03/08/2011 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB103 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 103 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
March 8, 2011
3:11 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Lance Pruitt, Co-Chair
Representative Bob Lynn
Representative Kurt Olson
Representative Dan Saddler
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 103
"An Act relating to the procurement of supplies, services,
professional services, and construction for the Alaska Energy
Authority; establishing the Alaska Railbelt energy fund and
relating to the fund; relating to and repealing the Railbelt
energy fund; relating to the quorum of the board of the Alaska
Energy Authority; relating to the powers of the Alaska Energy
Authority regarding employees and the transfer of certain
employees of the Alaska Industrial Development Export Authority
to the Alaska Energy Authority; relating to acquiring or
constructing certain projects by the Alaska Energy Authority;
relating to the definition of 'feasibility study' in the Alaska
Energy Authority Act; and providing for an effective date."
- MOVED CSHB 103(ENE) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 103
SHORT TITLE: POWER PROJECT; ALASKA ENERGY AUTHORITY
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/18/11 (H) READ THE FIRST TIME - REFERRALS
01/18/11 (H) ENE, FIN
02/15/11 (H) ENE AT 3:00 PM BARNES 124
02/15/11 (H) Heard & Held
02/15/11 (H) MINUTE(ENE)
02/17/11 (H) ENE AT 3:00 PM BARNES 124
02/17/11 (H) Heard & Held
02/17/11 (H) MINUTE(ENE)
02/22/11 (H) ENE AT 3:00 PM BARNES 124
02/22/11 (H) Heard & Held
02/22/11 (H) MINUTE(ENE)
02/24/11 (H) ENE AT 3:00 PM BARNES 124
02/24/11 (H) Heard & Held
02/24/11 (H) MINUTE(ENE)
03/01/11 (H) ENE AT 3:00 PM BARNES 124
03/01/11 (H) Heard & Held
03/01/11 (H) MINUTE(ENE)
03/08/11 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
BECKY LONG
Talkeetna, Alaska
POSITION STATEMENT: Testified in opposition to HB 103.
PAUL D. KENDALL
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 103.
BILL NOLL, Spokesperson
Alaska Ratepayers Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 103.
GENE THERRIAULT, Vice President of Resource Development
Golden Valley Electric Association (GVEA)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 103.
SARA FISHER-GOAD, Executive Director
Alaska Energy Authority (AEA)
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
103.
BRIAN BJORKQUIST, Senior Assistant Attorney General
Labor and State Affairs Section
Civil Division (Anchorage)
Department of Law
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
103.
DON SMITH
Anchorage, Alaska
POSITION STATEMENT: Answered a question during the hearing on
HB 103.
ACTION NARRATIVE
3:11:50 PM
CO-CHAIR LANCE PRUITT called the House Special Committee on
Energy meeting to order at 3:11 p.m. Representatives Pruitt,
Foster, Tuck, Petersen, Saddler, Olson, and Lynn were present at
the call to order.
HB 103-POWER PROJECT; ALASKA ENERGY AUTHORITY
[Contains discussion of HB 119]
3:12:49 PM
CO-CHAIR PRUITT announced that the only order of business would
be HOUSE BILL NO. 103, "An Act relating to the procurement of
supplies, services, professional services, and construction for
the Alaska Energy Authority; establishing the Alaska Railbelt
energy fund and relating to the fund; relating to and repealing
the Railbelt energy fund; relating to the quorum of the board of
the Alaska Energy Authority; relating to the powers of the
Alaska Energy Authority regarding employees and the transfer of
certain employees of the Alaska Industrial Development Export
Authority to the Alaska Energy Authority; relating to acquiring
or constructing certain projects by the Alaska Energy Authority;
relating to the definition of 'feasibility study' in the Alaska
Energy Authority Act; and providing for an effective date.
3:13:07 PM
CO-CHAIR PRUITT said additional public testimony on HB 103 would
be taken.
3:13:39 PM
BECKY LONG, Talkeetna, Alaska, provided a synopsis from the
public viewpoint of the Alaska Energy Authority (AEA),
Department of Commerce, Community & Economic Development
(DCCED), meetings on the Railbelt large hydroelectric (hydro)
project. She informed the committee she attended the open house
presentations in Talkeetna, Palmer, and Anchorage, and has
secondhand information from the meeting in Fairbanks. Ms. Long
stated that there is high interest in the project from members
of the public; in fact, approximately 150 people attended in
Fairbanks, approximately 150 people attended in Talkeetna,
approximately 80 people attended in Palmer, and approximately
120 people attended in Anchorage. The public submitted written
questions after the presentations because there was no
opportunity for public comment at the meetings. There were 43
questions asked in Fairbanks, 42 questions asked in Anchorage,
43 questions asked in Palmer, and 101 questions asked in
Talkeetna. The most commonly asked question was: "Why the
Susitna Dam is the only alternative being offered to fulfill the
50 percent renewable mandate, and why isn't the Alaska Energy
Authority (AEA) pursuing energy efficiency, solar, and wind in
future plans?" Ms. Long noted that public members often
referred to the Alaska Conservation Alliance Railbelt
Electricity Efficiency Landscape (REEL) in Alaska Roadmap study,
which showed that a 50 percent improvement in Railbelt
electrical efficiency could generate an increase of up to $947
million in economic output, $290 million in wages, $53 million
in business income, 9,350 jobs, and up to a 425-megawatt
reduction in electrical demand. The second-most-asked question
pertained to all of the financial implications of the project,
and the state's return on this investment. For example, there
were concerns about whether other important renewable energy
projects would be neglected if the state makes such a large
financial commitment to one project. Ms. Long pointed out that
the governor's budget this year included $65 million for the
Susitna hydro project, and only $41.5 million for all other
renewable energy projects. The third-most-asked question
regarded the public process. Representatives from AEA stated
that it would not have the authority to pursue Susitna without
the passage of HB 103, and that there would be more
opportunities for public comment during the Federal Energy
Regulatory Commission (FERC) licensing process. However,
residents expressed concern that the state process, through the
legislature and AEA, has occurred without adequate public
comment. She said, "Why has there been no public process on the
state level approving Susitna, and yes, there is a huge federal
public process on down the line, but the momentum is now to
commit significant state resources to this megaproject." Other
questions asked were about fisheries, seismic, sedimentation,
dam configuration, wildlife, climate change, access, threats to
human safety, studies from the '80s, and hydrology. Ms. Long
acknowledged that there are gaps in data, and that AEA is
studying the gaps; however, AEA and its consultants cannot
answer questions about dam failure, and how long it would take
floodwaters to reach Trapper Creek and Talkeetna. Other
specific needs are studies on reservoir-induced seismicity,
genetic studies, sedimentation, spring migration of caribou,
economic impact studies on Talkeetna, archeological studies, and
effects on spring ice flows. In conclusion, she expressed her
opposition to the dam, and opined AEA and its consultants are
putting a positive spin on the fisheries, seismic, hydrology,
and environmental impact data that is known. In fact, members
of the public have their own knowledge and experience about
river-altering projects, and it is known "that there are always
unforeseen consequences beyond what the scientists can predict,
and we have to live with the consequences, nothing alters a
river as totally as a dam."
3:20:11 PM
REPRESENTATIVE TUCK understood Ms. Long's objections to the
Susitna dam and asked whether she was opposed to all aspects of
the bill.
3:20:43 PM
MS. LONG has heard that the concepts are good, but opposition to
HB 103 is the only way to communicate her concerns to the
legislature about moving forward with the Susitna dam.
3:21:19 PM
REPRESENTATIVE SADDLER asked whether there was any part of the
project or the bill that Ms. Long could support.
3:21:39 PM
MS. LONG said no.
3:21:42 PM
PAUL D. KENDALL, expressed his disappointment with the public
meeting on the Susitna dam at the Dena'ina Civic Center in
Anchorage. He opined the Susitna dam could be a project that
all in Alaska could support; however, although "top notch
players and prominent members of the community" were present at
the meeting, he did not hear an intelligent discussion of the
project, but questions were taken from cards passed out to
participants. Mr. Kendall considered this type of process and
focus group corrupted and debilitating to a strong and cohesive
community. He pointed out the meeting could have been lively
and engaging, and could have provided lots of detail so the
community could understand what AEA is. Mr. Kendall stated his
opposition to the dam because it is isolated, and will not
generate power for 11 years; in fact, in 11 years there will be
a new shift in the generation, distribution, ownership, and
design of energy. Any consideration of the dam must be based on
a preponderance of intelligent and heartfelt discussion with all
Alaskans. This project represents another failure of Alaska to
look at all of its communities as a package. Mr. Kendall
indicated he would provide the committee with additional written
testimony.
3:28:56 PM
BILL NOLL, Spokesperson, Alaska Ratepayers Inc., noted his
experience with public processes and pointed out that at
subsequent meetings held by AEA and its consultants, there will
lots of opportunity for discussion and the interchange of ideas.
Also, he understood that the scope of the proposed Watana
project includes a transmission line out to the main
transmission line on the Parks Highway.
3:30:25 PM
GENE THERRIAULT, Vice President of Resource Development, Golden
Valley Electric Association (GVEA), stated GVEA supports the
passage of HB 103. He referred to his previous testimony
regarding GVEA's concern about the language in the section of
the original bill that deals with AEA subsidiary corporations
operating power projects. This concern is partially mitigated
by the wording of AS 44.83.396, which requires AEA to enter into
contracts with a utility purchasing power from an AEA project,
for the operation of the project. In addition, existing law
mandates a process to select an operator when there is more than
one wholesale customer. Mr. Therriault advised that during
deliberations on the bill, GVEA wants to ensure that this
section of law will apply to AEA subsidiary corporations,
especially since the bill will apply to a number of other
projects, and not just the Susitna dam.
3:33:10 PM
REPRESENTATIVE SADDLER asked for more information on GVEA's
concerns.
3:33:24 PM
MR. THERRIAULT explained that AS 44.83.396 instructs AEA on
projects that it owns, to enter into contracts so that utilities
that purchase power end up operating the plant. For example,
Homer Electric Association (HEA) operates the Bradley Lake
Hydroelectric Project (Bradley Lake Hydro). This bill will
empower AEA to create subsidiary corporations, and GVEA wants to
ensure that the existing language will also apply to projects
that are owned by AEA subsidiary corporations.
3:34:45 PM
CO-CHAIR PRUITT closed public testimony. He then asked Ms.
Fisher-Goad to address the issue raised by Mr. Therriault.
3:35:39 PM
SARA FISHER-GOAD, Executive Director, Alaska Energy Authority
(AEA), Department of Commerce, Community & Economic Development
(DCCED), deferred the question to Mr. Bjorkquist.
3:36:30 PM
BRIAN BJORKQUIST, Senior Assistant Attorney General, Labor and
State Affairs Section, Civil Division (Anchorage), Department of
Law, said Section 11, page 3, lines 13-17, of the bill, are
designed to address the question from GVEA. Section 11 adds a
new subsection to AS 44.83.396 with the intent that if a project
is within a subsidiary, then the subsidiary must comply with AS
44.83.396, and if a project is within AEA, AEA must comply with
AS 44.83.396. He restated that AS 44.83.396 is the section that
deals with AEA contracting with utilities for the operation of
the project.
3:37:57 PM
CO-CHAIR PRUITT surmised any loophole would be closed by Section
11.
MR. BJORKQUIST said yes.
3:38:12 PM
CO-CHAIR FOSTER moved Amendment 1, labeled 27-GH1822\A.7, Kane,
3/7/11, which read:
Page 4, line 22:
Delete "construction,"
3:38:32 PM
REPRESENTATIVE SADDLER objected for discussion purposes.
CO-CHAIR PRUITT stated the amendment removes the extra word
"construction" on page 4, line 22, of the bill.
MS. FISHER-GOAD had no objection to the amendment.
3:39:19 PM
REPRESENTATIVE SADDLER removed his objection. There being no
further objection to the adoption of Amendment 1, it was so
ordered.
3:39:32 PM
CO-CHAIR FOSTER moved Amendment 2, labeled 27-GH1822\A.8, Kane,
3/7/11, which read:
Page 3, line 4:
Delete "authority may use"
Insert "legislature may appropriate"
3:39:43 PM
REPRESENTATIVE SADDLER objected for discussion purposes.
CO-CHAIR FOSTER explained the purpose of the amendment was to
authorize the legislature to appropriate money from the newly
created Alaska Railbelt Energy Fund as a way to assure
legislative powers of appropriation.
3:40:12 PM
MS. FISHER-GOAD said AEA has no objection to the amendment, as
its intent is to make the proposed legislation consistent with
the existing Railbelt Energy Fund which requires legislative
appropriation.
REPRESENTATIVE SADDLER asked whether a "legislative oversight
appropriation" is required at every expenditure, or for a one-
time study.
3:41:21 PM
MR. BJORKQUIST advised it is a matter of legislative
prerogative; for example, the legislature could make one large
appropriation to AEA out of the fund for multiple tasks -
similar to appropriations from the general fund - choosing to
make broad appropriations for many tasks, or it could make
narrow appropriations for limited tasks.
3:42:21 PM
REPRESENTATIVE SADDLER withdrew his objection. There being no
further objections to adopting Amendment 2, it was so ordered.
3:42:36 PM
REPRESENTATIVE TUCK moved to adopt Amendment 3, labeled 27-
GH1822\A.4, Kane, 3/4/11, which read:
Page 1, lines 1 - 2:
Delete "relating to the procurement of supplies,
services, professional services, and construction for
the Alaska Energy Authority;"
Page 1, line 11, through page 2, line 13:
Delete all material.
Page 2, line 14:
Delete "Sec. 2"
Insert "Section 1"
Renumber the following bill sections accordingly.
Page 7, line 8:
Delete "Section 13"
Insert "Section 12"
Page 7, line 10:
Delete "sec. 4"
Insert "sec. 3"
Page 7, line 14:
Delete "sec. 16"
Insert "sec. 15"
3:42:47 PM
REPRESENTATIVE SADDLER objected for discussion purposes.
3:42:55 PM
REPRESENTATIVE TUCK explained Amendment 3 would require AEA to
use the state's normal procurement procedures. The agency
reasoned that it needs its own procurement code because "others
do it," and because AEA does not want to go through the
administration for the appeal process. He said he was unsure of
how the current procurement code hinders a project.
Representative Tuck pointed out that the contractors bidding on
the Susitna dam are the same ones that bid on other projects,
and the state procurement code is a proven method to ensure that
experts are at work. In addition, it is fair, proven, and
demonstrates good business practices by its appeal process.
Finally, he cautioned against creating a new bureaucracy, "When
really [it] hasn't been demonstrated what's wrong with the one
that we have."
REPRESENTATIVE LYNN agreed. His experience is that the state
has a tried and true procurement code.
3:45:29 PM
REPRESENTATIVE SADDLER observed this is the largest construction
project undertaken by the state. He asked whether there are
cost savings or advantages to using a "differently sculpted,
more finely crafted procurement process" for a large project.
REPRESENTATIVE TUCK advised that the state has handled all sizes
of projects well with its current procurement code because it is
streamlined. Much work was done to centralize the process
through the Department of Administration (DOA) in order to
maximize the purchasing power of the state. Furthermore, the
state procurement code is innovative and includes new methods
for overseeing projects.
3:47:03 PM
REPRESENTATIVE SADDLER restated the importance of cost savings.
3:47:09 PM
REPRESENTATIVE TUCK recalled his experience serving on the
Anchorage School Board during a time without proper oversight,
and called attention to problems with construction of the
improvements to the Port of Anchorage. Referring to an audit of
AEA in 2008, he pointed out that at that time AEA was not
following federal and state procurement codes, or best practices
within the industry.
REPRESENTATIVE SADDLER asked whether recommendations from the
audit have been implemented.
3:48:43 PM
MS. FISHER-GOAD responded that AEA wants this section included
in the proposed legislation in order to consolidate its
procurement practices under one set of regulations. There is
some confusion when this provision is discussed along with the
Susitna project, because a large project requires a specific
procurement plan, whether AEA is operating under AS 36.30 or its
own rules. Ms. Fisher-Goad opined there is nothing wrong with
the existing code, but to procure on behalf of communities,
those procurements are outside of the procurement code. She
clarified that AEA's intent is to establish a set of rules that
covers all of its projects, and to have an appeal process to
AEA's board of directors, rather than to DOA or the Department
of Transportation & Public Facilities (DOTPF) commissioner. She
acknowledged that her agency needs to further explain the issues
with the procurement code and that the provision does not relate
to the Susitna project specifically, but with routine tasks.
Ms. Fisher-Goad said AEA does not have a problem with the
amendment.
REPRESENTATIVE SADDLER surmised that if Amendment 3 passed, the
state procurement code would apply.
3:50:51 PM
MS. FISHER-GOAD indicated that AEA would use the code where
appropriate, and continue to follow its other rules with respect
to procurements it does on behalf of communities that are not
subject to AS 36.30.
REPRESENTATIVE OLSON asked whether this amendment would mean the
use of the same procurement code that was used on the private
Goose Creek Correctional Center in the Matanuska-Susitna (Mat-
Su) Valley.
3:51:35 PM
REPRESENTATIVE TUCK assumed the same procurement code was used;
however, he opined one of the problems with that project came
from the oversight authority given to the Mat-Su Borough by the
state. The location of the jail was moved, creating a need for
support staff services and water facilities not related to
problems with the procurement code.
REPRESENTATIVE SADDLER withdrew his objection.
CO-CHAIR PRUITT reopened public testimony.
3:52:54 PM
REPRESENTATIVE TUCK asked for information on the lack of
oversight over procurement methods by the Anchorage School
District.
DON SMITH, Anchorage, Alaska, said he was not familiar with this
issue.
3:55:17 PM
CO-CHAIR PRUITT, after ascertaining that there was no further
objection to adopting Amendment 3, indicated it was so ordered.
3:55:24 PM
REPRESENTATIVE PETERSEN moved to adopt Amendment 4, labeled 27-
GH1822\A.3, Kane, 3/4/11, which read:
Page 1, line 5:
Delete "regarding employees and"
Insert "and to"
Page 5, line 25, following "projects":
Insert ";
(20) to carry out and be guided by the
state energy policy described in AS 44.99.115"
3:55:39 PM
REPRESENTATIVE SADDLER objected for discussion purposes.
3:55:45 PM
REPRESENTATIVE PETERSEN recalled the past successful efforts to
pass meaningful legislation establishing the goals of the
state's energy policy. The proposed legislation does not
mention the requirements to meet the state's energy policy and
he urged that AEA be tasked with following the framework created
by the legislature.
3:57:01 PM
REPRESENTATIVE SADDLER read the goals from the state's energy
policy as follows: to promote energy efficiency and
conservation; to promote development of renewable and
nonrenewable energy resources; to promote economic development
through cost-effective, long-term sources of energy for
communities statewide. He opined HB 103 accomplishes those
goals, without binding a specific project to all of the goals,
and said he did not support the amendment.
REPRESENTATIVE PETERSEN pointed out HB 103 is not specific to
one project, but gives AEA the authority to create subsidiaries
and to manage numerous projects, and he said he felt it was
important to set in statute the goals set by the legislature.
3:58:36 PM
REPRESENTATIVE OLSON agreed with Representative Saddler that the
amendment is unnecessary.
REPRESENTATIVE TUCK observed that AEA is going to be its own
corporation, and stated that there is value in reminding AEA
that its purpose is to follow the state energy policy.
REPRESENTATIVE SADDLER assured the committee HB 103 "does in
fact, carry through the intent of that policy."
REPRESENTATIVE PETERSEN recalled the state's energy policy was
written by legislators and by stakeholders from throughout the
state who worked very hard. He said it is a good idea to
explicitly state in the bill the guidelines set by the
legislature.
MS. FISHER-GOAD agreed that a good statewide policy is now
established and codified in law. As a matter of fact, this
amendment is not necessary because all state agencies are
expected to follow statewide policy through their programs;
furthermore, language in the statewide policy includes items
that do not pertain to AEA programs, such as references to
transportation, heating programs, and permitting and regulatory
processes. She assured the committee that AEA follows the state
energy policy and pointed out that HB 103 seeks to re-establish
powers taken away in 1993.
4:02:48 PM
REPRESENTATIVE PETERSEN withdrew Amendment 4.
REPRESENTATIVE SADDLER withdrew his objection.
4:03:42 PM
REPRESENTATIVE PETERSEN moved to adopt Amendment 5, 27-
GH1822\A.5, Kane, 3/7/11, which read:
Page 2, line 23:
Delete "and other staff"
Page 3, line 22:
Delete "and employees of the authority are"
Insert "of the authority is"
Page 7, line 3, following "EMPLOYEES.":
Insert "(a)"
Page 7, following line 7:
Insert a new subsection to read:
"(b) Notwithstanding any other provision of law,
staff members of the Alaska Industrial Development and
Export Authority who will be transferred as staff to
the Alaska Energy Authority and who are employed as of
the effective date of this section
(1) shall immediately be appointed to the
classified service upon their transfer;
(2) may not have a reduction in pay
(A) solely because of the assignment
described in this subsection; or
(B) if the employee is assigned to a
position in the classified service that is classified
at a lower rate of pay than that received when the
position was assigned to the exempt service;
(3) shall retain the step status previously
held immediately before the transfer and shall be
entitled to receive any merit or cost-of-living salary
increases they would receive had they not been
transferred."
4:03:55 PM
REPRESENTATIVE SADDLER objected for discussion purposes.
4:04:00 PM
REPRESENTATIVE PETERSEN explained that Amendment 5 establishes
that AEA employees, with the exception of the executive
director, would be considered classified employees, and not
exempt employees. Language in the bill infers that some exempt,
higher-level appointees would be exempt from civil service
protections afforded to other employees if they were transferred
between AEA and the Alaska Industrial Development & Export
Authority (AIDEA), DCCED. He opined after such a transfer,
employees may find themselves "performing the same duties, but
being considered exempt employees." This amendment would
protect the employees and protect the state from possible action
taken by an employee.
4:05:24 PM
REPRESENTATIVE TUCK observed some employees are "more technical
than they are going to be political," and consistency should be
maintained during changes in administrations in order to pass on
institutional knowledge. He asked for clarification of the
purpose of the amendment.
4:06:25 PM
REPRESENTATIVE PETERSEN read from the amendment the following:
Notwithstanding any other provision of law, staff
members of the Alaska Industrial Development and
Export Authority who are transferred, who will be
transferred as staff to the Alaska Energy Authority
and who are employed as of the effective date of this
section, shall immediately be appointed to the
classified service [upon] their transfer and may not
have a reduction in pay solely because of the
assignment described in the subsection.
REPRESENTATIVE PETERSEN restated the purpose of the
amendment is to protect employees and the state.
4:07:33 PM
REPRESENTATIVE OLSON asked whether this was a Senate amendment.
REPRESENTATIVE PETERSEN responded that he wrote this amendment,
although it may be similar.
4:08:13 PM
MS. FISHER-GOAD stated that AEA does not support Amendment 5
because AIDEA employees who manage and staff AEA programs are
exempt employees, as has been the case since 1993, and also
since 1999, when Division of Energy programs were incorporated
back into AEA, and AIDEA hired Division of Energy employees into
exempt service. At this time, AEA seeks to have employees in
order to provide AEA staff to work on its programs, and to
provide "truth in budgeting;" for example, there is over $5
million in interagency receipts reflected in AIDEA's budget as
funds transferred from AEA to pay for the staff who work on AEA
programs. The intent of this provision of the legislation is to
maintain the status quo, thus the folks who were AIDEA employees
prior to the effective date of the bill would maintain their
current status as exempt employees. Regarding the concern about
turnover, she indicated that neither AEA nor AIDEA have an
"election cycle" process, and there is little turnover within
the agencies. Also, Ms. Fisher-Goad pointed out that the
amendment would create three tiers of employees: AIDEA exempt
employees; AEA current hold-harmless employees; potential new
AEA employees who may be paid less under a classified system.
Furthermore, paragraph (3) of the amendment requires that
employees retain a step status previously held immediately
before the transfer, and shall be entitled to receive any merit
or cost-of-living salary increases they would receive had they
not been transferred. She opined a classified employee held to
his or her previous exempt status would not get a benefit
negotiated for them, and this would eliminate a union's ability
to negotiate benefits.
4:13:00 PM
MS. FISHER-GOAD advised that exempt employees benefit from
federal and state laws regarding discrimination, are covered by
the Whistleblower Protection Act of 1989, and are covered by
the Public Employees Relations Act of 1947 (PERA), which
provides for collective bargaining.
REPRESENTATIVE TUCK referred to Ms. Fisher-Goad's statement that
AEA would not be able to pay new employees "higher," and asked
whether it is AEA's desire "to recruit qualified people, and
being able to get them at a range that you can retain and keep
them."
4:14:00 PM
MS. FISHER-GOAD responded that during a classification process,
an employee going from an exempt to a classified status usually
is put at a lower range. This amendment would keep an existing
employee paid at the same level, but a new AEA employee would be
paid at a lower range. If there were a negotiated benefit to a
classified employee, the language in paragraph (3) would hold
the employee to his or her previous exempt status. Also, AEA
would be the only agency to have this classification of
employee.
4:15:45 PM
A roll call vote was taken. Representatives Petersen and Tuck
voted in favor of Amendment 5. Representatives Lynn, Olson,
Saddler, Foster, and Pruitt voted against it. Therefore,
Amendment 5 failed by a vote of 2-5.
4:16:54 PM
REPRESENTATIVE PETERSEN moved to adopt Amendment 6, labeled 27-
GH1822\A.6, Kane, 3/7/11, which read:
Page 1, line 4:
Following "quorum":
Insert "and membership"
Following "Authority;":
Insert "establishing an Alaska Energy Authority
Advisory Board;"
Page 3, following line 9:
Insert a new bill section to read:
"* Sec. 5. AS 44.83.030 is amended to read:
Sec. 44.83.030. Membership of the authority. The
directors of the Alaska Energy Authority are the
members of the Alaska Industrial Development and
Export Authority and two members of the advisory board
elected under AS 44.83.055."
Renumber the following bill sections to read.
Page 3, following line 23:
Insert a new bill section to read:
"* Sec. 8. AS 44.83 is amended by adding a new
section to article 1 to read:
Sec. 44.83.055. Alaska Energy Authority Advisory
Board. (a) The Alaska Energy Authority Advisory Board
is established and is made up of seven members
appointed by the directors of the authority. The
advisory board members shall serve staggered three-
year terms and may be removed by the directors of the
authority for cause. The advisory board shall consist
of three public members and four other members
qualified as follows:
(1) one member with expertise in operation
of power plants serving urban areas of the state;
(2) one member with expertise in providing
energy to rural areas of the state;
(3) one member with expertise in energy
efficiency improvements;
(4) one member with expertise in consumer
and ratepayer advocacy.
(b) Each year, the advisory board shall elect
two of its members to serve as voting members of the
board of directors of the authority under
AS 44.83.030.
(c) The advisory board shall advise the board of
directors and executive director of the authority on
how to fulfill most efficiently and effectively the
corporate purpose of the authority in the best
interest of the residents of the state.
(d) The advisory board may create subcommittees
to consider specific projects and programs and may
appoint persons not serving on the advisory board to
serve on a subcommittee.
(e) The members of the advisory board serve
without compensation but shall receive the same travel
pay and per diem as provided by law for members of
boards and commissions under AS 39.20.180."
Renumber the following bill sections accordingly.
Page 6, following line 26:
Insert a new bill section to read:
* Sec. 16. The uncodified law of the State of
Alaska is amended by adding a new section to read:
INITIAL APPOINTMENTS AND TERMS. Notwithstanding
AS 44.83.055(a), as enacted by sec. 8 of this Act, the
terms of the first members of the Alaska Energy
Authority Advisory Board are as follows:
(1) three members shall be appointed for a
three-year term;
(2) three members shall be appointed for a
two-year term; and
(3) one member shall be appointed for a
one-year term."
Renumber the following bill sections accordingly.
Page 7, line 8:
Delete "Section 13"
Insert "Section 15"
Page 7, line 14:
Delete "sec. 16"
Insert "sec. 19"
4:17:04 PM
REPRESENTATIVE SADDLER objected for discussion purposes.
4:17:07 PM
REPRESENTATIVE PETERSEN said the amendment relates to an AEA
advisory board. It is important to consider the additional
authority and powers that are being granted to AEA by HB 103.
He opined AEA should have an advisory board of seven members,
two of whom are also on the AIDEA board, in order to provide
expertise and public members' advice to AEA so that better
decisions will be made.
REPRESENTATIVE LYNN asked about the estimated cost.
REPRESENTATIVE PETERSEN said he was unsure.
4:19:23 PM
MS. FISHER-GOAD provided background on the AIDEA board and the
AEA board. The AIDEA board consists of five public members and
two commissioners; in fact, those same people make up the AEA
board, but they convene as separate boards. Board members are
paid travel and per diem when seated to review AEA work, but
when seated as the AIDEA board working on AIDEA business, public
members are paid $100 per day. She turned to Amendment 6, and
said the amendment provides the advisory board more protection
from removal than is afforded the AIDEA board; in addition, the
two AEA advisory board members on the AIDEA board may appoint
themselves while sitting on the AIDEA board. Ms. Fisher-Goad
concluded that the amendment would be difficult to implement.
Furthermore, she pointed out that AEA has two statutory advisory
committees that consult on the Renewable Energy Fund and the
Emerging Energy Technology Fund, and AEA has instituted several
planning processes and regional energy plans that include
working groups and public processes that, with its board of
directors, guide the policies and the direction of AEA.
4:23:19 PM
REPRESENTATIVE PETERSEN was unsure about a board that gavels
back and forth for different purposes. Along with granting
additional powers, he opined this is a good time to separate the
boards.
REPRESENTATIVE TUCK expressed his concern about HB 119 that will
allow AIDEA to have subsidiaries. He questioned the best
structure for the relationship between AIDEA and AEA, and
surmised that "AEA does want their own autonomy and wants to be
out of underneath the guise of AIDEA, although they are going to
have some shared employees and also have the ... same
facilities." He asked for confirmation that AEA wants to have
the same board as AIDEA.
4:26:35 PM
MS. FISHER-GOAD clarified that she was not expressing a
position, but noting that the statutory structure provides for
the AIDEA board members to also be the AEA board members.
REPRESENTATIVE TUCK remarked:
HB 103 is making it so that AEA has their own powers,
don't we want them to fully have their own powers?
I'm not sure, and if not, then maybe the structure is
still ... about having the structure with AIDEA as a
subsidiary ...."
REPRESENTATIVE TUCK then asked whether it is a beneficial
structure for AEA to "keep that umbilical cord there ... and
still have some autonomy, and then still be able to have those
relationships with the employees and the facilities and
everything else." He asked for further clarification on AEA's
ultimate goal.
4:28:49 PM
MS. FISHER-GOAD acknowledged Representative Tuck's valid
questions; however, Amendment 6 intends to do something else.
She recalled that last year the legislature addressed whether
AIDEA and AEA should have separate boards, separate people, and
separate requirements for members; although the board was
expanded, and the issue was discussed, no changes were made.
She restated that Amendment 6 does not create a separate board,
but an advisory board of members not appointed by the governor.
4:30:55 PM
REPRESENTATIVE SADDLER suggested that the amendment makes the
issue muddier, rather than clearer. He observed that there is
sufficient communication between the two boards, AEA is
functioning for its current programs and processes, and the
advisory board adds confusion and "open[s] the back door to a
lot of people involved in the process." He said he did not
support the amendment.
4:32:04 PM
REPRESENTATIVE OLSON confirmed that it is commonplace for
boroughs and cities to have their governing bodies reconvene
with a different purpose, such as to hear tax disputes and
property valuations. He said precedence has been set in the
state.
REPRESENTATIVE LYNN agreed.
REPRESENTATIVE TUCK related his experience serving on many
advisory committees and agreed that they are not uncommon. He
asked whether other state corporations have advisory committees.
MS. FISHER-GOAD clarified that AEA's advisory committees
consult, but do not take the place of a board. She opined
Amendment 6 does not create an advisory board to consult or to
develop a program. Advisory boards have been useful, especially
with the Emerging Energy Technology Fund.
4:35:37 PM
MR. BJORKQUIST stated he was not aware of any other public
corporation that has advisory committees; however, his
experience with this issue is limited.
REPRESENTATIVE TUCK asked for more details on how Amendment 6 is
different from existing advisory committees or boards.
4:36:45 PM
MS. FISHER-GOAD further explained that Amendment 6 provides
advisory board members with more protection than members of the
AEA board of directors because directors serve at the pleasure
of the governor, and directors would be appointing advisory
board members who could only be removed for cause. Also, two
advisory board members, appointed as members of the AEA board of
directors, could help select advisory board members - themselves
- and would serve until dismissed for cause. She referred to
the Renewable Energy Fund advisory committee and stressed that
the statute which established this advisory committee directs
AEA "to essentially develop this program in consultation with
the advisory committee - it's not having an advisory committee
direct them - it's having them ... help through a collaborative
process develop a program." Ms. Fisher-Goad reiterated this is
the difference, and mentioned several other examples.
4:39:19 PM
REPRESENTATIVE SADDLER related his experience, and said he did
not recall another publicly-based advisory committee.
Furthermore, governor appointees provide adequate public input.
REPRESENTATIVE PETERSEN offered a conceptual amendment to
Amendment 6 that the members would be appointed and removed by
the governor.
4:40:28 PM
MS. FISHER-GOAD countered that with the AEA board of directors
and an advisory board there would be 11 members appointed by the
governor to provide oversight and assistance. She said, "I
think that would be an additional layer of a board that would be
somewhat confusing."
REPRESENTATIVE PETERSEN restated the intent of the amendment is
to address the changes in the purview of AEA in that it will be
managing projects and getting financing. At this time, AIDEA
forms agreements with financing institutions for the financing
of projects, and now AEA would be managing its own projects. He
expressed his belief that if AIDEA and AEA continue to share the
same board there may be conflicts in certain situations. He
cautioned against "creating a new AEA ... with [HB] 103, we're
giving it new powers, but we're allowing it to be run by the
same AIDEA board."
REPRESENTATIVE LYNN asked whether Amendment 6 makes HB 103 a
better bill and will advance the Watana dam.
4:43:58 PM
REPRESENTATIVE PETERSEN reminded the committee that the Watana
dam is not specific to HB 103. The bill gives AEA the authority
to manage projects big and small, which is a change from AEA's
present task of giving grants for energy projects.
CO-CHAIR FOSTER understood Representative Petersen's concerns;
however, he said his preference was to separate this debate from
HB 103.
4:46:18 PM
REPRESENTATIVE SADDLER maintained his objection.
REPRESENTATIVE PETERSEN offered to make further changes to the
amendment, or to reintroduce the issue as a separate bill.
4:47:04 PM
MS. FISHER-GOAD encouraged Representative Petersen, or the
committee, to consider this question as a separate piece of
legislation.
4:47:43 PM
REPRESENTATIVE PETERSEN withdrew Amendment 6.
4:48:34 PM
MS. FISHER-GOAD, in concluding remarks, pointed out that the
public process by AEA on the Susitna project so far is not part
of the FERC licensing process; however, pursuing a FERC license
for the Watana project will include significant public meetings.
The format of the previously held meetings was intended to allow
for a presentation on why AEA prefers the Susitna project over
the Chakachamna Hydroelectric Project, and not a debate process.
Other formats have advantages and disadvantages, such as
preventing a speaker from monopolizing the discussion. Ms.
Fisher-Goad assured the committee that AEA and its consultants
are working to answer questions; in fact, all written letters of
concern will be addressed. She restated that there will be
ample time for additional public meetings in a variety of
formats.
4:52:30 PM
REPRESENTATIVE TUCK expressed his belief that it is appropriate
during this discussion to also to look at HB 119, which allows
AIDEA to create subsidiaries; for example, if AEA becomes a
subsidiary of AIDEA, whether AEA would gain powers and more
bonding. He asked Ms. Fisher-Goad whether AEA would be
restricted in any way if it became a subsidiary of AIDEA.
4:54:00 PM
MS. FISHER-GOAD pointed out that AEA and AIDEA have ties, but it
is not a "parent-child relationship." She deferred to Mr.
Bjorkquist.
4:54:59 PM
MR. BJORKQUIST advised HB 119 would give AIDEA the ability to
form a subsidiary corporation only for the purposes of a
"development finance project." Such a project would be one that
AIDEA owns and operates, for example, the Delong Mountain
Transportation System (DMTS) connected to the Red Dog Mine.
House Bill 119 allows AIDEA to develop a similar project within
a subsidiary corporation, rather than owning the project as an
AIDEA asset. This legislation could not be used to make AEA
into a subsidiary corporation, because it would not be a
development finance project. Mr. Bjorkquist said he has
represented both corporations for 14 years and has observed that
the board members understand "what they're doing when they're
sitting for the respective corporations, they do not blur their
roles with respect to one corporation when they're meeting as a
different corporation." The statutory mission of AIDEA is on
economic development and finance, and AEA has a focus on energy.
Furthermore, the commissioners seated on the boards fulfill the
statutory duties of the relevant corporation. He assured the
committee that there is a distinction between the two
corporations; in fact, in Alaska many public corporations have
commissioners on their boards of directors.
4:58:30 PM
REPRESENTATIVE PETERSEN expressed his support for renewable
energy projects that will help the state reach its goal of 50
percent renewable by 2025.
4:59:47 PM
CO-CHAIR FOSTER moved to report HB 103, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 103(ENE) was
reported from House Special Committee on Energy.
5:00:41 PM
CO-CHAIR PRUITT said this bill is a vital aspect to fulfill the
state's energy policy.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 5:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 103 Amendment #1.pdf |
HENE 3/8/2011 3:00:00 PM |
HB 103 |
| HB 103 Amendment #3.pdf |
HENE 3/8/2011 3:00:00 PM |
HB 103 |
| HB 103 Amendment #2.pdf |
HENE 3/8/2011 3:00:00 PM |
HB 103 |
| HB 103 Amendment #5.pdf |
HENE 3/8/2011 3:00:00 PM |
HB 103 |
| HB 103 Amendment #4.pdf |
HENE 3/8/2011 3:00:00 PM |
HB 103 |
| HB 103 Amendment #6.pdf |
HENE 3/8/2011 3:00:00 PM |
HB 103 |
| Emails from the public -- Denis Ransy, Barbara Mannix.pdf |
HENE 3/8/2011 3:00:00 PM |
Public Feedback |
| HB 103 - Response from the public -- Becky Long.pdf |
HENE 3/8/2011 3:00:00 PM |
HB 103 |