02/14/2012 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB294 | |
| Presentation: Overview by Cold Climate Housing Research Center | |
| Presentation: Progress Report on Lake Chikuminuk Hydropower Project | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 294 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 14, 2012
3:11 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Bob Lynn
Representative Kurt Olson
Representative Pete Petersen
Representative Chris Tuck
MEMBERS ABSENT
Representative Lance Pruitt, Co-Chair
Representative Dan Saddler
OTHER LEGISLATORS PRESENT
Representative Bryce Edgmon
COMMITTEE CALENDAR
HOUSE BILL NO. 294
"An Act relating to the power cost equalization program."
- HEARD & HELD
PRESENTATION: OVERVIEW BY COLD CLIMATE HOUSING RESEARCH CENTER
- HEARD
PRESENTATION: PROGRESS REPORT ON LAKE CHIKUMINUK HYDROPOWER
PROJECT
- HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 294
SHORT TITLE: POWER COST EQUALIZATION
SPONSOR(s): REPRESENTATIVE(s) EDGMON
01/25/12 (H) READ THE FIRST TIME - REFERRALS
01/25/12 (H) ENE, FIN
02/14/12 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE BRYCE EDGMON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As the prime sponsor of HB 294, introduced
the bill.
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
294.
MEERA KOHLER, President and Chief Executive Officer
Alaska Village Electric Cooperative (AVEC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 294.
BRAD REEVE, General Manager
Kotzebue Electric Association
Kotzebue, Alaska
POSITION STATEMENT: Testified in favor of HB 294.
JODI MITCHELL, Chief Executive Officer and General Manager
Inside Passage Electric Cooperative
Auke Bay, Alaska
POSITION STATEMENT: Testified in support of HB 294.
JOHN HANDELAND, General Manager
Nome Joint Utility System
Nome, Alaska
POSITION STATEMENT: Testified in support of HB 294.
GENE STRONG, Board Member
Inside Passage Electric Cooperative
Klukwan, Alaska
POSITION STATEMENT: Testified in support of HB 294.
PETER ANDREW, President
Board of Directors
Nushagak Electric & Telephone Cooperative, Inc.
Dillingham, Alaska
POSITION STATEMENT: Testified in support of HB 294.
ANDREW GUY, President and Chief Executive Officer
Calista Corporation
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 294.
HENRICH KADAKE SR, Mayor
City of Kake
Kake, Alaska
POSITION STATEMENT: Testified in support of HB 294.
ANDY VARNER, Executive Director
Southwest Alaska Municipal Conference
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 294.
ROBERT VENABLES, Energy Coordinator
Southeast Conference
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 294.
TARA BOURDUKOFSY, Director
Human Services
Aleutian Pribilof Islands Association, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in favor of HB 294.
MARK WASIERSKI, Coordinator
Head Start
Aleutian Pribilof Islands Association, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 294.
ANGELA MORGAN, Executive Director
Middle Rivers
Interior Rivers Resource Conservation & Development Council,
Inc. (IRRC&D)
Natural Resources Conservation Service (NRCS)
U.S. Department of Agriculture; Representative
Aniak Traditional Council
Aniak, Alaska
POSITION STATEMENT: Testified in support of HB 294.
JACK HEBERT, President and Chief Executive Officer
Cold Climate Housing Research Center
Fairbanks, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "Promoting and advancing the development of healthy,
durable, and sustainable shelter for Alaskans and other
circumpolar people."
ALAN WILSON, Chairman
Board of Directors
Cold Climate Housing Research Center
Fairbanks, Alaska
POSITION STATEMENT: Answered a question during the presentation
by the Cold Climate Housing Research Center.
CHRISTINE KLEIN, Chief Operating Officer
Calista Corporation; Representative
Nuvista Light & Electric Cooperative, Inc.
Anchorage, Alaska
POSITION STATEMENT: Gave remarks on the Chikuminuk Lake
Hydropower project and introduced Ms. Brown, Chief Executive
Officer of Nuvista Light & Electric Cooperative, Inc.
ELAINE BROWN, Chief Executive Officer
Nuvista Light & Electric Cooperative, Inc.
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "Chikuminuk Lake Hydropower," dated February, 2012.
ACTION NARRATIVE
3:11:58 PM
CO-CHAIR NEAL FOSTER called the House Special Committee on
Energy meeting to order at 3:11 p.m. Representatives Foster,
Petersen, Lynn, and Tuck were present at the call to order.
Representatives Pruitt and Saddler were excused. Representative
Olson arrived as the meeting was in progress. Representative
Edgmon was also present.
HB 294-POWER COST EQUALIZATION
3:12:46 PM
CO-CHAIR FOSTER announced that the first order of business would
be HOUSE BILL NO. 294, "An Act relating to the power cost
equalization program."
3:13:48 PM
REPRESENTATIVE LYNN moved to adopt HB 294 as the working
document. There being no objection, HB 294 was before the
committee.
3:14:31 PM
REPRESENTATIVE LYNN moved to adopt the two fiscal notes attached
to HB 294, one of which was identified as HB294-DCCED-AIDEA-02-
10-12. There being no objection, the fiscal notes were adopted.
3:15:12 PM
REPRESENTATIVE BRYCE EDGMON, Alaska State Legislature, prime
sponsor of HB 294, introduced the bill, saying that HB 294
proposes to return the power cost equalization (PCE) program to
its pre-1999 form. At that time, the program offered subsidies
to all users in rural communities with the exception of federal
facilities. Today, the PCE program provides subsidies to
consumers up to the level of 500 kilowatt (kW) hours of use per
month, and is largely limited to residential users in eligible
communities. The bill will expand the monthly cap to 700 kW
hours and will also return more non-residential users back into
the program. Although discussion about HB 294 will focus on the
PCE program, Representative Edgmon expressed his intent to also
discuss the immediate issue of the high cost of energy in rural
communities that rely on diesel fuel for almost any activity.
Representative Edgmon observed that the PCE program is already
in place and, with expansion, could provide immediate relief
from the high cost of energy to rural Alaska. He acknowledged
that the bill has supporters and detractors and testimony will
cover the fiscal impact and weaknesses of the program - he
welcomed the debate. The legislature has taken a lot of action
regarding energy issues recently because of the increase in oil
prices; in fact, the state has spent a considerable amount of
money for weatherization, home energy rebate, low-income home
heating assistance, and community revenue sharing programs, and
$400 million has been directed to the PCE endowment, yet it has
not had much effect on the utility bills in rural areas.
Representative Edgmon urged for a vigorous discussion of the
bill, and a focus on the rising costs of energy in rural Alaska.
3:20:01 PM
REPRESENTATIVE PETERSEN asked whether grocery stores would
qualify for PCE with the changes to the program authorized by HB
294.
REPRESENTATIVE EDGMON indicated yes, and pointed out that the
increase from 500 kW hours to 700 kW hours would not make a
difference in Dillingham or Bethel, but would make a difference
in the energy costs of a business in a small village, and
thereby in the overall cost structure of rural Alaska.
3:22:06 PM
SARA FISHER-GOAD, Executive Director, Alaska Energy Authority
(AEA), discussed the fiscal impact of the legislation. She
directed attention to the fiscal note identified as HB294-DCCED-
AEA-02-10-12, and said the estimated increase in the cost of the
program is approximately $33,126,000. On page 2 of the fiscal
note the estimate is divided into three sections: $15,140,000
represents the 40 percent increase in customers' reimbursement
from 500 to 700 kW hours per month - this estimate is based on
the assumption that all customers will use 700 kW hours for 12
months, although this may not be true; $17,900,000 represents
the annual cost to include commercial and public school
customers as eligible customers - this estimate was based on
1999 statistics for commercial customers and two public school
buildings per community; and $86,000 represents an annual
increase of one additional PCE clerk to manage the program and
verify eligibility. Ms. Fisher-Goad said page 3 indicated out-
year estimates broken down to the PCE endowment fund and the
$400,000,000 coming to the program in future years. The PCE
endowment is based on a three-year average market value so AEA's
projections are for earnings to 7 percent of the market value.
She advised that the second fiscal note reflects the new clerk
position at the Alaska Industrial Development and Export Agency
(AIDEA), because AIDEA has the positions that carry out AEA
programs.
3:26:27 PM
MEERA KOHLER, President and Chief Executive Officer, Alaska
Village Electric Cooperative (AVEC), said AVEC is a nonprofit
member-owned utility serving 54 villages. She advised AVEC is
showing a decline in population for the first time since 1968,
which is a reflection of the exodus from the villages that began
in 2008. She expressed AVEC's support of HB 294, and recalled
that PCE was established in 1984 to bring the cost of
electricity in rural Alaska to a level equal to that of urban
Alaskans. At the time of inception, the benefit of up to 700 kW
hours was extended to all nongovernment consumers. The program
has been trimmed back several times in different ways and the
result is that eligible kW hours have been reduced by about one-
half. The bill seeks to restore additional eligible hours and
eligibility to commercial customers. Ms. Kohler opined the
restoration of eligibility is a meaningful benefit for the
thousands of Alaskans who are commercial customers. The members
of AVEC account for about one-third of the state's PCE benefits
- $11.3 million - and restoring the benefits as directed by HB
294 will result in an additional $4,280,000 in PCE credits to
its members. Further, adding school facilities in AVEC's
villages adds $227,000, and brings the total to a 40 percent
increase. Ms. Kohler acknowledged these numbers are different
than what was presented by AEA, because AEA assumed customers
would claim 700 kW hours for 12 months. Also, the actual
average consumption of PCE-eligible electricity by residential
consumers is currently 284 - not - 500, kW hours. Her
organization estimates that its customers' average consumption
would go up from 380 to about 600 kW hours, or less. According
to AEA's report, FY 10 total cost of electricity in PCE
communities was about $157,600,000, and PCE provided less than
20 percent. She concluded that restoring the benefits will
result in an increase of program cost to about 27 percent of the
cost of delivering electricity in rural Alaska, and she strongly
encouraged the committee to support the bill.
3:31:26 PM
BRAD REEVE, General Manager, Kotzebue Electric Association, said
his company is in favor of reexamining the program to seek a
reduction in the high cost of power in rural areas. The average
usage in Kotzebue is about 560 kW hours per month, and the
winter seasonal use is the most difficult for families to
manage. He acknowledged there has been past opposition to the
"government paying government for relief," as addressed by the
bill; however, the benefits to schools and businesses in small
villages could "make or break" them. Mr. Reeve suggested
continuing conservation and taking a close look at the details
of the program. He expressed his wish for a similar program for
heating fuel due to the very high prices for diesel in Kotzebue.
Mr. Reeve closed, saying any assistance is appreciated.
3:34:47 PM
JODI MITCHELL, Chief Executive Officer, Inside Passage Electric
Cooperative (IPEC), informed the committee IPEC is a regulated,
member-owned, nonprofit, electric cooperative that serves five
rural service areas in Southeast with primarily diesel-generated
power. She spoke in support of the bill, and opined that energy
costs are a quality-of-life issue. Ms. Mitchell cautioned that
the 500 kW hours limit in the winter causes the utility to have
a higher rate because of lesser economies of scale. Further,
she had heard from her members that businesses are failing in
the face of uncertain energy costs, and because customers are
devoid of disposable income. Members of her cooperative have
also seen out-migration, especially in Kake, and this is very
disturbing because of the potential loss of its culture.
3:39:13 PM
JOHN HANDELAND, General Manager, Nome Joint Utility System,
advised that the City of Nome has been interested in changes to
the program for a number of years. Nome is also experiencing
record-breaking cold and an increased cost of fuel, thus the
city council and utility board have made energy issues a higher
priority. He said the increase to 700 kW hours is beneficial
and the addition of businesses and commercial customers will
provide assistance to small businesses. Mr. Handeland pointed
out that the 70 kW per month eligible for community facilities
in each residential community is the limit at least since 1999,
but there have been changes...
3:41:43 PM
Due to technical difficulties, the committee took an at-ease
from 3:41 p.m. to 3:46 p.m.
3:46:30 PM
MR. HANDELAND continued to say that the number of kilowatts that
are available for local community facilities is an area that
should be reviewed as the legislature works on the bill. He
disagreed that the change in the PCE eligibility rate impacts
residents' efforts toward conservation; in fact, customers are
fully aware of the level at which PCE is available and use
electricity out of necessity, not out of luxury. Regarding
AEA's assumption on the use of electricity to compute the cost
of the program, he pointed out that people need assistance
during the winter, and suggested kilowatts could be banked like
"roll-over minutes," against the need for higher use in the
winter for supplemental heat. This would not be difficult to
monitor using modern day accounting systems. Finally, Mr.
Handeland stated that the City of Nome, because of the extreme
cold, is seeing a substantial increase in its accounts
receivable, and is recommending that the effective date of HB
294 be retroactive to the start of the current state fiscal year
- 7/1/11 - for the benefit of consumers who need help.
3:53:03 PM
GENE STRONG, Board Member, IPEC, said he supports the increase
to 700 kW hours as this will help rural communities and stop
out-migration to urban areas. He also encouraged seasonal
billing, instead of monthly billing, because by the time PCE
papers arrive the oil bills are past due. Mr. Strong noted that
the economies of the small communities are tight, and
nonexistent in winter. His utility covers a large area of five
communities that are not connected, although there are some
hydroelectric projects that will be underway in the future with
legislative support.
3:56:18 PM
PETER ANDREW, President of the Board of Directors, Nushagak
Electric & Telephone Cooperative, Inc., expressed his support of
HB 294. Nushagak is in the Bristol Bay region and provides
electricity, telephone, cable TV, and internet service. Mr.
Andrew explained that like Nome, Dillingham serves as a hub to
provide for many smaller communities, and restoring the increase
in kW hours will enhance economic growth and will help Alaskans.
His area has also suffered from record cold and he urged support
for the bill.
3:57:46 PM
REPRESENTATIVE EDGMON asked how the aftermath from the cold
winter will impact the Bristol Bay region and IPEC utility
customers.
3:58:28 PM
MR. ANDREW said he has seen Alaskans buying heating oil five
gallons at a time. This bill "frees them up a little bit more
to buy a little more fuel." In addition, Dillingham residents
have been using wood for heat and the weatherization program has
helped rural Alaskans stretch their dollars.
4:00:01 PM
ANDREW GUY, President and Chief Executive Officer, Calista
Corporation, spoke in support of HB 294, specifically for the
provision to include commercial businesses. The Alaska Native
Claims Settlement Act (ANCSA) corporations were formed 40 years
ago to benefit shareholders and descendants, and to improve
socioeconomic standards. One of the best ways to do that is to
start new businesses that provide jobs; however, it is very hard
to start and operate a business in rural Alaska because of the
cost of electricity. In his travels around his region, he sees
people going to Bethel and Anchorage to shop, due to the higher
cost of local goods. Mr. Guy said this is wrong and stops
growth in the local economy. He urged consideration of HB 294
as it will help village corporations grow by lowering the cost
of doing business. He expressed his belief that urban
businesses have benefited from energy programs in the Railbelt,
and rural Alaska deserves parity.
4:03:46 PM
HENRICH KADAKE SR, Mayor, City of Kake, said he whole-heartedly
supports the bill because the population in Kake has decreased
almost 45 percent - from over 900 residents to 510. The
decrease in population is due to the small businesses in Kake
that cannot operate because they cannot afford energy, and
because houses are not kept warm. Ninety percent of the
population lives on a fixed income, and even the tribal
corporations cannot stay in business. Mr. Kadake urged the
committee to support the bill saying, "it's a good thing for the
people in the rural communities and Southeast too."
4:05:28 PM
ANDY VARNER, Executive Director, Southwest Alaska Municipal
Conference (SWAMC), said SWAMC is the Alaska Regional
Development Organization Region (ARDOR) representing Bristol Bay
Borough, Lake & Peninsula Borough, Kodiak Island Borough, and
the Aleutian and the Pribilof Islands. He expressed his
appreciation to Representative Edgmon for introducing the
legislation. One of the major objectives of SWAMC is to
increase economic and business development in its region;
however, rural Alaska is a challenging environment in which to
operate a business. The high costs of energy, infrastructure,
and long distances to markets combine to stifle economic
development, particularly when the full cost of energy is passed
on to consumers in a vicious cycle. Mr. Varner agreed that many
businesses are on the verge of closing because of fuel costs,
and observed that schools need to put their money into
curricula. In times of high oil prices, the state "rides on the
back of residents and businesses," and HB 294 is a good start to
a conversation on the goal of keeping people in business in
rural Alaska. He advised that PCE is critical to rural Alaskans
- as are the other programs supporting energy efficiency,
renewable energy, and weatherization - but HB 294 would directly
impact businesses.
4:09:32 PM
ROBERT VENABLES, Energy Coordinator, Southeast Conference,
stated that Southeast Conference is the state's regional
development organization for Southeast Alaska, and the federally
recognized economic district. He thanked the legislature for
its efforts to bring about the long-term improvements that are
needed to develop regional and renewable energy resources that
will diminish and displace the dependency on diesel fuel, as
well as the need for PCE. At this time, however, communities
have devastated economies and businesses are hurting in
communities like Hoonah, and disappearing in communities like
Angoon and Kake. In Southeast, the cost of operating schools
continues to increase although federal support has diminished.
The bill does not seek to establish a new program, but restores
the original intent of PCE, and gives rural businesses a future.
Mr. Venables said that HB 294 can help as everyone works for
better long-term solutions.
4:12:24 PM
TARA BOURDUKOFSY, Director, Human Services, Aleutian Pribilof
Islands Association, Inc. (APIA), said APIA represents 13 of the
federally recognized tribes in its region. Ms. Bourdukofsy
supervises the federal Head Start, Administration for Children
and Families, Department of Health and Human Services programs
in Sand Point, St. Paul, Unalaska, and King Cove, and she
introduced the Head Start coordinator. She said APIA is very
encouraged by the bill and urged that it be moved forward.
4:14:19 PM
MARK WASIERSKI, Coordinator, Head Start, APIA, informed the
committee of the importance of including Head Start programs as
part of the school system in Alaska so PCE can be available to
rural programs whether they are housed alone, within a school
district, or are in another facility, such as a tribal community
building. Rapidly increasing power costs have drastically
impacted the Head Start program's ability to provide the basic
program needs of health, safety oversight, and nutritional
services, as money is diverted to pay for power costs of up to
$2,000 per month. The inclusion of Head Start programs into PCE
will free money to more adequately provide for the basic
required services that Head Start provides to Alaska's most
needy children. Mr. Wasierski expressed his full support of the
bill and a return to the "1998 levels."
4:15:49 PM
ANGELA MORGAN, Executive Director, Middle River, Interior Rivers
Resource Conservation & Development Council, Inc. (Interior
Rivers RC&D), Natural Resource Conservation Service (NRCS), U.S.
Department of Agriculture, and a representative of the Aniak
Traditional Council, said Interior Rivers RC&D council
represents eleven villages on the middle Kuskokwim River and
four villages on the Yukon River. She said she was also
speaking on behalf of the Aniak Traditional Council. One of the
main goals of Interior Rivers RC&D council is to seek economic
development for the villages, therefore, she expressed her
support of HB 294, and the increase from 500 to 700 kW hours.
Her region has also suffered from extremely cold weather,
especially in the middle Yukon River and middle Kuskokwim River
areas, and residents are having broken pipes and difficulties
caring for their families and elders during power outages. Even
with the current level of PCE, residents are paying over $1,000
per month for fuel and electricity, and are worried about being
disconnected for nonpayment of their bills. Ms. Morgan stressed
that small businesses also need to be eligible for PCE, and
acknowledged the past work by legislators that has helped the
region.
4:20:39 PM
CO-CHAIR FOSTER said HB 294 would be held for further
consideration.
4:21:00 PM
^PRESENTATION: OVERVIEW BY COLD CLIMATE HOUSING RESEARCH CENTER
PRESENTATION: OVERVIEW BY COLD CLIMATE HOUSING RESEARCH CENTER
4:21:25 PM
CO-CHAIR FOSTER announced the next order of business would be a
presentation by the Cold Climate Housing Research Center.
4:21:24 PM
JACK HEBERT, President and Chief Executive Officer, Cold Climate
Housing Research Center (CCHRC), provided a PowerPoint
presentation entitled, "Promoting and advancing the development
of healthy, durable, and sustainable shelter for Alaskans and
other circumpolar people." Mr. Hebert said CCHRC is a 501c3
nonprofit founded by the Alaska state homebuilding industry to
find practicable solutions to the cost of power and the cost of
energy. The work of CCHRC is more urgent, timely, and important
now than ever. The Alaska Housing Finance Corporation (AHFC)
supports the research at CCHRC in a big way, although it also
seeks funding from other sources. The CCHRC headquarters in
Fairbanks is a LEED Platinum certified building, and is
considered to be the most energy efficient building at its
latitude in the world. It was built at less than the cost of a
standard commercial building, and uses approximately 50 percent
less energy. He cautioned that shelter is a matter of physical
and economic life or death in Alaska due to the issue of
sustainability, thus CCHRC aggressively works on the outer
envelope of a house, and also on indoor air quality,
affordability, and on using programs that allow homeowner
involvement in design and construction. Mr. Herbert recalled
CCHRC was founded in 1999 and now has over 30 employees working
on programs from Barrow to Hydaberg; it is a statewide
organization with 50 active projects, many in rural Alaska.
Although the urban areas are not neglected, the people living in
areas in a "crisis mode" have led to the origination of CCHRC's
sustainable northern shelter and communities program. He
explained that the sustainable northern shelter and communities
program is a process that begins with working with a local
community - looking at the physical, environmental and economic
resources available - and using indigenous wisdom with 21st
century technologies. This process will "bring the good from
the past into today and try to make it work." There are many
problems when adapting to the present: the cost of energy, the
cost of construction, and the fact that building a home in rural
Alaska is not attainable for most families even though they have
creativity and talent.
4:29:35 PM
MR. HEBERT warned that a partnership between housing authorities
and rural and urban populations must move quickly to find
answers to these issues. For example, the first prototype home
was built three years ago in Anaktuvuk Pass, and was a
collaborative effort with the residents there; in fact, the
architecture of the home reflects the culture and lifestyle of
the area. As building scientists, the goal of CCHRC was to
deliver the materials for one house in a DC-6 and build it
quickly with local labor. The house was greatly successful,
whenever possible using local materials, local people,
alternative energy systems, sustainable systems, and onsite
water and waste water treatment to avoid the cost of connecting
with a utility. The house has a simple heating and ventilation
system, has been occupied for three years, and uses 150 gallons
of fuel oil per year to keep the entire house from 78 degrees to
80 degrees in winter.
4:32:28 PM
CO-CHAIR FOSTER asked whether earth "berming" is used all around
the house.
MR. HEBERT explained that earth berming is used against the
prevailing wind to prevent "drift." A refined design of the
Anaktuvuk Pass prototype is now being used by the Tagiugmiullu
Nunamiullu Housing Authority (TNHA) in five villages on the
North Slope. In further response to Co-Chair Foster, he said
the cost of a regular new house in Anaktuvuk Pass is $750,000;
the cost of the prototype was about $300,000.
4:34:16 PM
MR. HEBERT, in response to Representative Petersen, said the
prototype is 1,100 square feet, with three bedrooms.
MR. HEBERT, in response to Co-Chair Foster, said the house has
an R-value rating of R-60, and is constructed with soy-based
foam with no conductive surfaces to the outside. This design is
specific to Anaktuvuk Pass, however, in other regions the same
principles and approach are used; for example, on the North
Slope it is not possible to berm earth over the house, so the
house itself sits on an R-120 thermal rack that protects the
permafrost.
4:35:34 PM
REPRESENTATIVE LYNN asked how the houses are protected from
humidity inside the house.
MR. HEBERT explained the prototype uses a recirculating system
with a heating element in the airstream of the heat recovery
ventilator (HRV). The heater is small - 17,000 British thermal
units (Btu) - and puts air into the airstream of the HRV.
Instruments in the home indicate the level of CO2, moisture,
temperature, and occupant load in order to maintain a very
healthy indoor air quality.
4:37:06 PM
CO-CHAIR FOSTER noted the low rate of oil consumption.
MR. HEBERT advised that the prototype was modeled to use 112
gallons of fuel per year, but the homeowner keeps the home very
warm. He turned to the housing situation in Quinhagak, where
over 30 percent of the homes are at catastrophic structural
failure and are using 1,200 to 1,400 gallons of fuel oil per
year. The prototype design, which was developed by the
residents, was similar to a yurt - the shape of their
traditional homes - and was very thermally efficient for this
area and provided safe egress. The house also used a HRV system
and a small Toyotomi heater. This prototype has used 170
gallons of fuel per year for the past two years with very good
indoor air quality. Mr. Hebert observed that it is hard to
demonstrate the work CCHRC does in rural villages, but a new
project starting this spring on the site of the University of
Alaska Fairbanks (UAF) will do so. The Sustainable Village at
UAF, which will be built over the next ten years, will consist
of four zero-energy homes per year that will be built with
renewable and efficient systems in a village setting. Students
will design and build the houses under a private sector model,
meaning that the houses will be financed and paid for by the
students who will be the anchor tenants. The village will
demonstrate science and will allow for builders to conveniently
"tinker with a prototype."
4:42:42 PM
MR. HEBERT stated that CCHRC is working on innovative solutions
such as heat pump technology, solar-thermal strategies, and
geopolymer concretes. Another of these is the BrHEAThe System
which is a combination high efficiency, long-rig truck heater,
incorporated with a HRV, and that runs off a 12-volt battery
producing great indoor air quality. There is also a study
underway on passive refrigeration and how to use outside air to
control the temperature in a refrigerator or freezer.
Geoploymer concrete uses fly ash waste from the generation of
electricity to replace Portland cement. For the first
demonstration of its use in North America, CCHRC will use this
product to build an addition to the research center. He advised
this industry has great potential for Alaska because the
material can be produced here for future dam construction. He
pointed to the construction of a net-zero energy home in
Fairbanks and added that the addition to the research center
will have 50,000 gallons of thermal water storage for winter
space heat.
MR. HEBERT turned to the subject of the power of information.
The research center needs to publicize its programs along with
all of Alaska's unmatched energy efficiency and retrofit
programs. In fact, the follow-up on the effectiveness of the
programs is of extreme interest internationally. Regarding the
retrofit program, he estimated that if the retrofit program
continues, and weatherizes all the homes in the state, the
energy savings would equal the output of the proposed Susitna
Dam. Energy savings also reduce the cost of the power cost
equalization (PCE) program. He concluded that Alaskans can find
creative solutions.
4:47:09 PM
ALAN WILSON, Chairman, Board of Directors, Cold Climate Housing
Research Center, added the technologies and new materials from
CCHRC projects are now being used in 50 percent of the new homes
in Juneau, resulting in a 30 percent reduction in energy use.
REPRESENTATIVE LYNN asked whether some of these features can be
used in desert areas to conserve air conditioning.
MR. HEBERT indicated yes, and added that the principles learned
in an extreme environment can be applied globally.
REPRESENTATIVE PETERSEN asked whether CCHRC was obtaining
patents on its new technology.
MR. HEBERT stated that because of the lack of resources, CCHRC
intends to get its technology commercialized, and "have others
take the ball."
The committee took an at-ease from 4:48 p.m. to 4:51 p.m.
4:51:05 PM
^PRESENTATION: Progress Report on Lake Chikuminuk Hydropower
Project
PRESENTATION: Progress Report on Lake Chikuminuk Hydropower
Project
4:51:29 PM
CO-CHAIR FOSTER announced that the final order of business would
be a progress report on Lake Chikuminuk Hydropower Project.
4:51:37 PM
CHRISTINE KLEIN, Chief Operating Officer, Calista Corporation;
Representative, Nuvista Light & Electric Cooperative, Inc., said
she would provide an update on the Chikuminuk Lake Hydropower
project. Ms. Klein recalled last year her organization
requested funding and support for a hydropower project in
Southwest Alaska. The legislature made the project possible by
appropriating $10 million for the highest priority project in
the Calista - Association of Village Council Presidents (AVCP)
region. She introduced Ms. Brown, the new chief executive
officer for Nuvista Light & Electric Cooperative ("Nuvista") who
was hired in August 2011, after a nationwide search. Nuvista
was formed with the mission to improve the energy economics of
rural Alaska, and Ms. Klein said this project will "get us on
our way." The nonprofit cooperative is made up of 12 board
members from throughout the region as well as Alaska Village
Electric Cooperative (AVEC), Yukon-Kuskokwim Health Corporation
(YKHC), AVCP Regional Housing Authority (AVCP-RHA), Middle
Kuskokwim Electric Cooperative, Chaninnik Wind Group, Lower
Yukon Representative, AVCP, and Calista Corporation.
4:54:06 PM
ELAINE BROWN, Chief Executive Officer, Nuvista Light & Electric
Cooperative, Inc., provided a PowerPoint presentation entitled,
"Chikuminuk Lake Hydropower," dated February 2012. Ms. Brown
informed the committee the project will impact 59,000 square
miles, 56 villages - providing power to 14 villages - , and the
Kuskokwim and Yukon Rivers. She said the population in the
region is increasing by approximately 6 percent per year, thus
the hydropower project is very important. Recently, Nuvista has
reviewed approximately thirty-eight studies of the Yukon-
Kuskokwim (Y-K) Delta area, seven of which focus on hydropower.
Currently, Nuvista is working with the Alaska Energy Authority
(AEA), Department of Commerce, Community & Economic Development,
on a comprehensive region-wide energy study. Nuvista is also
studying the lack of infrastructure linking communities in the
Kuskokwim area. In fact, the Denali Commission has provided
information on a proposed grid system. She observed that the
population in the Y-K area is increasing in spite of high energy
costs and the lack of infrastructure. Her region is looking for
a permanent solution that will work with the power cost
equalization (PCE) program, and which will address the cost of
energy using wind, hydro, and interties, in order to displace
five million gallons of diesel fuel used in the Kuskokwim area
and save approximately $32,500,000. The project would also
eliminate about 55,000 tons per year of CO2 that are currently
released. Slide 4 listed the cost of diesel and electricity in
the Y-K Delta. Ms. Brown pointed out that diesel fuel cost
between $6 and $10 per gallon in 2011, and is expected to cost
between $7 and $12 per gallon in the future. In the past, 15-20
percent of family income was used for home heating but now, 60-
75 percent of family income is used for heating. In addition,
each community has its own electricity generation plant, many of
which are aging and in need of replacement. She cautioned that
PCE is not a permanent solution. Ms. Brown called attention to
slide 5 which was a graph showing electrical cost projections.
In 2010, the cost of diesel fuel in the villages averaged $.825
per kW hours, which was two times the cost of diesel fuel in
Bethel, and the cost of electricity was three and one-half times
the cost in Anchorage.
4:59:03 PM
MS. KLEIN added that the slide 5 graph illustrates that the 2005
projection was that the cost would be at $.70 in 20 years;
however, the reality is that the costs are off the graph now.
CO-CHAIR FOSTER asked whether PCE is included in the $.825
average cost.
MS. KLEIN explained that PCE varies by area and by the amount
consumed, but the average of $.83 is with the subsidy.
5:00:15 PM
MS. BROWN continued to describe some of the conditions in
Nuvista's region: village generators use 20 million gallons of
diesel per year, which is one-third of state use; there is no
infrastructure except for a few interties; and there are no
transmission lines or roads. Nuvista has reviewed previous
feasibility studies on coal, hydropower, and alternatives such
as wind, bio-mass, and hydro. In coastal villages there is new
interest in developing wind generation. Because of the $10
million provided by the legislature, the Chikuminuk Lake
Hydroelectric Energy program has begun its permitting process
and licensing phase, and is ready to file its preliminary
application to the Federal Energy Regulatory Commission (FERC).
Environmental studies, preliminary engineering investigations,
and public meetings will be held in the Bristol Bay and Calista
Regions this summer. Slide 8 listed the actions completed on
the Chikuminuk project: held community meetings in Bethel that
resulted in the final choice of the Chikuminuk project; hired
executive director and program manager; the Nuvista team - 100
percent Alaskan hire, 75 percent Native hire, and Yupik speaking
- is developing scopes, public meetings, and agency
coordination; installed the Chikuminuk stream gauge with the
U.S. Geological Survey, U.S. Department of the Interior;
comprehensive energy plan underway integrating past and future
work; and applied for grants to fund a regional intertie and
grid system.
5:05:09 PM
MS. KLEIN pointed out that Ms. Brown and the Nuvista team are
assisting communities with grant applications for federal
funding and other available funding.
MS. BROWN continued, saying an engineering agreement was signed
with Hatch Engineering in January 2012, and with nine
subcontractors from Fairbanks, Anchorage, Wasilla, and Bethel.
Slide 9 was a map of the Calista Region divided into subregions
that showed existing interties, a proposed intertie, and wind
turbines. Slide 10 illustrated the
licensing/design/construction schedule for the Chikuminuk Lake
hydro project. She said the first two or three years will be
extremely busy with field studies, engineering, environmental,
agency consulting, public meetings in Dillingham and the Calista
Region, and in Anchorage meeting with agencies. The FERC
license, final design, and construction begin in 2015, with the
project operational in 2021. Slide 11 listed the planned
activities for 2012: filing the preliminary FERC permit
application; Department of Natural Resources (DNR) meetings on
permitting; agency meetings; Wood Tikchik Advisory Council
meetings; updates with the affected communities; joint public
informational meetings in Anchorage and in the region; and
preliminary engineering and dual field season reconnaissance
work. Almost two years of field work will be combined into one
season, including core drilling in Wood Tikchik to determine if
the moraine walls will support the water and the dam. Slide 12
illustrated Chikuminuk Lake Project Phases and she advised that
the $10 million has funded the first phase including licensing
activities; field geotech, environmental studies, preliminary
engineering, investigations, and holding public meetings within
the regions.
5:10:03 PM
MS. BROWN concluded that the schedule shows activities for the
next 10 years. As an aside, she mentioned that the per capita
investment in the Y-K Delta is $17,262, as compared to $16,200
per capita in the Railbelt.
5:12:01 PM
REPRESENTATIVE PETERSEN confirmed that the comparison was with
the per capita cost of the Susitna River dam project.
5:13:07 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 5:13 p.m.