Legislature(2023 - 2024)BARNES 124

02/16/2023 10:15 AM House ENERGY

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10:16:36 AM Start
10:17:58 AM HB62
11:22:40 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 62 RENEWABLE ENERGY GRANT FUND TELECONFERENCED
Moved HB 62 Out of Committee
-- Public Testimony --
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                       February 16, 2023                                                                                        
                           10:16 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative George Rauscher, Chair                                                                                           
Representative Tom McKay                                                                                                        
Representative Josiah Patkotak                                                                                                  
Representative Stanley Wright                                                                                                   
Representative Mike Prax                                                                                                        
Representative Calvin Schrage                                                                                                   
Representative Ashley Carrick                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 62                                                                                                               
"An Act relating to the renewable energy grant fund and                                                                         
recommendation program; and providing for an effective date."                                                                   
                                                                                                                                
     - MOVED HB 62 OUT OF COMMITTEE                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB  62                                                                                                                  
SHORT TITLE: RENEWABLE ENERGY GRANT FUND                                                                                        
SPONSOR(s): REPRESENTATIVE(s) EDGMON                                                                                            
                                                                                                                                
02/06/23       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/06/23       (H)       ENE                                                                                                    
02/16/23       (H)       ENE AT 10:15 AM BARNES 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE BRYCE EDGMON                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, presented HB 62.                                                                       
                                                                                                                                
LAIB ALLENSWORTH, Staff                                                                                                         
Representative Bryce Edgmon                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Gave  the sectional analysis  for HB  62 on                                                             
behalf of Representative Edgmon, prime sponsor.                                                                                 
                                                                                                                                
CURTIS THAYER, Executive Director                                                                                               
Alaska Energy Authority                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Provided  invited  testimony  during  the                                                             
hearing on HB 62.                                                                                                               
                                                                                                                                
CONNER ERIKSON, Director of Planning                                                                                            
Alaska Energy Authority                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  during the hearing on HB
62.                                                                                                                             
                                                                                                                                
DOUG WOODBY, Co-Chair                                                                                                           
350 Juneau                                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Gave public  testimony in  support of  the                                                             
renewable energy grant fund during the hearing on HB 62.                                                                        
                                                                                                                                
MATTHEW JACKSON                                                                                                                 
Southeast Alaska Conservation Council                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Gave public  testimony during the hearing on                                                             
HB 62.                                                                                                                          
                                                                                                                                
MICHAEL ROVITO, Deputy Director                                                                                                 
Alaska Power Association                                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Gave public testimony in support of HB 62.                                                               
                                                                                                                                
GARY HENNIGH, Administrator                                                                                                     
City of King Cove                                                                                                               
King Cove, Alaska                                                                                                               
POSITION STATEMENT:  Gave public testimony in support of HB 62.                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:16:36 AM                                                                                                                   
                                                                                                                                
CHAIR  GEORGE  RAUSCHER called  the  House  Special Committee  on                                                             
Energy meeting  to order at  10:16 a.m.   Representatives Wright,                                                               
McKay, Carrick,  Prax, and Rauscher  were present at the  call to                                                               
order.    Representatives Schrage  and  Patkotak  arrived as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
               HB  62-RENEWABLE ENERGY GRANT FUND                                                                           
                                                                                                                                
10:17:58 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER  announced that the  only order of  business would                                                               
be HOUSE  BILL NO. 62, "An  Act relating to the  renewable energy                                                               
grant  fund  and recommendation  program;  and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
10:18:20 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE BRYCE  EDGMON, Alaska State Legislature,  as prime                                                               
sponsor, presented HB  62.  He stated that the  bill would extend                                                               
the authorization of the renewable  energy grant fund for another                                                               
ten years.   The grant  was created in 2008,  at a time  when oil                                                               
prices  were  high,  to  expand the  usage  of  Alaska's  natural                                                               
resources.   He  said that  the  reason for  extending the  grant                                                               
another  ten  years rather  than  more  standard three  years  is                                                               
because he believes that the  grant has been successful enough to                                                               
warrant such a lengthy extension.                                                                                               
                                                                                                                                
10:22:48 AM                                                                                                                   
                                                                                                                                
LAIB   ALLENSWORTH,  Staff,   Representative  Edgmon,   gave  the                                                               
sectional analysis for HB 62  on behalf of Representative Edgmon,                                                               
prime sponsor.  He stated that  Section 1 would extend the repeal                                                               
date from June  30, 2023, to June 30, 2033;  Section 2 would make                                                               
the bill  retroactive; and Section  3 set an  immediate effective                                                               
date.  He explained that the  retroactivity of Section 2 would be                                                               
to ensure  continuous authorization  if the  bill was  not passed                                                               
before June 30, 2023.                                                                                                           
                                                                                                                                
10:24:30 AM                                                                                                                   
                                                                                                                                
MR.  ALLENSWORTH gave  a brief  history of  the renewable  energy                                                               
grant fund.   He reiterated  that the  fund was created  in 2008,                                                               
and  said  it  received  a 10-year  extension  in  2012,  passing                                                               
unanimously  both times.   The  fund  has given  $299 million  in                                                               
grants for renewable energy.  He  added that there was an initial                                                               
investment  of $100  million  in  the fund  and  that the  amount                                                               
contributed since then has varied from  year to year based on the                                                               
current fiscal situation  of the state.  The  $1.4 million fiscal                                                               
note was for  the maintenance and support of  the current grants.                                                               
He  concluded that  the  bill does  not  obligate any  particular                                                               
amount to be appropriated for the fund.                                                                                         
                                                                                                                                
10:27:27 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER asked  if there was any money left  over from last                                                               
year's $15 million appropriation.                                                                                               
                                                                                                                                
REPRESENTATIVE EDGMON  answered that  the legislature  created an                                                               
endowment in  2016 that among  other things, would  contribute to                                                               
the renewable  energy grant fund  in years  of high revenue.   He                                                               
added that Governor  Mike Dunleavy is proposing  $7.5 million for                                                               
the 2024 fiscal year budget.                                                                                                    
                                                                                                                                
10:29:05 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  PATKOTAK  asked  if   the  $7.5  million  was  in                                                               
addition to the $1.4 given in the fiscal note.                                                                                  
                                                                                                                                
MR.  ALLENSWORTH answered  that it  would be  in addition  to the                                                               
fiscal note.                                                                                                                    
                                                                                                                                
10:29:36 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PRAX asked  what the return on  investment was for                                                               
rural areas investing in alternative energy.                                                                                    
                                                                                                                                
REPRESENTATIVE EDGMON  answered that the Alaska  Energy Authority                                                               
(AEA)  has  numbers  on  the  amount  of  diesel  fuel  saved  by                                                               
investing in renewable energy in rural areas.                                                                                   
                                                                                                                                
10:32:19 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SCHRAGE asked if there was  ever a time in which a                                                               
full  $50  million every  year  for  five years  was  contributed                                                               
towards the  renewable energy  fund, and what  the health  of the                                                               
fund is currently.                                                                                                              
                                                                                                                                
MR.  ALLENSWORTH  answered that  between  2008  and 2014,  $20-30                                                               
million  was  contributed each  year,  which  he described  as  a                                                               
"healthy" amount.  He said that  the fund is working as it should                                                               
in delivering grants for renewable energy projects.                                                                             
                                                                                                                                
10:35:05 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SCHRAGE  asked whether  more funding  is necessary                                                               
to keep the fund working properly.                                                                                              
                                                                                                                                
10:35:51 AM                                                                                                                   
                                                                                                                                
CURTIS  THAYER,  Executive  Director,  Alaska  Energy  Authority,                                                               
answered that  there is not  meant to be  a fund balance,  as the                                                               
money  appropriated for  the fund  goes towards  renewable energy                                                               
projects  through a  grant process.   He  added that  if projects                                                               
were finished  under budget, the legislature  could reappropriate                                                               
the remaining funds to contribute towards other projects.                                                                       
                                                                                                                                
10:38:02 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SCHRAGE asked  what the  average amount  of money                                                               
contributed toward the renewable energy  grant fund has been over                                                               
the course of the last five rounds.                                                                                             
                                                                                                                                
MR. THAYER answered  that it is possible for the  fund to receive                                                               
no money in certain years and  most of the $19.2 million that has                                                               
been appropriated in the last five years came in the last two.                                                                  
                                                                                                                                
10:40:11 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PRAX  asked what  the outlook  for the  power cost                                                               
equalization fund looks like.                                                                                                   
                                                                                                                                
Mr. Thayer answered  that the two funds  largely remain separate,                                                               
although it  is possible for  leftover funds from the  power cost                                                               
equalization fund to "waterfall"  into the renewable energy grant                                                               
fund, as  the purpose is  to lower  power cost for  rural Alaska.                                                               
Most of  the funds  distributed as part  of the  renewable energy                                                               
grant fund have come from the State of Alaska General Fund.                                                                     
                                                                                                                                
10:43:48 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PRAX asked  if the Department of  Revenue would be                                                               
able to inform  the legislature on the future  potential of funds                                                               
that  could go  from  the  power cost  equalization  fund to  the                                                               
renewable energy grant fund to give  it a better idea of how much                                                               
funding  the legislature  should contribute  to renewable  energy                                                               
projects.                                                                                                                       
                                                                                                                                
MR. THAYER answered that the  Department of Revenue manages funds                                                               
for AEA.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  EDGMON  added  that during  the  previous  year's                                                               
session, SB 243  was passed, which increased  the residential cap                                                               
for  subsidization.    The  bill  also  allowed  the  Power  Cost                                                               
Equalization  Fund  to  be  managed   in  such  a  way  that  its                                                               
investments would receive larger returns.                                                                                       
                                                                                                                                
10:46:22 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  PATKOTAK asked  what  types of  things are  taken                                                               
into  consideration when  deciding  which  projects will  receive                                                               
funding through the renewable energy grant fund.                                                                                
                                                                                                                                
10:46:43 AM                                                                                                                   
                                                                                                                                
CONNOR ERICKSON,  Director of  Planning, Alaska  Energy Authority                                                               
answered there  is a  four-step review  process for  all projects                                                               
applying  for  the   fund  that  starts  with  a   review  of  an                                                               
application's eligibility  and continues  with the  technical and                                                               
economical  feasibility  of  the  project.   The  third  step  is                                                               
continued  economic   review,  including  looking   at  potential                                                               
matching  opportunities.   He  said  that  the  final step  is  a                                                               
presentation and  final ranking of  the projects.   The finalists                                                               
are presented  to the Renewable  Energy Fund  Advisory Committee,                                                               
made up of  four legislators and five members of  the public, and                                                               
its  recommendations   are  forwarded  to  the   legislature  for                                                               
consideration.                                                                                                                  
                                                                                                                                
10:49:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SCHRAGE  asked for clarification on  the amount of                                                               
money for proposed projects this year.                                                                                          
                                                                                                                                
MR. THAYER  answered that there  are currently 31  proposals that                                                               
would amount to $33 million, and  it is likely that some of those                                                               
applicants  will not  make it  through  the entire  process.   He                                                               
added that  the $7.5 million  figure given  by the governor  is a                                                               
placeholder until a final request  is determined.  In response to                                                               
a  follow-up  question,  he  stated  that  it  was  difficult  to                                                               
determine exactly how much the  number of applicants would change                                                               
from round  to round, although there  is a cap of  $2 million for                                                               
any given project.                                                                                                              
                                                                                                                                
10:52:34 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE CARRICK  asked how  much money  AEA would  need to                                                               
fund all  viable projects if  the legislature had the  ability to                                                               
fund all of them.                                                                                                               
                                                                                                                                
MR. THAYER  answered that  he was unsure  what that  amount would                                                               
ultimately be.  He added that  the fund's purpose is to help with                                                               
the early development  of the projects being funded  and has been                                                               
beneficial across the state.                                                                                                    
                                                                                                                                
10:55:28 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER opened public testimony on HB 62.                                                                                
                                                                                                                                
10:55:51 AM                                                                                                                   
                                                                                                                                
DOUG WOODBY,  Co-Chair, 350 Juneau,  testified in support  of the                                                               
renewable  energy  grant fund.    He  stated that  the  renewable                                                               
energy grant fund  has been a helpful tool  for rural communities                                                               
to save money  on utility bills.  He added  that he believes that                                                               
investing  more  in  renewable energy  will  help  fight  climate                                                               
change.                                                                                                                         
                                                                                                                                
10:57:53 AM                                                                                                                   
                                                                                                                                
MATTHEW  JACKSON, Southeast  Alaska Conservation  Council, stated                                                               
that the AEA estimates that  the projects funded by the renewable                                                               
energy  grant  fund save  a  total  of approximately  30  million                                                               
gallons of  diesel each year,  saving rural  Alaskans significant                                                               
amounts of  money.  He  said that he believes  greater investment                                                               
in  the fund  would  provide encouragement  to  those looking  to                                                               
create renewable energy projects and  thus cause there to be more                                                               
applicants for the grants.                                                                                                      
                                                                                                                                
10:59:59 AM                                                                                                                   
                                                                                                                                
MICHAEL  ROVITO,  Deputy   Director,  Alaska  Power  Association,                                                               
testified in support  of HB 62.  He stated  that the Alaska Power                                                               
Association supports the  bill on behalf of  its electric utility                                                               
members.  He said that the  fund has reduced carbon emissions and                                                               
electric rates  for its  members.  Extending  the sunset  date of                                                               
the  renewable   energy  grant  fund  gives   electric  utilities                                                               
certainty that the  fund will be there so that  they can continue                                                               
to invest in renewable energy.                                                                                                  
                                                                                                                                
11:01:57 AM                                                                                                                   
                                                                                                                                
GARY  HENNIGH, Administrator,  City  of King  Cove, testified  in                                                               
support of HB 62.  He stated  that he is in his thirty-third year                                                               
as the  city administrator of  King Cove,  Alaska.  He  said that                                                               
King Cove  has two river  hydro facilities that have  allowed the                                                               
community to  rely on  renewable energy for  90 percent  of their                                                               
energy needs.   The renewable  energy grant fund is  what allowed                                                               
the city  to invest in and  build those projects.   He added that                                                               
the way the  power cost equalization program is set  up creates a                                                               
disincentive  for communities  wanting to  take advantage  of the                                                               
renewable energy  grant fund  and he gave  the example  that king                                                               
cove is not benefitting from  the power cost equalization program                                                               
because its energy  costs are already lower due  to its renewable                                                               
energy projects.                                                                                                                
                                                                                                                                
11:06:33 AM                                                                                                                   
                                                                                                                                
CHAIR  RAUSCHER, after  ascertaining there  was no  one else  who                                                               
wished to testify, closed public testimony on HB 62.                                                                            
                                                                                                                                
11:06:45 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  PRAX asked  whether it  is accurate  to say  that                                                               
investing in  renewable energy projects  reduces the cost  to the                                                               
state for the power cost equalization program.                                                                                  
                                                                                                                                
MR. THAYER answered  that the power cost  equalization program is                                                               
a program for rural communities  to be subsidized for high energy                                                               
costs,  whereas funds  from the  power cost  equalization program                                                               
can  be  used to  benefit  urban  Alaska communities,  making  it                                                               
difficult  to create  a proper  comparison.   he  added that  the                                                               
power cost  equalization fund  is meant to  provide a  subsidy to                                                               
rural  Alaska communities  to equalize  their  energy costs  with                                                               
urban Alaska.   in response to a follow-up comment,  he said that                                                               
the power cost  equalization fund was a response  to "even things                                                               
out" between  rural and  urban Alaska due  to the  state spending                                                               
more money  on infrastructure in  urban parts  of the state.   he                                                               
added that some areas of the  state have less access to renewable                                                               
energy, so they rely more on cost equalization.                                                                                 
                                                                                                                                
REPRESENTATIVE  PRAX  commented that  people  in  urban parts  of                                                               
Alaska  have  "forgotten"  the   reasoning  for  the  power  cost                                                               
equalization fund and  asked if there were numbers  showing a how                                                               
the infrastructure built  in those areas is saving  money for the                                                               
people living there.                                                                                                            
                                                                                                                                
MR.  THAYER answered  that the  Railbelt intertie  has saved  the                                                               
people of  Fairbanks an average  of $40  million a year  in power                                                               
costs since it was built.                                                                                                       
                                                                                                                                
11:14:51 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  MCKAY asked  for clarification  on the  amount of                                                               
money HB 62  would commit future legislatures to  provide for the                                                               
renewable energy grant fund.                                                                                                    
                                                                                                                                
REPRESENTATIVE EDGMON  answered that HB 62  reauthorizes the fund                                                               
for the  next ten  years, but only  appropriates funding  of $1.4                                                               
million this year, leaving the  funding for future years for that                                                               
year's  legislature  to  decide.   In  response  to  a  follow-up                                                               
question, he stated that the $1.4  million is the cost to run the                                                               
program, whereas the $7.5 million  is an amount requested for the                                                               
distribution of grants.                                                                                                         
                                                                                                                                
11:17:18 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER asked if it was correct  to say that a vote for HB
62  is  a vote  to  continue  the  program  but not  provide  any                                                               
specific amount of funding for it.                                                                                              
                                                                                                                                
REPRESENTATIVE  EDGMON answered  that  HB 62  would only  provide                                                               
funding to  run the program,  but not  any specific amount  to be                                                               
given  out  in grants.    He  added  that Governor  Dunleavy  had                                                               
already assumed the $1.4 million as part of the budget.                                                                         
                                                                                                                                
11:18:47 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PATKOTAK added  that the $1.4 million  is a fiscal                                                               
note for  the purpose  of appropriating the  cost of  running the                                                               
program for the next year.                                                                                                      
                                                                                                                                
11:20:34 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PATKOTAK  moved to report  HB 62 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.                                                                                                                          
                                                                                                                                
11:21:23 AM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 11:21 a.m. to 11:22 a.m.                                                                     
                                                                                                                                
11:22:40 AM                                                                                                                   
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Energy meeting was adjourned at 11:22 a.m.                                                                 

Document Name Date/Time Subjects
HB 62 Sponsor Statement Version A.pdf HENE 2/16/2023 10:15:00 AM
SFIN 3/28/2023 9:00:00 AM
HB 62
HB 62 Sectional Analysis Version A.pdf HENE 2/16/2023 10:15:00 AM
SFIN 3/28/2023 9:00:00 AM
HB 62
HB 62 REF Update Letter to Legislature 2023.01.26.pdf HENE 2/16/2023 10:15:00 AM
HB 62
HB 62 -APA Support 2.10.pdf HENE 2/16/2023 10:15:00 AM
HB 62
HB 62 REF Projects by Energy Region 02.07.2023.pdf HENE 2/16/2023 10:15:00 AM
HB 62
HB 62 REF Round 14 Status Report 04.01.2022.pdf HENE 2/16/2023 10:15:00 AM
HB 62
HB62 REF Fact Sheet 2.7.23.pdf HENE 2/16/2023 10:15:00 AM
HB 62
HB 62 Fiscal Note.pdf HENE 2/16/2023 10:15:00 AM
HB 62