Legislature(2011 - 2012)BARNES 124
03/29/2012 03:00 PM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| HB357 | |
| HB323 | |
| HB336 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 357 | TELECONFERENCED | |
| += | HB 323 | TELECONFERENCED | |
| += | HB 336 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
March 29, 2012
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. 357
"An Act establishing the sustainable energy transmission and
supply development program in the Alaska Industrial Development
and Export Authority."
- HEARD & HELD
HOUSE BILL NO. 323
"An Act relating to the Alaska energy efficient home grant fund;
and creating a grant program for converting homes in regions
designated as particulate matter nonattainment areas to
efficient home heating systems."
- MOVED CSHB 323(ENE) OUT OF COMMITTEE
HOUSE BILL NO. 336
"An Act establishing an energy assistance program in the
Department of Revenue to issue an energy voucher to Alaska
permanent fund dividend recipients; and relating to the analysis
and recommendation of an energy assistance program by the
governor."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 357
SHORT TITLE: AIDEA SUSTAINABLE ENERGY PROGRAM
SPONSOR(s): REPRESENTATIVE(s) PRUITT
02/22/12 (H) READ THE FIRST TIME - REFERRALS
02/22/12 (H) ENE, FIN
03/06/12 (H) ENE AT 3:00 PM BARNES 124
03/06/12 (H) <Bill Hearing Postponed to 3/13/12>
03/13/12 (H) ENE AT 3:00 PM BARNES 124
03/13/12 (H) Heard & Held
03/13/12 (H) MINUTE(ENE)
03/29/12 (H) ENE AT 3:00 PM BARNES 124
BILL: HB 323
SHORT TITLE: NONATTAIN AREA HOME HEATING SYSTEM GRANTS
SPONSOR(s): REPRESENTATIVE(s) T.WILSON
02/17/12 (H) READ THE FIRST TIME - REFERRALS
02/17/12 (H) ENE, FIN
03/06/12 (H) ENE AT 3:00 PM BARNES 124
03/06/12 (H) <Bill Hearing Postponed to 3/13/12>
03/13/12 (H) ENE AT 3:00 PM BARNES 124
03/13/12 (H) Heard & Held
03/13/12 (H) MINUTE(ENE)
03/22/12 (H) ENE AT 3:00 PM BARNES 124
03/22/12 (H) Heard & Held
03/22/12 (H) MINUTE(ENE)
03/27/12 (H) ENE AT 3:00 PM BARNES 124
03/27/12 (H) Heard & Held
03/27/12 (H) MINUTE(ENE)
03/29/12 (H) ENE AT 3:00 PM BARNES 124
BILL: HB 336
SHORT TITLE: ENERGY ASSISTANCE PROGRAM & VOUCHERS
SPONSOR(s): REPRESENTATIVE(s) THOMPSON
02/22/12 (H) READ THE FIRST TIME - REFERRALS
02/22/12 (H) ENE, L&C, FIN
03/06/12 (H) ENE AT 3:00 PM BARNES 124
03/06/12 (H) <Bill Hearing Postponed to 3/13/12>
03/13/12 (H) ENE AT 3:00 PM BARNES 124
03/13/12 (H) Heard & Held
03/13/12 (H) MINUTE(ENE)
03/27/12 (H) ENE AT 3:00 PM BARNES 124
03/27/12 (H) Heard & Held
03/27/12 (H) MINUTE(ENE)
03/29/12 (H) ENE AT 3:00 PM BARNES 124
WITNESS REGISTER
DIRK CRAFT, Staff
Representative Lance Pruitt
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking on behalf of Representative Lance
Pruitt, prime sponsor, reviewed aspects of the proposed CS for
HB 357.
MARK DAVIS, Deputy Director
Investment Finance & Analysis
Alaska Industrial Development & Export Authority (AIDEA)
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Described how HB 357 would expand the tasks
of AIDEA.
DON KUBLEY, Representative
Alaska Independent Power Producers Association
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 357.
JODI MITCHELL, CEO/General Manager
Inside Passage Electric Cooperative (IPEC)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 357.
DUFF MITCHELL, Vice President & Business Manager
Juneau Hydropower Inc.
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 357.
JOE GRIFFITH, General Manager
Matanuska Electric Association; President
Alaska Railbelt Cooperative Transmission & Electric Company
(ARCTEC)
Palmer, Alaska
POSITION STATEMENT: Testified in support of HB 357.
REPRESENTATIVE TAMMIE WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as the prime sponsor of HB 323,
clarified previous testimony from the Alaska Housing Finance
Corporation (AHFC), and answered questions.
REPRESENTATIVE STEVE THOMPSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as the prime sponsor of HB 336,
described the intent of proposed Amendment 1.
PAUL LABOLLE, Staff
Representative Neal Foster
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained the intent of proposed Amendment
1 to the proposed committee substitute (CS) for HB 336.
ACTION NARRATIVE
3:11:33 PM
CO-CHAIR NEAL FOSTER called the House Special Committee on
Energy meeting to order at 3:11 p.m. Representatives Foster,
Pruitt, Tuck, Petersen, Saddler, Olson, and Lynn were present at
the call to order.
HB 357-AIDEA SUSTAINABLE ENERGY PROGRAM
3:12:18 PM
CO-CHAIR FOSTER announced that the first order of business would
be HOUSE BILL NO. 357, "An Act establishing the sustainable
energy transmission and supply development program in the Alaska
Industrial Development and Export Authority."
[Although the proposed CS for HB 357 was identified as Version
I, Version M was adopted during the hearing on 3/13/12, and was
before the committee.]
3:12:27 PM
REPRESENTATIVE LANCE PRUITT, Alaska State Legislature, explained
that today's hearing was a continuation of the discussion on HB
357, which expands the power of the Alaska Industrial
Development and Export Authority (AIDEA) to facilitate the
financing of energy projects through a new fund within AIDEA
known as the sustainable energy transmission and supply
development (SETS) fund. Representative Pruitt highlighted five
key components of the bill that grant AIDEA the ability to:
ensure project obligations and guarantee loans or bonds for
projects; defer principal payments and capitalize interest;
offer financing terms up to 30 years for energy projects and 50
years for transmission and hydroelectric (hydro) projects; offer
sales lease-back agreements, build-operate-transfer agreements,
and other agreements to finance energy projects; and offer
reduced interest rates for renewable projects, projects in rural
areas, or projects that promote economic development.
3:14:48 PM
DIRK CRAFT, Staff to Representative Lance Pruitt, Alaska State
Legislature, reminded the committee he had presented a sectional
analysis of the bill at a previous meeting. He pointed out that
HB 357 is a companion bill to SB 25, which empower and create a
new fund within AIDEA that puts a portion of state savings to
work financing the construction and development of energy
projects within Alaska. The bill authorizes AIDEA to facilitate
the financing of energy projects, through which rates would
repay the loans or investments from AIDEA. The agency would
also have the authority to use capital markets to "backfill the
fund" by using loans as an asset, thereby establishing a
perpetual investment vehicle. Thus, 20 years or 30 years from
now, there will be funding available for the replacement of
infrastructure. Mr. Craft stressed that the principal and
interest payments from these funds will remain in-state, as
opposed to the current practice of placing loans out-of-state.
He referred to previous testimony heard by the committee on the
future capital energy needs of Southeast and the Railbelt -
which will cost billions of dollars - and said the intent of the
bill is to fill the financing gap between what the utilities can
bond for, and what is needed. Furthermore, to address concerns
about limitations on financing, he called attention to page 10,
line 22 of the bill which read:
Sec. 44.88.740. Limitations on financing. (a) Unless
the authority has obtained legislative approval by
law, the authority may not finance or participate in
financing of
(1) more than one-third of the capital cost of an
energy project; or
(2) a loan guarantee that exceeds $20,000,000.
(b) Financing under AS 44.88.730 is limited to the
life of an energy project, which may not be more than
(1) 30 years; or
(2) 50 years for a transmission line or
hydroelectric energy projects.
MR. CRAFT explained that this section ensures that a loan
exceeding $20,000,000 requires approval from the legislature.
3:17:00 PM
REPRESENTATIVE TUCK asked whether the loans would be
transferable.
MR. CRAFT deferred to AIDEA. In further response to
Representative Tuck, he said the loans are intended for any
transmission and energy projects.
REPRESENTATIVE PRUITT added that energy projects are defined on
page 11, line 3 of the bill.
MR. CRAFT advised that a new proposed CS with changes to this
section will be provided to the committee.
REPRESENTATIVE PETERSEN asked whether the bill sets the interest
rates for the loans.
MR. CRAFT said beginning on page 6, line 14 of the bill,
sections 8 through 12 set the interest rates for AIDEA, and
define the different sources of revenue available to finance
projects. The proposed legislation clarifies that the interest
rate applies to the fund being created. In further response to
Representative Petersen, he confirmed that the fund is self-
sustaining in that when loans are paid back, more principal
becomes available to make additional loans.
3:20:21 PM
MARK DAVIS, Deputy Director, Investment Finance & Analysis,
Alaska Industrial Development & Export Authority (AIDEA),
Department of Commerce, Community & Economic Development
(DCCED), stated the bill creates an energy infrastructure bank
within AIDEA. He explained that AIDEA does not currently make
direct loans, and in fact, the bill does more than authorize
AIDEA to make loans. At this time, AIDEA operates the
enterprise development fund which is used for loan participation
with banks and for development projects. However, the proposed
bill creates a new fund separate from the enterprise development
fund for energy projects, and the new fund will make loans,
raise money through bonds, and issue loan and bond guarantees.
In addition, there are special powers to defer interest
payments, to capitalize interest, and to allow for a project to
"cash flow over time." Mr. Davis gave the example of the DeLong
Mountain Transportation System (DMTS), saying that large
projects need time to develop, hence the term "patient capital."
He further explained the bill allows for money from a state
savings account to be transferred to AIDEA and used for energy
projects by way of loans, bonds, and guarantees in order to work
with a private partner. For example, a private utility could
issue a bond and AIDEA could guarantee that the bond is for a
public project, making it a tax-exempt bond, and improving the
debt financing for the project. Thus the project is financed by
the same vehicle, but the debt service is substantially lowered.
He assured the committee that AIDEA would continue to work with
the Alaska Energy Authority (AEA), DCCED, to coordinate projects
in rural Alaska. Mr. Davis stressed that AIDEA does not intend
to delve into the energy business, but to lower the cost of
energy projects that is usually passed along to the ratepayers.
3:24:32 PM
CO-CHAIR FOSTER opened public testimony.
3:24:50 PM
DON KUBLEY, Representative, Alaska Independent Power Producers
Association (AIPPA), informed the committee he was a sixth
generation Alaska resident. He expressed his support of HB 357,
and said AIPPA is a newly-formed energy advocacy organization
dedicated to encouraging private investment in capital to assist
Alaska achieve its renewable energy resource goals and provide
competitive-priced power for residents. Further, AIPPA consists
of Alaska's leading independent power producers and developers
from all over Alaska and who are interested in geothermal, wind,
biomass, hydrokinetic, and hydropower developments. Some of its
members are Cook Inlet Region, Inc. (CIRI), Delta Wind Farm,
Alaska Power and Telephone (AP&T), Kootznoowoo, Juneau
Hydropower, Inc., and polarconsult alaska, inc., all of whom
dream of making stranded renewable energy resources available to
Alaska and the U.S. He spoke of removing barriers to a new
industry that will bring jobs, a tax-base, and economic well-
being to the state, and of AIPPA's efforts to encourage private
investment in Alaska's energy infrastructure. Mr. Kubley
recalled that the original plan for the Four Dam Pool
[hydroelectric facilities built by the state in the 1980s]
envisioned a grid from Metlakatla to Skagway providing clean
energy to Southeast residents, and by way of a 30-mile
extension, to the Canada grid in British Columbia (B.C.). This
grid would be a green pipeline sending clean power to B.C. and
all of the villages and communities of Southeast, providing
power for local manufacturing. Although finishing the grid
would be expensive, it would be worth it. Mr. Kubley restated
his strong support of the legislation.
3:29:38 PM
JODI MITCHELL, CEO/General Manager, Inside Passage Electric
Cooperative (IPEC), said IPEC is a nonprofit member-owned
utility serving 1,300 members in the small communities of
Angoon, Hoonah, Kake, Klukwan, and the upper Chilkat Valley.
Her cooperative is almost entirely dependent on diesel
generation and she spoke in support of the bill. Ms. Mitchell
observed grant funding is necessary in rural Alaska to avoid
expensive financing that could result in a hydro project with
rates higher than diesel. Thus IPEC pursues grant funding
through the AEA renewable energy fund. However, a loan program
to provide "gap funding" will be needed for monies needed in
excess of grants. At this time, IPEC has loans through the
Rural Utilities Service (RUS), U.S. Department of Agriculture
for $5.3 million; however, her organization would prefer to
repay a loan to the state rather than to the federal government.
Ms. Mitchell suggested the legislation should also allow
utilities to refinance federal loans with state loans.
3:32:28 PM
DUFF MITCHELL, Vice President & Business Manager, Juneau
Hydropower Inc., disclosed he was also a member of AIPPA. Mr.
Mitchell expressed his support of HB 357, saying it is a great
vehicle to advance the goals of the state energy policy. He
explained that infrastructure investments pay dividends in three
ways: AIDEA will receive money back from sound loans;
economically feasible infrastructure stabilizes rates for today
and for the future, especially with hydro; and local well-paying
jobs are created. In addition, syndicating loans encourages
outside investors to come and invest in Alaska. In closing, Mr.
Mitchell recommended increasing the appropriation from
$250,000,000 to $500,000,000.
3:36:15 PM
JOE GRIFFITH, General Manager, Matanuska Electric Association
(MEA); CEO, Alaska Railbelt Cooperative Transmission & Electric
Company (ARCTEC), stated MEA serves 57,000 members from Eagle
River to Petersville, and ARCTEC is a generation and
transmission cooperative that provides interregional energy
solutions to utilities through cooperative actions. He agreed
with some of the previous speakers and staff on reasons for the
bill, adding that the costs of electrical infrastructure -
although critically needed - are staggering throughout the
state. In fact, $6,000,000,000 will be required in the
Railbelt, exclusive of the distribution utilities. Currently,
consumers are financially stressed by fuel costs, which are
driving businesses out of the state. Mr. Griffith opined that
HB 357 will reduce the impact of the cost of capital
improvements, provide a reasonable method of financing, keep
money in the state, create jobs, and reduce costs to consumers.
Mr. Griffith agreed that the appropriation should be increased
to $500,000,000, and the limitation on financing - which
requires a project of $20,000,000 to be approved by the
legislature - should be increased to $50,000,000 to avoid
delays.
3:40:05 PM
CO-CHAIR FOSTER, after determining that no one else wished to
testify, closed public testimony. He asked whether the bill
allows for the refinancing of federal loans.
MR. CRAFT deferred to the sponsor of the companion bill.
REPRESENTATIVE PETERSEN pointed out a clause in the bill allows
for repurchase and leaseback, which may be a way for AIDEA to
lower the interest rates on existing projects.
CO-CHAIR FOSTER asked how the amount of the $250,000,000
appropriation was decided.
3:42:43 PM
MR. CRAFT said, "... they thought this would be an easier number
to get through [because] right now there is an urgency, that
we're at unprecedented interest rates right now ... right now is
the ideal time to get something like this in place."
3:43:25 PM
CO-CHAIR FOSTER held over HB 357.
The committee took a brief at-ease.
HB 323-NONATTAIN AREA HOME HEATING SYSTEM GRANTS
3:43:36 PM
CO-CHAIR FOSTER announced that the next order of business would
be HOUSE BILL NO. 323, "An Act relating to the Alaska energy
efficient home grant fund; and creating a grant program for
converting homes in regions designated as particulate matter
nonattainment areas to efficient home heating systems."
3:44:58 PM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature,
clarified statements made by the Alaska Housing Finance
Corporation (AHFC), Department of Revenue (DOR), during the
3/27/12 hearing on HB 323. She stated HB 323 applies to owner-
occupied housing units only, of which there are 21,410,
according to 2010 U.S. Census data. Furthermore, 501 wood
stoves in the Fairbanks North Star Borough (FNSB) have already
been replaced and 2,256 homes have participated in the AHFC
energy rebate program, with 324 homes pending, so they would be
disqualified for the program proposed by HB 323. In addition,
940 homes are disqualified by their participation in the AHFC
weatherization program. Representative T. Wilson said her
office took a survey of constituents and found that about 40
percent have old oil furnaces. She concluded that the
$1,000,000 cap on the appropriation for HB 323 is more than
sufficient to test the program.
3:46:16 PM
REPRESENTATIVE TUCK observed that the options in the bill are
grants in the amount of $7,500 to replace a furnace, or $5,000
to replace a wood stove. Also, participation in this program
will disqualify a homeowner from participation in the energy
rebate program. Representative Tuck pointed out the intent of
the legislation was to achieve attainment so FNSB is no longer
out of compliance with the Environmental Protection Agency (EPA)
and to help people have more energy efficient homes. He opined
residents should not have to choose between the programs, and
suggested that they could apply for both programs for a
cumulative amount not to exceed $10,000.
REPRESENTATIVE T. WILSON said most people who take advantage of
the energy rebate program spend in excess of $10,000. She
advised that HB 323 should advance without changes for one year,
after which the response to the program and the raters'
experiences can be reevaluated.
3:49:11 PM
REPRESENTATIVE OLSON moved to report the proposed CS for HB 323,
Version 27-LS1275\I, Kirsch/Nauman, 3/26/12, out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, CSHB 323(ENE) was reported out
of the House Special Committee on Energy.
[Although the maker of the motion stated HB 232, the clear
intent of the committee was to move HB 323.]
3:50:04 PM
The committee took an at-ease from 3:50 p.m. to 3:55 p.m.
HB 336-ENERGY ASSISTANCE PROGRAM & VOUCHERS
3:55:38 PM
CO-CHAIR FOSTER announced that the final order of business would
be HOUSE BILL NO. 336, "An Act establishing an energy assistance
program in the Department of Revenue to issue an energy voucher
to Alaska permanent fund dividend recipients; and relating to
the analysis and recommendation of an energy assistance program
by the governor."
3:56:09 PM
REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature,
reminded the committee HB 336, and public testimony on the bill,
were previously heard. He said questions have been addressed by
a friendly amendment which puts wood, coal, and other heating
products into the bill in addition to the $250 payment to
homeowners who do not use electricity or fuel oil.
CO-CHAIR FOSTER questioned how the other body deals with power
cost equalization (PCE), and determining the dollar value of the
voucher. Also, he confirmed that biomass is included in the
bill.
3:57:53 PM
The committee took an at-ease from 3:57 p.m. to 3:58 p.m.
3:58:01 PM
REPRESENTATIVE OLSON moved Amendment 1 which read [original
punctuation provided]:
Pg 3 line 14 after the word address, insert
Or other identifying information requested by the
corporation
CO-CHAIR FOSTER objected for the purpose of discussion.
3:59:55 PM
PAUL LABOLLE, Staff to Representative Neal Foster, Alaska State
Legislature, said Amendment 1 is a housekeeping amendment
necessary to comply with the companion bill in the other body.
Page 3, line 14, of the bill instructs that the distribution
method is based on the address listed on the heating oil,
natural gas, or electricity account. However, in many villages
addresses are not used, and the president of the Alaska Village
Electrical Cooperative Inc. (AVEC) suggested the language for
Amendment 1. He explained that "the corporation" referred to in
the amendment is the electrical utility. In response to
Representative Tuck, he clarified that in over 90 percent of
cases the corporation would be an electric utility.
REPRESENTATIVE TUCK suggested the amendment should say "by the
corporation and/or utility."
MR. LABOLLE said he was unsure of whether corporation covered
all of the possibilities, but cooperatives and public utilities
are corporations. In addition, to qualify as a vendor, an
entity must meet the requirements in section 1, subsection (e)
of the bill.
CO-CHAIR FOSTER maintained his objection.
4:03:47 PM
REPRESENTATIVE OLSON moved Amendment 2 which read [original
punctuation provided]:
Page 4 line 10 after the word rent, delete
[,ENERGY, OR HEATING COSTS]
Page 4 line 12 after the word voucher, insert
or
Page 4 line 13 insert a new subsection, subsection (3)
(3) not withstanding direct payment for
electricity in (g) of this section, for a recipient
whose primary residence heats exclusively with a fuel
not listed in (b) of this section, upon certification
the $500 will be used toward heating costs at the
recipient's primary residence in the state, for a
check for $500 in the name of the recipient of the
energy voucher.
4:03:53 PM
CO-CHAIR FOSTER objected for the purpose of discussion.
4:03:59 PM
MR. LABOLLE called attention to page 4, which was the cash
disbursement section of the bill. He said the intent of
Amendment 2 was to address those who heat with a fuel other than
natural gas, diesel, or electricity. Page 4, line 10 instructs
that the cash disbursement will be used toward rent or energy
costs other than those provided for in the bill. As the $250
cash payment is not equitable with the identified fuel sources,
and in keeping with the "spirit of the bill" the amendment
equates two cords of wood with two months of heat, 250 gallons
of fuel oil, or 35,000 cubic feet of natural gas. Thus on page
4, line 10, Amendment 2 deletes "energy, or heating costs." Mr.
Labolle said the bill would still provide for those whose
utilities are included in their rent and whose landlord does not
want to apply to the transfer options of the bill. Amendment 2
also inserts the word "or" on page 4, line 12 after the word
"voucher" and adds the aforementioned new subsection (3). For
example, he explained that a resident who lives in a cabin and
heats with wood, but who has an electric utility, would still
qualify for the larger cash disbursement that is to be used for
home heating.
4:07:29 PM
REPRESENTATIVE PETERSEN observed the bill retains the language
that limits one cash disbursement to $250, but increases another
cash disbursement to $500, and asked for the difference.
MR. LABOLLE explained that if the utilities are included in rent
they are generally a smaller amount. Furthermore, the sponsor
intends to discourage applying for a cash payment instead of a
utility payment, because the bill is an energy rebate measure.
REPRESENTATIVE TUCK estimated the average statewide cost for
electricity is 15.1 cents per kilowatt (kW) hour. If so, the
cash payment will be higher than needed for some. Also, the
cash payment is an option for tenants.
4:10:11 PM
MR. LABOLLE said the voucher transfer provisions are on page 4,
line 7, paragraph (1), and remain unchanged. He then summarized
Amendment 2 for those who rejoined the meeting.
CO-CHAIR FOSTER added that the amendment originated from his
intent to include other fuel sources such as biomass and wood.
He acknowledged that there is no easy way to administer these
additions, and cautioned that increasing the cash payment may
encourage residents to apply for the cash payment.
4:13:18 PM
MR. LABOLLE related that the Alaska Housing Finance Corporation
(AHFC), Department of Revenue (DOR), indicated its preference
for a cash payment rather than a "separate section out
specifically for wood" because of the challenges to qualifying
distributors, and because there are many other sources of heat
such as propane, district heat, and pellet stoves, that would
not be included. In response to a previous question from
Representative Tuck, he said one reason to carve out the new
provision was to allow residents the option to choose between
heat and electricity. The current version of the bill allows a
resident who heats with an alternative source of fuel to apply
the $250 cash payment toward an electricity bill, but they would
have no provision for heat.
REPRESENTATIVE PETERSEN confirmed that any form of heating one's
home, although not mentioned in the bill, was covered by the
amendment.
4:15:10 PM
MR. LABOLLE said correct.
4:15:14 PM
CO-CHAIR FOSTER removed his objection to Amendment 2. There
being no further objection, Amendment 2 was adopted.
MR. LABOLLE summarized Amendment 1.
4:17:16 PM
CO-CHAIR FOSTER removed his objection to Amendment 1. There
being no further objection, Amendment 1 was adopted.
4:18:16 PM
REPRESENTATIVE TUCK moved Conceptual Amendment 3. He directed
attention to page 4, lines 8 and 9 of the bill which read:
owner of the residence in the state in which the
recipient resides, the value of which may, subject to
negotiations between the landlord and tenant, be
deducted from rent; or
REPRESENTATIVE TUCK observed that a tenant can transfer their
voucher to the landlord "for the cost of the utility or for
$250." He cautioned that landlords could "line their pockets,"
because the bill instructs that the value, subject to
negotiations between the landlord and tenant, be deducted from
rent. Representative Tuck opined the full value should be given
for rent and it should not be subject to negotiations between
the landlord and tenant.
CO-CHAIR PRUITT stated the possibility that a landlord may
discount the value of the voucher.
REPRESENTATIVE TUCK said correct. A tenant is in a
disadvantaged position because they have no options; however, a
landlord with a voucher can get 1,500 kW of power which may be
worth twice the value of the voucher. He said, "That's what I'm
trying to prevent, is that the full value is not going as
intended." Conceptual Amendment 3 adds the word "full" before
the word "value" on page 4, line 8 of the bill. Also, the
amendment removes the words "subject to negotiations between the
landlord and tenant," from page 4, line 9. He said page 4,
lines 7 through 9 would read:
(1) if applicable, for a replacement voucher in the
name of the landlord or owner of the residence in the
state in which the recipient resides, the full value
may be deducted from rent;
4:20:57 PM
CO-CHAIR FOSTER objected for the purpose of discussion.
REPRESENTATIVE PETERSEN ascertained the voucher does not have to
be $250 because if the landlord is heating with electricity, oil
or natural gas, in parts of the state the value of the voucher
would be significantly higher. He said, "These vouchers would
be in equal value to, to what the cost of that energy [is] that
the landlord is providing, to that tenant."
REPRESENTATIVE TUCK pointed out the language in the bill allows
for the landlord to negotiate something less to apply to the
rent than the actual cost.
REPRESENTATIVE PETERSEN further noted that the utility sends the
landlord the bill thus the tenant may not know the value of the
energy, especially in a multi-unit building with a central
heating system, where it is difficult to know what the amount
per unit is.
4:23:38 PM
MR. LABOLLE suggested a similar scenario is a house that has a
small apartment with a shared meter and boiler. He advised
that the sponsor is waiting for language on regulations for PCE,
so more work is to be done on the bill, and he would work with
Representative Tuck on this issue also.
REPRESENTATIVE TUCK said:
I believe the language is already there. It's price
times 1,500 kilowatts of power. We know what the
price is; you don't have to know how much they use.
All you have to know is what the price is. So, I
don't see the problem with this. I think it's spelled
out very well, to, to keep that from happening.
MR. LABOLLE understood Representative Tuck's point.
4:25:13 PM
REPRESENTATIVE PETERSEN restated his example of a four-plex
metered by one natural gas meter, and how to determine the cost
per unit.
MR. LABOLLE explained that in the case of a four-plex, with each
unit rented by one tenant, and sharing one diesel furnace, each
tenant will be credited for an amount equal to "whatever the
going rate for diesel was, multiplied by 250 gallons." He opined
Representative Tuck's point is that the language in the bill is
not specific to usage, and that the volume [250 gallons] would
already be written into law.
4:26:45 PM
CO-CHAIR FOSTER asked whether the bill sponsor wished to address
the conceptual amendment.
REPRESENTATIVE THOMPSON indicated he had no objection to
Conceptual Amendment 3.
4:27:18 PM
CO-CHAIR FOSTER removed his objection. There being no further
objection, Conceptual Amendment 3 was adopted.
REPRESENTATIVE PETERSEN gave an example of a landlord who lives
in a building that also houses renters. He asked whether the
landlord can choose to use their voucher on their personal
residence or on rental units.
REPRESENTATIVE THOMPSON advised if the landlord's name is on the
utility bill, they could apply it to the building or to their
residence. Only one voucher would be issued, and AHFC will
write regulations, but there would be only one credit per name.
REPRESENTATIVE TUCK recalled there was previous discussion with
AHFC that suggested the use of PFD application addresses for
this program.
MR. LABOLLE directed attention to page 3, line 3, of the bill
and read:
(6) is valid for heating oil, natural gas, or
electricity delivered to the voucher recipient's
primary residence in the state;
4:30:51 PM
MR. LABOLLE advised an issue in addition to that of PCE is the
language on page 4, line 7, with the use of the term "landlord."
The sponsor has been informed that utility billings are
sometimes paid by a condominium homeowners' association thus a
determination must be made on whether a homeowners' association
could be considered a landlord.
CO-CHAIR FOSTER held over HB 336.
4:32:06 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 4:32 p.m.
| Document Name | Date/Time | Subjects |
|---|