lake                                                               
is   not  normally   dispatched   to   its  maximum   capability.                                                               
Furthermore,  although  wattage  from  Bradley Lake  may  not  be                                                               
available for  every incident, additional  megawatts from  it and                                                               
the  intertie   can  be  shifted  to   full  capability,  thereby                                                               
incrementally  reducing the  amount of  production needed  from a                                                               
gas turbine.                                                                                                                    
                                                                                                                                
                                                                                                                                
3:53:16 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE TUCK  asked whether  energy generated by  hydro or                                                               
natural gas is cheaper to provide.                                                                                              
                                                                                                                                
                                                                                                                                
MR. EVANS advised  that this is a very  complex economic dispatch                                                               
problem.    Hydro cannot  be  run  "full  out" all  year  because                                                               
production is limited by the supply of water.                                                                                   
                                                                                                                                
                                                                                                                                
3:54:29 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE GARA asked  Mr. Evans to compare  the energy usage                                                               
of  residential and  nonresidential  consumers  during high  peak                                                               
periods of a cold snap.                                                                                                         
                                                                                                                                
MR. EVANS said  that he would provide  the electrical consumption                                                               
statistics for each class of consumer  at a later date.  His firm                                                               
plans  to  inventory the  capabilities  of  commercial users  and                                                               
develop agreements  for conservation  and the use  of alternative                                                               
fuels.  The goal is to  not shift the commercial customer "either                                                               
through an  outage or through  a commercial arrangement",  but to                                                               
reduce the footprint.                                                                                                           
                                                                                                                                
                                                                                                                                
PHIL   STEYER,  Director,   Government   Relations  &   Corporate                                                               
Communications, Chugach  Electric Association (CEA),  stated that                                                               
a review  of CEA's  annual load  profile looks  like a  "U": high                                                               
electric loads in the winter and  low in the summer.  Because its                                                               
market  is  largely residential,  the  daily  profile on  a  cold                                                               
winter day  reveals peaks during  the morning and  early evening,                                                               
and a low at midnight.   Using 1/7/09 as an example, he estimated                                                               
that  if  consumers avoided  using  electricity  in the  evening,                                                               
there would be a 10 percent  reduction in use.  Mr. Steyer opined                                                               
conservation  by  nonresidential  consumers would  be  needed  to                                                               
increase  the  savings.   In  response  to Co-chair  Millett,  he                                                               
explained  that CEA  customers are  about 80  percent residential                                                               
and 20  percent commercial,  while ML&P  customers are  about the                                                               
opposite.   However,  CEA kilowatt  hour sales  are about  evenly                                                               
split  between   residential  and  commercial  customers.     All                                                               
utilities have commercial  customers, but the mix  of customers a                                                               
utility company has may be more commercial or residential.                                                                      
                                                                                                                                
                                                                                                                                
3:59:42 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR. EVANS added that CEA  planned on scheduling a "voluntary day"                                                               
in order to  measure the result of taking voluntary  actions.  He                                                               
then returned  to slide 7  and noted that the  voluntary customer                                                               
actions for  mid- and long-term  have been discussed  in previous                                                               
testimony  before the  committee.   Mr.  Evans  pointed out  that                                                               
voluntary  consumer response  "can be  done under  both sides  of                                                               
natural gas and electric consumption."                                                                                          
                                                                                                                                
4:01:19 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CO-CHAIR MILLETT  inquired as to  how many times CEA  has reached                                                               
yellow or red levels of disruption.                                                                                             
                                                                                                                                
                                                                                                                                
MR. EVANS said  that to his knowledge CEA has  not reached yellow                                                               
or red levels on  a large scale.  He advised  that CEA has joined                                                               
with  many consumers  for its  Smart Power  conservation program.                                                               
He acknowledged CEA has operated in  the [up to 40 percent level]                                                               
and interruptions have been handled  with operating measures that                                                               
do  not impact  the  customer and  have  prevented brownouts  and                                                               
blackouts.                                                                                                                      
                                                                                                                                
                                                                                                                                
4:03:29 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR. EVANS continued to explain that  it is possible to reduce the                                                               
consumption  footprint  operationally  by  maximizing  resources,                                                               
emergency purchasing,  and re-dispatching units.   For example, a                                                               
compressor  outage   can  be  accommodated  by   generating  more                                                               
pressure in a different way.                                                                                                    
                                                                                                                                
                                                                                                                                
4:04:31 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAMRAS  referred  to   slide  8,  titled  "System                                                               
Operations Response to a Gas  Supply Interruption" and asked from                                                               
where emergency gas could be purchased.                                                                                         
                                                                                                                                
                                                                                                                                
MR. EVANS  explained that  CEA has been  able to  purchase excess                                                               
capability gas from another producer.   This procedure is handled                                                               
"behind the pilot's chair, so to speak."                                                                                        
                                                                                                                                
4:05:58 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE JOHANSEN  asked whether  very cold  winters create                                                               
problems with low water levels at Bradley Lake.                                                                                 
                                                                                                                                
                                                                                                                                
MR. EVANS said  that generally speaking the inflow  from the lake                                                               
begins  early  in the  summer  and  is  reduced from  October  to                                                               
freeze-up.    In   further  response,  he  noted   that  CEA  has                                                               
experienced minimum  lake elevations late  in the year,  in April                                                               
or  May, but  the operating  groups  monitor the  lake level  and                                                               
curtail the flow  where necessary.  The lake  collects water from                                                               
rain, snowpack, and glacier melt.                                                                                               
                                                                                                                                
                                                                                                                                
4:08:42 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE   GARA  recalled   hearing   comments  about   the                                                               
possibility  of  rolling blackouts  during  a  very cold  winter.                                                               
Considering Mr.  Evans' previous testimony, he  asked whether the                                                               
danger of rolling blackouts is real.                                                                                            
                                                                                                                                
                                                                                                                                
MR. EVANS agreed that the threat is  real and is not limited to a                                                               
disruption in  the flow of  gas, but also includes  problems that                                                               
can  be caused  by an  infrastructure failure.   In  addition, he                                                               
reminded the  committee of  the uncertainties  in the  Cook Inlet                                                               
Emergency Management Plan regarding  production from the wells in                                                               
Cook Inlet.   The utilities  are a "weakly  interconnected system                                                               
all throughout  the supply chain to  make this work."   He warned                                                               
that a production, delivery, or  conversion problem could surface                                                               
and Alaska does not have a lot of backup.                                                                                       
                                                                                                                                
                                                                                                                                
4:11:14 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE TUCK,  referring to  slide 8,  asked for  the cost                                                               
effectiveness of  the six system  operations responses  listed on                                                               
the slide.                                                                                                                      
                                                                                                                                
                                                                                                                                
MR. EVANS advised that GEA  normally chooses the least disruptive                                                               
response which would generally be  purchasing from GVEA; however,                                                               
GVEA is also a liquids,  diesel-based generation and GEA holds an                                                               
interruptible  contract.    He described  other  scenarios  using                                                               
different  operations   responses.     In  further   response  to                                                               
Representative Tuck,  he explained  that the contract  to provide                                                               
generation  to MEA  expires in  2014.   In fact,  how all  of the                                                               
utilities manage  generation going forward is  under deliberation                                                               
at this time,  whether "we could work something out,  or we could                                                               
do something through a Railbelt energy corporation."                                                                            
                                                                                                                                
4:14:13 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  TUCK surmised  the service  area may  be under  a                                                               
"yellow" status  for three to  four months  this year.   He asked                                                               
whether this would affect consumers' rate cost.                                                                                 
                                                                                                                                
MR. STEYER  referred to slide 7  as "our one-page attempt  to put                                                               
on a single piece of paper  and explain to people what this issue                                                               
is all  about."  There  are three  levels of response  to resolve                                                               
problems:  at  the green level, the use of  systems operations by                                                               
the utilities; at  the yellow level, the use  of voluntary action                                                               
by  customers; at  the red  level, the  use of  disruptions.   He                                                               
pointed out that the first response  to an incident is the use of                                                               
systems operations, and remarked,  "Heretofore, all problems have                                                               
been resolved  [by actions] within  the green area  and customers                                                               
have  never been  asked, in  my 22  1/2 years  at Chugach,  we've                                                               
never gotten into  this middle band - voluntary  actions."  Only,                                                               
as  a last  resort, would  there be  consumer interruptions.   In                                                               
response to  Representative Gara, he said,  "Sometimes people get                                                               
this page out of order."   In fact, even the problems last winter                                                               
were  resolved at  the  green  level.   Mr.  Steyer then  defined                                                               
short-term as a problem measured in  hours or days; mid-term as a                                                               
problem measured in  weeks or months; and long-term  as a problem                                                               
measured in years.                                                                                                              
                                                                                                                                
                                                                                                                                
4:18:38 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CO-CHAIR MILLETT said:                                                                                                          
                                                                                                                                
     You said that you've only gone to one of, one thing in                                                                     
      the green box to this point.  Is that what you said                                                                       
     ...?                                                                                                                       
                                                                                                                                
                                                                                                                                
MR. STEYER clarified that last  winter, during the cold snap, CEA                                                               
"really only  used one  of these  tools in  the toolbox...."   He                                                               
added that other utilities, such  as ENSTAR and the LNG facility,                                                               
may have used other actions.                                                                                                    
                                                                                                                                
CO-CHAIR MILLETT remarked:                                                                                                      
                                                                                                                                
                                                                                                                                
     I guess  what I'm  trying to  get at is  ... but  if we                                                                    
     used all of  these tools, I guess I'm trying  to get to                                                                    
     the point ...  [how] close were we to  getting into the                                                                    
     yellow?                                                                                                                    
                                                                                                                                
                                                                                                                                
MR. STEYER opined  that many actions were still  available to the                                                               
utilities had  the utilities  needed them.   He pointed  out that                                                               
headlines  and   hallway  conversations   do  not   always  serve                                                               
customers and constituents well.                                                                                                
                                                                                                                                
                                                                                                                                
4:20:31 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CO-CHAIR MILLETT continued to say:                                                                                              
                                                                                                                                
                                                                                                                                
     If  we haven't  gotten to  that  point ...  I guess  my                                                                    
     question  to you  is why  is the  municipality planning                                                                    
     and why  are, why do  we have so many  people-ENSTAR in                                                                    
     particular and  the municipality-saying that this  is a                                                                    
     distinct  possibility, and  you're telling  me that  we                                                                    
     haven't  even made  it  through the  green  box and  we                                                                    
     haven't gotten  to that  point.  So,  is there  a false                                                                    
     sense of  dire straits here?   Is it warranted,  are we                                                                    
     jumping way ahead...?                                                                                                      
                                                                                                                                
                                                                                                                                
MR. EVANS  assured Co-Chair  Millett that  the situation  is real                                                               
due to the declining deliverability  of Cook Inlet.  Although the                                                               
precise  answer regarding  production in  Cook Inlet  is unknown,                                                               
the  utilities want  to  have  plans in  place;  this is  prudent                                                               
utility planning and operation.   He reiterated past testimony in                                                               
which he  warned that  the situation  is going  to get  worse and                                                               
actions must be  taken to "keep the lights on  and safety first."                                                               
Today's testimony  is focused on  how the utilities  are planning                                                               
for a contingency, however, a perfect storm could happen.                                                                       
                                                                                                                                
                                                                                                                                
4:22:44 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  JOHANSEN expressed  his interest  in knowing  how                                                               
close this area of the  state is to [voluntary consumer response]                                                               
to a gas supply interruption problem.                                                                                           
                                                                                                                                
                                                                                                                                
MR. EVANS acknowledged  that at one time or another  CEA has used                                                               
all of the [actions] available to [system operations].                                                                          
                                                                                                                                
4:24:24 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE GARA relayed that he  has heard that there is also                                                               
a danger  of a  shortage of gas  availability during  peak winter                                                               
usage.                                                                                                                          
                                                                                                                                
                                                                                                                                
MR. EVANS  confirmed that  sufficient gas  is under  contract for                                                               
this winter and there would need  to be a gas supply interruption                                                               
to cause a  failure.  However, it is possible  that a temperature                                                               
of 30 below  for 20 days might exceed the  capability.  There are                                                               
two issues to understand, the  deliverability and the volume.  If                                                               
either were stretched to the  breaking point - then the utilities                                                               
would use [system operations] tools to handle that.                                                                             
                                                                                                                                
                                                                                                                                
REPRESENTATIVE GARA restated  that the gas now  under contract is                                                               
enough  for   this  winter,  although  the   systems  issues  are                                                               
separate.                                                                                                                       
                                                                                                                                
                                                                                                                                
MR.  EVANS  said,   "There  is  always  ...  there   could  be  a                                                               
deliverability problem here,  we could exceed the  ability of the                                                               
Cook Inlet to deliver gas."                                                                                                     
                                                                                                                                
                                                                                                                                
MR. STEYER continued  his discussion of slide 7.   The short-term                                                               
system operations  response, shown in  green, could reduce  up to                                                               
40  percent  of CEA's  peak  daily  demand  for gas.    Voluntary                                                               
consumer response, shown in  yellow, represents another reduction                                                               
of up  to 15  percent.   He expressed his  belief that  these are                                                               
actions customers could and would  do if necessary.  Furthermore,                                                               
CEA  is  seeking ways  to  help  its  customers choose  the  most                                                               
valuable actions  to take.   To  do this,  CEA has  organized its                                                               
customer base  not only  by the retail  or commercial  level, but                                                               
also by government or public  control versus private control of a                                                               
facility.     Thus,  federal,   state,  and   municipal  building                                                               
management  will  be  contacted  to prearrange  the  planning  of                                                               
voluntary responses.  The remainder  of retail customers may have                                                               
energy saving  responses unique  to each site.   Mr.  Steyer then                                                               
displayed   slide  10,   titled  "Customer   Interruptions"  that                                                               
illustrated the information that  will be provided to residential                                                               
customers.                                                                                                                      
                                                                                                                                
                                                                                                                                
4:31:04 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  observed that  every rural  community that                                                               
the  committee   has  visited  since   January  is   living  with                                                               
[interruptions for short durations] every day.                                                                                  
                                                                                                                                
                                                                                                                                
4:31:33 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  STEYER  stressed that  the  document  presented is  a  draft                                                               
document  and  a work  in  progress.    The  goal is  to  develop                                                               
something  simple for  residents to  use during  the course  of a                                                               
short-term  interruption.    He  concluded  by  saying  that  the                                                               
voluntary responses and a common  plan are being developed by all                                                               
six of  the Railbelt utilities,  ENSTAR, and the  Municipality of                                                               
Anchorage.                                                                                                                      
                                                                                                                                
                                                                                                                                
4:33:37 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  EVANS returned  to slide  7,  and said  after reductions  by                                                               
system  operations  and  voluntary  consumer  response,  rotating                                                               
consumer interruptions over  a peak period can  save an estimated                                                               
20  percent.    The  minimum requirement  in  the  transportation                                                               
system is  25 percent of  the on-peak  take, or 25  million cubic                                                               
feet  per  day (mmcf/d).    A  minimum  amount of  generation  is                                                               
required to  keep the backbone  of the transportation  system up.                                                               
He concluded by  advising the committee of  the upcoming electric                                                               
and gas  utility tabletop exercise and  the deadlines coordinated                                                               
with the Municipality of Anchorage  that were listed on slide 13,                                                               
titled "Next Steps."                                                                                                            
                                                                                                                                
                                                                                                                                
4:35:03 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CO-CHAIR MILLETT asked for the  state's and legislature's role in                                                               
CEA's contingency plans and long-term solutions.                                                                                
                                                                                                                                
                                                                                                                                
MR. EVANS expressed  his belief that coordination  with the state                                                               
for  resources to  support contingency  planning, education,  and                                                               
communications is critical.   In the long-term, the  next step is                                                               
for  the Cook  Inlet  Resource Management  Plan  to provide  more                                                               
answers  and  transparency in  order  to  better communicate  the                                                               
"pockets of information  between DOR and DNR."   Furthermore, the                                                               
state, as the lease-holder, needs to  work with CEA and ENSTAR on                                                               
potential gas  storage.  Mr. Evans  pointed out that CEA  is also                                                               
participating in the  development of an in-state  bullet gas line                                                               
and other  in-state resources.   However,  the decisions  made by                                                               
CEA must  be in the  best interest of  its consumers.   He opined                                                               
that the state must make  hard decisions about its investments in                                                               
infrastructure  such   as  the   bullet  line  and   the  Susitna                                                               
Hydroelectric Project.  Mr. Evans  said, "I personally think that                                                               
if  you're going  to export  a BTU  you should  create a  BTU ...                                                               
Susitna  goes a  long ways  to do  that ...  in some  communities                                                               
where they have an abundance of  hydro, or a higher percentage of                                                               
hydro, they have more stable rates."                                                                                            
                                                                                                                                
                                                                                                                                
4:38:07 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  agreed that  the overarching concern  of a                                                               
utility  is to  keep the  lights  on.   He  asked how  to make  a                                                               
transition to a bullet line supply  of gas in 2015-2016, "so that                                                               
you're contributing to the volume of gas ... on day one."                                                                       
                                                                                                                                
                                                                                                                                
MR. EVANS offered  his personal opinion that there is  a need for                                                               
an  anchor tenant  and the  likely  candidate is  the LNG  export                                                               
[plant].   Although the plant  does not  line up with  the Alaska                                                               
Gasline  Inducement Act  (AGIA), the  legislature must  sort this                                                               
out.   The other question  is how much  the state is  prepared to                                                               
invest in its future.                                                                                                           
                                                                                                                                
4:41:48 PM                                                                                                                    
                                                                                                                                
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP), informed  the committee  that REAP is  a coalition  of 65                                                               
organizations  working to  promote  renewable  energy and  energy                                                               
efficiency.   Mr. Rose  agreed that there  are short-,  mid-, and                                                               
long-term solutions to this problem  not only on the supply side,                                                               
but  on the  demand side  by using  conservation, weatherization,                                                               
and energy efficient  construction.  He advised that  most of the                                                               
gas in  Cook Inlet supplies  residential and  commercial electric                                                               
generation and  pointed out that conservation  requires conscious                                                               
decisions and  behavioral changes, but energy  efficiency reduces                                                               
the amount  of energy  consumed while  still delivering  the same                                                               
quality  of   services.    Examples  of   energy  efficiency  are                                                               
replacing  a  car   to  improve  gas  mileage,   or  replacing  a                                                               
refrigerator  with an  EnergyStar  model.   However, large  scale                                                               
implementation  of  either  needs a  comprehensive  strategy;  in                                                               
fact, a  recent study  indicated that the  U.S. could  reduce its                                                               
energy consumption  by 23 percent  through energy  efficiency and                                                               
conservation.   Mr. Rose  noted that  buildings consume  about 70                                                               
percent of all electricity generated,  and also account for about                                                               
40 percent of the total energy  use in the U.S.  Furthermore, the                                                               
U. S.  Department of Energy  (DOE) estimates that every  $1 spent                                                               
on the Building  Energy Codes Program will save  $50-$60 over the                                                               
lifetime of the investment.   In Alaska, the legislature invested                                                               
$360 million in energy weatherization  and energy rebate programs                                                               
and Alaska Housing Finance Corporation  (AHFC) is estimating that                                                               
if every person in the  region participated in the weatherization                                                               
program each  household could save  780 therms [one  therm equals                                                               
100,000 BTUs]  per year.   This represents  roughly 5  percent of                                                               
the Cook  Inlet gas load.   Mr. Rose encouraged the  committee to                                                               
consider  how  to  change  the way  people  think  about  energy.                                                               
Partly because of the extreme  climate, "Alaskans use more energy                                                               
per capita than probably any  society on the planet."  Therefore,                                                               
Alaskans  should   have  the  most  incentive   to  reduce  their                                                               
consumption of  energy.  He  agreed with Co-Chair Millett  that a                                                               
large part of Alaska's energy use is industrial.                                                                                
                                                                                                                                
                                                                                                                                
4:47:30 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  ROSE  stated  that  one   of  the  fundamental  barriers  to                                                               
increasing energy  efficiency is  the sheer number  of households                                                               
and electric  devices.  In  addition, energy efficiency is  not a                                                               
primary  focus of  our  economy  as it  is  in  other states  and                                                               
countries.   Other barriers are:   cost of improvements;  lack of                                                               
cold   climate  research   baseline  data;   ingrained  behavior;                                                               
competing incentives  such as hotel  guests who do not  pay extra                                                               
for the  use of  energy; landlords  who pass  energy costs  on to                                                               
their tenants; and lack of  choice of devices provided by others,                                                               
such as cable boxes.                                                                                                            
                                                                                                                                
                                                                                                                                
4:50:02 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAMRAS stated  that the  hospitality industry  is                                                               
leading the  marketplace of ideas  in energy  conservation areas,                                                               
such as providing  recycling bins in rooms and  saving on laundry                                                               
costs.   He suggested that  hotels are changing  guests' behavior                                                               
when traveling and after returning home.                                                                                        
                                                                                                                                
                                                                                                                                
MR.  ROSE agreed  that the  hospitality industry  is doing  so in                                                               
select places,  but the  point is simply  that the  problem still                                                               
exists.                                                                                                                         
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  RAMRAS  continued  to explain  that  hotels  were                                                               
among the  first to install  flat panel  TVs to save  energy, and                                                               
suggested that the speaker is  ignoring a movement in the private                                                               
sector that is changing the behavior  of consumers.  In fact, the                                                               
hospitality  industry  is  "glamorizing the  green  movement  and                                                               
changing  the   broad  behavior   of  large,   cross-sections  of                                                               
consumers ....   You  make the  business component  sound passive                                                               
and I don't  think they are."  Representative  Ramras opined that                                                               
private venues  across the country are  taking conservation steps                                                               
because it is good business management.                                                                                         
                                                                                                                                
                                                                                                                                
MR. ROSE  expressed his understanding  that many good  things are                                                               
happening and the research proves that more can be done.                                                                        
                                                                                                                                
                                                                                                                                
4:53:15 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  JOHANSEN asked  for clarification  as to  whether                                                               
Alaskans are the number one energy consumers in the world.                                                                      
                                                                                                                                
                                                                                                                                
MR.  ROSE said,  "Yes ...  I  said one,  one of  the largest  per                                                               
capita   users  in   the  world."     In   further  response   to                                                               
Representative Johansen, he  explained that per capita  is all of                                                               
the energy  use in the  state, including industrial  use, divided                                                               
by the population.                                                                                                              
                                                                                                                                
                                                                                                                                
4:54:07 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  ROSE  continued to  list  realistic  barriers to  increasing                                                               
energy  efficiency:  cost  of  new  technologies;  poor  building                                                               
practices  and  lack  of  building  codes;  and  inexperience  in                                                               
"green" building.  Turning to  ways to address these barriers, he                                                               
noted that  the Cold Climate  Housing Research Center  has issued                                                               
the  following   program  and  policy  recommendations:     state                                                               
leadership,  funding  energy  efficiency,  financial  incentives,                                                               
building  codes   and  standards,   baseline  data,   and  public                                                               
education and  outreach.  Mr.  Rose then relayed that  in Juneau,                                                               
when  an avalanche  crippled  power lines  and  cut off  Juneau's                                                               
hydroelectric  energy  supply,  electric energy  consumption  was                                                               
reduced by 30 percent.   After power was restored, there remained                                                               
a  sustained  reduction  of  8  percent.    It  is  believed  the                                                               
sustained  reduction is  the result  of changes  in lighting  and                                                               
some energy  efficiency improvements to freezers  and appliances.                                                               
Although a catastrophe brought these  changes, perhaps people can                                                               
be  motivated to  prevent a  looming catastrophe.   He  suggested                                                               
competition may be a driving  force.  For example, the Sacramento                                                               
Municipal Utility District utility  bills compare each customer's                                                               
energy  usage to  the  consumption of  35,000  other users;  this                                                               
policy  resulted  in an  average  2  percent decrease  in  energy                                                               
usage.    A  holistitic  approach to  the  problem  helps  people                                                               
understand  why  conservation  is   important  and  should  be  a                                                               
"normal" policy,  and addresses  the structural barriers  such as                                                               
aligning  utility  companies'  interest with  energy  efficiency;                                                               
access  to   accurate  energy   saving  advice;   incentives  for                                                               
investing in new technologies; and building codes and standards.                                                                
                                                                                                                                
                                                                                                                                
4:58:16 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MR.  ROSE then  described the  Alaska Efficiency  Challenge.   He                                                               
explained that the program is  currently specific to Southcentral                                                               
Alaska  and a  website is  being  developed which  will list  400                                                               
energy saving  and efficiency measures effective  in this region.                                                               
Consumers can  pledge to  take certain  measures and  the website                                                               
will immediately calculate  the savings for the  consumer to see.                                                               
The primary  goal of this program  is to work with  the utilities                                                               
to monitor  and verify what  the consumers are  doing voluntarily                                                               
to  save   energy,  and   then  establish   competitions  between                                                               
communities,   schools,   and   businesses,  to   generate   "the                                                               
competitive  element, the  competitive  spirit  that people  have                                                               
that  really  resonates  with  people."    He  opined  that  this                                                               
competitive spirit  will combine  with the  desire to  save money                                                               
and to save  natural gas.  When completed, the  website will show                                                               
detailed information on each of  400 possible ways to save energy                                                               
and money.   Mr. Rose  concluded that "this  is one piece  of the                                                               
puzzle, not  a silver bullet,  none of these are  silver bullets,                                                               
...  but just  another way  that we  could be  a little  bit more                                                               
energy efficient.                                                                                                               
                                                                                                                                
5:01:39 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  PETERSEN asked  whether the  development of  Fire                                                               
Island  [Wind Farm}  would help  [CEA] and  ML&P during  the peak                                                               
load times.                                                                                                                     
                                                                                                                                
                                                                                                                                
MR.  ROSE estimated  that a  54 megawatt  project equals  about 5                                                               
percent  of  the  overall  gas   generation;  however,  there  is                                                               
increased wind  in the winter  that would coincide with  the peak                                                               
load.   He  was  unsure how  the wind  power  would balance  with                                                               
hydro.                                                                                                                          
                                                                                                                                
CO-CHAIR MILLETT thanked the presenters.                                                                                        
                                                                                                                                
5:03:00 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 5:03 p.m.                                                                  

Document Name Date/Time Subjects
Customer Action Plan - short.pdf HENE 9/1/2009 2:00:00 PM
Alaska EE [Read-Only].pdf HENE 9/1/2009 2:00:00 PM
Gas Supply Interruption Presentation (9-1 House Special Committe on Energy) [Read-Only] [Compatibility Mode].pdf HENE 9/1/2009 2:00:00 PM
Utilities Emergency Response Overview.pdf HENE 8/26/2009 5:00:00 PM
HENE 9/1/2009 2:00:00 PM
September 1 Agenda.pdf HENE 9/1/2009 2:00:00 PM
House Special Committee on Energy Sept 1 2009 Final [Compatibility Mode].pdf HENE 9/1/2009 2:00:00 PM