Legislature(2009 - 2010)Fairbanks

10/22/2010 09:00 AM House ENERGY


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09:13:06 AM Start
09:13:14 AM Overview(s): Update on Energy Projects and Appropriations
11:52:42 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Teleconference --
+ Location: Akosofu Building, Room 501, Fairbanks TELECONFERENCED
Subject: Update on Energy Projects and
Appropriations
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                       Fairbanks, Alaska                                                                                        
                        October 22, 2010                                                                                        
                           9:13 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bryce Edgmon, Co-Chair                                                                                           
Representative Charisse Millett, Co-Chair                                                                                       
Representative Kyle Johansen                                                                                                    
Representative Pete Petersen                                                                                                    
Representative Chris Tuck                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Nancy Dahlstrom (Resigned 5/31/10)                                                                               
Representative Jay Ramras                                                                                                       
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Paul Seaton                                                                                                      
Representative Tammy Wilson                                                                                                     
Representative Mike Kelly                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW(S):  UPDATE ON ENERGY PROJECTS AND APPROPRIATIONS                                                                      
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LUKE HOPKINS, Mayor                                                                                                             
Fairbanks North Star Borough                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the overview regarding the                                                              
update on energy projects and appropriations.                                                                                   
                                                                                                                                
STEVE HAAGENSON, Executive Director                                                                                             
Alaska Energy Authority (AEA)                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during  the overview regarding the                                                             
update on energy projects and appropriations.                                                                                   
                                                                                                                                
SARA FISHER-GOAD, Deputy Director                                                                                               
Operations                                                                                                                      
Alaska Energy Authority (AEA)                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during  the overview regarding the                                                             
update on energy projects and appropriations.                                                                                   
                                                                                                                                
BOB BREAN, Director                                                                                                             
Research and Rural Development                                                                                                  
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during  the overview regarding the                                                             
update on energy projects and appropriations.                                                                                   
                                                                                                                                
CARY BOLLING, Energy Specialist                                                                                                 
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during  the overview regarding the                                                             
update on energy projects and appropriations.                                                                                   
                                                                                                                                
JACK HÉBERT, President/Chief Executive Officer (CEO)                                                                            
Cold Climate Housing Research Center (CCHRC)                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:    Testified  during the  update  on  energy                                                             
projects and appropriations.                                                                                                    
                                                                                                                                
JULIE ESTEY, Business Director                                                                                                  
Alaska Center for Energy and Power (ACEP)                                                                                       
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:    Testified  during the  update  on  energy                                                             
projects and appropriations.                                                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:13:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  BRYCE  EDGMON called  the  House  Special Committee  on                                                             
Energy meeting to  order at 9:13 a.m.   Representatives Johansen,                                                               
Petersen (via  teleconference), Millett, and Edgmon  were present                                                               
at  the  call to  order.    Representative  Tuck arrived  as  the                                                               
meeting was  in progress.  Representatives  Chenault, Guttenberg,                                                               
Wilson, Seaton,  Kelly, Stoltze, P. Wilson  (via teleconference),                                                               
and Olson (via teleconference) were also in attendance.                                                                         
                                                                                                                                
^Overview(s):  Update on Energy Projects and Appropriations                                                                     
   Overview(s):  Update on Energy Projects and Appropriations                                                               
                                                                                                                                
9:13:14 AM                                                                                                                    
                                                                                                                                
CO-CHAIR EDGMON announced  that the only order  of business would                                                               
be an update on energy projects and appropriations.                                                                             
                                                                                                                                
9:15:33 AM                                                                                                                    
                                                                                                                                
LUKE  HOPKINS,  Mayor,  Fairbanks  North  Star  Borough,  relayed                                                               
Fairbanks  is the  northern most  metropolis in  the state  using                                                               
natural  gas that  is  the highest  priced in  the  country.   He                                                               
indicated that  numerous plans to  supply natural gas as  a major                                                               
energy  solution  for  the  state   would  be  presented  to  the                                                               
legislature.  He further indicated  that energy plans, industrial                                                               
opportunity,  and  growth in  the  state's  economy are  directly                                                               
related.   He  stated that  the  high cost  of energy  has had  a                                                               
detrimental effect  on the level  of investment occurring  in the                                                               
northern part  of the state.   Currently, the lowest  cost energy                                                               
source for many  Fairbanks residents is wood heat  or coal, which                                                               
he indicated  is bad for air  quality.  He offered  his hope that                                                               
an energy plan  for the state would include  a reasonable natural                                                               
gas solution.   He noted that HB 305 brought  about discussion on                                                               
nuclear power.   He said that might be the  solution, but many of                                                               
those projects are still years away.   He stated that the current                                                               
high  cost of  energy  is  not only  hampering  the community  of                                                               
Fairbanks from  developing, but also  hampering residents  in the                                                               
area from  being able to afford  to remain in the  community.  He                                                               
asked the  committee to  keep Fairbanks'  situation in  mind when                                                               
discussing energy options.                                                                                                      
                                                                                                                                
9:24:29 AM                                                                                                                    
                                                                                                                                
STEVE  HAAGENSON,  Executive  Director, Alaska  Energy  Authority                                                               
(AEA),  reminded  the  committee  that  about  a  year  ago,  AEA                                                               
produced a  document called, "Alaska  Energy:  First  Step Toward                                                               
Energy  Independence,"  and the  goal  was  to reach  50  percent                                                               
renewable  resource use  by 2025  and  a 20  percent increase  in                                                               
efficiency by  2020.   He said HB  306 took the  state in  a good                                                               
direction   regarding  energy   policy.      He  explained   that                                                               
conservation  and  efficiency  are  two different  choices.    He                                                               
indicated that last  April AEA produced a rough  draft of "Alaska                                                               
Energy  Pathway,"  the final  copy  of  which  was given  to  the                                                               
committee.                                                                                                                      
                                                                                                                                
MR.  HAAGENSON talked  about  the  Railbelt.   He  said, "The  50                                                               
percent  renewable  target  was  forced   on  this  thing."    He                                                               
mentioned an analysis of a carbon  tax that was doubling the cost                                                               
of fuel,  which he indicated  was a driving influence  toward the                                                               
use  of  renewable  energy.    He  indicated  that  the  analysis                                                               
recommended a  large hydroelectric facility at  Chakachamna Lake,                                                               
Susitna, Glacier Fork, and Fire Island,  and the plan would be 50                                                               
percent hydro  and 50 percent  natural gas.  Currently,  he said,                                                               
Anchorage  uses  about  95  percent natural  gas  and  5  percent                                                               
hydroelectric, while  the entire  Railbelt uses  approximately 95                                                               
percent fossil  fuel and 5 percent  hydro.  He said  the Railbelt                                                               
Integrated   Resource   Plan   (IRP)  recommended   building   in                                                               
Chakachamna, but  he said  AEA feels  more comfortable  with "the                                                               
estimate on Susitna."                                                                                                           
                                                                                                                                
9:29:34 AM                                                                                                                    
                                                                                                                                
MR. HAAGENSON directed attention to  page 6 of the aforementioned                                                               
publication, which addresses the subject  of gas and shows a line                                                               
graph detailing capital expenditures and  high debt capacity.  He                                                               
talked  about a  funding  gap  and said  a  combination of  three                                                               
things would reduce  it:  reduce the  state's [capital spending],                                                               
increase debt capacity by building  the economy, and obtain grant                                                               
funding from the state.                                                                                                         
                                                                                                                                
9:31:49 AM                                                                                                                    
                                                                                                                                
MR. HAAGENSON next  talked about the 228  communities outside the                                                               
Railbelt.   He said AEA figured  out the needs of  each community                                                               
for heat,  electricity, and transportation  and the  capital cost                                                               
and  deployment cost  of those  resources, and  it queried  as to                                                               
which resources  each community may  have nearby.   Mr. Haagenson                                                               
directed attention to pages 27  through 31 of the handout, which,                                                               
using Kipnuk as an example, show  a breakdown of current to long-                                                               
term  and projected  goals for  electric and  heat, "demand-side"                                                               
efficiency  and  conservation  for electric  usage  and  heating,                                                               
upgrade potential  of Kipnuk's  current power  plant, information                                                               
related  to heat  recovery,  and short  to  long-term options  of                                                               
wind/diesel  energy use.   He  noted  that most  upgrades in  the                                                               
state  are done  through grants,  but Kipnuk's  upgrade would  be                                                               
done through  a loan.  He  highlighted some cost figures  on page                                                               
31.                                                                                                                             
                                                                                                                                
9:36:24 AM                                                                                                                    
                                                                                                                                
MR.  HAAGENSON  said a  byproduct  of  generating electricity  is                                                               
heat.    He   talked  about  numbers,  including   a  30  percent                                                               
deployment,  a  capital cost  of  $1.4  million  for a  new  wind                                                               
turbine, an  approximate annual capital  cost of  $132,000, about                                                               
$0.282/kilowatt hour (kWh)  to pay the debt, zero  fuel cost, and                                                               
an  approximate cost  of $0.047/kWh  [as shown  on page  31 under                                                               
short-term  deployment for  a wind/diesel  technology].   He said                                                               
subtracting the  28 cents from the  45 cents would show  what the                                                               
cost would  be for that power.   He indicated that  when there is                                                               
30  percent wind/diesel,  there is  70 percent  diesel, and  that                                                               
diesel  fuel is  priced  at  $107.50 per  barrel.   He  mentioned                                                               
having  used  the  Energy  Information  Administration's  (EIA's)                                                               
"number."   He  returned to  page 27,  to the  following figures:                                                               
$0.51, $0.49, $0.41,  and $0.40.  He explained  those figures are                                                               
"the  resulting  cost  of  community  power  before  [power  cost                                                               
equalization] (PCE) in Kipnuk."                                                                                                 
                                                                                                                                
MR. HAAGENSON  drew attention  to the compact  disc (CD)  that is                                                               
included at  the back of the  handout.  He then  turned attention                                                               
to page  25, which shows  regional capital cost rollup  for every                                                               
Native corporation and  for the Railbelt.  He  indicated that the                                                               
cost of advancing  this plan would be  approximately $10 million.                                                               
He  noted that  the  far  right column  on  that  page shows  the                                                               
capital cost per capita.  Mr.  Haagenson spoke about results.  He                                                               
said  63 percent  of the  energy  in rural  Alaska is  renewable,                                                               
"mainly  driven by  Southeast hydro."    He indicated  that if  a                                                               
strategy were adopted  for rural Alaska, that number  could go up                                                               
to 94  percent.  As shown  on page 14, Mr.  Haagenson pointed out                                                               
that through following a plan  for 50 percent renewable energy by                                                               
2025,  non-Railbelt  diesel  use  for electric  could  drop  from                                                               
approximately 35  million gallons per  year to around  5 million,                                                               
and non-Railbelt  diesel use for  heat could drop from  nearly 60                                                               
million  gallons per  year to  about 30  million.   He said  heat                                                               
costs twice  as much as electricity,  and while there is  help to                                                               
rural Alaska from  PCE for electricity, there is no  help for the                                                               
cost of  heat.  He  opined, "The sooner  we can deploy  more heat                                                               
source, the better off we are."                                                                                                 
                                                                                                                                
9:41:00 AM                                                                                                                    
                                                                                                                                
MR. HAAGENSON next  discussed financing options.  He  said HB 306                                                               
includes a section that says that  the Power Project fund will be                                                               
used as  a vehicle for energy  projects in Alaska.   He said that                                                               
is the first time  the venue has changed from a  grant to a loan,                                                               
which he said is a "long-term,  healthy thing" that will "help us                                                               
close the  gap."  He talked  about a "rain barrel  model," and he                                                               
explained that basically  money comes in and out  of a community.                                                               
He directed  attention to  page 17, and  he highlighted  the five                                                               
strategies   for  economic   development:     import   reduction,                                                               
infrastructure development,  highest and best use  of a resource,                                                               
public/private  partnerships,  and  the   state  as  an  economic                                                               
facilitator.  He offered further  details regarding each of those                                                               
strategies.                                                                                                                     
                                                                                                                                
9:47:27 AM                                                                                                                    
                                                                                                                                
MR. HAAGENSON  talked about  the term "pathway."   He  said ideas                                                               
have  failed in  the past  because  outsiders have  come in  with                                                               
advice on what to  do, but no one has had the  passion to take on                                                               
the projects.   He said  the pathway is  the beginning and  it is                                                               
necessary to  find people with  the passion to carry  out visions                                                               
and develop  projects according to  the wishes of  the community.                                                               
He  offered an  example of  a  project taking  place in  Cordova,                                                               
Alaska.                                                                                                                         
                                                                                                                                
9:49:46 AM                                                                                                                    
                                                                                                                                
MR. HAAGENSON  said the mix of  loan and grant funding  will be a                                                               
challenge for  the legislature,  because that  is not  the normal                                                               
process for the legislature.  He spoke of grants as incentives.                                                                 
                                                                                                                                
9:50:55 AM                                                                                                                    
                                                                                                                                
MR. HAAGENSON,  in response to Representative  Johansen, said AEA                                                               
has "a scope  of work" to put  before IRP and all  utilities.  In                                                               
response to  another question,  he said,  "Whenever you  get away                                                               
from a volatile fuel it will  stabilize, and since wind and hydro                                                               
are  typically free  fuel, it  stabilizes  them very  well."   He                                                               
mentioned biomass,  "using stick  wood," and growing  willow, and                                                               
said  that  would be  "tied  more  to  labor," which  means  more                                                               
volatility, but still less volatility than fuel.                                                                                
                                                                                                                                
9:53:09 AM                                                                                                                    
                                                                                                                                
MR. HAAGENSON,  in response to Representative  Kelly, said carbon                                                               
tax looks  bad to those on  the receiving end of  it; however, he                                                               
suggested the state  come up with a strategy that  helped it make                                                               
money from the  carbon tax.  He said there  may be an opportunity                                                               
that  has  yet to  be  considered  -  a  resource that  could  be                                                               
deployed -  that would  allow the  state to  earn revenue  from a                                                               
carbon tax.  He agreed  with Representative Kelly that carbon tax                                                               
would not be good for the state  unless a way is found to make it                                                               
benefit   the  state.      In  response   to   a  question   from                                                               
Representative  Kelly  regarding  carbon   tax,  he  said  it  is                                                               
"addressed," but it is "not the  base model."  He offered further                                                               
details.                                                                                                                        
                                                                                                                                
9:56:35 AM                                                                                                                    
                                                                                                                                
MR. HAAGENSON, in  response to a question  from Representative T.                                                               
Wilson  regarding biomass,  indicated  that  AEA considered  many                                                               
biomass recommendations,  but focused  on stick wood  "as opposed                                                               
to  looking at  willow."   He  said  there is  a  lot of  biomass                                                               
available in  Alaska, such  as in Tok,  Gulkana, and  Kenny Lake.                                                               
He  said biomass  comes in  many forms,  including chipped  wood,                                                               
shredded  wood,   stick  wood,   and  pellets.     He   said  one                                                               
consideration  when using  biomass sources  is how  long it  will                                                               
take  those  sources to  grow  back.    He said  researchers  are                                                               
considering that question.  He  stated that the document includes                                                               
only known, proven technology - no  risk.  He said currently Cold                                                               
Climate Housing is putting in a  heat pump at a school, and solar                                                               
panels will heat the ground in  the summer and then the heat will                                                               
be pumped back  out in the winter.   He noted that  Alaska has 90                                                               
percent of  the nation's  tidal zones,  but does  not use  any of                                                               
that energy source,  and he questioned why that is  the case.  He                                                               
mentioned  geothermal  energy.    He then  mentioned  an  "action                                                               
drill."   He offered  various examples  of energy  renewal ideas,                                                               
and he said if  the state can put the deals  together, it can use                                                               
the resources to its advantage.                                                                                                 
                                                                                                                                
10:00:40 AM                                                                                                                   
                                                                                                                                
MR.  HAAGENSON,  in  response   to  Representative  Seaton,  said                                                               
currently most wind turbines are  designed to create electricity,                                                               
and the best way to deliver  the electricity "to site" is through                                                               
electric line.   He said the reason there  is limited penetration                                                               
is that  at approximately 30  percent penetration,  problems with                                                               
the running the  system occur.  He mentioned having  a dump load,                                                               
and he  said when that  dump load energy  is used for  heat, more                                                               
heat   is  used.     In   response  to   another  question   from                                                               
Representative  Seaton regarding  off-grid heat  supplies through                                                               
wind, said that typically the  smaller the turbine, the worse the                                                               
economics.   He concluded, "So, we  tend to look at  the utility-                                                               
scale  solutions,  not   necessarily  the  home-scale  solutions,                                                               
trying to get the economy to scale."                                                                                            
                                                                                                                                
10:03:47 AM                                                                                                                   
                                                                                                                                
SARA  FISHER-GOAD,  Deputy  Director, Operations,  Alaska  Energy                                                               
Authority (AEA), directed attention to  a two-page handout in the                                                               
committee packet  from AEA,  page one of  which shows  rounds one                                                               
through four of grants and funding.   She relayed that the fourth                                                               
round ended  in September,  2010, and  AEA is  in the  process of                                                               
reviewing the  104 applications it  received during  that period.                                                               
She reported that in the prior  rounds, AEA issued 116 grants and                                                               
almost $40  million in funds  for projects.   The second  page of                                                               
the handout, she  noted, shows a pie chart  depicting the funding                                                               
allocation  by development  phase for  rounds one  through three.                                                               
She explained that  there had been some concern  when the program                                                               
was developed  that perhaps too  much money was going  to studies                                                               
and  reconnaissance work  rather than  to construction;  however,                                                               
she  said of  the $150  million, $118  million is  designated for                                                               
construction  projects.   She also  noted  that the  rest of  the                                                               
second  page  shows  the  scheduled   project  completion.    The                                                               
corresponding  bar  chart only  shows  rounds  one and  two,  she                                                               
noted,  but most  of the  projects are  expected to  be completed                                                               
during  calendar year  2012.   She pointed  to another  bar chart                                                               
further down  the page, which  shows projected  cumulative annual                                                               
fuel  savings,  which also  reflects  just  rounds one  and  two;                                                               
however, she said  AEA is anticipating nearly $8  million in fuel                                                               
savings  or the  equivalent per  year for  the projects  that are                                                               
constructed.    Other  information  on  the  page,  she  related,                                                               
includes:   the expected completion  date, the  renewable funding                                                               
energy grant, and the total project cost.                                                                                       
                                                                                                                                
10:07:37 AM                                                                                                                   
                                                                                                                                
MR.  HAAGENSON, in  response to  Co-Chair Edgmon,  indicated that                                                               
the  reason the  state has  not pursued  renewable energy  in the                                                               
past is because  the price of oil  and diesel was low  and it was                                                               
convenient.    Now,   he  said,  it  is  just   convenient.    He                                                               
recommended studying  the market and the  economics of delivering                                                               
a product that really can be delivered.                                                                                         
                                                                                                                                
10:12:20 AM                                                                                                                   
                                                                                                                                
CO-CHAIR    MILLETT   expressed    concern   about    the   aging                                                               
infrastructure  of transmission  and  how that  factors into  the                                                               
cost of bringing big scale renewable energy projects on line.                                                                   
                                                                                                                                
MR.  HAAGENSON   said  the  IRP  was   all-inclusive;  there  are                                                               
generation projects and transmission  projects listed in the plan                                                               
as means to deliver power across  the Railbelt.  In response to a                                                               
follow-up  remark, he  said  Susitna does  not  compete with  the                                                               
gasline,  and he  explained why.   He  opined that  it should  be                                                               
determined how  one could  strengthen the  other.   Regarding the                                                               
rail belt, he  said utilities have been working  together to find                                                               
a  common base,  because  a  large presence  must  be present  to                                                               
support  any  large  project.    In response  to  a  request  for                                                               
clarification, he confirmed  that he believes that  the state can                                                               
have both  a successful  gasline and projects  like Susitna.   He                                                               
said the state just needs to spend its money wisely.                                                                            
                                                                                                                                
10:18:32 AM                                                                                                                   
                                                                                                                                
MR. HAAGENSON,  in response to  a request from  Co-Chair Millett,                                                               
stated that AEA is very healthy  at this point, and it is working                                                               
hard on the issue of renewable  energy.  However, he said AEA has                                                               
experienced  loss  through attrition  and  expects  more loss  to                                                               
occur in  the next year.   He noted that attrition  is a national                                                               
problem,  because all  the Baby  Boomers are  entering retirement                                                               
age.  He said last year SB  220 asked for an evaluation of Alaska                                                               
Industrial Development and Export  Authority (AIDEA) and AEA, and                                                               
for opportunities  to be  sought to  build an  energy department,                                                               
and for an outline of the structure  of what AEA should be.  That                                                               
undertaking is happening currently and  AEA is a significant part                                                               
of  that process.   He  said some  states have  good models,  but                                                               
Alaska is  different.  He said  not many states have  the capital                                                               
to build  power plants, for  example.  He recommended  looking at                                                               
the options and going with the smart plan.                                                                                      
                                                                                                                                
10:23:46 AM                                                                                                                   
                                                                                                                                
MR. HAAGENSON  returned to his  presentation.  He  indicated that                                                               
because  of a  moving of  assets involving  AEA's sister  agency,                                                               
AIDEA, AEA  now has $21 million  more in its power  project fund.                                                               
He mentioned contracting with Alaska  Center for Energy and Power                                                               
(ACEP) to do an  analysis for nuclear power.  He  said there is a                                                               
Village Energy  Efficiency Program  (VEEP) that has  been active,                                                               
saving about 25,000 kWh per  village annually and investing about                                                               
$105  per capita,  with  a return  of $300  per  capita over  the                                                               
length  of  the   project.    There  has  been   a  reduction  of                                                               
approximately 4.5  percent in  energy use  in rural  Alaska among                                                               
participants.      He   further   reported   that   AEA   managed                                                               
approximately $1.5  million of federal stimulus  money, which was                                                               
utilized in 97 communities.   He mentioned change outs for energy                                                               
efficiency  and indicated  that  a $5.7  million  grant from  the                                                               
federal government will return about  $10 million over a ten-year                                                               
period.   He  reported  that  AEA is  also  getting  ready for  a                                                               
commercial  audit program,  and  with about  $600,000 of  federal                                                               
stimulus  money  and  approximately  $2.6  million  from  private                                                               
sources will yield  an approximate $4.3 million  savings over ten                                                               
years.  He said on the regional  level, AEA will be doing a side-                                                               
by-side  comparison  of  Chakachamna  and  Susitna,  publish  its                                                               
results in  November, listen to  public feedback, and  submit the                                                               
superior choice as  the primary project listed  in an application                                                               
to FERC, with the secondary one listed as an alternative.                                                                       
                                                                                                                                
10:28:09 AM                                                                                                                   
                                                                                                                                
MR. HAAGENSON said  AEA is working on Reynolds Peak  hydro and is                                                               
expecting  a cost  estimate  and schedule.    He offered  further                                                               
details.  He said AEA  is also working with Southeast Conference,                                                               
Southeast  Power Authority  (SEPA),  and with  all the  Southeast                                                               
utilities  companies   on  an   innovative  research   plant  for                                                               
Southeast Alaska.   He indicated that  the load and the  best way                                                               
to  deliver energy  will be  identified, and  that for  Southeast                                                               
Alaska, hydro  is available  to supply  demand.   He said  AEA is                                                               
also considering transition lines  for connections.  He mentioned                                                               
a contraption  that works  like "a  backwards refrigerator."   He                                                               
said Southeast Alaska is facing a  problem because it is using up                                                               
all its  capacity on resisted  heat, and it needs  the technology                                                               
to drop "the demand on peak down."                                                                                              
                                                                                                                                
MR.  HAAGENSON   indicated  that  AEA  is   considering  possible                                                               
hydroelectric sites in  the entire Bethel region.   He said there                                                               
are some hills and lakes nearby  that can be used, but people are                                                               
concerned about the  fish.  He explained that AEA  is just trying                                                               
to  find  out  where  it   is  possible  to  deliver  power  long                                                               
distances.                                                                                                                      
                                                                                                                                
MR.  HAAGENSON, regarding  Fire Island,  said it  costs about  10                                                               
cents to make the power and another  10 cents to regulate it.  He                                                               
indicated  that utilities  focus  on cost  and  reliability.   He                                                               
further indicated that in this scenario  the focus is on cost and                                                               
an attempt  is being made  to "take  a variable resource  in wind                                                               
and  fit it  into  a gas  supply  that they  are  ... almost  ...                                                               
[demanding be held]  steady."  He said this causes  problems.  He                                                               
said the utility  has "taken that impact and they've  put it back                                                               
onto  ...  theory,"  thereby  taking  almost  as  much  power  to                                                               
regulate  as  it would  cost  the  utility  to  "get out  of  the                                                               
investment."   He  said he  requested this  utility to  talk with                                                               
Golden Valley  Electric Association  ("Golden Valley"),  which is                                                               
not on a gas  supply, but gets fuel out of a  tank at no penalty.                                                               
Further,  Golden Valley  has the  largest battery  in the  world,                                                               
which can  be modified to take  care of "short-term swings."   He                                                               
surmised that  Golden Valley  would be  willing to  come together                                                               
with  Fire Island  to make  some kind  of deal.   He  offered his                                                               
understanding that  there is  a deadline  in mid-December,  so "a                                                               
lot of these things have to come together fast."                                                                                
                                                                                                                                
10:34:20 AM                                                                                                                   
                                                                                                                                
MR.  HAAGENSON  talked about  Mount  Spur  as another  geothermal                                                               
resource.   He indicated  that this entity  is planning  to drill                                                               
holes to identify the resource in  2011.  He mentioned an initial                                                               
citing of  50 megawatts (mWs),  and he indicated that  Mount Spur                                                               
is considering  a cost of 10-12  cents to make the  power, and is                                                               
looking  at ways  to structure  that cost.   The  big issue  with                                                               
Mount  Spur  is  deliverability,   he  said,  because  a  50-mile                                                               
transition line must be built into the site.                                                                                    
                                                                                                                                
MR. HAAGENSON said the Alaska  Intertie Agreement is scheduled to                                                               
terminate  on October  16, [2010],  but AEA  has signed  a three-                                                               
month  extension  that would  allow  utilities  with an  original                                                               
intertie  agreement to  come together  with a  plan in  which the                                                               
operating  rules would  be separate  and "floating  those to  the                                                               
RCA," and  then there will  be "a  very easy governance  model to                                                               
take care of the assets."   He indicated that other entities that                                                               
are  interested  in using  that  intertie  are being  allowed  to                                                               
participate.                                                                                                                    
                                                                                                                                
MR. HAAGENSON said  Bradley Lake is probably  the biggest success                                                               
story; when it was built people  did not know how they were going                                                               
to pay  for the 5  cent power, but  that rate, which  is actually                                                               
less than 5 cents, looks good  today.  The Bradley model is being                                                               
applied  to other  projects, including  Susitna, Allison  Lake in                                                               
Copper Valley, and  in the Southeast Alaska region.   He said the                                                               
state put out  half the money for the Bradley  Lake project, with                                                               
a 30-year, zero  interest/zero payment loan, which  is then paid,                                                               
based on bonds during the following  30 years.  He indicated that                                                               
AEA is also  working on Battle Creek diversion,  which would give                                                               
a lot more energy to the project.                                                                                               
                                                                                                                                
MR. HAAGENSON said AEA also does  bulk fuel tank upgrades, and he                                                               
offered an example relating to the  U.S. Coast Guard.  He said 70                                                               
out of  90,000 tanks farms  in Alaska have already  been replaced                                                               
by the Denali Commission since 2000  at a cost of about $400,000.                                                               
He mentioned  another program called Rural  Power System Upgrades                                                               
(RPSU),  and  he offered  further  details.    He said  AEA  also                                                               
manages the Bulk  Fuel Revolving Loan Fund, which is  a cash flow                                                               
mechanism system  for communities  that get their  fuel delivered                                                               
once a  year.  He offered  further details.  He  said AEA manages                                                               
the PCE program,  a $31 million program that  assists Alaskans in                                                               
getting the  cost of energy down.   He said AEA  has an emergency                                                               
response program to keep the lights  on and guard the system, and                                                               
a  circuit rider  program to  provide technical  assistance.   He                                                               
related an example by way of  an anecdote.  He mentioned training                                                               
and  a  54-person  operating  hub  of  people  who  operate  wind                                                               
turbines and hydro plants in the  state.  He reiterated that just                                                               
36 people run about 20 programs.                                                                                                
                                                                                                                                
CO-CHAIR EDGMON thanked those who testified for their work.                                                                     
                                                                                                                                
The committee took an at-ease from 10:42:01 AM to 11:03:14 AM.                                                              
                                                                                                                                
11:03:16 AM                                                                                                                   
                                                                                                                                
CO-CHAIR EDGMON announced that the  committee would now hear from                                                               
the Alaska Housing Finance Corporation (AHFC)                                                                                   
                                                                                                                                
11:03:42 AM                                                                                                                   
                                                                                                                                
BOB  BREAN,  Director,  Research and  Rural  Development,  Alaska                                                               
Housing   Finance   Corporation   (AHFC),  announced   that   his                                                               
colleague,   Cary    Bolling,   would   present    a   PowerPoint                                                               
presentation, which would give the  committee an update on AHFC's                                                               
Home  Weatherization Program,  which is  largely appropriated  by                                                               
the legislature, the Home Rebate  Program, and the Revolving Loan                                                               
Fund.                                                                                                                           
                                                                                                                                
11:05:02 AM                                                                                                                   
                                                                                                                                
CARY   BOLLING,  Energy   Specialist,   Alaska  Housing   Finance                                                               
Corporation  (AHFC),   turned  to  a  slide   in  the  PowerPoint                                                               
entitled,  "Overview,"  and  he  reviewed  that  the  legislature                                                               
appropriated   $200   million   for  an   income-based,   no-cost                                                               
weatherization program, which had been  in existence for about 25                                                               
years, but previously  with $6 million appropriated.   He further                                                               
reviewed  that the  legislature appropriated  $100 million  for a                                                               
rebate program for  those individuals who do not  qualify for the                                                               
weatherization  program.   There  was an  additional $60  million                                                               
appropriated during a special session  in September 2008 to carry                                                               
the program  into 2009.   Mr.  Bolling relayed  that there  was a                                                               
major training  effort to ready  the programs in about  a month's                                                               
time after the legislation was passed.                                                                                          
                                                                                                                                
MR.  BOLLING  directed  attention  to   the  next  slide  of  the                                                               
PowerPoint, entitled,  "Allocations," which shows the  regions to                                                               
which  allocations were  made.   He  explained that  each of  the                                                               
region's   allocation   amounts   were  determined   based   upon                                                               
population, fuel cost, and climate.   Regarding the next slide of                                                               
the PowerPoint,  entitled, "Weatherization Program," he  said out                                                               
of the  $200 million,  $70 million  were encumbered  between 2008                                                               
and 2009, and  $60 million were encumbered by 2010.   As depicted                                                               
on the  next slide  of the PowerPoint,  Mr. Bolling  relayed that                                                               
during programs prior to 2008,  about 600 homes were weatherized;                                                               
in fiscal year 2009 (FY 09),  1,864 homes were weatherized; in FY                                                               
10, 3,139  homes were  weatherized; and  a projected  4,000 homes                                                               
will  be  weatherized   in  FY  11.     Regarding  the  following                                                               
PowerPoint  slide,  Mr.  Bolling   related  that  the  number  of                                                               
communities  in  which  the programs  are  effecting  change  has                                                               
increased; the total for FY 10 is 111.                                                                                          
                                                                                                                                
MR. BOLLING  directed attention  to the  slide of  the PowerPoint                                                               
entitled,  "Home  Energy  Rebate  Program,"  and  said  the  $160                                                               
million  in funds  are fully  encumbered, and  $72.8 million  has                                                               
been expended.   He explained that AHFC  reimburses the homeowner                                                               
for the cost of having an  energy rating done, and then AHFC puts                                                               
money aside for 18 months for  the homeowner to finish the rebate                                                               
program, and that is how the funds are encumbered.                                                                              
                                                                                                                                
11:09:00 AM                                                                                                                   
                                                                                                                                
MR. BOLLING  directed attention to  the PowerPoint  slide showing                                                               
"As-Is Ratings Paid:  24,292*,"  which shows, along with a graph,                                                               
that since September 16, 2008, AHFC  has paid 9,142 rebates at an                                                               
average of  $6,258 each,  and with a  participation rate  of 63.5                                                               
percent.   He said  when someone does  not complete  the program,                                                               
the money  that was set  aside for them  is rolled back  into the                                                               
program to  be used by  someone else.   Mr. Bolling  relayed that                                                               
there is a  rebate program for "5 star plus  homes" that pays out                                                               
a $7,500  rebate to the  buyer of a new  home, and AHFC  has paid                                                               
out 822 of those rebates.                                                                                                       
                                                                                                                                
MR.  BOLLING turned  to the  PowerPoint  slide regarding  "Raters                                                               
Available," and he said that AHFC  had to ramp up training to get                                                               
more raters  trained, because at  the start of the  program there                                                               
were  only 38  raters available.   At  the peak  of the  program,                                                               
there were 123 raters, and  currently there are approximately 97,                                                               
he reported.  He said AHFC  will reimburse the travel expenses of                                                               
raters  who go  to communities  without raters,  if there  are at                                                               
least  three  to  five  people in  the  community  interested  in                                                               
signing  up  for  the  rebate  program.    He  said  there  is  a                                                               
centralized sign-up/wait list and a toll-free number.                                                                           
                                                                                                                                
MR.  BOLLING, in  response to  Representative Tuck,  said whether                                                               
the aforementioned minimum requirement  of interested parties has                                                               
to be three or five depends on the size of the community.                                                                       
                                                                                                                                
MR. BREAN added that often, through  word of mouth, by the time a                                                               
rater arrives  in a town,  more people have  signed up to  have a                                                               
rating done.                                                                                                                    
                                                                                                                                
MR. BOLLING, as  shown on the next slide, pointed  out that there                                                               
are 3,575  on the  wait list.   At the  beginning of  the program                                                               
there were  almost 2,000  people waiting  to get  energy ratings.                                                               
The chart  shows how people  have been  taken off the  wait list.                                                               
Currently, AHFC  dispatches about 100  ratings per week or  400 a                                                               
month, which is down from  the approximately 1,500 that were done                                                               
in a month at the peak of the program.                                                                                          
                                                                                                                                
11:15:27 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON asked  about "other  programs" related  to                                                               
weatherization.                                                                                                                 
                                                                                                                                
MR. BREAN  agreed to  provide those  statistics to  the committee                                                               
after the meeting.   He noted that the other  programs are income                                                               
driven, and  AHFC requires  all the contractors  to do  all their                                                               
assessments and  have their waiting  list together almost  a year                                                               
in advance.   He said the 4,000  homes that are slated  for FY 10                                                               
are  probably already  in the  system, and  there may  be another                                                               
3,500 in FY 12.  He  said the weatherization program is different                                                               
from the rebate program because  the assessments are done well in                                                               
advance and the consumer has to  meet income criteria in order to                                                               
qualify for the program.                                                                                                        
                                                                                                                                
REPRESENTATIVE  SEATON discussed  the  need to  have feedback  on                                                               
procedures  for low  income individuals  to  actually access  the                                                               
program.                                                                                                                        
                                                                                                                                
11:17:34 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE T.  WILSON asked  if AHFC has  considered allowing                                                               
people  on   the  waiting   list  to  choose   to  pay   for  the                                                               
weatherization  and keep  the  receipts,  with the  understanding                                                               
that the receipts may or may  not be reimbursed, just so they can                                                               
get their homes weatherized sooner rather than later.                                                                           
                                                                                                                                
MR. BREAN explained that he  has not considered that possibility,                                                               
because he  thinks AHFC wants  to be sure  that it has  the funds                                                               
available before  people get  to that  part of  the process.   He                                                               
said  that is  something that  AHFC could  consider; however,  he                                                               
emphasized that those who choose  to go ahead with expenses while                                                               
still on  the waiting list would  be taking a big  risk that they                                                               
may not be  reimbursed.  He directed attention to  the next slide                                                               
of the  PowerPoint, which illustrates that  the average homeowner                                                               
paid  costs  are  almost  $11,000,  and  the  average  rebate  is                                                               
approximately $6,200.   He said the homeowner would  need to have                                                               
an  initial energy  rating done  in order  to set  a standard  by                                                               
which the improvements could be measured.                                                                                       
                                                                                                                                
REPRESENTATIVE  T. WILSON  said she  thinks people's  interest in                                                               
this idea  stems from the  Internal Revenue Service  (IRS) rebate                                                               
that  was issued;  people want  to take  advantage of  that while                                                               
they  have it.   She  asked Mr.  Brean to  think about  the idea,                                                               
because she  has had several  calls from constituents  willing to                                                               
sign a waiver to start their improvements at their own risk.                                                                    
                                                                                                                                
11:20:57 AM                                                                                                                   
                                                                                                                                
MR.  BREAN  said  that  typically when  a  consumer  follows  the                                                               
recommendations  of a  rating,  he/she will  save  money even  if                                                               
there is no  rebate program in existence.  He  said the "frosting                                                               
on the  cake" is  the benefits  that are  reaped by  having those                                                               
improvements  done.   In  many  cases, he  said,  there  is a  29                                                               
percent savings on energy/utility bills,  which is a quick return                                                               
on investment.                                                                                                                  
                                                                                                                                
11:21:48 AM                                                                                                                   
                                                                                                                                
MR. BOLLING  returned to the  slide showing costs  to homeowners,                                                               
which  he said  averages $4,600,  and annual  energy savings  are                                                               
about  $1,580,  which  he said  is  approximately  "a  three-year                                                               
payback."  He  directed attention to the next  slide, which shows                                                               
energy and carbon  dioxide emissions saved, based  on about 7,000                                                               
homes  that have  completed  the  program.   He  said on  average                                                               
people move up  about 3 steps in rating stars,  saving 97 million                                                               
British thermal  units (Btus) per  year.  The average  energy use                                                               
is  reduced about  30 percent,  conservatively.   He pointed  out                                                               
that  at the  bottom of  the slide  are listed  equivalent energy                                                               
savings, including  barrels of  crude oil,  gallons of  fuel oil,                                                               
and gallons of fuel  oil per home.  He said  the next slide shows                                                               
the average  saved for  those using  electric, natural  gas, oil,                                                               
propane, and wood.                                                                                                              
                                                                                                                                
11:23:37 AM                                                                                                                   
                                                                                                                                
MR.  BOLLING  directed attention  to  the  next slide,  which  is                                                               
labeled,  "Second  Mortgage  for  Energy  Conservation,"  and  he                                                               
explained that  this is a program  for people who might  not have                                                               
the money  up front.  The  second mortgage can be  up to $30,000,                                                               
and  is  a  15-year loan  at  a  fixed  taxable  rate.   He  said                                                               
approximately 84 of those loans have  been paid off, and about 34                                                               
are still  active.   When this  is done  in conjunction  with the                                                               
rebate program, he  said, the rebate can be used  to pay down the                                                               
loan.    Mr. Bolling  highlighted  the  next slide,  which  shows                                                               
before and after statistics, before  being between 1996 and March                                                               
2008, and  after being between  April 2008 and October  15, 2010.                                                               
The  before ratings  numbered 25,557,  whereas the  after ratings                                                               
numbered  34,283; the  rebates  were not  an  option before,  but                                                               
number 9,142; there were 2,345  five-star plus homes built in the                                                               
before  period,  and there  have  been  822  built in  the  after                                                               
periods  so  far;  and  the  total  weatherizations  done  before                                                               
numbered  10,704, while  in the  past  two years  5003 have  been                                                               
done.                                                                                                                           
                                                                                                                                
MR. BOLLING, in response to a  question, said AHFC has reached 40                                                               
percent of its original projections.                                                                                            
                                                                                                                                
MR.  BREAN   added  that   a  year   prior  to   the  legislative                                                               
appropriation  being  made,  AHFC had  commissioned  a  statewide                                                               
housing need  assessment, which resulted in  a determination that                                                               
10-12 percent of homes were in need of the program.                                                                             
                                                                                                                                
11:27:36 AM                                                                                                                   
                                                                                                                                
MR. BOLLING moved on to  the next slide, entitled, "Alaska Energy                                                               
Efficiency,  Revolving  Loan  Fund  (AEERLF)," which  is  a  $250                                                               
million  revolving  loan  fund presently  being  developed.    He                                                               
explained that the loan fund  would be used for energy efficiency                                                               
improvements for the following:   regional educational attendance                                                               
areas (REAAs),  the University of  Alaska, state  facilities, and                                                               
municipal  facilities.   He said  guaranteed savings  from energy                                                               
efficiency improvements  would be used  to pay off the  loan, and                                                               
an  energy assessment  would be  required before  the loan  would                                                               
actually be  made.   Mr. Bolling  said the  next slide  shows the                                                               
process called,  "Retrofit Energy  Assessment for  Loan (REAL))."                                                               
He  said prior  to  applying  for the  loan,  there  would be  an                                                               
initial  evaluation, which  would  include  an energy  benchmark.                                                               
Following that would be audits  by certified energy managers, and                                                               
energy  performance contracts  would  be used.   Finally,  energy                                                               
performance contracts (EPCs) by  energy service companies (ESCos)                                                               
would be used; DOT/PF would  publish a list of approved qualified                                                               
ESCos from  which to choose.   He  noted that for  projects under                                                               
$250,000,  retrofits could  be managed  by qualified  ESCs or  by                                                               
facility owners themselves.                                                                                                     
                                                                                                                                
11:29:58 AM                                                                                                                   
                                                                                                                                
MR. BOLLING  turned to  the next slide  of the  PowerPoint, which                                                               
shows  the process  of  a retrofit  energy  assessment for  "Loan                                                               
(REAL) application":   a REAL application and  benchmark is given                                                               
to  AHFC;  AHFC  reviews  the application  for  eligibility;  and                                                               
initial assessment  is performed  by a qualified  energy auditor,                                                               
which  allows AHFC  to prioritize  projects; an  investment grade                                                               
audit (IGA) is  conducted; and then the loan  application will be                                                               
forwarded to AHFC for approval.                                                                                                 
                                                                                                                                
MR. BOLLING  directed attention  to the  next slide,  which shows                                                               
the  process  of  an  energy  efficiency  revolving  loan  (EERL)                                                               
application:    the  loan  is  approved  by  AHFC;  upgrades  are                                                               
accomplished by  the ESCo or  facility owner; the loan  is repaid                                                               
within a  term up to 15  years and according to  projected energy                                                               
savings; technical assistance is  available; and long-term energy                                                               
savings should be realized.                                                                                                     
                                                                                                                                
11:31:22 AM                                                                                                                   
                                                                                                                                
MR. BOLLING directed  attention to a slide, which  shows two ways                                                               
to get the work  done.  The first path, he  explained, is to have                                                               
the  ESCo do  the IGA.    In this  method, the  ESCo manages  the                                                               
project and performs  the work through EPC.  The  second path, he                                                               
said, is  one by  which a certified  energy auditor  or certified                                                               
energy manager does the IGA,  and the facility owner would manage                                                               
the project if it is less than $250,000.                                                                                        
                                                                                                                                
11:31:56 AM                                                                                                                   
                                                                                                                                
MR. BREAN opined that the critical  piece of this process is "the                                                               
performance  contracting element,"  because it  puts the  onus on                                                               
the  performance  contractors to  "get  their  numbers right"  to                                                               
begin with, which  allows AHFC to more  accurately predict energy                                                               
savings.                                                                                                                        
                                                                                                                                
11:33:29 AM                                                                                                                   
                                                                                                                                
MR.  BREAN,  in  response  to  a  question,  said  Department  of                                                               
Transportation  & Public  Facilities  (DOT&PF)  will be  handling                                                               
"the  breakout  of  all  public facilities,"  but  AHFC  will  be                                                               
working  with schools,  the university,  and municipalities.   He                                                               
recollected that SB 220 required  DOT&PF to retrofit a percent of                                                               
all  public facilities.   He  indicated that  AHFC does  not want                                                               
deferred  maintenance to  [increase].    He said  the  fund is  a                                                               
revolving loan  fund, and  AHFC anticipates that  if it  does not                                                               
hold everybody to the same  performance standards and principles,                                                               
then the  revolving loan fund  would quickly  have no money.   He                                                               
said AHFC  wants energy  savings to enable  people to  make their                                                               
loan payments, which  in turn will help make  loans available for                                                               
more facilities.                                                                                                                
                                                                                                                                
11:37:21 AM                                                                                                                   
                                                                                                                                
JACK  HÉBERT,  President/Chief   Executive  Officer  (CEO),  Cold                                                               
Climate Housing  Research Center  (CCHRC), stated that  CCHRC was                                                               
recently awarded $.9 million for  an expansion of the Sustainable                                                               
Northern Community  facility.  The  purpose of the  expansion, he                                                               
explained,  is  to  grow  CCHRC's   partnerships,  so  that  many                                                               
agencies can work  together to meet challenges in  both rural and                                                               
urban Alaska.  Mr. Hébert expressed  his hope that this would not                                                               
only  include both  federal and  state agencies,  but also  would                                                               
include representation from housing  authorities in rural Alaska,                                                               
the  Alaska  State Homebuilders,  and  AHFC.   He  reported  that                                                               
construction is  planned for  next spring.   He  said there  is a                                                               
private  match,  but  the grant  from  the  Economic  Development                                                               
Administration (EDA)  was "nice."  In  expanding partnerships, he                                                               
said,  CCHRC   is  expanding  its  relationship   with  the  U.S.                                                               
Department  of  Housing  and Urban  Development  (HUD)  and  USDA                                                               
Rural,  and it  is  continuing to  develop  relationships in  the                                                               
private sector.  For example, he  noted, CCHRC is about to sign a                                                               
memorandum of  understanding (MOU) with the  Alaska Native Tribal                                                               
Health Consortium (ANTHC).   He said probably  the most important                                                               
recent  partnership is  the one  with AHFC,  which is  focused on                                                               
energy  efficiency,  affordability  of  rural  housing,  and  the                                                               
general stimulus  that housing can create  for rural communities.                                                               
In response  to Co-Chair  Edgmon, he  said he  would be  happy to                                                               
give  a tour  of  CCHRC's facility.   He  indicated  that he  had                                                               
information to provide the committee via flash drives.                                                                          
                                                                                                                                
11:41:15 AM                                                                                                                   
                                                                                                                                
JULIE  ESTEY, Business  Director,  Alaska Center  for Energy  and                                                               
Power (ACEP), explained  that ACEP is an  applied energy research                                                               
group  at the  University of  Alaska  that is  looking for  seeks                                                               
practical  solutions for  today and  the near  future.   She said                                                               
ACEP  provides independent  verification  of  technology and  can                                                               
help the  state make decisions  regarding in which  technology to                                                               
invest.   She said  ACEP looks  at the  following on  a community                                                               
scale:   power generation,  heat, and  transportation.   She said                                                               
there is a lot of expertise  at the university, and ACEP operates                                                               
by bringing  together geologists, social  scientists, economists,                                                               
and  engineers  to  find  solutions,  because  energy  is  multi-                                                               
disciplinary.                                                                                                                   
                                                                                                                                
MS.  ESTEY listed  examples of  ACEP's  current energy  projects,                                                               
including:    diesel  engine   efficiency,  battery  storage  and                                                               
integration,  wind/diesel   hybridization,  hydrokinetic  energy,                                                               
geothermal  technology, and  biomass.   She  noted  that she  had                                                               
provided  a  handout  [entitled, "ACEP  Current  Projects  List,"                                                               
included  in the  committee  packet].   She said  ACEP  is a  new                                                               
program that can  operate at the interception  of need, capacity,                                                               
and funding.                                                                                                                    
                                                                                                                                
MS.  ESTEY  said that  in  addition  to  helping the  state  make                                                               
decisions, ACEP  also produces an  educated work force  of people                                                               
qualified  to   determine  not   only  what   is  technologically                                                               
feasible, but  also what is  socially and  economically feasible.                                                               
She noted  that further information had  been provided [entitled,                                                               
"How  ACEP Uses  Its General  Fund Allocation,"  included in  the                                                               
committee  packet],  and  she thanked  the  legislature  for  its                                                               
support in  providing that  allocation.  She  said ACEP  has used                                                               
that money  to provide  outreach to  rural areas.   She  said one                                                               
graph on  the handout shows  the funding that ACEP  receives from                                                               
various  sources, while  the  larger graph  shows  the number  of                                                               
projects and how they are funded.   She said ACEP has developed a                                                               
strong  portfolio and  has been  able to  double its  revenue and                                                               
triple the number  of projects because of  the initial investment                                                               
by the state.                                                                                                                   
                                                                                                                                
11:47:42 AM                                                                                                                   
                                                                                                                                
MS. ESTEY  expressed gratitude for  the work the  legislature did                                                               
regarding energy  legislation.  Especially pivotal,  she posited,                                                               
was  the new  state-run  Emerging Energy  Technology Grant  Fund.                                                               
She said ACEP has been working  with the Denali Commission on its                                                               
management of that  pilot program, and she said it  is amazing to                                                               
see  the 11  related projects  get going.   She  said a  critical                                                               
aspect  of  the program  is  the  independent data  analysis  and                                                               
collection, which will show how  the projects work and whether or                                                               
not they make economic sense.  She  said this is an area in which                                                               
the  state has  typically not  been strong.   She  explained that                                                               
typically the state doles out  money for projects and then relies                                                               
on  people with  vested interest  in those  projects to  tell the                                                               
state how  the projects are doing.   She said this  often results                                                               
in money  being spent  on projects  that are  not viable  for the                                                               
state.                                                                                                                          
                                                                                                                                
MS.  ESTEY  reported that  ACEP  has  also  started a  "Wind  for                                                               
Schools"  program, which  is federally  funded, but  a grassroots                                                               
program  through which  a  school  can erect  a  wind turbine  or                                                               
access  information  electronically.    She  indicated  there  is                                                               
technical support at  the schools and at the  university level to                                                               
support that program.   She noted that these  programs are taking                                                               
place or  scheduled to take  place in Juneau, Sitka,  and Kodiak,                                                               
and are supported by the U.S. Coast Guard.                                                                                      
                                                                                                                                
MS.  ESTEY concluded  by  announcing that  a  conference is  held                                                               
every 18  months; this year's will  be held in Juneau.   She said                                                               
ACEP looks  forward to  everyone's participation  and attendance.                                                               
She expressed her hope that  the legislature will consider ACEP a                                                               
resource for figuring out the best way to move forward.                                                                         
                                                                                                                                
11:51:05 AM                                                                                                                   
                                                                                                                                
CO-CHAIR EDGMON expressed appreciation  for all the presentations                                                               
and updates.  He  said he read that Alaska is  one of four states                                                               
most  improved in  energy efficiency,  and it  now ranks  thirty-                                                               
seventh  in the  nation.   He  related that  at  the 2008  Energy                                                               
Conference,  AEA claimed  that  2 million  gallons  of diesel  is                                                               
being replaced  by the money  being poured into  renewable energy                                                               
sources.                                                                                                                        
                                                                                                                                
11:52:42 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 11:52 a.m.                                                                 

Document Name Date/Time Subjects
Energy Committee Agenda Akosofu Building.pdf HENE 10/22/2010 9:00:00 AM
AHFC Energy Programs 10222010.pdf HENE 10/22/2010 9:00:00 AM